Nonprofit news roundup – Week of 11.19.07

* As community coffers dry up, increasing resentment surrounds nonprofit tax breaks, especially property-tax exemptions for hospitals and universities that represent millions of dollars in lost revenues, The New York Times reported Nov. 12. Courts have supported revocations of tax exemptions in Illinois and Michigan, and cities like Boston and Colorado Springs are pressuring nonprofits to pay fees for city services instead of property taxes.

* The practice of hoarding endowments at universities, foundations, museums and other charitable groups is butting up against increasing disapproval from politicians, watchdogs and even some philanthropists, The New York Times reported Nov. 12.  Anecdotal evidence indicates many foundations are favoring spend-down policies, giving significantly more annually than the much-criticized minimum 5 percent payout of assets, while rising university tuition and large endowments have caused Congress to consider applying a similar minimum annual expenditure to educational institutions.

* Charity mergers are becoming more common as a way to cut costs, avoid duplication of services, and expand reach, The New York Times reported Nov. 11. Some experts predict a trend, while others are not so sure, given that nonprofit mergers entail all the hassle of a for-profit merger without the “cold, hard cash” incentives.

* Interest in politically-oriented nonprofits is growing as federal regulations crack down on campaign finance, The Los Angeles Times reported Nov. 13. Gifts directed to a nonprofit, instead of directly to a campaign, allow donors simultaneously to circumvent caps on contributions and avoid unwanted publicity.

* The University of California at Irvine gave donor Donald Bren the right to be consulted in hiring a dean for its new law school as part of the gift agreement for his $20 million donation, The Los Angeles Times reported Nov. 9. However, Chancellor Michael Drake says Bren had no input in the controversial hiring and firing of the school’s newly chosen dean, Erwin Chemerinsky.

* Social marketing, a popular sustainable development strategy, is facing criticism from such top-flight development economists as prominent UN advisor Jeffrey Sachs, The Boston Globe reported Nov. 11. The strategy involves selling goods such as condoms and mosquito nets at very low, subsidized prices in order to generate both the perceived product value and the homegrown distribution networks that a free giveaway might not inspire.

* Groups like Questbridge, a Palo Alto, California-based nonprofit, are working to narrow the ever-widening diversity gap among students at prestigious U.S. universities by focusing on income, not race, The Wall Street Journal reported Nov. 15 [subscription only]. In exchange for recruiting fees, the organization matches low-income students with 20 top U.S. colleges, where these recruits account for significant percentages of last years’ acceptances.

* Harvard University has chosen Robert S. Kaplan, former Goldman Sachs vice chairman and current Harvard Business School professor, to temporarily run its $35 billion endowment, The New York Times reported Nov. 9. Kaplan is replacing emerging-markets specialist Mohammed El-Erian while the university seeks a permanent successor.

* Online social networks seem poised to drive a revolution in the philanthropy world, many experts say, through a rash of new ventures such as the Clinton Foundation’s and Facebook’s new Causes section, which focus on raising charitable dollars, The New York Times reported Nov. 12. However, amounts raised online so far have been modest, estimated as generally less than 1 percent of a charity’s donations, and some think that Web 2.0 hasn’t lived up to its potential.

* The Hershey Co. board will replace all but two members after a messy struggle with the charitable trust that runs the company, The Wall Street Journal reported Nov. 12 [subscription only]. The shakeup comes as the company reports declining revenues and profits.

* The Bill & Melinda Gates Foundation will partner with the Chinese government to tackle AIDS in China, expand testing, education efforts, and care and support for HIV-positive citizens, The Seattle Times reported Nov. 14. An initial $50 million will be distributed to governmental and nongovernmental organizations.

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