Major Nonprofit Group Accused of Wrongly Stifling a Critical Essay

The chief executive of a prominent community foundation is accusing Independent Sector and its

president of compromising its independence because it refused to publish an essay it invited him to write. In the essay, he named the James Irvine Foundation and several other nonprofit groups that have been accused of improper or unethical behavior.

Emmett D. Carson, president of the Minneapolis Foundation, said Independent Sector, a coalition of large charities and foundations, declined to publish his essay unless he removed references to the groups or confirmed the accuracy of the allegations against them. Most notably, Mr. Carson said, he was told he had to either excise two brief mentions of Irvine or independently verify allegations published in news reports about the foundation’s executive-compensation and spending practices. Mr. Carson said Independent Sector’s president, Diana Aviv, told him her institution otherwise risked becoming a defendant in a multimillion-dollar libel suit.

Ms. Aviv’s action “seems the height of censorship to me, and compromises Independent Sector’s ability to speak forcefully on these issues at a time when I believe that’s what our sector needs,” said Mr. Carson, whose essay exhorts the nonprofit world to police itself better.

Besides instructing him to step lightly around Irvine, Mr. Carson said, Ms. Aviv also asked him to remove references to the other groups mentioned in his essay — the Nature Conservancy, the United Way of the National Capital Area, PipeVine Inc., and the American Red Cross — even though he offered no details of the controversies surrounding those organizations.

The Nature Conservancy has been accused of conflicts of interest in the way it buys and sells environmentally sensitive land. The former top executive of the Washington, D.C., United Way has been accused of stealing as much as $1.6-million from the organization. PipeVine, a charity in San Francisco that processed donations for United Ways and other groups, is under investigation for allegedly mishandling millions of dollars in contributions. The Red Cross was widely criticized for its handling of donations after September 11, 2001.

Ms. Aviv approved the overall message of his essay, Mr. Carson said, but objected to his brief references to the specific nonprofit groups — particularly the two mentions of the Irvine Foundation.

Irvine has been in the spotlight since April 27, when the San Jose Mercury News published a lengthy article about the foundation and its former president, Dennis Collins. Among the issues the article raised:

• Mr. Collins’s compensation, which in 1999 was $336,000 in base salary and $381,043 in deferred compensation.
• The spending of $104,000 on two farewell parties when Mr. Collins retired, and $25,000 in travel money as a parting gift.
• The potential for conflicts of interest when Irvine grantees used an executive-search firm run by Mr. Collins’s wife.
• The funneling of many education grants to wealthy private institutions, including Occidental College, a former employer of Mr. Collins, who sat on its board.

In the same article, James Gaither, who was then chairman of Irvine’s board, defended Mr. Collins’s compensation package as appropriate, and Mr. Collins denied any conflicts of interest or other wrongdoing. Neither Mr. Gaither nor Mr. Collins disputed the accuracy of the article’s dollar figures.

Failure to Speak Out

In his essay, which he subsequently submitted for publication in The Chronicle, Mr. Carson says that, in the past two years, “the public has been bombarded with media stories questioning the ethics, integrity, and operations” of “some of the most well-known nonprofit organizations, including the James Irvine Foundation, the Nature Conservancy, the United Way of the National Capital Area, PipeVine Inc., and the Red Cross, among others.”

Mr. Carson criticizes nonprofit leaders for failing to speak out forcefully against dubious practices, even when they involve member institutions.

He also asserts that it is unlikely that federal legislation that had been proposed in April to effectively increase foundation payout rates “would have gained the traction it has without the questions raised about the James Irvine Foundation and others, coupled with our sector’s apparent indifference to the magnitude of the allegations.”

Ms. Aviv, in an interview, acknowledged having invited Mr. Carson to write a guest column about the congressional bill for her monthly Memo to Members, which is distributed to about 2,000 members of Independent Sector.

“After we received the piece, we let Dr. Carson know that a small portion of his article would require additional confirmation,” she said. “We asked him to consider letting us run an edited version of his article.”

But Ms. Aviv declined to comment on what the sticking point was, or on Mr. Carson’s contention that she had told him that Independent Sector had been put on notice that allegations in the Mercury News article were false, and that Independent Sector therefore could be sued if it repeated or referred to those charges.

“The conversation I had with Dr. Carson was a private conversation,” she said. “I’m not going to repeat its details.”

Threats Denied

Irvine’s president, James E. Canales, denied trying to impose any kind of gag order on Independent Sector.

“At no time did the James Irvine Foundation or attorneys for the James Irvine Foundation threaten any kind of legal action against Independent Sector,” said Mr. Canales, who took office on May 1, four days after publication of the Mercury News article. He added: “I’ve come into this new post with a commitment to openness and transparency.”

Shortly after taking office, Mr. Canales said, he did speak to Ms. Aviv about a message to members she had sent on April 28, immediately after publication of the Mercury News article. The memo, referring to the “troubling story” in the newspaper, urged Independent Sector members “to review their own practices and policies and to engage their boards of directors in ensuring that their organizations meet the highest standards of financial and ethical practice.”

Mr. Canales characterized the memo as “a laundry list of allegations” that was sent out to Independent Sector members without first either informing Irvine or seeking its response.

“I would have been irresponsible if I had not called Diana to express my concern about her Memo to Members,” which had caught the foundation off guard, he said. “We had a good exchange about it, but nothing that was threatening.”

In a subsequent message to Independent Sector members on July 3, Ms. Aviv clarified that she had not meant to imply in her earlier memo that she had “any information other than what was in the newspaper article,” and she apologized to the foundation and to Mr. Collins “for any concern or embarrassment that the Member Alert may have caused.”

Mr. Canales said Irvine has “a very healthy and productive relationship” with Independent Sector, which it joined as a founding member in 1980 and has supported in various ways. He noted that he is chairman of the host committee for Independent Sector’s annual conference this fall in San Francisco.

Mr. Collins was appointed to Independent Sector’s board for a term that started in January 2001 and expires at the end of this year, though he has been on a leave of absence while he traveled abroad after stepping down as Irvine’s president. Efforts to reach him for comment were unsuccessful.

Mr. Carson said he felt that Independent Sector’s refusal to publish his article as he wrote it put him in a no-win situation: either acquiesce to what he felt was an unreasonable demand, or try to get the piece published elsewhere while explaining its origins, at the risk of potentially damaging an organization he and the Minneapolis Foundation have supported for years.

“But once somebody tells you they’re engaged in unbecoming behavior,” he said, “you’re either complicit or you’re obligated to speak out.”

Mr. Carson added: “I don’t think Independent Sector ought to have secret agreements to protect members whom questions have been raised about.”