Self-Regulation Needed by Charities

LETTERS TO THE EDITOR

To the Editor:

Patricia Nash Christel’s letter (“Accountability Efforts Deserved Attention,” July 20) in response to Pablo Eisenberg’s article, “Why Don’t Charities and Lawmakers Want to Curb Nonprofit Abuses?” (Opinion, June 29), points out a major weakness in the nonprofit sector and its leadership.

She notes that almost 80 percent of the Panel on the Nonprofit Sector’s recommendations focused on “specific changes that Congress should make.”

That is precisely the problem. Most of the problems of the sector could be solved internally with strong leadership and active self-regulation.

It is terribly unfortunate that the sector would have to rely on federal oversight and enforcement to clean up its own mess.

One example points to the sector’s impotence.

It has not denounced the multitude of misdeeds that are prevalent in such organizations as the American Red Cross, United Way, the Baptist Foundation of Arizona, the Nature Conservancy, and others.

Those so-called stalwart agencies and hundreds of others like them have been prime examples of how not to do things. Their malfeasance has amounted to billions of dollars taken from those in need. The sector’s response: “These are a few bad apples.” This denial has resulted in declining contributor confidence in nonprofits and increased interest on the part of our elected officials to regulate charitable efforts.

The multitude of problems affecting the nonprofit sector can no longer be addressed by mere public-relations blitzes.

The sector has to respond by having a massive effort to educate leaders at both the local and national levels as to what their roles and responsibilities are.

With billions of dollars at risk, there needs to be systemic and fundamental change in the way the sector manages its business. They have to stop hiding the sector’s weaknesses and step up by addressing them forthrightly.

One thing is certain — the status quo is unacceptable. Without change, the future will be intolerable.

Gary R. Snyder
Nonprofit Management Center
West Bloomfield, Mich.

To the Editor:

In her letter to the editor, Patricia Nash Christel claims that in my article of June 29 I unfairly criticized the Independent Sector panel reports as focusing primarily on self-regulation, thereby ignoring the 80 percent of the recommendations that outlined specific changes that Congress could make to strengthen legislation and regulations to eliminate nonprofit abuses.

What I said was that the reports were “big on self-regulation and best practices” and that the reports “shied away from dealing with foundations and avoided tough measures to make charities more accountable.”

The Independent Sector panel made no serious recommendations to eliminate self-dealing, rampant trustee fees, egregious travel and hotel costs, unnecessary special perks to nonprofit executives, excessive executive compensation, major conflicts of interest and other questionable nonprofit expenditures — those items that created the foundation and nonprofit scandals in the first place.

In the hearings before the Senate Finance Committee, Independent Sector and some of its members did not support such recommendations. In short, Independent Sector has not responded to the crisis of public accountability with the vigor and resoluteness that one might have expected.

Nor during the hearings and before did it push vigorously for substantial increases in funds not only for federal oversight but also for the work of state attorneys general.

It is a positive sign that Independent Sector is now pushing hard for additional resources for Internal Revenue Service enforcement activities. It is about time.

Pablo Eisenberg
Senior Fellow
Public Policy Institute
Georgetown University
Washington