Lehman Bros. Seek Bigger Payments From Nonprofits

A year after exiting bankruptcy, Lehman Brothers Holding Inc. is back and is demanding larger exit payments from a host of nonprofits.

Lehman Bros. is not a name that brings back fond memories for most people. The financial institution's bankruptcy in Sept. 2008 was one of the major causes of the financial collapse that ravaged the economy.

According to a report in Bloomberg, the managers of Lehman's estate feel they were shortchanged by some nonprofits that made exit payments on derivatives that crashed after the bank filed for Chapter 11 bankruptcy, forcing it to sell its assets.

One of these organizations is Buck Institute for Research on Aging in Novato, Calif., which paid Lehman $2 million in Oct. 2008 to cancel a contract with the bank. Lehman has now come back to the organization and demanded $12.1 million more in addition to $4.7 million in interest. These funds are more than half of what the nonprofit spent o Alzheimer's, Parkinson's, and other diseases last year according to its most recent financial statement.

Mary McEachron, Buck’s chief administrative officer and general counsel, declined to comment on the situation to Bloomberg, saying only that the matter has not yet been resolved.

One other organization targeted by Lehman Bros. is a 5,000-student liberal arts college in Boston called Simmons College. The school paid Lehman $5.5 million in Jan. 2009 to exit from three interest rate swaps. In its June 30, 2012 financial statement, Simmons stated it held back $800,000 of that payment for out-of-pocket expenses. This didn't set well with Lehman, which now wants to enter a settlement through mediation with the college.

Lehman exited the bankruptcy process in March 2012 and has since liquidated about $46.2 million in assets. The bank needs $65 million more to repay its creditors by 2016.

You can read the full story in Bloomberg.

May 15, 2013 Edition Of The NonProfit Times

The May 15, 2013 issue of The NonProfit Times is now online and hitting mailboxes across the country. Here's a peak at the content you can expect to find in the second issue of the month:

Articles

• Keeping Score With Capital Campaigns: The New Jersey Symphony Orchestra culminated a four-year capital campaign this past June, raising $35.8 million, some 12 percent more than its original $32 million goal, despite the worst economy since the Great Depression.
• Binders Full Of Fundraisers Causing A Diversity Stir: Veteran UK fundraiser Giles Pegram, CBE, caused a social media uproar when he tweeted “women are still not adequately engaged in the thinking in fundraising,” causing flashbacks to Mitt Romney's infamous "binders full of women" line.
• 10 Issues That Top The Activist List For 2013: a new report from Future 500 indicates that a series of issues will force corporations to partner with nonprofits to adapt to a changing environment.

Columns

• Donors And Their Wealth: Everyone’s looking for investment advice. Charities and donors are no different. Some of the nation’s largest nonprofits are complex businesses, generating income from donations but also via fundraising events, program service revenue or membership fees, as well as investment income.
• Now Casting: An actor who can play equally well Prospero, Willy Loman, and Felix Unger or Lady Macbeth, Amanda Wingfield, and Lady Bracknell, is highly valued by any theatre company. Likewise, grant writers who can flawlessly execute diverse roles bring real value to their nonprofits.

Nonprofit Galas Breaking Fundraising Records On West Coast

Nonprofit galas in the Bay Area are breaking all sorts of fundraising records this year, bringing hope that organizations could soon be returning to pre-recession fundraising levels.

A report in the San Francisco Business Times reveals that many San Francisco-based organizations are getting a big boost in revenue from their annual galas. For example, Meals on Wheels (MoW) raised almost $2.17 million for homebound seniors at its 26th annual Star Chefs and Vinters Gala in April. That amount was the most ever raised by the organization for that particular event. In total, it netted $300,000 more than last year's gala, as more than 1,000 guests showed up to sample a spread of food made by gourmet chefs.

MoW Executive Director Ashely McCumber told The Business Times that she believed the success of this year's gals stems from a couple of factors: Strong donor relationships and an increased confidence in the economy, as people are feeling more comfortable giving once again. He added that most of the money from the gala came from individuals while corporate donations remained the same. Around 200 businesses and individuals participated in the gala's live and silent auctions.

While Habitat for Humanity San Francisco has not yet had its annual gala, Executive Director Phillip Killbridge told The Business Times that he is confident it will also break fundraising records, especially after Coldwell Banker Residential Brokerage wrote the nonprofit a $25,000 check.

Are your nonprofit galas and special events seeing similar results? Let us know in our comments section.

You can read the full story in the San Francisco Business Times.

NJ Nonprofit Director Charged With Embezzlement

The former director of human resources for a New Jersey nonprofit was charged Saturday with embezzling more than $100,000 from the organization.

According to a report on a Philadelphia CBS affiliate, prosecutors allege that Christopher English generated paychecks from previously terminated employees of the Arc Mercer -- an advocacy and resource group for the mentally disabled -- and deposited those checks into his personal checking account. He allegedly spent that money on items ranging from a new truck to a $30,000 travel trailer.

English faces up to 10 years in prison if convicted.

Authorities say the alleged theft was discovered when the Arc's payroll company reported some discrepancies to the organization. The nonprofit was able to recover almost all of the funds that was taken in English's alleged embezzlement.

The Arc Mercer is located in Ewing, N.J., and has almost 350 employees and an annual budget of close to $17 million.

You can read the full story on CBS Philly's website.