Mich. Gov. Snyder Defends Use Of Nonprofit Funds

Amid reports that his nonprofit paid for the living and travel expenses of a government official, Michigan Gov. Rick Snyder is saying that taxpayers should not be alarmed.

According to a report in Crain's Detroit Business, Snyder spoke out in defense of the New Energy to Reinvent and Diversify Fund (NERD), a foundation he started to promote various charitable causes. Various reports indicated that NERD paid $4,200 to cover Detroit Emergency Manager Kevyn Orr's stay at a hotel and that the fund is also paying for Orr's flights home to see his family in Maryland on the weekends.

When asked about whether taxpayers should be concerned about this at an event at the Michigan State University club, Snyder indicated that it was an appropriate use of the organization's money and that it was actually saving people money.

"We've been very clear it's all legal, it's all been presented, the information that's required," Snyder said. "It doesn't go to my personal benefit, it's actually offsetting costs of government, so people should feel comfortable with that."

NERD is registered as a social welfare, or 501(c)(4), organization, meaning that donors can contribute to the fund anonymously. Federal tax records show that the organization raised $368,000 in 2012, down from the $1.3 million it received in 2011. It had total expenses of $590,453 last year, compared with spending of $865,830 in 2011.

You can read the full story in Crain's Detroit Business.

Newtown Shootings Donations To Be Distributed

The community foundation formed after deadly school shootings in Newtown, Conn., has released its initial recommendations about how to distribute the donations received since its inception.

The Newtown-Sandy Hook Community Foundation raised $11.4 million with the help of the United Way of Western Connecticut in the aftermath of the Dec. 14 shootings that left 26 dead, including 20 children. The foundation initially decided to distribute $7.7 million of those funds to the families and survivors, and created a committee to decide how to divvy up the remaining money.

According to a report on NPR, that committee, headed by Kenneth Feinberg and Camille Biros, announced its recommendations at a public forum Thursday at Newtown's Edmond Town Hall. They recommended the remaining $7.7 million be distributed as follows:

• The 26 families of the deceased would each receive $281,000.
• Two teachers who were injured would get $150,000 between them.
• The 12 surviving children who witnessed the shootings would get $20,000 each.

While some praised the plan during the public forum, not everybody was satisfied. Caryn Kauffman, who represents a coalition of victims of prior mass shootings, asked during the meeting why the funds were not going to all of the victims.

"The intent was to give the money to the victims. We're starting from a false premise and this process is re-victimizing the victims," she said, according to the NPR report.

The $7.7 million is expected to be distributed on Aug. 16. You can read the full story on NPR's website.

Texas AG Investigating Cancer Foundation

Texas Attorney General Greg Abbott has reportedly launched an investigation into the nonprofit arm of the Cancer Prevention and Research Institute of Texas (CPRIT) in an effort to determine what is happening to the money it has raised.

According to a report in The Austin American Statesman, the Abbott's office sent a letter to the CPRIT Foundation, now known as the Texas Cancer Coalition (TCC), on Friday to request that the organization cease all expenditures until the investigation is complete.

“Based on the preliminary information available to us at this time, we have serious legal concerns about the events that reportedly surrounded the formation of the TCC,” wrote G. David Whitley, the assistant deputy attorney general, in the letter.

TCC raised nearly $3.6 million over three years to supplement the six-figure salaries of CPRIT's top two executives and for conferences to fight cancer. The Foundation, however, was swept up in the ethical questions surrounding CPRIT. The state agency is being investigated by state prosecutors for allegedly mismanaging at least $56 million in grants. The investigation began after it was disclosed that CPRIT allegedly awarded an $11 million grant to a Dallas-base startup without any scientific or business review.

Abbott's office set its sights on TCC after it changed its name and mission. The attorney general believes the Foundation needed state authorization to make such a change. Craig Enoch, a lawyer for TCC, wrote in a response to Whitley's letter that state authorization was not necessary and that TCC leadership had discussed the potential change for months.

“The Foundation, in fact, is unaware of any authority requiring it to seek the Attorney General’s approval were it to actually dissolve and transfer its assets to another private charity with a similar mission,” wrote Enoch.

In terms of the funds raised, TCC spokesman Marc Palazzo told The Statesman that the money would be returned to the state once the organization pays its bills.

You can read the full story in The Austin American Statesman.

New Foundation To Oversee Newtown Fund

A new foundation has been formed to oversee the more than $9 million that has been donated to the Newtown Fund since the shootings took place Dec. 14.

Soon after the tragic shootings at Sandy Hook Elementary School in Newtown, Conn., the United Way of Western Connecticut and Newtown Savings Banks set up a fund for donations. The organization, however, did not want to oversee the money, so a transition team was formed to create a foundation that would distribute the funds for charitable purposes.

According to The Hartford Courant, the organization, known as the Newtown-Sandy Hook Community Foundation Inc., took two months to create. During that period, members of the team drafted bylaws for the foundation. The transition team officially transferred authority to the foundation, which has former U.S. Sen. Joseph Lieberman as an unpaid advisor. Lieberman met with families of victims on Wednesday to explain how the organization will operate, and to solicit suggestions.

While the foundation is open for business, it is not yet ready to begin distributing money. The board will first consider requests and suggestions that will be vetted by a "distribution committee." According to Newtown Selectman Will Rodgers, who headed the efforts to form the foundation, there is a possibility there will be more than one distribution committee.

Rodgers told The Courant that there is not yet a timetable for when the first funds will be distributed.

You can read the full story in The Hartford Courant.

Prosecutors: Ex-Mayor Stole Millions From Husband's Foundation

The former mayor of San Diego is accused of stealing millions from her late husband's foundation to feed her gambling addiction, according to a report in The New York Times.

Maureen O'Connor spent the last 10 years betting more than a billion dollars at casinos across the U.S., liquidating her savings, auctioning her belongings, and selling off her real estate in order to continue her wagers. Prosecutors also say she stole $2,088,000 from her husband's foundation, leaving it bankrupt. The name of the foundation was not listed in the report.

O'Connor appeared in court Thursday to answer the charges against her, and tearfully admitted to them. She blamed an addiction to gambling aggravated by a brain tumor for her decisions, and told reporters that she didn't mean to harm the city.

"Those of you who know me here would know that I never meant to hurt the city that I love," she said. “I always intended to pay [the money] back and I still intend to pay it back,” she said.

While the money she stole did not come from the city, the money taken from the trust of her husband, Robert O. Pearson, founder of the Jack-in-the-Box burger chain, most likely would have gone to local charities.

Documents filed in court by her lawyers state that after Pearson died in 1994, O'Connor turned to gambling to deal with the loss. “She began to seek an outlet in gambling,” her lawyers wrote. “The pattern fits the syndrome known as grief gambling.”

While she made over a billion dollars through bets at casinos in Las Vegas, Atlantic City, and San Diego, she still lost over $13 million.

Under an agreement made with federal prosecutors, O'Connor will get treatment for gambling addiction and has two years to pay back the foundation and taxes owed to the government.

You can read the full story in The New York Times.

Sept. 11 Memorial's Executive Salaries Comes Under Fire

The last thing anybody expected was controversy at the September 11 Memorial and Museum at the World Trade Center.  But that's exactly what has happened after a former employee received a severance package.

The Wall Street Journal reported today that Joan Garner, former executive vice president of design and construction at the memorial, received $296,565 in compensation after leaving her position in May 2010.  That brought her total salary for the year up to $439,463, making her the highest paid employee at the organization.

Tax records for the organization, which were first reported on by The Record of Bergen County, show that seven other executives received compensation that totaled more than $200,000.  Four of those executives received more than $300,000, including the president, Joseph Daniels, who earned $378,288 in salary and benefits.  All in all, the foundation spent $6.5 million on salaries and other benefits in 2010, a sharp increase from the $5.3 million in 2009.

The executive pay at the memorial has come under heavy fire from the families of 9/11 victims, who have called on Mayor Michael Bloomberg, the organization's chairman, to get the salaries under control.  However, Bloomberg has long defended the compensation at the memorial and other nonprofits, and his spokesperson said they are in line with similar nonprofits.

Ken Berger, president and CEO of Charity Navigator, disagreed with the mayor.  He told The Journal that the salaries in question are on the high end of the spectrum, and that an organization with such an important public mission shouldn't be spending money this way.  His comments certainly fall in line with the outraged comments from families who lost loved ones during 9/11.

You can read more about this controversy in The Wall Street Journal.  In addition, you can read all about the construction of the many September 11 memorials in The NonProfit Times.

49ers Wide Receiver Gives Back

In 2005, Braylon Edwards, then a rookie wide receiver for the Cleveland Browns, gave a challenge to 100 local eighth-graders: If they could graduate high school with a 2.5 GPA and 15 hours of community service, they would each get $10,000 scholarships.  Years later, Edwards is still offering this chance to college students.

In 2007 Edwards, who now plays for the San Francisco 49ers, started the Advance 100 Program through the Braylon Edwards Foundation (BEF).  It's a continuation of the promise he made to those Cleveland-area kids, 79 of whom met the original criteria, according to Yahoo! Sports.  The program was developed by Edwards and his mother as a way to use their good fortunes to help others.  Even though they didn't expect many students to fit the criteria (only half of Cleveland public school students graduate), they went through with their commitment anyway.

Those 79 original students were provided with laptops and other supplies to help them once they arrived in college.  Edwards is paid a $1 million base salary for the year, which is about half what he'll pay the Advance 100 students to get through college.

Edwards is certainly not the only athlete to help those who are less fortunate.  A look at Pros Give Back, a site which tracks good deeds from athletes all over the sports world, will show many other acts of generosity like Edwards'.  We've also seen similar philanthropy from athletes like Jonathan Vilma and Craig Breslow.  In an age where we see athletes and owners squabbling over millions of dollars, it's good to read stories like the one coming out of the Advance 100 Program.

Heifer CEO Suing Board For $5 Million

We just put an article up on our website in which we learn that Heifer International Foundation CEO Domingo Barrios is suing the organization's board for $5 million in damages.  Barrios was suspended for allegedly violating confidentiality rules.  He claims that the real reason stems from his questioning of their governance practices.  Here's an excerpt from the story:

In his lawsuit, Barrios alleges that Williams and Smith encouraged him to “violate his fiduciary responsibilities” to the foundation by directing him not to reveal “certain pertinent information which would be detrimental to the foundation.” In June, the board approved a resolution that would give Heifer’s CEO the power to decide on unrestricted bequests, permitting the organization “to control and participate in planned giving,” Barrios said, and essentially destroying a primary purpose of the foundation.


Barrios claims he was asked by Smith and Williams not to share the proposal with the foundation until Heifer met to approve the resolution, which he believes violated rules of governance. He informed the foundation’s board of the adverse effect the resolution could have and subsequently was suspended for allegedly violating confidentiality rules and claims by the board chairman that he was “ripping the organizations apart,” according to court documents.


Shannon Boshears, director of communications and research at the foundation, said the organization has not been served with legal papers and does not comment on pending or ongoing litigation.

These situations usually turn out pretty ugly; when bad blood builds up, you never know what can happen.  Get the full scoop on this story at The NonProfit Times.

Amy Winehouse Foundation Hits A Snag

Mitch Winehouse, father of the late Amy Winehouse, told the BBC Newsbeat blog that plans to create a foundation in his daughter's name have hit a snag.  The problem?  The proposed name, 'The Amy Winehouse Foundation,' has already been registered.  Winehouse insists the foundation will still be created, but he's going to hold off on his plans until this issue has been resolved.

Foundations created in celebrities' names are often meant to promote a cause that was important to that individual.  In this case, Mitch Winehouse had planned to have his foundation help those who were struggling with substance abuse.  Amy Winehouse, who died last month at the age of 27, had long struggled with addictions to drugs and alcohol.  Her father said that she had gotten past her drug addictions at the time of her death, but that she was having trouble with alcohol.  The cause of her death has yet to be determined.

If you would like to read more about The Amy Winehouse Foundation, head over to BBC Newsbeat.  If there is any update on the status of the foundation, we will be sure to post about it here.

NPTtv: Rahm Emanuel Leans on Nonprofits to Help Transition

There’s a bit of controversy is swirling around Chicago Mayor-elect Rahm Emanuel’s transition. The former chief of staff to President Obama has asked several large nonprofit foundations to foot the $200,000 tab.  Normally, candidates use campaign funds or help from donors for ths kind of help, but it appears Emanuel is taking a different route.

According to his campaign, Emanuel didn’t want to solicit contributions from private donors, so he submitted grant proposals to the MacArthur Foundation, the Joyce Foundation, the Robert R. McCormick Foundation, and the Spencer Foundation. He will use the money from these foundations to pay his political team until he officially takes office.
 
Of course, any new decision causes some problems, and this one has been no different.  David Morrison, Deputy Officer of the Illinois Campaign for Political Reform, is unconvinced over the reasons from the Emanuel camp and says that there is no reason he couldn’t have use campaign funds instead.