Last week I noted the story about an LA "backroom" fiduciary nonprofit that misspent the money of the variety of nonprofits that had trusted the organization. According to the LA Times, these group's monies were spent on were "used to pay legal fees and other bills, including $12,000 a month for offices in Pacific Palisades, as well as back taxes and penalties to the IRS." Almost one million dollars of funds were depleted from these grops leaving almost all without any money.
I'm not sure what the groups could have done to prevent this situation. For sure they should take up a class-action suit to get their money back from the exec and the board (never mentioned in the article) that was responsible for this gross violation. I also have a tip. These digital versions of news stories permit related ads and on this page, at least when I was read the story, was an ad by BofA that said: "supporting the nonprofits that address critical community needs." While I can't speak to the nature of the needs being addressed by the groups that lost their funds here, seems like BofA should at least be a first stop.
Mike,
Rick Cohen wrote a two part investigative piece last week on this disaster for Nonprofit Quarterly. It is worthwhile and fascinating read - and offers lots of case examples for your blog and practice.
Kate Barr
Posted by: Kate Barr | February 15, 2012 at 08:58 PM