Nonprofit Board Crisis

Nonprofit Hospitals get and dont give

According to the San Francisco Chronicle, "San Francisco's five nonprofit hospitals received $79 million last year in tax breaks intended to compensate them for providing free care to the city's poor and uninsured, but they spent just $16 million on charity care, according to a new city report.  California Pacific Medical Center, with campuses in Laurel Heights, Pacific Heights and the Castro, was responsible for the vast majority of the disparity the report by the city Department of Public Health said.  California Pacific received close to $70 million in tax breaks - $67 million in state and federal income tax exemptions and $2.8 million in local property tax exemptions - while spending $5.2 million on charity care, the report said."

Like universities, what is tax exempt should be up for review.  Thanks to San Francisco for highlighting a problem that is not specific to the city -- this is a national problem.

For-profit spins off nonprofit

New Haven, CT based CURE, a pharmaceutical research firm, has decided that there are not enough financial incentives in finding drugs to solve all the world's health problems so it has spun off a nonprofit called World Cures.  World Cures will turn to fundraising to finance its operations.

While I applaud the dedication to solving world health problems, I can't help wondering if there is some other motive behind a for-profit's shedding some resources to pursue what would otherwise be included in its mission -- to create chemical cures to address health issues.  Is there really more money in philanthropy than in the for-profit world?  With the Gateses of the world, maybe the answer is: that's right!

Mozilla, a nonprofit?

Talk about social enterprise?  Take a look at this <A href=" http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/01/28/BULFULUNF.DTL&hw=nonprofit&sn=001&sc=1000
"> story</A> about Mozilla in Monday's San Francisco Chronicle.

And scratch your head.  How exactly or on what basis did Mozilla get a tax exemption?

Or, does Mozilla represent Bill Gates's proposed form of social capitalism?

Yale responds to Sen Grassley

In Sunday's Washington Post we hear Yale President Richard Levin say: Yale and Harvard can't win with critics. "If we don't spend our resources for a social good, we are criticized," Levin said. "If we do spend our resources for a social good, we are criticized. We are trying to strike a balance."

Pah...lease!!  With over how much money in the fund balance pot and all those tangible assets and, waiting in the wings, years of alumni waiting to leave their special school money, Yale like Harvard and a number of schools singled out by Senator Grassley in his latest effort to hold nonprofits accountable can indeed, I believe, afford to be more generous.

I've got an idea. Why doesn't each Ivy League school take a portion of its fund balance and make a no-interest loan to the traditional black universities to help them build their capacity to subsidize the education of a whole lot of smart folks who don't have the means or the elite access to the Ivy Leagues?  Now that would be filling a void that the market just isn't ready to fill, the market including the Ivy Leagues.  After all, the Ivy Leagues weren't really that available to give equal opportunities to the Black and Latino communities over the years.  Why not now that money isn't an obstacle (if it ever was)?

What makes a successful museum

An article in the San Francisco Chronicle today focused on the future of the Mexican Museum.  Included in the article were lessons about what it takes today to make an arts cultural center succeed.  The advice seems reasonable:

     • have a base of folks with bucks who are ready to invest
     • have a compelling vision
     • have a strong business plan

The Mexican Museum has been in the works for more than 10 years.  It has a collection which folks are concerned about.  Still, it doesn't seem to be able to even get the building built -- never mind fund the operations once in business.  But, the article also pointed to the reality that two other museums, while having gotten off the ground had to scale back their plans.

Meanwhile we learn from the Chronicle one or two issues ago that arts and culture are doing just fine.

So what is the story, exactly?  Why do some museums do really well and others not so well?  Thoughts anyone?

United Way Screws Up and Doesn't Own It

Fox Valley United Way, according to the Chicago Sun Times, took a 6-month "hiatus" after losing a huge enough chunk of money that no grant obligations were payable, staff was cut from 7 to 3 and a new Exec and new Board were recruited.

The only explanation: we promised more than we could pay out.  The ex-ED doesn’t admit to the problem.  Neither does the past finance guy nor the board, but they have all resigned. 

Is this the way to run a business?  Should the United Way still be trying, again -- I think not.

Top Fortune 500 Is a Nonprofit

Mitre Corporation (www.mitre.org) was rated one of Fortune Magazine's Top 100 Corporations to work for.  Hooray for Mitre but why is it a nonprofit (Senator Grassley)?  What void is it filling that lacks incentives for for-profit pursuit?  Why does the public sector, which heavily funds it, not want to pursue?

Maybe this is what Bill Gates has in mind when he says that for-profits or capitalism should be helping the bottom third of the world?

Little League loses without accountability

In a "too good to be true" story from yesterday's Hartford Courant, John Crooks, no, I did not make this up, was indicted with complaints from the Norwich (CT) Little League and a nonprofit Bingo that Mr. Crooks embezzled funds.

In the most "wow" category, Mr. Crooks is alleged to have stolen $15,000 from the Little League.  Wow, that's a lot of money from a Little League I say!  Just exactly how does someone steal that much money without the money being missed from such a small-budget organization (well, I guess it was eventually missed).

Clearly policies and procedures and not-so-good checks and balances are the only clear explanation.  And then there's the governance standard for duty-of-care: do for your nonprofit what you would do as though it were your own business.  Board members is this how you would run your own business?

Grassley Tells Colleges to Live up to their Nonprofit Status

From the Chicago Sun Times we learn that Senator Grassley has called on colleges to do more with their endowments than build them up.  Senator Grassley wants colleges to spend more to subsidize tuitions through loans and grants.

Hurray for Senator Grassley but has he gone far enough?  Given the near profit-making nature of universities in particular, is it not time to set some different standards for when or if they are nonprofit vs. for-profit.  Maybe if they had to pay more than in-lieu-of taxes, universities would be more responsible.  After all, right now the big folks in particular are just tax-free corporations with few obligations to the public other than those they self-impose.

There are after all the public schools to address the public good so why do we need a free-standing for-profit disguised as a nonprofit.  Senator Grassley, let's go for bigger stakes of accountability and not just ask universities to share more -- make them for-profits and tax responsible to the communities they want to serve.