Late this past week came two significant news items regarding the Internal Revenue Service: that the agency is finally going to revamp the core annual reporting requirements for non-profits, and that the agency's chief is departing to take over the troubled American Red Cross.
[Both of these changes were reported in news articles which are not online, yet at least: the first item in Friday's Wall Street Journal and the second item in this week's Chronicle of Philanthropy. Both newspapers based their articles on extensive quotes from various parties both on and off the record, and neither item is being denied by anyone.]
The redesign of the federal Form 990 is long overdue; as the Journal puts it the form "has over 100 line items of information in haphazard order, the result of decades of additions by the tax agency without a complete revamp. A reader finds a charity's revenue listed pages before learning what the group does. Questions about officers, directors and other key employees are often scattered many pages apart." The revamp appears to be mainly aimed at reorganizing the thing so it flows in a logical order.
Unfortunately that won't get at the bigger issue which is the lack of any requirement to report actual results other than financial. The head of the IRS's tax-exempt organization unit says, "I'm pretty sure the public doesn't want the government deciding who's effective and who isn't." She's missing it; no one argues for the federal government ranking non-profits' effectiveness. (I mean seriously, can you imagine? Might as well let a federal bureaucracy decide who's best on "Dancing With The Stars".) No, what would be a real step forward would be simply a requirement that non-profits report each year some measure(s) of effectiveness. Let organizations themselves decide what that is and then let the marketplace of informed donors and watchdogs decide who is being smartest about that. The governmental role here would be simply to enable a free market of comparisons, just like it does with regard to investing in for-profit corporations.
Meanwhile New York Times reporter Stephanie Strom broke the story that IRS chief Mark Everson is leaving to take over the Red Cross, which has recently been in some crisis. Whether he is a good fit for that organization is open to debate (I lean slightly towards yes); it does seem like a good sign for them that they can land someone with a resume of his caliber.
The Chronicle rightly notes, though, that Everson has in his four years running the IRS sharply increased the agency's focus on tax-exempt organizations. While some of the specifics of that have seemed weak (see above) or dubious (the NAACP and All Saints Episcopal Church audits had the scent of partisan politics), in the big picture we clearly need more focus on this booming civic sector not less. Hopefully the next agency director will understand that.
Showing posts with label Red Cross. Show all posts
Showing posts with label Red Cross. Show all posts
Saturday, May 05, 2007
Thursday, March 22, 2007
Updates: Red Cross, Robertson v. Princeton, symphonies
Quick updates tonight on some subjects previously covered here:
The American Red Cross, it turns out, has to get formal permission from the U.S. Congress in order to reorganize themselves into a normal non-profit structure. That's because of the organization's special disaster-response status granted by Congress decades ago. It sounds like the legislators are receptive to the basic premise that the organization's outdated governance structure is the root of its recent troubles including losing three CEOs since 1999. The current board chair told a House committee that the proposed changes have helped lured some strong candidates for the job.
Princeton University has quietly (at least they wanted it to be quietly) reimbursed the Robertson Foundation almost $800,000 which the university can't bring itself to admit was used contrary to donor intent. (Rather, they say its because university officials failed to properly disclose the use of those funds.) This move has not taken any steam out of the huge lawsuit being pursued by the Robertson heirs; in the court of public opinion, Princeton just continues to shoot itself in the foot.
And the John S. and James L. Knight Foundation has summarized its hard-earned knowledge about the state of symphony orchestras into a short "issue brief" which should be required reading for everyone involved in classical music today. They do not pull any punches, and their core messages continue to remind me of some of the existing thinking and practices in other fields such as non-profit theater and dance. "Classical music lovers are everywhere, but most of them are not in the local concert halls....Interest in the art form looks healthy. Yet orchestras are struggling to remain relevant in a rapidly-evolving cultural landscape...."
The American Red Cross, it turns out, has to get formal permission from the U.S. Congress in order to reorganize themselves into a normal non-profit structure. That's because of the organization's special disaster-response status granted by Congress decades ago. It sounds like the legislators are receptive to the basic premise that the organization's outdated governance structure is the root of its recent troubles including losing three CEOs since 1999. The current board chair told a House committee that the proposed changes have helped lured some strong candidates for the job.
Princeton University has quietly (at least they wanted it to be quietly) reimbursed the Robertson Foundation almost $800,000 which the university can't bring itself to admit was used contrary to donor intent. (Rather, they say its because university officials failed to properly disclose the use of those funds.) This move has not taken any steam out of the huge lawsuit being pursued by the Robertson heirs; in the court of public opinion, Princeton just continues to shoot itself in the foot.
And the John S. and James L. Knight Foundation has summarized its hard-earned knowledge about the state of symphony orchestras into a short "issue brief" which should be required reading for everyone involved in classical music today. They do not pull any punches, and their core messages continue to remind me of some of the existing thinking and practices in other fields such as non-profit theater and dance. "Classical music lovers are everywhere, but most of them are not in the local concert halls....Interest in the art form looks healthy. Yet orchestras are struggling to remain relevant in a rapidly-evolving cultural landscape...."
Saturday, November 11, 2006
Whole lotta shakups goin' on
Two of the biggest, best-known non-profits in the world have launched major reorganizations: the American Red Cross and the Girl Scouts.
The Red Cross shakeup is in response to a series of missteps and criticism in recent years, most famously related to the 9/11 attacks and then Hurricane Katrina. Basically they are adopting what most non-profit people would recognize as a normal structure at the top, with a self-recruiting policymaking board of directors which hires a CEO to run the place. The Red Cross has since 1947 had a 50-person board largely chosen by state chapters which tried to directly run the organization; different board members had different titles, operational decisions were made by committees, and not surprisingly three CEOs have resigned since 1999. No doubt the current highly-democratic structure will be missed by the state and local chapters, but it just wasn't plausible for running what is now a $4 billion/year operation with 35,000 employees deployed in hundreds of local offices.
Girl Scouts of the USA, meanwhile, has announced a huge internal consolidation: 312 local councils will be consolidated into 109 over the next three years. In some places as many as seven current councils, each with their own local boards and staffs, will be combined into a single new one. The primary motivation here is simple efficiency; local councils are naturally worried about how many camps might end up getting closed, staff positions eliminated, and so forth. What the organization hopes to gain isn't just reduced administrative costs but new ability to modernize their program nationwide.
The Red Cross shakeup is in response to a series of missteps and criticism in recent years, most famously related to the 9/11 attacks and then Hurricane Katrina. Basically they are adopting what most non-profit people would recognize as a normal structure at the top, with a self-recruiting policymaking board of directors which hires a CEO to run the place. The Red Cross has since 1947 had a 50-person board largely chosen by state chapters which tried to directly run the organization; different board members had different titles, operational decisions were made by committees, and not surprisingly three CEOs have resigned since 1999. No doubt the current highly-democratic structure will be missed by the state and local chapters, but it just wasn't plausible for running what is now a $4 billion/year operation with 35,000 employees deployed in hundreds of local offices.
Girl Scouts of the USA, meanwhile, has announced a huge internal consolidation: 312 local councils will be consolidated into 109 over the next three years. In some places as many as seven current councils, each with their own local boards and staffs, will be combined into a single new one. The primary motivation here is simple efficiency; local councils are naturally worried about how many camps might end up getting closed, staff positions eliminated, and so forth. What the organization hopes to gain isn't just reduced administrative costs but new ability to modernize their program nationwide.
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