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 It sounds like the legislators are receptive to the basic premise that the organization's outdated governance structure is the root of its recent troubles including losing three CEOs since 1999.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...."

Non-profit dirty laundry airing in courtrooms

Updates today on two previously-mentioned pieces of non-profit sector ugliness, plus a new one. (Much of this comes courtesy of The Charity Governance Blog which despite its annoying logrolling for the proprietor and his book, is worthwhile for the relevant news provided with legally-experienced comments.)

In Wisconsin the sad case of the prosecution of the former chief financial officer of a major museum is slogging its way through the courts with still no sign of anybody else being held accountable for what was clearly a mess with multiple authors. Charity Governance sees the defendant as clearly a fall guy: "We hope he decides to force the DA's hand and fight to preserve his reputation. Although the press and others have noted that there is plenty of shared blame in the financial collapse of the Milwaukee Public Museum, to this point, others who had oversight authority over the museum simply haven’t been held accountable in any meaningful way."

Over in the Ivy League, Princeton University appears to have become at least dimly aware that whether or not they win the Robertson donor-intent lawsuit in court they have been getting their butts kicked in the media. I dunno that letters to the editor are really going to change that fact any, even if having read a couple of the pieces that the letters respond to I'd agree that the university isn't being treated entirely fairly by editorial writers. The case itself is inching along with no end in sight. Still looks from here like the university is guilty of being at least cavalier with the donor's funds over the years, and ought to settle the thing before its good name gets tarnished further.

Now this month comes the Salvation Army trying to use what is obviously a technicality to ace Greenpeace out of $33 million left in a will. The sordid details with some comments can be found here, and here, and here. Yecchh -- I'm guessing that Salvation Army staffers, volunteers and donors are not feeling all warm and fuzzy about the organization at the moment.

A constitutional right to federal grants?

Public-health and human-services groups have celebrated two federal court rulings overturning a string that Congress placed onto federal grants for overseas work to combat HIV/AIDS, and a broad coalition is now working to defeat the Bush Administration's appeal. On the specific issue at hand I'm totally with them, but at another level this makes me uneasy.

A US law enacted in 2003 requires nongovernmental organizations to pledge their opposition to prostitution as a condition of receiving funds for international anti-AIDS work. The issue is that non-profits doing such work feel they must work with sex workers and that in order to gain trust they have to refrain from trying to talk folks out of being prostitutes. That's a policy-tactics choice which I'm fine with but a lot of folks in the U.S. Congress aren't, hence the idea of requiring signing that pledge in order to get federal funding.

The pledge, it's worth noting, does not stop anyone from working with prostitutes nor require anyone to specifically try to stop them from plying that trade, and United Nations-affiliated programs were specifically exempted from it. You can read it for yourself here in one of the court decisions, see page 12. Actually the feds' interpretation of the pledge, according the court ruling, has been more that it would prevent a group from advocating the legalization of prostitution.

Regardless, the plaintiffs successfully turned this into a free-speech issue; the government's counterargument is that it's just a contract issue (there's no constitutional right to a grant and anyone not wanting to sign the pledge can just decline to accept one on those terms). It turns out that the Supreme Court has previously concluded that when the federal government is the funder, speech-inhibiting grant requirements have a big enough impact that they can constitute an unreasonable infringement of the First Amendment right to free speech. (See the page of that court document numbered 56.) As one of the federal judges put it, “The Supreme Court has repeatedly found that speech, or an agreement not to speak, cannot be compelled or coerced as a condition of participation in a government program.”

That was news to me but as stated it sounds like the government can't require somebody to sign a loyalty oath as a condition of receiving an entitlement, like a Social Security check. An interpretation that it means the government can't place conditions on a discretionary optional grant...is it just me or does that slope sound rather slippery? Can't we imagine scenarios where such a right to federal grant money could lead to funding going to groups carrying out far-less-positive agendas? Is that really what the Supreme Court meant?

And do we really want corporations (albeit in this case not-for-profit ones) to be able to assert inalienable rights just like an individual person? I thought Teddy Roosevelt settled that point a while back in the negative and I've always been glad he did. I dunno, could be I'm just exposing my ignorance of constitutional law and theory, but...really not sure the forest isn't being lost for the sake of a tree here.