‘Three Cups of Tea’ Author to Repay Charity
NPR
April 6, 2012
Guest commentator: Alnoor Ebrahim
Topic: Result of probe into Greg Mortenson’s charity
Alnoor Ebrahim
The Montana attorney general’s office has reached a settlement with author and philanthropist Greg Mortenson, and his non-profit Central Asia Institute. While a year-long probe found “serious internal problems” in the charity’s management, the attorney general says the settlement allows CAI to continue with what he describes as a “worthwhile” mission…
DANIEL BOROCHOFF: Unless I see a true independent board of responsible people that are not directly connected and aren’t sycophants of Greg Mortenson, I’m not convinced.
ALLISON KEYES: Daniel Borochoff is president of Charity Watch, and was among the first to raise red flags about the charity’s financial dealings.
Harvard business school Professor, Alnoor Ebrahim, agrees with his assessment.
ALNOOR EBRAHIM: You really want a board, ideally, to serve a public purpose, a board that is going to be willing to challenge the leadership on the organization instead of acquiescing.
Hear the NPR story or read the transcript.
Bill Gates Foundation, the world’s largest nonprofit, has only ever had three board directors, which are all family, Bill & Melinda Gates, and Bill Gates Sr. Why is the IRS, or Washington Attorney General, or you, not harassing them to increase the board so it has ‘effective oversight’ and good governance. Look at their financials, its surprising actually.
Also look at American Institute of Philanthropy ‘watch-dog’ nonprofit IRS 990. Their media hound leader Daniel Borochoff, earned over $ 153,373 in salary and benefits of $ 483,257 in total budget income. That’s a whopping 32% of entire nonprofit AIP budget goes to the CEO. Industry accepted standard is 5-8% maximum. Borochoff does not practice what he preaches.
SOME FACTS, NOT FICTION:
1. Last year, the IRS revoked or shut down 318,000 nonprofits in USA
2. There are not millions of nonprofits in USA ‘doing it right’, as there are only 1.5 million total registered nonprofits in the USA.
1,574,674 registered tax-exempt organizations, including:
959,698 public charities
100,337 private foundations
514,639 other nonprofits, including chambers of commerce, fraternal and civic leagues.
(Source: NCCS Business Master File 08/2011)
Nonprofit salaries should be based on the skills, experience, education and market value of the nonprofit worker. Salaries should not be based on an arbitrary percentage of income. A 5 to 8 percent of income as a maximum salary is ludicrous. It would mean that a $500,000 organization such as AIP could only pay its CEO $25,000 to $40,000. All the bad charities in the country and their fundraising and PR consultants (People I suspect like you Alex Hodge, if that is his real name.) would love to weaken small watchdog agencies by forcing them to hire chiefs with the skill level and expertise comparable to a low level clerical worker with a salary in the range that you falsely claim is industry standard.
According to Hodge’s reasoning , a nonprofit CEO that wanted a bigger salary without having to do any additional work could hire a professional fundraising company to go out and raise ten million dollars and even if it cost the charity $9 million to do it; the CEO would be entitled to an $800,000 larger salary. This is just one of many examples of why it makes no sense to base a salary on the income of a nonprofit.
“Alex Hodge” and “Alex Hodges” has been posting his uninformed comment above in multiple places on the internet probably because he doesn’t like the critical comments that AIP has made about his nonprofit or client. He does not understand that salaries make up the major portion of any research organization’s budget. He also doesn’t understand that except for fundraising personnel, the salary of most nonprofit workers is appropriately allocated to programs. Please read this article for more discussion on nonprofit salaries: Debunking Charity Salary Myths at http://www.charitywatch.org/articles/salaries.html