I have written of “rules of thumb” before. I called them the product of heuristic
thinking. They are based on experience
and, by and large, are usually true.
Here’s a rule of thumb, a prescriptive rule of thumb: all non-profit organizations should have
total transparency. In order to get the
tax benefits they enjoy, they should conduct their affairs totally in the
open. This goes for charities and
community based efforts to improve local conditions and for churches. And here’s a bit of further advice: don’t give to any organization, no matter how
beneficial its work might be, unless it has an open door policy as to its
records and its communication. The
proviso is that such openness needs to respect the day-to-day practical demands
of the organization’s operations; you wouldn’t be able to interfere with an
activity simply because you need to see the previous day’s phone logs, for
example.
As it is, there is little oversight of the operations. Here is one account of the current
conditions:
Last week federal authorities
disclosed that four cancer charities had bilked tens of millions of dollars
from donors. Questions continue to
surface about the lack of transparency at the Clinton Foundation. Philanthropy, we’re learning, is a world with
too much secrecy and too little oversight.
Despite its increasing role in American society, from education to the
arts to the media, perhaps no sector is less accountable to outsiders.[1]
Solution? Stop
donating to organizations that don’t open up their records. After all, these are not competitive businesses
that have proprietary secrets concerning marketing strategies or product
development. They are organizations that
might compete for donation dollars, but that sort of competition is not to
bolster profits. They are, instead,
meant to help needy populations.
Openness, of course, would discourage if not make impossible mal accumulation
from or spending of civic-minded contributors.
It would also discourage undue influence for political purposes that
some donations might allow. One gives a
donation to someone’s foundations in hopes of incurring political favor. Along with openness would be a prohibition of
shell organizations that are set up to hide the identification of donors.
Now let me focus on the Catholic Church. I am currently reading the accounts of the
Vatican Bank in Rome.[2] I will not make any accusations as to the
intent of obvious abuses of the bank that stretch back to the 1970s. That run of fraudulent activity that the
Church’s bank was associated with could have been avoided if the Church’s
dealings had been transparent. The space
here does not allow for a rundown of the felonious acts involved, but they are
even linked to murders and suicides. At best,
church officials were incompetent in what they were doing, but even this could
have been ferreted out if the Church had not been so secretive. Adding to the interwoven nature of the
illegal activities was the immunity the Church enjoys because the Vatican has
sovereignty – it is an independent state.
Giving to the Church in Rome is like giving to the sovereign state of
France or Switzerland. One should ponder
how healthy such giving is. In any
event, the Church’s “divine” mission was highly compromised by what eventually
came to light as a result of the investigations that followed its financial
activities of that era.
So a rule of thumb should be:
don’t give any donation to a non-profit organization that will not open
up its books to the public. Exception: political parties and campaigns. Why?
They are in competition and their strategies are compromised if they
cannot maintain secrecy. Also, donations
to those organized entities are not tax deductible. How about a list of their contributors,
though? Oh yeah; they should also be
open to public inspection.
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