| For Immediate Release 4/4/2005 |
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| Independent Sector Recommendations on Nonprofit Accountability Fall Seriously Short of Addressing the Critical Issues Undermining Nonprofit Accountability and Trust | |||
| The nation's only philanthropic watchdog, the National Committee for Responsive Philanthropy (NCRP), today issued a critique of proposals on charitable accountability that are being considered by the Senate Finance Committee on April 5th. "Despite having raised more than $3 million to support their work, a panel of nonprofit leaders has generated paltry and picayune accountability recommendations that will accomplish little or nothing to cure the accountability problems facing the nonprofit sector", observed Rick Cohen, NCRP's Executive Director. The attached statement outlines multiple inadequacies in the recommendations that the Senate Finance Committee will be considering on April 5th. "It should be clear to nearly any dispassionate observer that these recommendations sidestep most of the toughest issues of self-dealing, inappropriate expenditures, exorbitant trustee fees, inadequate foundation payout, and insufficient transparency that underlie the nonprofit accountability problems that have roiled the sector for the past few years," Cohen said. The National Committee for Responsive Philanthropy issued a comprehensive set of foundation accountability principles early in 2004 and presented testimony to the Senate Finance Committee on charitable oversight and accountability in June 2004. As the only nonprofit whose nearly 30-year history has involved holding philanthropic grantmaking institutions accountable to people in need and to American taxpayers, NCRP's perspective contrasts sharply with the self-protective industry organizations presenting their recommendations to the Senate Finance Committee. "It's all too clear that the real agenda behind the policy recommendations to be presented to the Senate Finance Committee is an agenda to avoid stronger regulations on inappropriate and exorbitant expenditures, five- and six-figure fees paid to foundation trustees, self-dealing by foundation insiders, and inadequate grantmaking ("payout") rates by substituting self-policing for rigorous oversight and enforcement", Cohen said. "In fact, the panel that generated the recommendations being presented to the Committee clearly ruled out some issues a priori, such as the issue of inadequate foundation payout rates on the half trillion dollars of assets of tax exempt foundations, which is hardly a surprise given that a majority of the panel members represent private and public foundations, hugely disproportionate to their less than 1 percent proportion of the charitable sector as a whole." "The NCRP statement demonstrates the utter inadequacy of the self-regulation agenda that is being pitched to the Senate Finance Committee", Cohen added. "It's time to put some muscle and authority into government oversight and accountability so that the thousands of good nonprofits and foundations are not undermined by those that seem more interested in hiding behind their tax exempt status than in delivering the maximum value they should in exchange for their tax exempt status." ### |
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