Press Releases

For Immediate Release
6/21/2004
Contact: Jeff Krehely / Naomi Tacuyan
202-387-9177 ext. 26 / ext. 17
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Standards for Increased Accountability in Foundation and Corporate Grantmaking Offered by NCRP at Senate Hearing
Recommendations include sharply reducing compensation for foundation trustees, increasing diversity among foundation staff and board, and excluding foundation salaries and expenses from "payout"
WASHINGTON-Detailed standards for accountability and transparency will be presented in testimony tomorrow to the Senate Finance Committee by the National Committee for Responsive Philanthropy (NCRP), a philanthropy watchdog organization dedicated to reforming the philanthropic sector.

NCRP's accountability standards would serve three key goals-restoring public confidence in charitable institutions; strengthening the nonprofit sector's ability to serve and represent the people who are most in need in society; and ending the many misuses and abuses of philanthropy that have been recently highlighted in the press.

"We are not here only to criticize the sector's shortcomings. NCRP's proposed standards for philanthropic accountability come from an organization that represents the interests of the most important part of the United States nonprofit sector, the public charities that provide countless social services, political representation, and critical support to the communities and people most in need," said Rick Cohen, executive director of NCRP, who is slated to testify on Tuesday.  "We believe in the promise and potential of philanthropy for America, but the entire sector will be undermined without the kinds of straightforward and enforceable standards we are recommending."

Among NCRP's specific recommendations are the following:

  • Sharply limit if not eliminate compensation for foundation trustees
  • Eliminate any and all self-dealing and conflict of interest by foundations
  • Make private foundations' so-called "payout" an apples-to-apples benchmark by excluding foundation salaries and administrative expenses from their "qualifying distributions"-and raise minimum payout to 6%
  • Increase disclosure of corporate philanthropic grantmaking
  • Disclose grantmaking by public charities and donor-advised funds-and establish payout requirements for grantmaking donor-advised funds.
  • Increase the diversity of foundation board and staff
  • Reduce the private foundation excise tax-but devote the bulk of the remaining excise tax to public oversight and enforcement activities by IRS and state attorneys general.
"The United States Congress needs to step in and draft legislation that not only reigns in foundation abuses, but prevents them from happening in the first place. The standards for reform offered by NCRP constitute the framework of a coherent and comprehensive approach for governmental oversight combined with sectoral self-improvement," said Pablo Eisenberg, founder of NCRP.

NCRP's Senate testimony and accountability statement release comes in the wake of alarmingly low levels of public trust in the philanthropic sector, which are due to excessive foundation executive and trustee compensation, the ineffectiveness and outright failures of self-regulation, declining public oversight, and dubious recent entanglements between foundations and political figures and causes. Weak government oversight of philanthropy has led to the media leading the way in uncovering scandals and conflicts of interest in foundations and corporations, resulting in over a year of regular stories about philanthropy's dark side.

The full text of NCRP's accountability statement, "Standards for Foundation and Corporate Grantmaking," can be found at: http://www.ncrp.org/files/NCRPAccountabilityStatement061804.pdf.
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