Nonprofit Newswire | October 19, 2009

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The biggest and stingiest foundation in the world
Jul 10, 2009; FM Weekly | We don’t read Dutch either, but author Sofie Vriends sent us a translation of her article on the Stichting Ingka Foundation, which she contends was worth $36 billion in 2005. This Amsterdam-based foundation would be wealthier than the Gates Foundation, but who regulates it? Vriends points out that this foundation was established by the founder of IKEA, Ingvar Kamprad, and owns IKEA Holding B.V., which controls all of the IKEA stores worldwide. Registered as an “Institution for the General Good” (the equivalent of a 501(c)(3)) in the Netherlands, the stichting (Dutch for foundation) is exceptionally lacking in transparency and not required to be very transparent by the Dutch tax service. Vriends reports only one grant ($1.7 million to the Swedish Lund Institution in 2005, which one blog describes as “barely a rounding error” in the foundation’s finances), making this structure look suspiciously like a means of tax avoidance on the part of IKEA and the Kamprad family. We aren’t the only ones so suspicious. Prompted by the excellent FM Weekly article, we found that IKEA won a “public eye” nomination [PDF] from the Berne Declaration, a corporate social responsibility monitoring group based in Switzerland, for its corporate tax avoidance schemes through the stichting. The nomination is quite damning: “Ikea is an extreme example of the growing practice of corporate tax evasion, resulting in important public service and infrastructure projects that go unfunded. But even global corporations benefit from state-financed services. [C]orporate structures and transactions must not have tax evasion as their primary objective. Ikea’s tangled network is unlawful and should be dismantled. Furthermore, a responsible corporation states clearly who profits and where those profits are realized and taxed. Ikea lacks transparency and publishes virtually no figures, except of course for the prices in the Ikea catalogue.” Don’t think that the Kamprads don’t financially benefit; the foundation that owns IKEA pays franchising fees to Kamprad-controlled entities in the Antilles and Curacao, though they are hardly any more transparent than the foundation. At NPQ, we’ll take a look at the IKEA’s charitable activities in the U.S. in the future.—Rick Cohen

Schools Pay When Rhee Snubs Donors
Oct 14, 2009; Washington Post | This NPQ author has a daughter in the D.C. public school system, so watching D.C. schools chancellor Michelle Rhee is an unhappy pastime in our household. In the Washington Post, an op-ed columnist writes about foundations unhappy that Chancellor Rhee hasn’t been particularly forthcoming with them about Rhee’s lack of willingness in “building a partnership with them” due to Rhee’s “go-it-alone leadership style.” The article is confusing about whether foundations have or haven’t given. One part of the article suggests that they haven’t or that that there are “sizable” grants already lodged with Rhee’s D.C. Public Education Fund (or that they have pledged but are waiting for a labor contract with the Teacher’s Union to be done), her private fundraising arm. So would the local D.C. area foundations be concerned if Rhee were more open to them with her plans for their philanthropic largesse but still inclined to treat the public (and the D.C. City Council) with the disdain she is known for? One suspects that the foundations would have gone along with the Chancellor had they gotten the kind of solicitous treatment they expect, regardless of her public policy demeanor. What the foundations haven’t done is really taken her on for her policies of clearly favoring privatizing the management of increasing numbers of public schools, expanding the numbers of privately managed charter schools, and firing older, credentialed teachers (as a warning shot across the bow of the debilitated local Teacher’s Union). Before this complaint about her uncommunicative style, the capitol-area foundations were more than open to quite generous deals with her. One wishes that there were more of a policy orientation (and concomitant complaint) about Rhee than a focus on her management style as the reason for foundations going slow with their philanthropic support of the local schools.—Rick Cohen

French Investigators Look Into Charities
Oct 15, 2009; Wall Street Journal | In France, the authorities are looking into a number of charities that seem to be raising but not spending much of their charitable largesse. For example, the health charity Airma (dedicated to Alzheimer’s research) spent only 8.4 percent toward programs from the $7.4 million it raised in charitable giving between 2004 and 2006. The interesting part for our readers is that these questionable charities seem to be connected with U.S.-based fundraising and marketing companies. Two cited in the WSJ piece are Market Development Group, Inc. of Washington, D.C. and the Saturn Corporation of Cheverly, MD. WSJ didn’t do it, but we decided to see who these groups are—or were. We think MDG is (or was) the organization led by one W. Michael Gretschel (or sometimes identified as Walter M. Gretschel), whose bio says he has assisted some 500 charitable organizations and helped them raise $200 million. Prior to forming MDG, Gretschel worked as vice president and creative director for Richard Viguerie. Who’s Viguerie? Glad you asked. Viguerie is the very very conservative direct mail expert sometimes referred to as the “father” of modern conservative political fundraising (working for groups such as the Moral Majority, Judicial Watch, and others). The Saturn Corporation is not the down-the-tubes auto manufacturer, but a firm providing “online database management services, and other backend processes in the fund raising, membership, and commercial marketplaces.” The Fielding W. Yost who runs Saturn is not the Fielding H. Yost who was the longtime University of Michigan football coach, inaugural inductee to the College Football Hall of Fame, and inventor of modern linebacking, but one suspects that there is a family connection someplace. We will keep an eye on this French connection to U.S. direct marketing charitable fundraisers.—Rick Cohen

Lobbyist’s salary for nonprofit questioned
Oct 19, 2009; Washington Post | If I were the headline writer for this story, I don’t think I could have exercised as much restraint. The lobbyist in question, David W. Wilmot, was hired to lead the board of We Care, a collection of group homes whose mission was to care for Washington, D.C.’s developmentally disabled population. In 2000, the nonprofit’s tax filing revealed that Wilmot was being paid $105,000—for 5 hours of work a week. Subsequent years awarded Wilmot healthy pay rises (he earned $300,000 in 2007); a $300,000 personal loan, plus loans to other board members; and employment for his daughter. The best part? Wilmot continued to work as a lobbyist during this time, making tens, if not hundreds, of thousands of dollars from the likes of Anheuser-Busch and Wal-Mart. —Timothy Lyster


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