Nonprofit Newswire | When For-Profits Fund Nonprofits

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June 17, 2010; Source: New York Times | Stephanie Strom had another typically sharp, analytical piece in the Times last week, though her headline writer seems to have missed the point: “Nonprofit Advocate Carves Out a For-Profit Niche.”

Strom describes right wing gadfly Richard Berman who has created a variety of innocuously named nonprofits—the Center for Consumer Freedom, the Employment Policies Institute, etc.—to argue for a right wing agenda ranging from the opposition of a higher minimum wage and the opposition of the Humane Society’s campaign for better living conditions for livestock, to the opposition of efforts to reduce soda and snacks in schools.

The key is that all of Berman’s six nonprofits get most of their staff, legal, and financial services from Berman’s for-profit firm (with wife Dixie on staff). Some of Berman’s critics question whether the nonprofits are really nonprofits or just instrumentalities of Berman’s for-profit side, with no separate existence from his firm’s activities.

Catholic University law professor Roger Colvineaux asks the question that concerns us more. Who’s paying for Berman and his nonprofits? Because of nonprofit confidentiality rules, we can’t prove whether the soda companies are paying for one nonprofit, the oil companies for another.

The issue isn’t whether or not Berman is making a killing from his flimsily nonprofit nonprofits, but whether special corporate interests are surreptitiously funding them to carry out their corporate agendas. It is so easy for special interests to run their hands up the backs of nonprofits and make their mouths move, it may be time—as we’ve said in this column before—to reconsider significant parts of nonprofit donor confidentiality regimes.—Rick Cohen