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The Nonprofit QuarterlyEthical Questions at Large Boston Nonprofits
Nov 30, 2009; Boston Herald | Here’s some good fodder for the Nonprofit Ethicist. Should nonprofits make low-interest loans to their top executives? The Boston Herald reports that some large Boston area nonprofits have made significant loans to their CEOs and executive directors. Dana Farber, The Boston Symphony Orchestra and Combined Jewish Philanthropies all made large either low- or no-interest loans to their top leaders, who are already generously compensated. Combined Jewish Philanthropies CEO Barry Shrage’s $400K salary should be enough for him to be able to make his payments on his .047% loan, yet he was forgiven nearly $60,000 in payments last year. Technically the practice may not be illegal but donors don’t give to charities expecting the charities to function as irregular banks. It’s true there may be some occasions (relocation expenses, employer-assisted housing programs, etc.) where loans to insiders may be business-rational and even socially good. Each of the three nonprofits claimed they needed to make these loans to get the most talented leaders. The Herald also reports that some larger nonprofits and consulting firms share the same executives. Two large public health organizations, JSI Research and Training Institute and its affiliated global charity World Education Inc., both had large (in the millions of dollars) contracts with a for-profit firm run by Joel Lamstein who also happens to head the nonprofits. Lamstein considers the relationship “innovative” and “above board,” as he’s paid only $150,000 a year for running three companies with combined budgets of $300 million.—Kristin Barrali

The Nonprofit QuarterlyStocks Booming At Firms Selling To Nonprofits
Nov 30, 2009; NonProfit Times | As the year comes to a close it’s time to look back at the market. After a brutal 2008 it seems a few rays of hope are visible—especially for firms who sell to the nonprofit sector. Nonprofits appear to be a boon for shareholders of companies that serve the sector. An early look back over 2009 yields the insight that, if seen as an index, the companies serving nonprofits were up some 47% by the end of the third quarter. Most of the rebounders were software and service providers, like Blackbaud, Salesforce, and Oracle, whose “Internet-centric products” were successful offerings. The continued growth of these for-profits is expected at a steady rate. What do you know? We’re profitable!—James David Morgan

The Nonprofit QuarterlyNonprofit Accountability in North Carolina
Nov 30, 2009; Winston-Salem Journal | This editorial from the Winston-Salem Journal asks for more accountability for local nonprofits using public money. In FY 2008, North Carolina appropriated $694 million for 2,758 nonprofit agencies across the state. But, according to the legislature’s Program Evaluation Division, there is no standard process that evaluates whether the money is used appropriately or not. Read the AP story here. The November 9 report concluded that lawmakers should require grantees to provide more information about the number of people served or services delivered so state officials can determine whether the state got a good return on the money invested. Transparency’s a good idea, especially if it doesn’t disproportionately affect smaller nonprofits without the administrative infrastructure to handle the added paperwork.—Aaron Lester



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