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The Nonprofit QuarterlyN.J. Puts Freeze on Arts Funding
Dec 10, 2009; | In yet another iteration of frozen state budgets negatively impacting nonprofits, New Jersey suspended all arts funding yesterday—some $12.4 million. Jersey arts organizations are shouldering more than half of the announced freeze in overall state aid, and are predictably suffering. The deadline for a decision whether to cut the money entirely is two weeks away. Some organizations are missing a third or more of their budget while they wait.  It’s particularly wrenching to see such a blow dealt to the arts after the recent stimulus debates, where national advocates like Americans for the Arts advocated so strongly that these nonprofits as shovel-ready, engine-stoking economy boosters.—James David Morgan

The Nonprofit Quarterly“10 things” Nonprofits Won’t Tell You
Dec 10; Wall Street Journal | This installation of Smart Money’s popular series, “10 things” takes on nonprofits. Smart Money is part of Wall Street Journal’s digital network. Jason Kephart, the series author, every week lists 10 things a certain person or entity “won’t tell you.” And by him telling you these things you will spend money more wisely. Like, theme parks won’t tell us that “Our ride operators are barely old enough to drive,” or plastic surgeons won’t tell us that they “trained a whole weekend to learn this procedure.” So the top ten things “nonprofits won’t tell you” are probably no surprise to any of our readers nor are they particularly damning per se. But it is interesting sometimes to read what advice would-be contributors may be listening to. Did you know nonprofits won’t tell you that “You don’t have to be a financial genius to start a nonprofit,” or “We’ll raise money any way we can?” Take a look. There are eight more.—Aaron Lester

The Nonprofit QuarterlyBeware of Politician-Run Nonprofits 
Dec 8, 2009; Detroit Free Press | It would be difficult for Nonprofit Quarterly to raise this issue any more consistently: Beware of nonprofits or foundations established by, controlled by, and significantly benefiting politicians. Sometimes the issues are penny ante, like this month’s conviction of Baltimore’s mayor, Sheila Dixon, for having taken $525 in gift cards donated for the poor. But we’ve long warned about former Detroit Mayor Kwame Kilpatrick’s web of related charities that benefited the recently jailed ex-leader of the Motor City. The Detroit Free press now reports that Kilpatrick’s nonprofit Civic Fund could lose its tax-exempt status for having paid $45,000 in moving expenses, rent, and hotel bills for the then mayor and he could face civil and criminal charges for failing to report those payments as income. If the payments to Kilpatrick are re-characterized as loans rather than grants to him, they would still potentially jeopardize the Civic Fund’s charitable status because of their lack of charitable purpose. Kilpatrick’s defense was that he wasn’t a member of his eponymous Civic Fund’s board, a signer of checks from the Fund, nor knowledgeable of its “rules.” That’s a standard defense for politicians with charities, remember Rick Santorum’s explanation that he had no involvement in Operation Good Neighbor fund—that he only showed up for the photo-ops of handing out the checks. No, it doesn’t wash. In the wake of some odd and sometimes dubious charitable endeavors by the likes of Tom Delay, Rick Santorum, Alan Mollohan, Vincent Fumo, and Duke Cunningham, just to name a few, the public ought to be very wary when they encounter charities established and controlled by professional politicians.—Rick Cohen

The Nonprofit Quarterly$50-Million for Social Innovation, Cuts to Volunteer Fund
Dec 9, 2009; Chronicle of Philanthropy
| If you want to figure out what a nation’s priorities really are, look at its federal budget. The choices of what government chooses to fund and what it chooses to cut or defund reveals more than political rhetoric. In the House/Senate conference committee working on the budget of the Corporation for National and Community Service, the appropriators restored the budget of the Social Innovation Fund to $50 million, exactly what President Obama had asked for. That’s going to go to the high-flying nonprofit social entrepreneurs that attract attention sometimes disproportionately larger than their accomplishments. What struck us as sad was the cut of the Nonprofit Capacity Building Initiative from the measly $5 million a year as recommended in the Serve America Act to an even measlier $1 million a year.  It’s not big money, but highly symbolic. This was one of the few pots addressing the capacity building needs of small nonprofits.  Do realize that the nonprofits that get to the Social Innovation Fund table will most likely be reasonably well heeled or backed by foundations with hefty wallets. The nonprofits that would have been helped through NCBI are hardly likely to have been winners in the Social Innovation Fund, Promise Neighborhoods, or the other programs geared to groups with the ability to pony up huge amounts of capital.  The national entities that recognize the importance of the 90 percent of nonprofits that are small groups have to gear up to protect this vital community-based sector from being overlooked in the nation’s political consciousness.—Rick Cohen



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