Editorial: Do you love a charity? Check it out
CHECK A NONPROFIT
• Ask for an annual report. Any charity should have one that includes a clear mission statement, summary of its works and progress, and financial picture. Clarity and transparency are good signs, but aren’t enough.
• Most nonprofits are required to file an IRS Form 990, which is to be available for public inspection. It provides income, spending, balances and top salaries. It is a trouble sign if an organization says it is a nonprofit and cannot produce a 990 from at least the previous tax year. (So this year, 501(c)(3)s should be able to show you 2015 forms, if not from 2016.)
Forms 990 and other information also are available at:
• Guidestar.org, which has massive data on charities.
For this discussion, let’s set aside the question, raised by an audit of the Glenwood Springs Center for the Arts, of whether money was misused in the organization’s operations.
It eventually will fall to 9th District Attorney Jeff Cheney to decide on any legal action that might result from the mess that gutted an important organization that has touched hundreds of lives in our community each year. Cheney has the audit as Glenwood Springs police continue their investigation of center finances, which they began in April.
A lasting takeaway that we must begin to sort out now — Glenwood arts supporters, the city, other governments and thousands of well-meaning people in a region with both remarkable wealth and real need — is that nonprofits and other civic organizations simply cannot be overseen based on faith and good intentions.
Our region, from Parachute to Aspen, is home to more than 600 nonprofits, among other volunteer groups and organizations. Many people here have the financial means, time, expertise and good hearts to help their neighbors and provide programming that enriches the area. That’s great.
These groups include everything from hospital-affiliated nonprofits to education services to irrigation ditch associations.
If one lesson transcends this art center tragedy, it’s that each of these requires real, dedicated board leadership, real accounting and genuine, diligent oversight.
Money is involved, of course, from both the trust funds of the wealthy and the pockets of folks who might buy a burger at a festival — in addition to tax money in the form of grants and direct subsidies such as Glenwood’s support of the art center, which included paying its director and renting a building for $10 a year.
Bigger nonprofits also are significant employers, and a failure can make it hard for families to make ends meet.
The art center is not the first, nor, we are sadly confident, will it be the last such organization to crumble as a result of weak oversight and/or board members who are too trusting.
The Carbondale food co-op (which is not a nonprofit) is shuttered, struggling to come back to life after losing its lease and lacking resources to relocate, in part because of months of unpaid bills.
Growing Food Forward, recipient of a $5,000 LiveWell Garfield County grant that worked to get fresh produce to needy families, in 2015 was the subject of allegations of misappropriation. Then-DA Sherry Caloia ultimately found that while “a number of transactions (with only receipts and statements) … were not appropriately documented and accounted for,” nothing criminal occurred.
The vast majority of nonprofits and other civic groups are well-run. Board members take their roles seriously.
But it’s clear that tightening up is needed in many cases.
Part of the problem is an assumption that those with the responsibility to oversee these operations are doing so. In the case of the Center for the Arts, dissident board members concerned about financial practices tried to get the attention of the past city administration in both 2015 and ’16, only to be rebuffed and told the board had full oversight.
By all accounts and appearances, the city just didn’t want to mess with it while previous board leadership was looking the other way with vigor.
It’s wise that the current administration and council finally stepped into the fray and are examining city practices. The cautionary tale for all governments, even if they don’t provide direct subsidies, is that any grant to a nonprofit should require heavy vetting.
We need to overcome our trusting nature.
When an organization that’s been doing good works falls apart, it is a painful experience for the community. It usually is difficult to believe that people who seemed so sincere dropped the ball.
We journalists have an axiom: “If your mother tells you she loves you, check it out.”
Before you open your checkbook to a nonprofit, check it out.
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