Ruth Graham has an interesting article in the Atlantic about a mega church pastor that paid a consulting firm $210,000 to promote the pastor’s book. She questioned whether church money should be used to promote the pastor’s brand.
A couple of weeks, a college’s PR department sent me information about the president’s new book. They probably bought an e-mail list of bloggers and writers. I get e-mails from PR flacks every day asking that I review books or products, but this is the first plug that I received from a university. I was a little annoyed. College tuition money was used to promote the college president’s personal brand. The college website had a whole page devoted to her latest book.
Is this a similar problematic use of funds? Tuition money benefitted an administrator, not the students. I angrily deleted the e-mail.
And tangentally related is Lady Gaga’s Foundation.
The nonprofit — which took in $2.65 million in revenue — paid out a staggering $406,552 for legal fees, $300,000 for “strategic development” and $150,000 for “philanthropic consulting,” the latest filings show.
Fees added to the hefty expenses. They included $348,000 for the bus-tour production; $77,923 for travel; $62,836 for stage production; $60,000 for research; $58,678 for publicity; $50,000 for social-media development; and $47,825 for meeting and event coordination.
Total expenses came to $1.85 million.
Among all that, the foundation paid out a single $5,000 grant.
Charities, churches, foundations, and universities have to account for the expenditures in clear ways.
Apt. 11d 
The three institutions you describe are actually different in the laws that apply (I think) and abuses that occur. I.e. religious institutions, universities, and foundations.
My guess is that the Lady Gaga foundation, which has been in the news before (I think they had an implosion of a African school initiative in which significant funds were stolen from the foundation) is wholly funded by Lady Gaga (though there are tax incentives to setting up foundations). Foundations can be very badly run and the Gaga foundation is a pretty good example of how badly they can be run.
In the other two examples, I think the personal profit of individuals involved with not-for-profits have always been something that needs to be carefully watched (that applies to presidents touting their books, but also professors and doctors and all the other employees, who personally profit from the not-for-profit, if only for their salaries). But, press releases about the work of university employees are standard, no? The work is used to promote the university as well as the individual. Is it “promoting a personal brand” when a university writes that a book has been nominated for a prize? or that a professor has been invited as a guest on a main stream media show? or that an architect has won a competition?
Not sure how to follow the money exactly on how the university contacted a blogger about a book, but it doesn’t sound terrible to me on the whole.
The article on the Mars Hill megachurch author details shady dealings to manipulate book rankings (which sound dishonorable), but also says that book profits go to the church (so that use of church funds to promote the book isn’t directly profiting the pastor). On the other hand, they say that the pastor’s salary is unknown and unreported, which I find surprising and troublesome.
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Everybody who is anybody has had an African school scandal.
http://en.wikipedia.org/wiki/Oprah_Winfrey_Leadership_Academy_for_Girls
http://www.dailymail.co.uk/tvshowbiz/article-1369906/Madonna-charitys-bid-build-15m-Malawi-school-fails.html
From the second one:
“Madonna’s dream of building a school for girls in poverty-stricken Malawi has collapsed after £2.4million was frittered away without a brick being laid.
Funds raised by the singer from celebrity friends such as Tom Cruise and Gwyneth Paltrow were squandered on luxuries including golf course membership, and a car and driver for the school’s director, according to details of an audit revealed yesterday.”
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I have to add that a car and driver are pretty standard fare in developing countries. As I recall, Peace Corps in the Russian Far East employed drivers. Among other issues, you don’t just park a Land Rover in a seedy neighborhood and walk away for the day–that would be a terrible idea, and very wasteful. The driver also presumably doubles as a body guard.
So some kinds of spending that look bad are actually necessary.
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Yes to the car & driver. Having lived in southern Africa for a few years, in some countries it’s also a matter of more employment.
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There’s a national scandal struggling to hatch in the nonprofit-religious-charity world. So far, it hasn’t managed to get out of the shell, but it’s still pecking. My wife won’t send our discards to Goodwill because she is offended by executive salaries there, our stuff goes to Salvation Army. Bee Jay is exactly right that a lot of the staff at purported nonprofits, with the assent of compliant boards, suck up a lot of the money before the purpose gets much spent on it. Some of the salaries I have read about are shockingly high, and from institutions whose real estate holdings and income are not taxed like a competing private provider.
It’s all stitched into the existing fabric. There was a scandal locally about United Way, the big boss was pulling down a HUGE salary and then was expensing a lot of stuff which when put in the paper was indefensible. The last but one director of Smithsonian was living very large on the public dime. Both pro basketball and pro football get the benefit of nonprofit NCAA running their minor league teams (thinly disguised as college student athletes, oh yes) while baseball has to pay for its own minor leagues, where’s the parity there? One of the useful ways to look at Harvard/Yale/Princeton is as large untaxed hedge funds with relatively small educational institutions attached.
At some point something which compels attention will get national traction. For the moment, it is one more source of inefficiency and waste in our national life.
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“The last but one director of Smithsonian was living very large on the public dime”
He was definitely highly paid, but, I think the argument, as with football coaches at public institutions was that it was not on the public dime (through some foundation or another).
it’s messy.
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A tax prof blogger says the pimping of the pastor’s book puts his church’s deductability at risk: http://taxprof.typepad.com/taxprof_blog/2014/03/church-marketing.html. Seems right to me.
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Bee Jay, on the question of personal profit from working for a ‘nonprofit’, this is for you! From today’s SF Chron:
Political Rx: The California Hospital Association is asking Gov. Jerry Brown to try to talk health care unions out of going forward with a pair of blockbuster initiatives aimed for the November ballot.
One would prohibit private hospitals from charging patients more than 25 percent over the actual cost of their care.
The other would bar private and nonprofit hospitals and health care systems from paying their executives more than $450,000 a year, including benefits and bonuses.
The hospital association told Brown and legislative leaders in a recent letter that the initiatives are really aimed at punishing the hospitals unless they allow unions to organize 100,000 health care workers.
They note that the initiatives say nothing about county-run or University of California hospitals – which are unionized and often pay their execs way more than $450,000 a year.
The private and nonprofit hospitals know they’ll be up against it if the initiatives make the ballot. Proponents have a strong selling point with voters – if the president of the United States can get by on a $400,000 salary, hospital execs should be able to make it on something resembling that.
The unions have already combed through hospitals’ 2012 tax returns, and are getting ready to fire off goodies like:
The $9.8 million compensation package for Kaiser Permanente Chairman and CEO George Halvorson.
Kaiser President and Chief Operating Officer Bernard Tyson’s $4 million-a-year package.
Dignity Health President and CEO Lloyd Dean’s $4.8 million-a-year package.
And Sutter Health President and CEO Patrick Fry’s $3.8 million deal.
Brown’s press office declined to comment on the hospital association’s call for intervention. But the hospitals might not want to get too hopeful – the governor’s re-election campaign team, SCN Strategies, has been hired by the health care unions to run the initiatives campaigns.
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They’re trying to unionize our local giant healthcare nonprofit. They’re also trying to make it stop it from using its dominance of healthcare provision to achieve a monopoly of health insurance. And trying to make it pay some more taxes. This resulted in an interesting filing in which the largest employer in town (50,000+) argued both that it was serving traditional charitable purposes and that it technically had no employees. Instead, 44 wholly owned subsidiaries would each have to be sued separately.
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And how much do the top brass at this ‘charitable nonprofit’ make?
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Twenty-six get more than a million. The CEO gets $6 million. It’s just another giant corporation seeking special tax breaks.
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After about the 400th TV commercial from them or their competitor (think Poland – 1939), I’m so ready for a single-payer system. It can’t possibly be more wasteful.
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