American Red Cross
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The Red Cross style of ombudsman, which is similar to those used by many colleges and other large nonprofits, is not well understood. Some view it as an effective mechanism to manage complaints, but critics say it is at best a diversion from dealing with criticism and at worst a snare to catch whistle-blowers before they go public.
To get a handle on what’s in store for 2015, NonProfit PRO rounded up some of the nonprofit industry’s finest, who were kind enough to share their nonprofit trends for 2015. Here are three trends on the giving pyramid and major gifts.
NonProfit PRO spoke with two expert nonprofit tax attorneys to provide their tips on the tax issue for nonprofit organizations. Here are the insights—from the basics to the changing landscape—shared by Cliff Perlman, partner at the law firm Perlman & Perlman, and attorney Marc J. Lane.
In a continued effort to self-regulate, Independent Sector, a membership organization of nonprofits, released a set of 33 principles for charities to follow when their members meet in the boardroom, solicit donors, manage their operations and report their finances.
“Principles for Good Governance and Ethical Practice: A Guide for Charities and Foundations” is an update on a similar set of guidelines the group compiled in 2007.
The feud between the American Red Cross and two news organizations moved into a new phase this week, with ProPublica and NPR rejecting the relief organization’s demand for a correction and each side accusing the other of being "misleading." A joint statement by the news organizations defended their reporting as "scrupulously fair."
Since April 2014, ProPublica and NPR have jointly investigated the American Red Cross’s response to Hurricanes Sandy and Isaac in 2012 and claims about how donation dollars are spent.
Sen. Charles Grassley has asked the American Red Cross to explain how it calculates figures showing how much of a donated dollar goes to services after recent media reports uncovered apparent discrepancies in how the organization portrays its overhead costs.
A joint investigation by ProPublica and NPR said that while the organization regularly says it puts 91 cents of every donated dollar into services, that figure is inaccurate. The news organizations said that the Red Cross failed to provide an accurate estimate when questioned.
Donations climbed 3 percent last year to $335.2 billion after adjusting for inflation, with almost all of the increase coming from individuals, couples and estates, according to the latest figures from the Giving USA Foundation. The gains have been uneven, however, skewed toward groups favored by the upper-income households that benefited most from the rebound in stocks and housing. Groups connected to higher education, medical research and cultural institutions are flush, while growth for those such as the Salvation Army and United Way that rely on smaller individual gifts is lagging behind.
The American Red Cross regularly touts how responsible it is with donors' money. "We're very proud of the fact that 91 cents of every dollar that's donated goes to our services," Red Cross CEO Gail McGovern said in a speech in Baltimore last year.
McGovern has often repeated that figure, which has also appeared on the charity's website.
The problem with that number: It isn't true.