Haughty non-profits steeped in employee thievery

There's a holier-than-thou atmosphere at many non-profits. Employees, at least some of them, look down their noses at greedy money-grubbers at for-profit businesses in the private sector and pat themselves on the back for not being so low as to want to make ... money, in return for goods and services. They're out being people-helping people and lots of them want to 'save the world.' Naturally, a lot of them are full of leftwingers. And to annoy the rest of us even more, a lot of them make humongous salaries, well out of proportion to what they would in the private sector.

So it's not the least bit surprising to hear that non-profits are wracked with fraud. The Boston Globe reports:

The problem is national in scope, touching some of the country’s best-known nonprofits. The American Museum of Natural History in New York City reported it lost $2.8 million in 2015 after an employee fell for an e-mail scam and erroneously wired the money. The museum reported the incident to police, but the perpetrators have yet to be identified or return the money.

The IRS asks tax-exempt organizations to disclose any significant, unauthorized diversions of assets (usually meaning theft or embezzlement) on a key annual filing with the agency, called a 990. The Globe found more than 1,100 organizations across the country have checked the box on forms filed electronically since 2011.

But the vast majority of nonprofits never even face the question.

The Globe atributes it to idealists running these things without much financial training. But that seems too glib, given the nature of these beasts.

It seems that when one is dealing in 'free stuff' all the time and not monitoring well who is deserving of getting the goods and who is not, owing to political considerations or other subjective factors, it's not surprising that dishonest people running the show start to help themselves. And when one lives off donations instead of earning the money oneself, it reduces understanding of the value of the donations and makes them seem bottomless. It's not all that different from communist societies where nothing is based on market dynamics and everything is based on a flawed 'each according to his need' which never works the way it's advertised. Those societies, starting with Cuba, are racked from top to bottom with employee theft, and probably for the same reasons.

In short, it's market discipline that these places need, same as is found in the private sector.

This isn't everyone who works at non-profits. I know many people who are dedicated to their causes and absolutely honest. But the system itself seems to invite theft as accountability falls apart under the tent of charity, for whatever soft-hearted or soft-headed reasons.

It also doesn't help that, as the Globe reports, non-profits are reluctant to admit their victimizations, let alone the miscreants in their midst. Such actions show disrespect for the people whose pennies or dollars come in from their donor base. 

Only those who have something to risk and something to lose from how they act tend to treat the good they have with guarded care, giving the stewardship to their donations (from the grubby private sector) the respect they deserve.

With charities growing big and fat salaries attracting some of the wrong element, maybe it's time for a greater reckoning. The tax breaks are going, the donors will be challenged harder about whether their money will do any good without that, and so now maybe it's time for non-profits to come under increasing scrutiny from the law if not clean their own houses.

There's a holier-than-thou atmosphere at many non-profits. Employees, at least some of them, look down their noses at greedy money-grubbers at for-profit businesses in the private sector and pat themselves on the back for not being so low as to want to make ... money, in return for goods and services. They're out being people-helping people and lots of them want to 'save the world.' Naturally, a lot of them are full of leftwingers. And to annoy the rest of us even more, a lot of them make humongous salaries, well out of proportion to what they would in the private sector.

So it's not the least bit surprising to hear that non-profits are wracked with fraud. The Boston Globe reports:

The problem is national in scope, touching some of the country’s best-known nonprofits. The American Museum of Natural History in New York City reported it lost $2.8 million in 2015 after an employee fell for an e-mail scam and erroneously wired the money. The museum reported the incident to police, but the perpetrators have yet to be identified or return the money.

The IRS asks tax-exempt organizations to disclose any significant, unauthorized diversions of assets (usually meaning theft or embezzlement) on a key annual filing with the agency, called a 990. The Globe found more than 1,100 organizations across the country have checked the box on forms filed electronically since 2011.

But the vast majority of nonprofits never even face the question.

The Globe atributes it to idealists running these things without much financial training. But that seems too glib, given the nature of these beasts.

It seems that when one is dealing in 'free stuff' all the time and not monitoring well who is deserving of getting the goods and who is not, owing to political considerations or other subjective factors, it's not surprising that dishonest people running the show start to help themselves. And when one lives off donations instead of earning the money oneself, it reduces understanding of the value of the donations and makes them seem bottomless. It's not all that different from communist societies where nothing is based on market dynamics and everything is based on a flawed 'each according to his need' which never works the way it's advertised. Those societies, starting with Cuba, are racked from top to bottom with employee theft, and probably for the same reasons.

In short, it's market discipline that these places need, same as is found in the private sector.

This isn't everyone who works at non-profits. I know many people who are dedicated to their causes and absolutely honest. But the system itself seems to invite theft as accountability falls apart under the tent of charity, for whatever soft-hearted or soft-headed reasons.

It also doesn't help that, as the Globe reports, non-profits are reluctant to admit their victimizations, let alone the miscreants in their midst. Such actions show disrespect for the people whose pennies or dollars come in from their donor base. 

Only those who have something to risk and something to lose from how they act tend to treat the good they have with guarded care, giving the stewardship to their donations (from the grubby private sector) the respect they deserve.

With charities growing big and fat salaries attracting some of the wrong element, maybe it's time for a greater reckoning. The tax breaks are going, the donors will be challenged harder about whether their money will do any good without that, and so now maybe it's time for non-profits to come under increasing scrutiny from the law if not clean their own houses.