Tuesday, February 17, 2004

Even when there is no profit, wealth concentrates

Title: Non-profits' executives avoid scrutiny, valid reforms
Source: USA Today
Date: February 12, 2004
From the article:
    At a time when efforts to reform the corporate world are getting all of the attention, there is another group of chief executives who remain insulated from the effects of scandals at Tyco, WorldCom and the like. They are America's not-for-profit profiteers: the executives who cash in at universities, foundations and other tax-exempt organizations.

    A review of media accounts and public information reveals that many of the same questionable transactions detailed in the corporate scandals are occurring in the world of non-profits. University and foundation presidents are using tax-free dollars for luxury apartments and cars, personal loans and other perks. These abuses occur because non-profits are getting a pass from some promising corporate-accounting and conflict-of-interest reforms.
The News and Observer ran an article on February 9, 2004 that talks about the problem at the local level. It states:
    When the president of FirstHealth of the Carolinas Inc. needed money to supplement his $350,000 annual salary, the nonprofit board for the hospital and health care network came up with a $25,000 personal loan. In Durham, the headmaster of the private Trinity School received at least a $40,000 loan from its nonprofit board of prominent community leaders. Urban Ministries of Durham, a charity that feeds, clothes, shelters and counsels the needy, loaned two of its executives $10,000 each to help them buy homes, with the condition they don't have to pay the loans back until they leave the job, move out or sell the houses.
Wouldn't it be nice to get a low-interest or no-interest loan from your employer? Especially one that may never have to repay? Unfortunately, these loans are available only to wealthy executives. The concentration of wealth continues.


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