FIFA, Bogus Cancer Charities Illustrate Danger of Unchecked Finances

Ding dong, Sepp is gone.

Only days after Sepp Blatter was elected to a fifth four-year term as president of FIFA, the international soccer governing body, he caused even more of an uproar by abruptly resigning from the position earlier this week.

Much of the world celebrated the resignation as it marked a potential changing of the guard against a regime clouded by controversy and accusations of questionable actions. Blatter’s announcement came less than a week after Swiss officials arrested seven high-ranking soccer officials for charges including money laundering, fraud and racketeering. Blatter was also the target of a United States federal corruption investigation.

Ideally, you’ll realize when leadership has gone bad long before criminal investigations happen. FIFA isn’t the only recent example of leadership failing. A few weeks ago, a complaint filed by the Federal Trade Commission alleged that four cancer charities had cheated people out of $187 million while spending extravagantly and frivolously.

Why should you as a nonprofit executive care about these arrests? FIFA is a multi-billion dollar organization that truly touches every part of the world. Chances are yours nonprofits operates on a much smaller scale. (Unless you work for the Red Cross. Hi guys!)

Several lessons to learn from these recent incidents:

  • Hold your leadership accountable. Make sure that your organization has policies and procedures to make sure the leadership is following best practices and keeping the organization on the right path.
  • Make sure your finances are audited. This will eliminate any money leaks and make sure that it is being spent as it intended.
  • Properly vet organizations before donating. While not many people were donating money to FIFA, a lot were generously giving to the four sham cancer groups. Before giving to nonprofits, properly vet them by looking at their expenses and reviewing their Form 990s.

Even though FIFA isn’t a nonprofit, it can illustrate the dangers that can happen when an organization becomes too powerful without the proper oversight. David Callahan, the founder of Inside Philanthropy, wrote in an editorial for the New York Times that the lax oversight of nonprofit foundations is out of step with the times and is an invitation to corruption.

Callahan argues for several reforms to help with the failures of some charities including eliminating anonymous donors (especially for political groups), varying levels of tax exemptions based on an organization’s public benefit, increasing foundations dispersion of money and a better accounting of whether philanthropic dollars are effectively spent.

The key difference is to know the difference between valuable expenditure and indulgence. Bribes are not ok, but lobbying to help a disadvantaged group is fine. Just know the tax-exempt status limitations on your organization. Spending money to make sure your employees are properly compensated and working in enjoyable conditions is also acceptable. After all, we can’t change the world working in broken chairs.


Lincoln Arneal

Lincoln Arneal was a Senior Editor at Nonprofit Hub who brought loads of real-world nonprofit experience to the team. He was the past executive director of a nonprofit that provided leadership development to junior high and high school students. He looked to bring the insights from his time forming, developing, and running a nonprofit to help others in their quest to do good. Lincoln also had a legal background and had written for various newspapers (covering high school sports) for the past 15 years. He could be followed on Twitter at @NPLNK.

June 5, 2015

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