La Piana Logo

Publications

Models of Strategic Restructuring Case Study: Chattanooga Museums Administrative Consolidation

Models of Strategic Restructuring Case Study: Chattanooga Museums Administrative Consolidation

View Details

The Due Diligence Tool

The Due Diligence Tool

View Details

La Piana Consulting Blog

Archive for March, 2009

Gifts not for but from Charity

By David La Piana

Tuesday, March 17th, 2009

The New York Times on March 16 carried an article on New York state nonprofits that have regularly given political contributions to state-level politicians. Somehow at least 81 nonprofits, and scores of legislators, did not know this has been illegal for half a century. Some offered the excuse that they were only buying tickets to fundraisers. Of course, the point of a fundraiser is to raise money for the politician. I sometimes think I have been around too long to be shocked, but here is proof once again that you just never know.

The IRS ban on 501c3 organizations making political contributions or working on political campaigns is absolute. It was one of the first lessons I learned in the sector. Several wise mentors told me at various times early in my career as an executive director: “It is ok for you to make personal contributions to politicians,” they said, “but don’t put them on your expense reimbursement form. These have to come from you.” I guess they could have used some of those folks in New York.

This is just the kind of bonehead move that gives critics of the sector unnecessary fodder. Forget the fact that it is actually legal for businesses to make political contributions, and that this law puts nonprofits at a disadvantage. Forget also the obvious truth that money buys access, and that several of these New York nonprofits received nice state contracts after making their mostly modest contributions. It is still illegal.

Share

A Modest Proposal in the Wake of AIG

By David La Piana

Monday, March 16th, 2009

I would like to offer a modest proposal for how to deal with one part of the current financial mess we find ourselves in. It is simple, follows the dictates of common sense, and no one other than a few thousand fat cats will disagree with it.

The proposal is this: the top leadership of every bank, insurance company, automaker and other corporation seeking a taxpayer bailout should not be given a bonus, period. In fact, they should be fired. Now, call me heartless, but how many of us could take a multi-billion dollar enterprise from years of profitability, turn it on its head, cause the loss of millions of jobs and the destabilization of our entire global economy, and not only keep our jobs, but get a six- or seven-figure bonus?

The arguments for paying bonuses come from the likes the AIG board and fall into two pathetic categories.

First, is the argument that they were promised a year ago and so are legally binding. The solution to the first barrier is pretty clear. The same lawyers who figured out how entire industries can cancel their retirement programs can certainly find a legal way to take back these bonus promises. Were they promised without any strings? No clauses stating: “If we don’t remain profitable, or if our stock price goes below $1, all bonuses are off?”

Second, without these bonuses the corporation will not be able to retain its top talent. As to the talent retention question, I fear I will risk insulting the reader’s intelligence when I ask: “Is this group of incompetents who drove the corporation into the ground really irreplaceable?”

President Obama likes to talk about a new era of responsibility. I say let it begin with those who benefited most from the run-up of the last few years, those who engineered credit default swaps, and those who insured them. Let the responsibility begin with those who got us into this mess. The homeowners who bought what they could not afford are now feeling the weight of responsibility, without anyone offering them a bonus. Yet the bankers and financiers who played upon the weaknesses of homeowners still get bonuses. I would modestly suggest otherwise.

Share

Leave a Reply

You must be logged in to post a comment.

img_contact0

NonProfitNext

Where will you take nonprofits next? Read more about our research initiative and the converging trends reshaping the nonprofit sector.

 

Read Our Blog

E-mail Sign-up

Receive La Piana's e-newsletter, the Learning Link, for resources, tools, and upcoming events near you.

RSS

© 2012 La Piana | Copyright | Terms of Use | Privacy Policy | Site Map | Contact