Corporatization Redux - Tony Martignetti

Corporatization Redux

August 3, 2010

in Charity

$100 Bills

Recently I posted about how I see nonprofits acting more like companies, and being treated as for-profits by state and federal regulators. In just the past few days there’s more evidence of overseers regulating charities like companies.

Two weeks ago, Ken Feinberg, the Obama administration’s special master on executive compensation, complained about top executives’ pay at Goldman Sachs, Bank of America, AIG, Morgan Stanley and lots of other companies.

Last week, Stephanie Strom reports “Lawmakers Seeking Cuts Look At Nonprofit Salaries.” The reported concern among federal and state authorities is with salaries at executive levels.

Corporate salaries under the microscope, and a week later, nonprofit salaries. That’s quite a parallel.

Man at IRS

It goes further. The IRS’s director of exempt organizations is issuing warnings about nonprofits’ unrelated business income, or UBI. There’s tax to pay (UBIT, go figure) on income earned by nonprofits that is outside their charitable mission. This is a technical area (starting with the issue, “what income is unrelated”) and within the purview of more august personages than me.

“Salaries & Income Reporting Under Scrutiny”. Couldn’t that be a headline reporting on the oil, financial services or auto industry?

At the same time, there’s the retirement of the head of the Association of Fundraising Professionals. Rather than retire, she should go on to lead the American Bankers Association.

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