executive

administrators are selected on their abilities to do programs or fund

raise. Thus, while record numbers of homeless are being fed, the

accounting

takes a back seat. Books get done hurriedly and haphazardly by someone

who doesn’t really understand accounting or tax laws.

Increasing

pressures for greater accountability have made their way into the

charitable sector. Last April it was proposed before Congress that

the 1996 Internal Sanctions law be broadened and that even non-profits

be subjected to internal review. "This is more of a carrot than

a stick," insists Bornstein. "It would give your charity

credibility

to the donating public."

Too many charities make wish lists, instead of budgets. A full and

thoughtful financial statement, says Bornstein, helps the executive

administrator balance the checkbook and cover the immediate bills.

In the longer run, it helps keep the organization on financial track.

(If it is only May and you have already spent two-thirds of your

annual

budget, perhaps it is time to pull in your horns.) Finally, financial

statements for preceding years can be sliced and diced, helping the

board see the exact outlay for similar future projects.

member on your non-profit forever and owns the land on which your

charitable summer camp is annually held. Then one day he announces

that wife Irma is making him move to Florida and he must sell the

land. Instead of listing it through a real estate broker, he

graciously

offers to sell it to your non-profit for last year’s appraised value.

Everyone on the board nods and gratefully receives Joe’s generosity.

Done deal. Everyone except Bornstein, that is, whose head is shaking

in her hands. "Did anyone ever think to ask what the appraised

value was?" she asks. "Were realtors called to evaluate the

land and check for liens? Would you buy your new home based strictly

on last year’s appraisal?"

Such conflicts of interest occur frequently and range from

off-handedly

accepting this type of deal to hiring a director’s spouse. They are

not necessarily wrong and do not necessarily involve attempted fraud,

but they can undercut the charity’s integrity, and can place a

permanent

blot on your fund-raising capabilities. The solution is simple: always

get expert, objective comparisons; get two outside appraisals for

gifts; do a salary study as a matter of course. Upon hearing the

frequent

complaint of "such formality would offend our people,"

Bornstein

answers, "Imagine how not checking up would offend your

donors."

workers are paid less than peers in the for-profit sector. Thus, when

Henry collects $118 in expenses for the Atlantic City conference he

never attended, the tendency is let it slide. It can be written off

as a "perk" for all his good work. In the for-profit sector,

Henry would have some explaining to do, but too many charity

administrators

can’t be bothered enforcing integrity and allow these occasional

bonuses.

Sticky fingers also tend to develop when checks are signed by

individuals

not officially with the organization. Members tend to rotate in and

out of non-profits, and often, board members officially retire, but

for convenience sake keep on running some aspect of the program.

Eventually

these semi-outsiders may end up collecting dues or fees, and storing

them in their account or desk drawer. Hopefully everything gets

returned

into the company’s pot, but, says Bornstein, that is not always the

case.