Corrections or additions?
These articles by Bart Jackson and Barbara Fox were prepared for
the March 27, 2002 edition of U.S. 1 Newspaper. All rights
Non-Profit Disclosure: Rewards for Honesty
Giving makes us feel good, but being suckered makes
us feel angry, mighty angry. Today, both the corporate and individual
donor scrutinizes charities with the eye of a frugal homemaker sorting
through pricey cuts of meat. The non-profit sector must and does
as hard for every dollar as does the market sector. And the real
are those who best display donation-effectiveness.
On Thursday, March 28, at 4:30 p.m.
"The Need for Non-Profit Transparency and Accountability"
in Robertson Hall at Princeton University’s Woodrow Wilson School.
Free. Call 609-258-0157.
Landesman, who began developing nonprofit solutions as a Princeton
doctoral candidate, will explain how current technology can become
an ideal tool for creating donor relationships.
"The real problem is that non-profits inherently lack the
found in the market sector," says Landesman. He explains that
in the profit-driven market, the buyer and consumer are the same
A man buys and brings home meat, his wife cooks it and they both
it. If it’s poor meat, they shop elsewhere. But when the couple give
$10 to the local soup kitchen, they don’t eat the soup, and have no
way of knowing if it of good quality, or if its ingredients were
Those few fortunate exemptions from this accountability dilemma have
recently become the darlings of corporate giving. Public radio,
the arts, and certain regional open space land purchasing charities
all allow the donor to see, hear, or feel the final product. But even
these organizations must convince the giver that his dollar has been
For the past eight years, Landesman has labored to create a series
of methods that not only streamline non-profit organizations, but
also make their functions more visible to the giving public.
from St. Louis, Landesman spent most of his childhood in New York
City. After earning a bachelor’s at the University of Michigan and
a master’s degree in philosophy from Oxford, he came to Princeton.
In l993, while writing on volunteering and the public good, he created
a database that allowed the public to view IRS 990-form information
on non-profit organizations. Form 990 is an annual document filed
by approximately one-third of public charities to report information
about their finances and operations to the federal government.
The overwhelming response by both donors and charities to this site
led him to founding Internet Nonprofit Center (INC), a Seattle-based
organization with a website, www.nonprofits.org, full of information
on every aspect of non-profit management. Thought currently the
of electronic media for publishing company W.W. Norton, Landesman
continues to keep his hand in the charitable sector, working for
from Vermont Public Radio to the Fund for the City of New York.
"More avenues to a clear, bright vision of non-profits exist than
ever before," says Landesman. "Personalized explanations once
reserved for the $50,000-and-up donor are now available to the general
public." First, and most important for the corporate donor, is
the full, instant, electronic availability of the charity’s 990 IRS
form. The annual report and other brochures can also be provided
and quickly. Thirdly, virtual reality can take the giver to Korea,
where she can observe the rice being distributed, or to Tanzania,
where she can see the bicycle she donated being put to use by a needy
But Internet images not withstanding, nothing beats
bringing the people inside your organization. Landesman says of a
multi-layered volunteer corps still remains the best method of
donor relationships. People who give time tend to invest funds. You
can borrow especially skilled employees from donor corporations,
the worker a welcome sabbatical, and the donor a substantial tax
Typically, a non-profit’s best salaried employees are those who began
as enthusiastic volunteers — particularly in the organization’s
Despite some notable exceptions, Landesman says that the vast majority
of nonprofit organizations work hard to disclose their operations
to the public. The problem lies in the fact that donors seldom know
what to examine, and the charity doesn’t always know what to show.
A good guide to these questions — and answers — is found at
www.guidestar.org. And Landesman provides his own checklist:
methods of judging a donated-dollar’s effectiveness, Landesman says
that the percent of a non-profit’s gross spent on fund raising is
seldom the litmus test we might think. "Frequently, it is
to spend half as much in getting a new donor as she will currently
give," he explains. "This is not egregious skimming, it is
a wise investment." Typically the new donor will continue to
several times beyond the initial gift. And since all charities
lose patrons by natural attrition, they must aggressively seek new
members merely to stay even. Better to examine, he says, how those
funds are spent once they enter the charity’s hands.
giver to a charity receiving its primary funding from individuals?
Maybe. In addition to checking out the percentages given by major
categories of government, individuals, and corporate donors, the
donor will want to know whether the current contributors are young
or old, a lot of folks giving a little, or a few giving a lot. Do
these patrons also buy your firm’s product? To be effective fund
non-profits should provide break downs of their contributors to make
giving seem worthwhile to a whole array of possible donors.
cheaper to support via planned giving, such as bequeathed estates.
New charities face high start up costs, frequently with less going
to the actual non-profit work. However, the newer organizations can
often offer greater donor visibility aimed at a more specific target.
The non-profit, warns Landesman, while striving to present itself
as a rewarding recipient, should not be afraid to give staff costs
for office staff as well as for those who work with clients. The
donor will be looking at what changes have occurred in an organization
and why. Answering these questions before they get asked removes any
a brilliant stroke invented by the Salvation Army. It rapidly became
a bandwagon onto which hundreds of non-profits have gleefully piled.
It displayed the ideal of painless giving. Today charities are
seeking new methods of creative dollar extraction. Most are willing
to work with donors offering funds over extended periods. "There
is a basic conflict here," says Landesman. "Virtually
wants to earmark his particular funds for direct benefits — buying
rice, medical research, whatever. No charity can exist on that alone.
There’s got to be someone there, working however unglamorously, to
answer the phone." Non-profits see expanded staff and offices
as a direct expansion in benefits. Their donors only want to see the
sacks of food or field doctors. Both entities will have to compromise
on this issue.
array of potential recipients right down to their naked IRS
Not just the glossy brochure photos, but the inner working of the
charity are open and available. For the clever non-profit — which
knows how to display its operation enticingly — this transparency
can prove a powerfully magnetic tool in its solicitation arsenal.
A little honesty can bring you a lot of friends.
— Bart Jackson
The telecommunications industry was
almost as exciting to be in during the last few years as the dot.com
implosion, telecom is in a state of decline today."
Franz predicts that the older companies are the most likely to
and that American firms will soon consolidate wireless standards for
Franz will discuss "The State of Telecommunications in the World
Today" on Thursday, March 28, at 6:30 p.m. in Room 131 of
University’s Friend Center on Olden Street. The free seminar is
by the Princeton/Central Jersey Communications and Consumer
Chapter of the Institute of Electrical and Electronics Engineers.
Another free telecommunications seminar, this one pitched to a less
technically oriented audience, will be at the Princeton Public Library
in the Princeton Shopping Center on Tuesday, April 2, at 7 p.m.
Faigen, co-author of "Wireless Data for the Enterprise,"
will speak on "Wireless Data: Manifest Destiny or Technology
Until last month, Faigen was the chief marketing and strategy officer
for Broadbeam Corporation on College Road (U.S. 1, January 23). Call
The holder of two patents, Gerhard Franz grew up in Vienna, where
his parents were pharmacists. He has a PhD in Electrical Engineering
(semiconductors) from the Technical University of Vienna, Austria
and an executive MBA from Rutgers University, Newark. He came to the
United States in 1985, at age 28, to do electrical engineering
for General Electric in Schenectady and then moved to Lockheed Martin.
His most recent job at Lockheed was as director of marketing and sales
for Europe and central Asia for the space and telecommunications
Europe, especially Eastern Europe, is a good market for wireless
Franz says. Wireless is growing at a more rapid rate there than in
the United States, "because in Eastern Europe a lot of basic
is still not there. People are jumping a generation and going directly
to mobile services. You don’t have to have as big an investment."
When Lockheed divested this business at the end of last year, Franz
opened a consulting business, A.G. Franz Associates LLC at 5 Stanton
Court in Plainsboro (609-936-1919, www.agfranz.com). He also chairs
the Princeton section of the IEEE. He makes these predictions:
much higher data rates, which will enable web access on cell phones,
maybe even video. "With the third generation will come a
of standards in the United States," says Franz. In contrast to
Europe, where unified standards were set up early in the wireless
game, Americans must contend with a half-dozen incompatible systems:
Cingular, AT&T Wireless, Nextel, Verizon, VoiceStream, and Sprint.
Switching coverage means getting equipment.
Franz says that Verizon and Sprint are combining to adapt Code
Multiple Access (CDMA 2000) standards, and they will roll out
equipment that adheres to these new standards this year. Meanwhile
AT&T Wireless will move toward joining VoiceStream/Deutsche Telekom
in the third-generation evolution of the Global System for Mobile
Communication (GSM) standard (which is also the European standard).
The name for this will be wideband CDMA.
laptop users to "hook up wirelessly" in homes, offices, and
airports — just about any place other than moving vehicles.
will change the way we are connected, when, with your laptop, you
can connect in familiar places," says Franz.
will give the advantage to existing companies, such as Verizon.
Crossings, Tyco, and other companies that sprang up — they built
networks rapidly, and those networks are not profitable. When faced
with a lot of bandwidth and a downturn, they went under," he says.
"The existing companies will benefit, because they have the cash
business in their local service to sustain them."
These local phone companies will always do fine, says Franz.
people will always talk."
— Barbara Fox
Ethics in Real Estate
Anyone who has ever closed on a piece of property or
a building knows that no matter how niggling the real estate laws
may be, they never quite seem to apply to your case. Vague clouds
of "discretion" invariably swirl around the sharper points
of ethics. If you think that lawyers groping their way through these
misty gray areas never concern themselves with ethics, think again.
The Mercer County Bar Association, in an attempt to help ferret out
where right lies in those far fields beyond the law, offers a
discussion "Everyday Ethics in Real Estate Closings: The Issues
Nobody Talks About," on Thursday, April 4, at 12:30 p.m. at the
Palmer Inn. Cost: $37. Call 609-585-6200. Attendees will break up
into groups and considering a series of real estate situations. Each
table’s solution to each question are brought forth and discussed
before the group.
The questions will be proposed by
bar’s Department of Ethics Council, and by
attorney in private practice at 5 Independence Way who is a member
of the bar’s Real Estate Section. The moderators tailor the program
to cover situations involving bankers, real estate agents, surveyors,
and title insurance professionals, as well as attorneys.
"Real estate trends fluctuate," says Dennigan. "The
banker, and most of the professionals involved, however, are held
to very inflexible standards. Situations forever arise testing just
how far from our rules we ethically may stray." She proffers a
few examples of topics that will be covered, with much greater
in the roundtable:
the basement of a building leaks, flooding the brand new building
just purchased. It was, after all, the biggest rainfall in three
Inventory now lies soaked in soggy boxes. Can you seek redress from
the seller for failure to disclose a pre-existing problem? Was it
his legal or ethical duty to inform you that this rare deluge might
cause problems? Can you prove that he was aware of the condition?
All of these questions fall generally under the ever-tightening rules
of full disclosure. What used to be a sales brochure for a building
now need to be a confession. Dennigan insists you can no longer just
close the deal and walk away. But the question remains, exactly how
far down the road does the law reach? If you live on a street that
swells with traffic every rush hour, do you have to inform those
your house Saturday morning of this probability? Maybe. Dennigan says
the trend now tilts increasingly toward disclosing the ridiculously
and plans to move into his newly purchased one across town all within
a single Friday. He closes on the old house in the morning and hands
the check to his attorney, Ghengis, who plans to deposit it in escrow
in his bank, The Farmer’s Megatentacle. The money will go toward the
purchase of Irv’s new house that afternoon. At the afternoon closing,
Irv writes a new check for the new house, which the seller, Swifty
Greyhound, runs and deposits in his own bank, The Seaman’s Harpoon.
Attorney Ghengis, alas, did not make it to Megatentacle before
closing and simply deposited the closing check first thing on Monday.
But it is too late. Seaman’s has already rushed Greyhound’s check
to Megatentacle. Megatentacle has stamped the check "Insufficient
funds," and Seaman’s refuses to simply reissue the check. Irving
and Swifty were last seen at in front of the new house threatening
to "settle this like men," while their wives warned them to
remember their hernia and prostate conditions respectively. Now, who
ethically and who legally is responsible, and more important what
is the simplest way of settling this situation (without a double
on and handle the sale of a major piece of property by multiple
Since three of them live out of town, the attorney deals strictly
with the one local client. Throughout all negotiations and the final
closing, the lawyer dutifully sends copies of all papers to each
The deal closes, but scarcely before the ink is dry, the three silent
sellers come to town complaining about several aspects of the deal,
and seeking redress against the lawyer.
The other owners of the property were sent papers for review, but
not specifically phoned and polled for agreement on the several issues
of sale. Where do all the sellers, the attorney, and the final deal
stand? Such a situation becomes particularly sticky when spouses are
forced to divide and sell property in a divorce settlement.
will be brought to light. If a New Jersey lawyer negotiates a sale
with an attorney from Pennsylvania who is not a member of the New
Jersey Bar, is the Garden State attorney duty bound to report him?
If the closing depends on a short list of small repair items for which
a simply-negotiated repair credit could offer a smooth solution, how
closely do sellers and buyers have to stick to the H.U.D. regulations?
Truly the world of real estate and its regulations is filled with
a host of tangled questions. Says Dennigan: "Want the answers?
Come to the roundtable."
— Bart Jackson
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