GIK valuation – Things going on behind the scene

Previous posts have discussed an article at Chronicle of Philanthropy: Charity’s Exaggerated Revenue Could Affect Other Groups.

I saw two interesting background comments in the Chronicle’s article that tell me there is more going on than is visible.

The AG task force

The first is a quote from the office of the New Mexico Attorney General:

“It could have far-reaching effects in the gift-in-kind valuation across the board,” said Elizabeth Korsmo, New Mexico’s chief charity regulator. “I’d be very interested to see to what extent groups that say they received goods from this charity decide to revalue them.”

Ms. Korsmo is the same person mentioned in this post. She is an assistant Attorney General in New Mexico and is reportedly leading a task force looking at GIK valuations.

The article I mentioned in Forbes from last November quotes her as putting the “fraud” word on the table in the context of GIK valuation. I don’t think that AGs accidentally use words like that in an on-the-record interview with a Forbes reporter.

I infer from the quote in the Chronicle article that the AG task force is still monitoring developments.  (Yeah, yeah, I know – my powers of deduction are staggering.) All of us in the NPO world, especially those working in R&D charities, need to recognize that the NM AG hasn’t lost interest. Ms. Korsmo is still paying attention. Very close attention.

Let me describe the significance from my perspective. That comment was about a week after the release of World Help’s financials.  The only media coverage I’m aware of is the Chronicle article. But in that week, the NM AG is aware of the revised financials, is willing to comment to a reporter on the implications, and said she will continue to monitor.

If the NM Assistant AG is watching and if she is leading a task force of AGs, that means a number of other AGs are watching.

IRS audits

Notice the number of NPOs that Ms. Preston reports were audited in 2011:

The Internal Revenue Service has said in its work plans that it is making donated items a priority. In 2011, the agency audited at least two big international nonprofits that receive most of their revenue in donated items.

If I’m reading the tea leaves correctly, that means there was at least one more large NPO that was audited in 2011. I’m not aware of the second one getting publicity. Maybe I just missed it.  Does anyone have ideas who the other is? Are there more audits underway?

The point in mentioning this? The clock is still ticking on having maneuvering room to get the GIK valuations cleaned up.

I fear time is running out.

Leave a Reply

Your email address will not be published. Required fields are marked *