Once again: The time left to clean up the valuation of GIK meds is running out.

Volunteer Fire Department Station” by SliceofNYC is licensed under CC BY 2.0


See that fire siren at the top of the city’s fire hall?

The whistle is so loud my ears hurt.

The fire is valuation of donated medicine.

The town is the non-profit community.


It is time to rerun my fire alarm commentary.

My previous post provided a technical description of regulators’ concerns over accounting for donated medicine in the not-for-profit world. This post provides a word picture of the current situation.

Originally posted way back on November 9, 2012, here is my six-year-old discussion with some minor changes:



There is a fire burning in the nonprofit community. The fire is the issue of valuing donated pharmaceuticals. Primarily issue is about mebendazole.  Albendazole and antibiotics are involved, but to a lesser degree. There are many alarm bells ringing. 

The loudest fire alarm went off yesterday.

Forbes has been ringing the fire bell for five years. William Barrett has been ringing the bell loudly for the evangelical R&D community for a year.

Caroline Preston has been sounding the fire alarm for just over a year.

I’ve been ringing the alarm in this teeny, tiny little blog since last December.

Many other media sources are sounding the alarm as well. The number is growing.

The time left to put out the fire on our own is starting to run out.

As I mentioned earlier, the loudest alarm so far went off yesterday.

William Barrett reports in Charity Regulators (Finally) Eye Overvaluation of Donated Goods that there are a lot of rumors circulating that a number of state regulators are working on a coordinated enforcement action regarding overvalued meds.

The widespread rumors are that Elizabeth Korsmo, an assistant AG in New Mexico is a major player in the coordinated effort. In an interview with Mr. Barrett, Ms. Korsmo will only say:

“States are looking at gift-in-kind valuation issues,” she said. “This is on our radar. It’s a hot issue among regulators.”

If you’ve lived in a small community, you know that the volunteer fire department has an extremely loud siren that calls all the firemen. (When I grew up, it was only firemen.)  You can hear the fire whistle all over the town.  When it goes off, firefighters from all over drop what they are doing, jump in their cars, and race to the station because there’s a fire that needs to be put out. 

That article by Mr. Barrett should be a fire siren heard across the country.

There is a serious fire that needs to be put out.  Sounds like the AGs are screaming about the smoke billowing from some buildings in the downtown area.  The town volunteer fire department had better get busy.  If they don’t, the regulators will do it for them.

Enough of the fire analogy.

You get my point.

The time that is available to fix the poor accounting for donated medicine is quickly running out. If the charity community does not get the valuations fixed really soon, other people will fix it for you.  If the IRS and AGs get involved, the results will not be pretty.



Update to the old post:  In the above reprint, the last paragraph of my 2012 commentary is left as it originally appeared. I would bring it current as follows:

Looks like there is a long list of regulators who have a problem with valuation of donated medicine.  The time that is available to fix the accounting for meds is quickly running out. If the charity community does not get the valuations fixed soon, other people will fix it for you. 

The 50 AGs tried.  The IRS tried.  Their enforcement efforts, which appear to have been quite costly in terms of staff time, did not go beyond the charities immediately involved.

The California AG is trying again to address valuation.

That makes for three major efforts focused on donated medicine in this decade. I worry there may be other enforcement efforts beyond the horizon.

Eventually one of these major enforcement actions will take hold and resolve the valuation issue for the entire nonprofit world. I really don’t think any of us will like to see the results. Dear brothers and sisters in Christ, please deal with this issue as if the time is finally running out.

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