Financial info for the 4 charities the California AG accuses of overvaluing donated medicine

March 14, 2018, 11:00 am

Image courtesy of Adobe Stock.

For future reference, here is some select financial information on the charities that have been accused of overvaluing donated medicine.

In March 2018, the Attorney General of California filed cease and desist orders against three charities and a complaint against one.

The complaint was resolved with a stipulated judgment the same day the complaint was filed. Resolution? The National Cancer Coalition agreed to dissolve.

Listed in this post is some data from the most recent set of financial statements available at the charities’ web sites along with the 2015 info, which is the latest year cited in the cease-and-desist orders.

Since the cease-and-desist orders allege material misrepresentation in the audited financial statements, the auditor is also listed. Therefore this is an audit issue as well as an accounting issue.

I will make an educated guess that the 2017 financial statements for MAP and FffP will not be available until after the impact of the AG’s cease and desist action is assessed. Looking in from the outside, it seems to me like this issue would constitute a material subsequent event.

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Leave a Comment » | GIK - gift-in-kind valuation, Non-profit accounting | Tagged: , , | Permalink
Posted by Jim Ulvog

California A.G. files complaint against a charity for overvaluation of donated medicine. That charity agrees to dissolve itself. Three other charities issued cease-and-desist order.

March 14, 2018, 8:51 am

(update: headline modified)

The conflict over donated pharmaceuticals has heated up again.

The California Attorney General has filed cease and desist orders against three large charities who received between 89% and 98% of their revenue from medical GIK.

Update:  Those percentages appear to include all GIK, not just medicines. For example, in 2015 Food for the Poor had $1,159M total income with $1,033M of donated goods, according to their audited financial statements. According to their 990 for 2015, of the total GIK $818.7M was drugs and medical supplies, $110.8M was clothing and household goods, with $103M of other GIK. For 2015 donated drugs and medical supplies are 70.6% of total support and revenue.

Update: For MAP in 2015, total drugs and medical supplies from Schedule M of the 990 ties to the donated inventory on the audited financial statements. The only other GIK listed on Schedule M are securities, which amount ties to the financial statements. For 2015, donated drugs and medical supplies are 97.8% of total revenue and support.  Likewise for CMMB, the drugs and medical supplies listed on Schedule M ties to the line donated pharmaceuticals, equipment and supplies on the audited financial statements. For 2015, donated drugs and medical supplies are 90% of total support and revenue.

A complaint was filed against another charity, National Cancer Coalition, for overvaluation of GIK. The charity conceded the state’s claims and agreed to terminate the charity’s existence.

The three large charities are Food for the Poor, MAP International, and Catholic Medical Mission Board.

The cease and desist orders can be found at the AG’s web site:

Actions regarding the charity closing its doors:

This post will describe the complaint against NCC and the stipulated judgment.

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Posted by Jim Ulvog

Podcast on turmoil involving Wounded Warrior Project

October 1, 2016, 11:44 am
Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

If you’ve been following the media turmoil surrounding Wounded Warrior Project, you will want to check out a podcast from The Contributing Factor (that is Bill O’Reilly’s website):  Podcast: Ousted Wounded Warrior Project Executives Speak Out.

There are interviews with the two departed senior executives.

That page also has written responses from the board denying the specifics in the Doug White report.

The board asserts that giving dropped as soon as the media reports surfaced. Mr. Nardizzi asserts that he was watching the giving until the day he was released and noticed the giving was only 1.7% below the projected income.

Check out the podcast. I’ll try to have more comments later.

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Posted by Jim Ulvog

A completely different perspective on the crisis surrounding Wounded Warrior Project.

September 26, 2016, 9:53 am
Image courtesy of Adobe Stock.

Image courtesy of Adobe Stock.

Here are a few articles which will give you a different way of looking at the recent publicity surrounding Wounded Warrior Project. I’ve been swamped by several major projects so haven’t had much time to write recently. Those projects are still not done so I won’t be able to spend as much time on this post as I would like, yet I want to get some comments online for those who have been following the story.

The biggest article is The First Casualty: A report addressing the allegations made against the Wounded Warrior Project in January 2016 by Doug White, published September 6, 2016.

There is a lot of information about the entire story which has received minuscule coverage. Here is my quick recap of his major points:

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Leave a Comment » | Board training, Non-profit accounting, Non-profit Tax, Other stuff | Tagged: , , | Permalink
Posted by Jim Ulvog

Restructuring underway at Wounded Warrior Project

August 31, 2016, 9:14 am
Image courtesy of Adobe Stock.

Image courtesy of Adobe Stock.

Some of the recent news regarding WWP. Much more to say, not enough time today.

Wounded Warrior Project released their financial statements for fiscal year ending September 30, 2015. One sentence summary is they have continued the accounting practices in place for 2014, which have drawn lots of criticism. At first glance, looks to me like functional allocation of expense methodology is unchanged from 2014. Much more discussion is needed on the issue.

Tim Sandoval describes the issue on 8/17 at Chronicle of Philanthropy (behind paywall):  Wounded Warrior Sticks With Accounting Rules That Drew Fire.

Layoffs and restructuring have begun:

8/30 – News 4 Jax – I-Team: Executives laid off, reassigned at Wounded Warrior Project – Article says several executive vice presidents have been let go or reassigned. More changes at the EVP level are expected.

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Posted by Jim Ulvog

Initial reactions to Sen. Grassley’s letter to Wounded Warrior Project

May 18, 2016, 8:52 am
Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

Here are a few of the first reactions I’ve seen to the letter that was released to the media by the Senator’s staff on Monday.

Professor Brian Mittendorf describes what he sees as The Fundamental Issue in the Wounded Warrior Project Inquiry. The underlying issue in the letter from Senator Grassley to WWP is just a different way to look at the core issues in the discussion. The issue: Read the rest of this entry »

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Posted by Jim Ulvog

GuideStar begins major effort to let charities report their outcomes

May 13, 2016, 8:54 am
Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

GuideStar Premium is a new feature allowing charities to describe their goals and what progress they’re making. This provides NPOs the opportunity to quantify their outcomes and impacts.

This is a big step. It is a wonderful experiment.

GuideStar Platinum: Measuring Nonprofit Performance at Scale provides an overview of the new platform. This page provides more detail on the service.

Charities are allowed to self define the measures used. Organizations self measure their progress.

This will create wide variety in the measurement tools. I believe that is a wonderful thing. Self defining outcomes will allow a measure that is very carefully tailored to a particular organization. Over time I am guessing there will be some sort of comparability between charities within a specific sector which will allow some vague level of comparison within sectors.

The important point is that the outcomes for a rescue mission are radically different from an at-risk youth mentoring program, which in turn are radically different from a civil rights group or public issue advocacy group. Each organization needs a metric that specifically addresses what that organization is trying to accomplish.

There are somewhere in the range of 250 charities listed at Platinum Early Adopters. Congrats to these organizations taking the first struggling steps to publicly declare their quantitative progress against their outcome goals.

I took a look at the results for about a dozen of those early adopters. Here’s what I learned from my nonrandom sample.

Traditional input measurement

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Leave a Comment » | Non-profit accounting, Other stuff, Pondering | Tagged: | Permalink
Posted by Jim Ulvog

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