Business Ethics, Nonprofits and Charities, Fraud and Mutual Aid

I have worked in the nonprofit space longer than the for profit space. The same is especially true for my dad. Recently he struggled to make a list of all the nonprofits he's worked for. Also recently we were whistleblowers (again) for a nonprofit that turned out to be a greenwashing scam.

I'm usually very disinterested in discussing callouts, drama, cancellations, (here especially) but in regards to what I'm seeing about the [completionist](https://youtu.be/lFYCYwvRbEU?si=KMFy2LjWDrclhRw2), I am interested in discussing just from a business ethics standpoint! That's the intention of this thread, hopefully it adds to our discussions rather than anything else, you know what I mean?

In my experience, when charities are fraudulent, it's not usually black & white. Navigating that is not easy, and it takes a very strong ethical foundation to make a fair judgement.

In my experience, aside from the most black & white intentional fraud cases, this is how it goes, and this is exactly how I think it's going with the completionist's situation:

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    sincere intentions

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    blatant out of touch / privileged upperclass individuals who just don't "get it" (get what *nonprofit* even is, because they are born and raised in a capitalist society and haven't dedicated to unlearning the hustle mindset or whatever you want to call it lol)

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    years go by as they continue to make claims that they are working towards a goal, fudging numbers along the way, because "that's what you do" in business.

    What this is, is treating a nonprofit like a for-profity company*. It's a low business ethics way to run it. Los Angeles and cities in the US in general have a low bar for business ethics, putting money first is the status quo.
    Someone who comes from the *for profit space and starts a nonprofit commonly makes these mistakes, because they just don't get it.

  • All nonprofits are supposed to have a whistleblower policy. When the completionist was contact about what's going on, they should have asked about their whistleblower policy, or if there is one.

    I'm heading to work at a nonprofit in an hour. So I watched the video linked above this morning before getting ready for work. Ethics is my obsession and absolutely my dad's as well, so I'm coming at this from that angle, nothing else, hope you know what I mean. If this thread becomes more of a weird internet celeb gossip/drama thing that I don't like, I'll just delete it haha.

    Reminder that this is my cardinal rule for social media: I keep it positive, the only exception being _video games_. Since this isn’t about video games any critical stuff I say here is for educational purposes and is behind a foreground of optimism that the world is getting better.

    @“treefroggy”#p144415 one frustrating thing I see here in Illinois is that the orgs that do good work always run on a shoestring since public aid reimbursement is as low (and late to pay) as it is + the flimsiness of pulling in program grant money. We had a business creep governor for a single term several years ago who played “tough” with the budget, and whole NPs that relied on those revenue streams got wiped out. Is there a similar dynamic in CA?

    As for fraudulent behavior, I'm pleased to say I've never witnessed it in any organization I've worked for. What I've seen in other NPs though is what's labeled the Nonprofit Industrial Complex: large and lavishly-funded NPs that have ingratiated themselves into

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    @“treefroggy”#p144415 out of touch / privileged upperclass individuals who just don’t “get it”

    this class, and its taken for granted that they're "the experts." They're effectiveness beyond soaking up funding and praise is however questionable

    What up, I work at a non-profit too, honestly seems too small to be profitable if it were some kind of fraud (though what do I know, I‘m just entry level). But as the data-savvy one in the team I’ve been able to see how funders define what a KPI is and how the non profit has to sometimes do gymnastics to come up with the numbers. It has unfortunately made me a bit wary of large non-profits and foundations. Because if a small sized non-profit has to grit its teeth to proof incremental progress in KPIs, I can‘t begin to imagine what a large one does! I’ve also realized how easy it is to just make some shit up. Crazy stuff!

    What makes it worse is I've met people who see a 501c3 as a way to make money! They just come out and _say that!_

    I hate money!

    good topic, though i admit im a little wary of dismissing “cancellations” - though there‘s definitely room to critique here (there’s certainly an arena that isn't at all about accountability)

    i'm likewise personally wary of non-profits, as my experience with them in regards to actual mutual aid or community needs often resembled what the democratic party enjoyed: taking up oxygen & the lion's share of resources, while supplanting actual community needs & requests with their own mission statement (bonus points for defanging movements/direct actions with donor-friendly practices)

    here's a really good text on the subject

    [URL=https://i.imgur.com/9E9Oki2.jpg][IMG]https://i.imgur.com/9E9Oki2.jpg[/IMG][/URL]

    apologies if this all doesn't speak to the thread's intent, it's a perspective i like to share

    My girlfriend is a lawyer who works in tax compliance exclusively in the non-profit space, currently for a firm that represents many NPs and previously in-house at an individual NP that…gave advice to other NPs lol. Her stories and what I hear about this are all over the place.

    What you've said about ethics and greed and being run like a for profit business is absolutely a huge problem. The boards of these bigger NPs just run exactly like you'd expect any large corporation to run, it seems like. NP Industrial Complex as @yeso said. There are many famous NPs that are run by insane people who want to do something good but are wildly unethical in some ways...considering the time of the year you could read about Delancey Street Foundation for one lol.

    The big wave of Trust-Based Philanthropy has been pretty wild to hear about from a business perspective. All of these rich people want to just give money to grassroots orgs to do the things they want to do but it's of course not that simple. Despite what the concept of TBP is supposed to be the rich people want return on investment whether it's goodwill, tax breaks, actual money, or results. Compounding that is the way taxes work for NPs and what is required to be compliant with the IRS. Hearing it from my gf many grassroots orgs simply don't know how to run tax compliant organizations because no one is telling them how!! Rich people give them money with no real training on how to remain on the good side of the IRS, grassroots org spends money on things they shouldn't, rich panic and demand money back, grassroots org shuts down or is forced to pay back funds, rinse and repeat.

    I haven‘t personally worked in the non-profit space, but I’ve spent a medium amount of time thinking about this. What went down the last month with OpenAI which is a 501c3 is a big indictment of how that entitiy is structured and a corporate non-profit can easily fail at their stated purposes.

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    @“sabertoothalex”#p144506 many grassroots orgs simply don’t know how to run tax compliant organizations because no one is telling them how!!

    its almost like it would be better for the State to directly provide social support for its citizens. But I'm a good american who believes in the profit motive so it can't possibly be true

    As a complete outsider to this world but always curious about it, NPs always seemed to me like something state/local govts should be doing but outsourced it as the free-marketers dictated they should. Or maybe I'm thinking of consulting agencies.

    I have an aunt who was fired for whistleblowing at the University of Rhode Island Treasury office; until that point I had figured laws would protect against that kind of thing, not as naive now

    wasn't expecting this much of a response wow. guess we live for the drama.

    jk

    Seems like for some of you the takeaway is that nonprofits are bad and shouldn't be trusted?? No, nonprofits are a beautiful thing and a sign that there is still good in our society and a light of hope that one day things will be better and that this sort of thing hasn't been completely lost.

    All Nonprofits/Charities have to have a clearly defined mission statement.
    If you fail to do the work, then your nonprofit is failing. (KPI = key performance indicator, i.e., number of people you have **fed**, **clothed**, **served**, **housed**)

    I've witnessed great examples of highly successful nonprofits. Success, of course, is not measured in $$$$$$, it's measured by achieving their mission statement through KPIs.

    Setting aside obvious nation/worldwide examples like GreenPeace and Food Not Bombs, locally I've seen stuff like a very specific bicycle co-op in west LA, that has been doing it right all along.

    One of the easiest ways to do good in your community/ the world that is nearly failproof is **feed and clothe people**.

    Where it gets messy, especially for narrow minded folks, is the reality of:

  • - talking to and organizing homeless people
  • - talking to law enforcement when they tell you you can't *just feed people*
  • - sourcing stuff
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    Is there a similar dynamic in CA?

    From my perspective, the successful ones that crush it and do the work *get funding*, because there are a lot of people with a lot of money who take pride in their community.

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    @“yeso”#p144493 the orgs that do good work always run on a shoestring

    It's always a red flag for me when a NP/charity uses funding as an excuse for *every little thing*.
    like, yes, you need money to do certain things and some things you need to buy.
    But the NPs that are run poorly are run by the type of person that *couldn't possibly imagine* getting stuff like cardboard boxes out of the trash, so they buy it.
    Buying *new* biodegradables or "recycled" plastics instead of just reusing wasted stuff is greenwashing.

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    @“Viralata”#p144494 But as the data-savvy one in the team I’ve been able to see how funders define what a KPI is and how the non profit has to sometimes do gymnastics to come up with the numbers. It has unfortunately made me a bit wary of large non-profits and foundations. Because if a small sized non-profit has to grit its teeth to proof incremental progress in KPIs, I can’t begin to imagine what a large one does! I’ve also realized how easy it is to just make some shit up. Crazy stuff!

    all NPs can get away with a little smidgeon. viewing it as a whole and over a long time, you see the red flags. only do one illegal thing at a time. For example, the one we blew the whistle on was saying they were serving like 500,000 people when it was more like 500, because the other NP we collaborated with was serving 500,000 people and we gave them clothing a couple times... enough clothing for.... about 1,000 people. and *we let that slide for a while*, but that's what eventually broke the camel's back. that was our main focus when we were discussing their choices, and we had them fix the numbers wherever we could. But their excuse to not change that number on the front page of their website is because, for over a year, "the website is still being worked on" lol.

    After that, I volunteered for a NP that was *actually serving people*, and it was soooo refreshing to actually be *allowed* to serve over 500 people in a day. Good NP's are out there! Not hard to find if you're looking to volunteer. Just go to skid row or whatever equivalent and **see who's serving people**, and ask to volunteer lol.

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    @“Viralata”#p144494 What makes it worse is I’ve met people who see a 501c3 as a way to make money! They just come out and say that!

    hey dawg, here's your whistle. now record them saying that shit and blow that horn.

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    @“Viralata”#p144494 I hate money!

    YEAH!!!!!!! [hop on the degrowth train!!](https://www.youtube.com/watch?v=48G3ox90wss)

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    @“IrishNinja”#p144499 good topic, though i admit im a little wary of dismissing “cancellations”

    I reworded my OP a little bit

    also, from the degrowth video, this is the issue with poorly run nonprofits wasting funds on dumb shit imo:



    and it‘s why I’m all about that lifestyyyyyle

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    I've done did a lot of shit just to live this here lifestyyyyyyle

    Anyways, thanks everyone who chimed in, a brief discussion is really all I expected from this and I'm satisfied :o)
    great to hear your experiences :o)

    yeah, i don't mean to be dismissive of smaller non-profits necessarily; much of the houseless work i did for years was through them and outreach/supply from local catholic churches. i have absolutely seen white liberal ones use everything up to memorials for black trans teen murders as fundraising/“awareness” and do not care for it, regardless of intention

    @treefroggy it's interesting to see you list food not bombs though...i've been very active with regional chapters in a few states now, and always understood it as a largely anarchist mutual aid (very different from charity, no paid staff for one)? that's not to say that it works this way in every city/coast, but the most i've seen is crossover with IWW, ARA, black rose/etc. are there chapters that operate more like a charity? legit question, as with most anarchist structure i've never even seen a national branch

    You’re right. I’m not sure if it’s technically a nonprofit org. But in my belief, feeding people is feeding people and that’s the whole point of all of this.

    If anyone reading this hasn’t tried it, give feeding people a shot. You’ll always be glad you did.

    I’ve seen some of the best responses to law enforcement threatening us with jail time for feeding people. Here’s the best one, from a 70+ year old lady:

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    Ok take me to jail for feeding people. because I’m not stopping. And if I die there, I’ll die happy.

    Just never do two illegal things at the same time.

    [“Business Ethics, Nonprofits and Charities, Fraud”,“Business Ethics, Nonprofits and Charities, Fraud and Mutual Aid”]

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    @“treefroggy”#p144545 there are a lot of people with a lot of money who take pride in their community.

    ??? genuinely perplexed here because the people who have a lot of money tend to be proud of different things than say for example the people trying to help schizophrenics living in alleys. It’s the lack of durable sources of revenue and the need instead to hustle for minimal grants and burn energy on extracting charity money that causes attrition among agencies doing real work

    @“treefroggy”#p144545 I don’t doubt that there are honest people leading organizations. If anything that has been my experience. And the people who have disclosed that a 501c3 is a moneymaking tool luckily (!) don’t have one yet. But that’s kind of my point even if it is based on an anecdote.

    In another sense, my experience has also been that putting KPIs on things like community development, which is the area I work in, feels more harmful than good. Or at least, the effect is not as positive as even we say it is. I say “We” as in the other orgs who do similar work in other cities. And I think it is precisely because of the pressures of funding. I can’t tell you how many ‘sidequests’ we’ve had to do manifest a funder’s dream (which are the dreams of someone who is already rich and not actually doing the work). So, if our program design, hierarchy and all other structural components are subject to the desires of one or more funders, it doesn’t matter much what the core mission and vision are. It feels like the setup is meant to prioritize things _other_ than positive social impact. And that sadly overcrowds the actual positives.

    Sometimes the leadership is willing to push back against funders to establish more ‘sane’ KPIs, but I’m willing to say that those are less common and are able to do so because they have a strong base (what in NGO-speak they call ‘beneficiaries’).

    I think in the book that @"IrishNinja"#1055 linked there is an article where someone mentions that potential positives of having a grassroots movement that is supported by a non-profit as a fundraising tool. If I am remembering it right, the model outlined there did provide a better vision to what these things can do/be.

    I used to work for a distributor of public money grants and saw a lot of intentional and unintentional fraud being committed by non-profits and charities. The intentional ones would usually be people submitting receipts for indisputably unfundable stuff and trying to get away with the grift. More often than not though it was really dinky groups not realising they were being fraudulent - things like not getting new members of a board when others left when they were required to have a minimum (low number) amount as it was a requirement to ensure good governance.

    The two craziest things I remember happening were when some guy, who had not had money from us, had claimed he had so that he could get an extension and refurbishment on his house built. We only found out about it when the building contractor got in touch with us after the work was done and hadn't been paid. Turns out it was around £250k's worth of work and the fraudster had mocked up a load of fake applications and letters of confirmation, and such.

    The other story was more accidental but was spectacular in so much as that it was a small community group of parents of kids with learning disabilities, and they were finalists in a public participation competition that was being aired on national TV to win up to £50k. Their proposal was to use the money to take the kids on loads of trips and experiences that would normally be prohibitively expensive otherwise but when I watched their prerecorded TV bit in advance of broadcast they said that they were going to buy a mini bus to take the kids instead of spending money on vehicle hire etc. It turned out to be OK in the end as under our rules they were able to do that of they bought a second hand vehicle, but they hadn't even asked us if they could do it!

    I have worked in another funding organisation, and volunteered for several non-profits, so I've an interesting insight to how different places are run and the challenges they face. I'm grateful that I've not volunteered for anywhere fraudulent but it's always a surprise when places that have ostensibly good reputations end up being completely in the shit.

    @“Viralata”#p144610 as one example, for a few years i helped run a mutual aid in the south of miami, an area with a lot of black & migrant families that don‘t see much assistance (i grew up down there, it’s mostly a forgotten area until developers run out of space)

    we worked with some friends who had white liberal guilt funding from 2020 and had access to a kitchen for mass production, it was great. we linked up with a community fridge project that worked to get them installed in mom & pop shops down there, and for a while we were good to go! we'd take turns delivering to said community fridges, noting what foods were hits in what areas

    the nature of these things usually isn't indefinitely sustainable, so nearly 2 years in, our food source was drying up & we had to work with a non-profit. they were good at sourcing from whole foods/etc on the side, and while i was only able & willing to pitch in with so much of their mission statement, we were able to keep sourcing food & link up when we both had enough supplies to either run a free store, or eventually found a shop that let us use their massive parking lot as one. it was great!

    ive worked with a lot of anarchists burned by NP's and absolutely wont fuck with them, but as you & that text have said, if you can find angles that actually serve your community, you gotta take it - they needed to show these things were getting into people's hands, and we already had networks of distribution that did the riskier stuff around when the pigs have shift change. it was good work.

    I work at a non profit as well. It‘s a think tank in a niche area and we need smart people to function so everyone is paid pretty well. Makes me feel bad for some of the other non profits out there doing admin on windows xp and making a quarter what some of my coworkers make. There’s a lot of variety in the non profit world but it sure beats working for a heartless for profit most days.

    Well again my point is that here in LA there are many people with money who value that exactly. Politics here is often leaning more compassionate. It’s very liberal. So Idunno what to tell ya. You’re in Chicago right? Very different over there.

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    @“yeso”#p144594 genuinely perplexed here because the people who have a lot of money tend to be proud of different things than say for example the people trying to help schizophrenics living in alleys.