‘Let’s prosecute bad-actors pretending to be do-gooders’

Read the commentary from the Denver Post editorial board. Copied below in its entirety:

Cynthia Coffman

Colorado Attorney General Cynthia Coffman wants to add investigators to track nonprofit fraud and abuse.

American families, corporations and foundations gave nearly $373 billion to charities in 2015 according to the National Philanthropic Trust — that’s 2.1 percent of the U.S. gross domestic product.

Yet across the nation there are only about 350 state regulators scrutinizing charity operations, according to a groundbreaking report released this fall by the Charities Regulation and Oversight Project at Columbia Law School and the Center on Nonprofits and Philanthropy.

That fraud and corruption are occurring within these tax-exempt entities is undeniable.

The Internal Revenue Service is wholly ill-equipped to serve as anything other than a warehouse for nonprofit annual tax forms known as 990s.

Both the Clinton Foundation and the Donald J. Trump Foundation escaped scrutiny until the leaders of both clashed in a political showdown. In case you missed it, both foundations proved to be lacking integrity in their own unique ways, unless you think self-portraits and luxury hotel in Haiti are money well spent. New York’s attorney general remains on the Trump investigation.

This all makes the case for Colorado Attorney General Cynthia Coffman’s request for an additional $350,000 a year to beef up the state’s nonprofit investigations unit.

“To me, this is some of the worst fraud that people can commit because the resources they are stealing and converting to personal use are resources that aren’t going to the people who need that money,” Coffman said, as she presented the funding request to the state’s Joint Budget Committee.

She came to the meeting armed with real cases for fraud within Colorado’s nonprofit sector her office had prosecuted. Coffman wants two full-time attorneys and an investigator for the unit, according to a Denver Post story about her request. A separate unit, the consumer fraud division, currently handles nonprofit fraud investigations.

According to the Columbia Law School analysis, 13 states or territories have a dedicated bureau for nonprofit investigations similar to what Coffman wishes to establish. Another 14 handle charities within consumer protection divisions.

In Colorado, as in 59 percent of states, all of the work doesn’t fall on the attorney general’s office, however.

The Colorado Secretary of State’s office investigates nonprofit complaints as well. After investigating, the secretary’s office can pass on the case to the attorney general for prosecution.

Together the two helped shut down the Cancer Fund of America, an entity which misspent millions for the founder’s personal needs rather than charitable good in a 50-state investigation.

We believe Coffman when she says she needs more resources to pursue the bad-actors who pretend to be do-gooders. After all, she’s a Republican who just proposed to grow the size of government — something must be amiss.

More active enforcement could cause everyone in the nonprofit game to clean up their act, spend a little less in administration, a little more on charitable missions. It would serve as a clear reminder to administrators that they should follow the state’s solicitation rules more closely.

There is the possibility for nonprofit investigations to be hijacked by the political leanings of those in power, but that’s true of any branch of government led by a politician.

Whether it’s a Clinton or a Trump in Colorado, we hope Coffman’s new team would investigate equally. 

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Left to right: Betsey Martens of Boulder Housing Partners, Greg Harms of Boulder Shelter for the Homeless, and Isabel McDevitt of Bridge House.

Who wants to start the chant? LOCK ‘EM UP, LOCK ‘EM UP, LOCK ‘EM UP!!!

(This post has been e-mailed to Boulder City Council.)

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