“Courageous Nonprofit Leadership Groups Are Greatly Needed,” Pablo Eisenberg, Chronicle of Philanthropy.

As the government has shrunk its role, the public expects more of nonprofits, but such groups can’t shoulder that burden unless they have more dollars at their disposal.

Most grant makers don’t give more than the 5 percent of assets that is the legal minimum. Today, about $55-billion flows to nonprofits each year from foundations. An increase in the minimum payout to 6 percent — along with the requirement that no foundation overhead or administrative costs could be counted in that sum, as current law allows — could easily add more than $7-billion, or perhaps $10-billion, to the sum nonprofit receive each year.

…. But, nonprofits have been entangled in many financial scandals, including self-dealing by top employees and board members. Many nonprofits are opaque about how they spend their money and are run by irresponsible boards and incompetent managers. Media scrutiny of such problems is eroding public confidence in nonprofits, raising additional obstacles to fundraising. This lack of public accountability has been reinforced by an inadequate system of oversight and enforcement. Regulations are either being ignored or unenforced. In many areas — such as compensation, executive perks, and political activity — new, tougher regulations are required. State charity regulators have neither the resources nor the will to oversee their nonprofits, a task made more difficult by the fact that all but seven Attorneys General are elected, thus bringing politics into the oversight equation.

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