BONNIE ERBE Sunshine will cure stink of charities

Charities -- many of them, anyway -- are atwitter over Congress' possible doings.
Last month U.S. Senate aides summoned some 100 nonprofit organization leaders to Capitol Hill for feedback on trial balloons that have caused so much fear and chaos among putative do-gooders, they might as well have been trial tornadoes.
Some members of Congress quite legitimately want to reform government oversight in an arena that has -- let's face it -- been underscrutinized for too long. This move follows a bevy of scandals that have dogged the field during the past decade.
Since former United Way chief William Aramony served prison time for conspiracy, fraud, filing false tax returns and generally bilking well-meaning donors, the charitable sector has reeled from one embarrassment to the next. After 9/11, the Red Cross took in billions in donations and then faced media scrutiny for sitting on them in a rather prolonged manner, rather than doling them out expediently to needy recipients. The list of faux pas goes on and sadly on.
I was not invited to the congressional venting session even though I work for a small nonprofit when not writing this column. But if I had been there, here's what I would have said:
Sunshine
Reforms should be simple and easy. Charitable organizations should conduct all financial transactions in the "sunshine." Sunshine cures stink.
Sunshine certainly evaporates criminal or unethical conduct. More public disclosure is good. Excessively burdensome and costly paperwork, however, is not.
For example: Once an organization is granted 501-C-3 status (referring to the pertinent section of the tax code) or charitable status, that designation is relatively permanent. It is normally revoked only if officers are looting the till or otherwise violating federal law.
Congress is considering instead a five-year renewal in which nonprofits reapply for tax-exempt status.
Getting back to the United Way case, prosecutors proved Aramony was a womanizer who spent hundreds of thousands of charitable donations on flings with young women and trips to Egypt, London, Paris and global hot spots.
This, while government and corporate employees are emotionally bludgeoned each holiday season to make contributions to the United Way, so their office or department can beat out other offices or departments in amounts given. Obviously disturbing.
One need not rise to the level of Aramony's abuses to have one's tax-exempt status denied. On the other hand, many small, legitimate charities could be destroyed, or suffer great financial harm, if the government merely requires annual independent audits. Such audits typically run into the tens of thousands of dollars if not more. Regularly re-applying for C-3 status could be even much more costly.
The happy medium here is Internet posting of charitable organizations' tax returns. Some C-3's routinely file late returns. People considering making donations should be able to easily check these and other facts online, free of charge. Some of this material is available, but not as immediately as it should be and not, in many cases, without the cost of joining a Web site.
If donors want to know what percentage of a charitable organization's funds go to actual charitable work versus to fund raising, that should be readily available. A CEO's salary as well as that of high-level staff should be made public and easily traced.
Cheap and easy
All of this is cheap, easy to do and not burdensome on charities nor on the government, which would otherwise have to spend millions or billions beefing up IRS staff to better police philanthropic organizations.
Most Americans are woefully unaware of the importance of the charitable sector. According to the Foundation Center, wealthy Americans donated about $30 billion to private foundations last year. The Independent Sector, an alliance of nonprofits, reports between 1997 and 2001, the rate of employment grew faster for the U.S. nonprofit sector than for either business or government.
In fact, almost one in 10 Americans now works for a nonprofit. And with federal government "devolving" more and more responsibility for human services to the states, charitable services are more critical.
So let's fix the situation, but do so intelligently.
X Bonnie Erbe, host of the PBS program "To the Contrary," writes this column for Scripps Howard News Service.