The Financial Accounting Standards Board has now released an exposure draft of proposed changes to accounting rules for nonprofit entities. Many in the nonprofit sector are wondering what it means for them but perhaps not enough to read the entire 261 pages. If that is your circumstance, I did my best to summarize what I see as the primary changes here for the Chronicle of Philanthropy.
Wednesday, April 29, 2015
In response to critics of the Clinton Foundation, supporters have begun promoting it as ahead of the curve in terms of transparency. Leading the charge is a notable nonprofit voice, Tom Watson, who wrote in Forbes that "the Clinton Foundation is among the most forthcoming of major charities and nonprofit foundations – especially those headed by public figures." While I am of the view that the foundation has strengths that have been overlooked in the midst of political criticism, I don't think the evidence supports the perspective that it leads the way in disclosure. The reasons:
- The Clinton Foundation's purported leadership in disclosure comes from it voluntarily disclosing its donors on its website. True, your local food bank doesn't do this, but your local food bank also doesn't have foreign governments as donors. If one wants a fair comparison, the Clinton Foundation's closest peer is the Carter Center. The Carter Center has long disclosed its donors in its annual reports. In contrast, the Clinton Foundation only started doing so in 2008, after years of pressure.
- The Clinton Foundation recently admitted that it left donors to the Clinton Health Access Initiative out of its disclosures from 2010 to 2013.
- The Clinton Foundation has issued restatements of its financials twice in the past ten years, and has recently announced it will re-file several years of tax (990) forms to correct errors in reporting about donations from foreign governments.
- In past years, the Clinton Foundation has released unaudited financial figures in its annual report only to subsequently issue financial statements with different numbers.
In short, though the Clinton Foundation may have the best of intentions with respect to financial disclosures, the evidence indicates the implementation has been spotty.