Blue Avocado Investigates • By Jeff Angus • June 11, 2012 • Email Print

Nonprofits are probably most familiar with donor-advised funds (DAFs) at community foundations: a donor gives, let's say, $1 million to a community foundation and gets a $1 million tax deduction that year. Over the next several years, the donor "advises" the foundation to pay out the $1 million in grants to various nonprofits that the donor selects. Donor-advised funds are also administered by commercial institutions such as Fidelity and Chase. Writer Jeff Angus took a closer look at DAFs for Blue Avocado:

In 2009, the last tax year that the IRS has available statistics, donor-advised funds (DAFs) represented a sharply growing share of a diminishing giving pie.  While the amount of total giving went down by 8%, the amount of giving to donor-advised funds went up by . . .

Blue Avocado Investigates • Feature Articles • By Rick Cohen • December 5, 2011 • Email Print

The Vanguard Public Foundation was a high-profile, influential, progressive institution in San Francisco: the original "rich kids" foundation making grants to radical grassroots organizations and involving community members in grantmaking. As we chronicled in earlier Blue Avocado articles, Vanguard's ambitions coupled with absence of CEO oversight led to making the Foundation and many of its donors easy targets for a get-rich-quick scheme. Rick Cohen provides this update:

In all likelihood, within the next couple of months the former president and CEO of the Vanguard Public Foundation -- Hari Dillon -- will be sentenced for his self-admitted role in a small-scale version of a Bernie Madoff-like scam.

And around the same time, Mouli Cohen -- the persuasive businessman behind the scam -- will be sentenced as well. Just two weeks ago, he was convicted in U.S. District Court on 15 counts of wire fraud and 11 counts of money laundering (plus three counts of tax evasion). More than $30 million of foundation and donor money have disappeared.

As of now: Cohen is in jail and Dillon is facing jail; the Vanguard Foundation has closed its doors; there's talk of a grantee lawsuit (for awarded but unpaid grants); some activists are calling for a "tribunal" or a "truth and reconciliation process;" and progressive nonprofits are . . .

Blue Avocado Investigates • November 12, 2011 • Email Print

Blue Avocado readers will remember our coverage of the "Decline and Fall of the Vanguard Foundation" (for which we won a journalism award), which detailed the ways in which Vanguard CEO Hari Dillon and major donors became involved with businessman Mouli Cohen and a series of get-rich-quick schemes.

Two weeks ago, Mouli Cohen was convicted on 31 counts of money laundering, tax evasion, and other matters. Investigative reporter Rick Cohen is now plowing through the flurry of competing bankruptcy suits and conducting interviews, and will be bringing us a full report in the next issue of Blue Avocado. Thanks very much to the many Blue Avocado readers who have kept us apprised of developments. (Image to left is in Hari Dillon's handwriting -- and signed by him -- from one of the bankruptcy cases.)

See also in Blue Avocado:

• "Decline & Fall of the Vanguard Foundation, Part I"
• "Vanguard Foundation: How Did This Happen? Part II"

Blue Avocado Investigates • September 27, 2011 • Email Print

"Nonprofit staff don't vote." When the Silicon Valley Council of Nonprofits (SVCN) heard this from a speaker, they decided to test it among their members. Here's what they found.

In a survey of 560 staff at health and human service nonprofits, a remarkable 100% of senior managers and 92% of "line staff" (non-senior managers) are registered to vote. Wow! And . . .

Blue Avocado Investigates • Feature Articles • April 25, 2011 • Email Print

If there’s one day when socially conscious do-gooders can be excused for letting the cares of the world slip away in a haze of tryptophan, it’s Thanksgiving. As major holidays go, Thanksgiving is remarkably worry-free, its main focus neither commercial nor ceremonial in nature. You don’t have to come bearing gifts. You don’t have to dress up. You don’t have to stay up till midnight. Even religious worship is usually not de rigueur, unless you count prayer at dinner.

Honestly, unless you’re the host, all you have to do on Thanksgiving is show up, watch football, and, well, eat. Right?

Ah, if only it were that easy.

Blue Avocado Investigates • By Rick Cohen • April 1, 2011 • Email Print

In at least one state, casinos are required by law to give a portion of their profits to community foundations which, in turn, are required to grant it out as well as allowed to put a portion into their endowments . . . just one of the overlooked fundraising opportunities from casinos. Rick Cohen uses a fundraising framework to report on his investigation into the casino industry.

Casinos seem to have fool-proof systems for getting money out of their customers. Wouldn't it be nice if we had such a system for getting donations from the casinos?

The casino industry is huge: approximately 500 casinos earned $31.4 billion in gross gaming revenue (total dollars wagered minus the winnings distributed to bettors) in 2009. As a reference point, the roughly $35 billion in revenue earned by the retail sporting goods industry in the same year was diffused through a much larger group of 20,000 companies.

[An additional $2.1 billion is earned by charitable gaming, such as nonprofit bingo. In other words, we in the nonprofit sector are members of the casino industry. And note that these numbers don't include the mammoth industry of government-operated lotteries.]

Un-mapped territory

To understand casino giving, we contacted top experts in the casino industry and . . .

Blue Avocado Investigates • March 13, 2011 • Email Print

The 2011 Just Awards are coming up, and it's time to nominate that infuriating foundation and that ridiculous news article! Last year you'll recall that the winner for Most Narcisisstic Foundation was won by the Rockefeller Foundation and President Judith Rodin, an award cheered more people than those who agreed that the movie Crash should have won over Brokeback Mountain.

Nominations are now open at www.justawards.org, or by sending an email with the relevant info to editor at blueavocado.org.

For last year's winners, see here, and for how the Just Awards changed the world and notes on the runners-up, see here.

Nominate now and often! As a reminder, Award 1 is for for Narcissism in a Foundation and Award 2 is for Abominable Press Coverage of the Nonprofit Sector.

Blue Avocado Investigates • Feature Articles • By Rick Cohen • December 28, 2010 • Email Print

Like the mysterious Freemasons and their Grand Lodges, foundation affinity groups feel open and warm to insiders, but to outsiders they seem to be secretive, cloistered societies with their own coded languages, titles, and hierarchies. Rick Cohen first tells us about the lodges -- er, affinity groups -- then gives practical advice on how to make this knowledge work for your nonprofit:

You can't be a member of a foundation affinity group unless you are on the staff or board of a foundation. Their conferences are forums where grantmakers discuss what they should be funding . . . but you can seldom go unless you're a foundation person.

Why should you care? Because knowing how to work within their circles is an important way to get insider information about foundations and to get your organization a positive profile among grantmakers . . . in short, to help you and your cause raise money from foundations.

First we'll discuss the different types of affinity groups, then give some specific tips on how to make the most of them for your nonprofit, including ways . . .

Blue Avocado Investigates • Feature Articles • By Rick Cohen • September 27, 2010 • Email Print

In Part 1 of this story on the decline and fall of the Vanguard Public Foundation, we reported on how Vanguard's leadership became involved with apparent conman Samuel "Mouli" Cohen, and how millions of dollars disappeared into a get-rich-quick scheme, resulting in Vanguard's closure. In this concluding article, we explore how it was possible for a respected foundation to have come to such an inglorious end.

In August 2010, in a television-like drama, a limo was pulled over in Los Angeles by unmarked sedans and some 20 federal officers emerged -- some with guns drawn -- and arrested Samuel "Mouli" Cohen. A sealed indictment listed 19 counts of wire fraud, 13 counts of money-laundering, and accusations of defrauding 55 investors of $30 million.

The chief victims of this apparent con game? The Vanguard Public Foundation and its major donors.

Today, the Vanguard Foundation -- once a daring, progressive leader -- is little more than a telephone number, with its donors, leaders, and Cohen involved in multiple federal and state lawsuits.

The courts will eventually determine what Cohen did or didn't do and how much insiders at Vanguard -- including CEO Hari Dillon -- are to blame. What concerns us here are the questions on everyone's minds: What should the . . .

Blue Avocado Investigates • Feature Articles • By Rick Cohen • August 3, 2010 • Email Print

Once acclaimed as a pioneer in philanthropy and an important force for social justice, the Vanguard Foundation is no more. The full story will take years to emerge, but we report here on some of the clues to its sorry demise:

In San Francisco, the Vanguard Public Foundation is out of business, its nonprofit status suspended by the California Secretary of State, its website down, its assets apparently gone. Federal and state court lawsuits involving donors, investors, staff and trustees question what happened to millions of dollars that flowed through the foundation to progressive causes.

But nonprofits and foundations go out of business all the time, particularly in this nonprofit-devouring recession. What makes the Vanguard Public Foundation worth special inquiries? Is it because of the celebrities associated with Vanguard -- Danny Glover, Harry Belafonte, and United Farm Workers co-founder Dolores Huerta, among others? But the glam factor is not the story.

The Vanguard Public Foundation (not to be confused with the Vanguard Charitable Fund related to the for-profit Vanguard), was lauded in its heyday as a new wave of philanthropy, a generational shift, an exemplar and a model.

The famous people associated with the foundation are neither the story nor the cause of the foundation's demise. Rather the story may be one of organizational hubris, board narcolepsy, and the disease of our time: the siren song of the get rich investment plan which . . .