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My mother works in the non-profit fundraising sector, originally centered on education, but now runs her own consultancy for non-profits of all sizes. She knows
by moron4hire 7y ago
My mother works in the non-profit fundraising sector, originally centered on education, but now runs her own consultancy for non-profits of all sizes. She knows pretty much all the rules and laws about donations and propriety within fundraising foundations. I've helped her with her business, both in actual operations and for her IT concerns. I've also worked in other regulated industries, so I have a fair amount of familiarity with what sort of rules and laws are involved and what the consequences of violating those rules tend to be.
We are livid right now. She has to help a lot of orgs navigate it, where the rules can sometimes be tricky and somewhat counter-intuitive, especially if you don't have accounting experience (and let's face it, most people in fundraising foundations are some of the lowest paid people on campus, and you get what you pay for). Stuff that could get you fined or jail time for what lay-people might consider an honest mistake (but definitely should be considered 101-course material for fundraisers, considering the stakes).
Joichi Ito's actions go way, way beyond that. Who knows just how far the harm he has caused will actually spread. He's harmed the reputation of his institution, his program, and anyone associated with the program. He's lied and cheated for personal gain. It's a no-brainer that he needs to go to jail. Whatever investigation will follow should be focused on finding all the people who knowingly helped him to lock them up alongside him.
- solidsnack9000 7y agoWhat are some examples of things where you can get fined or put in jail for what lay-people might consider an honest mistake?
- moron4hire 7y agoA simple one that comes up a lot is back dating when a donation "occurred" to be within a certain tax year. Donations don't "occur" until they are processed completely. The end of the tax year has lots of donations come in. If the foundation isn't on their toes, they might not process all of them in time for the tax deadline. It's illegal (though completely possible, and happens all the time) to back-date the donation date to before the end of the tax year, after the tax year has ended. Others come up as errors of classification. A certain donor might donate a certain good or service instead of straight money. That donation has to be recorded at fair market value and has to be treated as if it were a proper vendor relationship. Determining that value can be quite complex, especially considering such donations are usually done out of excess stock or time that the donor doesn't have a good valuation on out of their own books. And often, those sorts of donations come with an expectation of quid pro quo: I give two dozen bails of hay that I have just lying around and expect to get a ticket to the next fundraising ball (which might have a few-thousand dollar list price). If the foundation gives that ticket, the bails of hay are no longer a donation and listing it as such is tax fraud.
- JustARandomGuy 7y ago>A simple one that comes up a lot is back dating when a donation "occurred" to be within a certain tax year. Donations don't "occur" until they are processed completely. The end of the tax year has lots of donations come in. If the foundation isn't on their toes, they might not process all of them in time for the tax deadline To fix this, many nonprofits have a fiscal year that is different than the calendar year (calendar year being Jan - Dec) while a fiscal year can be any 12 month period (for example, July beginning to June end). The organization reports based on its fiscal year, so it has plenty of time to process December donations. See here for detail: https://www.irs.gov/charities-non-profits/exempt-organizations-annual-reporting-requirements-filing-procedures-tax-year https://www.irs.gov/charities-non-profits/exempt-organizatio... (this details for nonprofit orgs but the same can be done for businesses and sole-proprietor orgs should this interest someone). (I have experience in working AML and Compliance for a large multinational bank)
- sjy 7y agoYou're aware of specific instances of people actually going to jail for this sort of thing? I'm not saying it doesn't happen, but honestly I'd be surprised if it did, and surprised if Ito was criminally charged in relation to this conduct.
- esoterica 7y agoJail for what? Accepting donations from a pedo is not a crime.
- davrosthedalek 7y agoHe hid the donations from MIT. Since Epstein was on the blacklist, MIT might have a civil case against him. I'm not a lawyer, so I don't know if that would be, for example, "fraud".
- moron4hire 7y agoAlso, using your professional relationship as a foundation employee to solicit funds for your personal, private ventures is suuuuuper illegal.
- davrosthedalek 7y agoIndeed, but I have not seen that he solicited them. Of course the fact that they were made stinks to high heaven.
- moron4hire 7y agoIt doesn't matter if he literally asked or not. Anti-corruption laws are much more concerned with the appearance of impropriety than they are with the actual turn off events. That is to say, they err on the side of caution. Anything that could have come about through abuse of the professional relationship is verboten, even if it was "happenstance". Simply put, disregarding all of the other issues, given the prior relationship between Ito and Epstein for the MIT Media Lab donations, there was no legitimate path for Epstein to invest in any private venture of Ito's.
- esoterica 7y agoCan you provide a citation for that?
- moron4hire 7y ago