This claim couldn't possibly be more wrong. In 20 years I've never seen a less accountable group for financial shenanigans than non-profits.
A (c)(3) need do little more than that file a Form 990, and few are forthcoming in sharing these although required to do so my law. With tens of thousands of new non-profits of all colors every year, the tiny number of staff that the IRS assigns to 501(c)(3)'s cannot possibly hope to provide minimal accountabilty much less anything close to the financial integrity of a public traded company. If Sarbanes Oxley applied to non-profits--and Congress actually funded someone to police non-profits--the prisions would be full.
Many, many, many non-profits are fronts for personal enrichment, whether through $130,000 salaries than soak up much of the revenues of small charities to insider dealings or asset deals. The have been many hearings of varieties of "private enurement" (as it's called) and how the IRS lacks any weapons to stop it.
Several years ago, Billy Grahams group was lobbying church groups to publish audited financials to show where the money goes. Virually all of them declined. And accountability? Read some of the letters to editor following the AARP's "suprise" support of the recent Medicare bill. Most members were surprised that they couldn't get a straight answer about how AARP makes decisions (AARP was founded by a group of fomer insurance brokers and devotes the bulk of its resources to its "unrelated" insurance business).
And don't forget "United Way." Even after the national chairman went to the Big House for grossly obvious fraud, local affilates are under investigation from SF to DC. DC's leader was just convicted for a pattern of fraud going back decades. For twenty years, auditors, regulators and boards of trustees winked, nodded, or slept-walked through their jobs.
And don't forget the Nature Conservancy's recent sales of prime nature reserves to rich donors. There are hearings now because that kind of nonsense was not prohibited, just like there were hearings ten yeas ago after Pat Robbertson bought church's TV station for a pittance then flipped it for a sale that yielded him and his son a king's ransom. Again, wrong, to many of us, but not illegal. Like those hearings, I'd be shocked if NC's shennagans result in meaningful reform.
Still, a few groups are paying attention: the following rates non-profits under its own reletively mild rules of minimally accountable conduct;
www.give.org
Plug in some names. You might be surprised.
