The New York Times > National > Public Confidence in Charities Stays Flat

The New York Times > National > Public Confidence in Charities Stays Flat:
"Two months before the Sept. 11 attacks, the Independent Sector, an association representing about 700 nonprofit groups, found that 25 percent of 4,216 people surveyed said they had 'a lot' of confidence in charities.

Since then, the Brookings Institution's Center for Public Service has been conducting the surveys.

Strong confidence in charities, according to the first Brookings survey, remained at 25 percent through December 2001, a period when confidence in all other civic institutions soared. It has hovered between 13 percent and 18 percent ever since."

"Government has managed to hold on to about half of the gain it received after 9/11," said Paul C. Light, a professor at New York University and a senior fellow at Brookings. "Charitable organizations, which never participated in that surge, have lost ground since then and been unable to regain it."

The terrorist attacks spurred record donations, but also bad publicity from reports that some charities planned to spend some of the money on other efforts and complaints that the money was not being distributed fast enough.

Since then, charities have faced intense scrutiny, which has led to demands for greater financial accountability and tougher regulation.

The Senate Finance Committee held a hearing in June on oversight of the charitable sector and plans to introduce legislation that would crack down on excessive compensation, impose more stringent financial oversight and plug loopholes in tax laws governing charitable activities.

The Internal Revenue Service, which grants tax exemption to nonprofits, is dedicating more auditors to its tax-exempt unit, auditing about 500 foundations to determine their compensation practices and taking other steps to beef up oversight.

"It's telling that public confidence in charities hasn't recovered and that people don't always trust charities to spend their money wisely," said Senator Charles E. Grassley, Republican of Iowa, the chairman of the finance committee. "While the strong majority of charities appear to be doing a good job, I'm discouraged that the more we dig, the more problems we find."

He cited cases of charities taking part in tax shelters used by corporations and wealthy individuals, insiders using charitable assets for their own purposes and donations being spent on private jets and European vacations. "Oversight has been poor," Mr. Grassley said.

http://www.nytimes.com/2004/09/13/national/13giving.html?pagewanted=all&position=