Category Archives: Nonprofit Industry News

News and notes regarding the nonprofit sector.

Salvation Army Scammers to Serve Time

Two Houston brothers who set up a fraudulent website following the Katrina disaster will each serve more than eight years in jail for their crimes. The federal government is cracking down on scammers such as the Stevens brothers, according to the Nonprofit Times:

Two Houston brothers each were sentenced last month to more than eight years for wire fraud and aggravated identity theft as a result of fraudulently operating a Web site that claimed to raise money on behalf of the Salvation Army for Hurricane Katrina victims. The fraudulent Web site, prosecutors said, collected more than $48,000 before anyone caught on.

U.S. District Judge David Hittner sentenced Steven Stephens, 24, to serve a total of 111 months. Bartholomew Stephens, 27, will serve a total of 105 months. A jury convicted the pair after a four-day trial in June.

The Stephens case is just one example of the more than 2,400 Katrina relief Web sites believed by the Federal Bureau of Investigations (FBI) to be fraudulent.

More recently, as Southern California burned this past October criminals began setting up bogus Web sites and soliciting donations. According to the FBI, in the days following the California wildfires fraudsters flooded the Internet with fake charity sites.

Technology has certainly advanced fund development for nonprofits. Unfortunately, it continues to advance fraud and other criminal activity as well. It isn’t possible to anticipate each and every scam before it happens. However, being aware of these trends and keeping a watchful eye out for such scams can help.

Having policies and procedures in place regarding online giving and your organization’s web presence activities will help. Making sure that your domain name doesn’t expire will prevent scammers from picking it up and using it against you.

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Red Cross CEO Out Due to Sex Scandal

The president and CEO of the American Red Cross, Mark W. Everson, resigned from his post today, just six months after taking the job, according to the Nonprofit Times. Recently, it was brought to the attention of the ARC’s board that Everson was having an inappropriate relationship with a female subordinate.



The Times also reports that the ARC Board of Governors has appointed Mary S. Elcano, general counsel, as interim president and CEO.

The board of governors, convened in an emergency conference call, asked for and today received the resignation of Mark W. Everson. It was effective immediately. He was not in the building late today, according to Suzy DeFrancis, ARC’s chief public affairs officer.

A senior executive at the ARC brought the relationship to the attention of the board 10 days ago, said DeFrancis. “We believe the board acted very promptly,” she said.

The female subordinate will remain with the organization, said DeFrancis. The board has asked three members of Everson’s team whom he brought from the Internal Revenue Service (IRS) to stay with the organization and they have agreed, she said.

Everson, the former IRS commissioner, was the ARC’s eighth CEO or interim CEO in 12 years. The organization hasn’t been immune to controversy and scandal over the years, just like every nonprofit that exists today. I thought the ARC communications shop handled this one well, at least out of the gate:

“The Red Cross is more than one person,” said DeFrancis. “It’s 750 chapters and thousands of volunteers,” she said.

“Although this is difficult and disappointing news for the Red Cross community, the organization remains strong and the life-saving mission and work of the American Red Cross will go forward,” said Chairman Bonnie McElveen-Hunter, in a statement.

Act swiftly, both internally and externally. Don’t try to hide the facts from the media. Lay it all out on the table. Textbook crisis communications strategy so far…Although, this is somewhat troubling:

Attempts to reach McElveen-Hunter for additional comment were not successful Tuesday afternoon. A woman answering the telephone at Greensboro, N.C.-based Pace Communications, where McElveen-Hunter is CEO, said she was out of the country and not in the office.

The Chairman of the Board, who issued a statement earlier in the day is “out of the country?” Perhaps the receptionist was being a little aggressive in keeping reporters at bay. But, if indeed she is unavailable for further comment, I would have had someone else issue the statement. I would have also asked the staff at Pace Communications to redirect the call.

If you spend any length of time in nonprofit communications, you will undoubtedly encounter a situation similar to this. Personnel crises happen and they can be the most uncomfortable to deal. Planning in advance for these help you execute them rapidly and professionally.

In addition, planning ahead helps you to more easily detach yourself from the situation. Often, the person or people involved will be someone you have worked with closely and with whom you’ve developed a relationship. You don’t want personal feelings of hurt and anger to prevent you from doing your job effectively.

So, what’s your plan?

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