Economic Outlook for Nonprofits and Fundraising Is Cloudy

Marion Steward

NONPROFIT NEWS FROM ELSEWHERE

A Minneapolis anti-hunger nonprofit that experienced skyrocketing growth in federal funding in recent years was raided by more than 200 law enforcement officers, with federal prosecutors citing lavish spending and little evidence of food being distributed. Aimee Bock, the director of Feeding Our Future, said the FBI probe is retaliation for the nonprofit’s lawsuit against the Minnesota Department of Education for withholding or delaying payment of federal funds. The conflict seems to have roots in Feeding Our Future’s head-scratching growth: Begun in 2016, the organization took in $307,000 in federal nutrition-program reimbursements in 2018 — and $197 million in 2021. Feeding Our Future reported to the education department last summer it was providing nearly 12 times the number of meals the Minneapolis Public School District was providing. Those and other statistics raised suspicion, and when the department began denying federal payments, Feeding Our Future sued. When a judge told the Department of Education it could not stop payments, the department contacted the FBI. Federal prosecutors say surveillance of some feeding centers found no evidence of food being distributed. They said millions went into the private bank accounts of one provider, with other money misspent on a lakefront property and a trip to Las Vegas. Prosecutors also accuse Bock, whose home was searched as part of the raid, of receiving a $310,000 kickback from one contractor that misappropriated $15 million. Bock said that money was for a building she sold the contractor and that one surveilled food center is open for limited hours, with most distribution taking place off-site and directly to clients’ homes during the pandemic. “I do not believe that Feeding Our Future has submitted an invalid claim,” Bock said. (Star Tribune)

The nonprofit Crisis Text Line has stopped sharing with a for-profit spinoff data from the millions of conversations it has fielded from distressed clients following complaints about the arrangement. The service, which allows people in crisis to communicate via SMS, Facebook Messenger, or WhatsApp, stripped personalizing information from the conversations and provided the data to Loris.ai, which develops customer-service software. Crisis Text Line is part owner of Loris, which used the hotline data to make software and artificial-intelligence applications more “empathetic” and which was to share some of its revenue with the hotline when it reached a certain threshold. Executives at the hotline defended the arrangement as an innovative way to support the nonprofit, and they noted that clients agreed to the sharing of their data. But tech experts and regulators said it’s possible that “some nefarious operator” could piece the data and identifying details together. And ethicists and former volunteers questioned whether embedding the data-sharing consent in the service’s terms and conditions, and then requiring desperate clients to agree before they could reach a counselor, was meaningful consent. On Monday, three days after Politico broke the story, the hotline ended the arrangement. “We understand that you don’t want Crisis Text Line to share any data with Loris, even though the data is handled securely, anonymized and scrubbed of personally identifiable information,” said a statement on the hotline’s website. One member of the nonprofit’s board said on Twitter that she had been wrong to agree to it. (Politico)

More News

  • Nonprofits Target the Surprise Hurdles That Cause Low-Income Students to Drop Out. (Washington Post)
  • $61 Million in Donations Help Complete Sun-Times Sale to WBEZ Parent (Chicago Sun-Times)
  • Philanthropist Says he Brought About the Fermat Breakthrough After the Best and Brightest Failed for Centuries to Solve the Puzzle. (New York Times)
  • After Nearly 2-year Closure, Arab American National Museum to Reopen (Detroit News)

Nonprofit Leadership

  • Girl Scouts’ First Asian American CEO Credits Her Diverse Girlhood (NBC News)
  • Colette LaBouff Appointed as Black Mountain Institute Executive Director (Los Angeles Times)

https://www.philanthropy.com/newsletter/philanthropy-today/2022-02-01

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