FIFA President Sepp Blatter’s Latest Legal Head Ache

The embattled FIFA president Sepp Blatter is now under investigation by Swiss Authorities for a “disloyal payment” made to Michel Platini, the current head of the European soccer confederation and candidate for the FIFA presidency. Blatter also stands accused of signing contracts that the attorney general of Switzerland deems “unfavorable to FIFA.”

Blatter – whose long tenure as FIFA president is set to end in February – is no stranger to controversy. His scheduled resignation is the result of an ongoing corruption scandal. Over the last year, the organization’s secretive inner dealings have emerged from the shadows. A handful were extradited to the United States by Swiss authorities last May at the behest of U.S. Attorney General Loretta Lynch.

One of the most disturbing aspects of FIFA’s troubles involves bribery accusations connected with Qatar’s receipt of the 2022 World Cup. Exploitative, lethal labor practices have painted a damning picture of corrupt FIFA officials. If the current death rates in the desert country continue, The Guardian projects that up to 4,000 migrants could perish by the completion of Qatar’s stadiums – a grotesque number that towers over workplace fatalities connected to other recent world sports events held in countries including Russia and China.

Qatari officials have allegedly lured migrant works from Southeast Asia with promises of high pay, only to confiscate migrants’ passports, charge exorbitant broker fees, and force laborers to work in scorching conditions without access to water. The slave-like conditions have drawn international condemnation, as well as increased scrutiny of FIFA’s potentially criminal administrative culture.

While he is yet to be charged, the Swiss investigation is the first instance in which government authorities have looked directly into Blatter’s affairs. The ongoing U.S. investigation, which involves a number of Blatter allies, does not include the FIFA president. The Swiss investigation mentions an alleged £1.3 million payment from Blatter to potential FIFA presidential candidate Platini, who has himself released a statement denying any wrongdoing. FIFA has announced that the organization’s lawyers will not assist in Blatter’s defense in the event of court proceedings.

The responsible course of action would be, of course, for Blatter to step down. He has dragged his feet, at first contending that he had no intention of leaving his post even in the wake of last May’s developments. He later announced that he would relinquish his position this February, perhaps in an effort to retain influence by guiding allies into top positions before his departure.

One thing is clear: the culture of FIFA’s administration is in dire need of an overhaul. Soccer is the world’s most popular sport, and an important cultural force for promoting life skills, cooperation, and discipline to children cross the globe. The game’s importance demands a well-run, socially oriented organization that commits more energy and resources to fostering the positives of the sport as opposed to defending the interests of corrupt and deceitful administrative leaders.

MacArthur Foundation Announces 2015 Recipients

(Above: writer and MacArthur Grant recipient Ta-Nehisi Coates speaking at the University of Michigan)

The MacArthur Foundation - one of the highest profile grant-giving organizations in the world – announced its 2015 recipients on Tuesday. Given to artists, scientists, writers, and important thinkers, each “genius” grant provides a no-strings-attached amount of $625,000 for each recipient to use in pursuit of her/his work. According to the foundation’s website, the grants are awarded for  “exceptional creativity, promise for important future advances based on a track record of significant accomplishment and potential for the fellowship to facilitate subsequent creative work.”

Among this year’s recipients, stand out “geniuses” included Ta-Nehisi Coates (The Atlantic correspondent and author of the riveting book on race Between the World and Me), Matthew Desmond (renowned urban socialists and ethnographer who has produced widely acclaimed work on evictions in the United States), and LaToya Ruby Frazier (acclaimed photographer whose portraits profiling the history of decaying steel-production town Braddock, Pennsylvania have documented the blight of the United States’ rust belt).

Click here to see a full list of recipients.

How Fundraisers Can Leverage Pope Francis Visit

It turns out that all the anticipation of Pope Francis’ U.S. visit reflected an accurate level of enthusiasm for the popular pontiff. His parade around the National Mall drew throngs of people, and he spoke before 18,000 people in Madison Square Garden. Philadelphia is doubling in size this weekend for the World Meeting of Families and Francis’ open-air mass tomorrow on the Benjamin Franklin Parkway.

With the Pope set to land in the City of Brotherly Love today, let’s take a look at what he’s said and done so far and how these issues may have an impact on fundraisers.

In his address to congress, the pope mentioned a number of exemplary religious figures, including Martin Luther King. He also offered praise for Dorothy Day, a somewhat controversial figure in the Catholic Church who nonetheless enjoy popularity for her selflessness and saintly life committed to serving the poor. The Dorothy Day Guild – an organization that spreads awareness of Day and advocates for her canonization – stands to benefit. The group should leverage Francis’ words in its messaging in order to expand the reach of its valuable work.

Pope Francis also addressed immigration, and championed a humane and compassionate approach to solving political issues revolving around the topic. Some political figures – prominently Bernie Sanders – has already leveraged the Pope’s address in their fundraising and communications. Non-political nonprofits can do this, too. If your organization works with or for immigrant demographics, there is a natural connection.

The environment is another hot topic this week. In front of the UN, Francis called for nations to acknowledge the right of the environment. These are bold words, and a huge boon for environmental groups looking for another figurehead to channel their messaging through. Especially on the heels of Francis’ highly publicized encyclical calling for better stewardship of the planet, this weeks events have elevated environmental issues to the forefront and related nonprofits need to jump into the discussion.

A highly public figure in possession of immense respect and a massive global audience, Pope Francis is an invaluable influencer. Positioning your nonprofit’s messaging within the context of his vision is an easy (and essential) way broaden the scope of your nonprofit’s work.

Public Benefit Corporations: Businesses for the Social Good

(Meeting at Kickstarter. Photo: Michael Mandiberg)

Perry Chen and Yancey Strickler – co-founders of the popular crowdfunding website Kickstarter – made waves on Sunday when they announced that their company would become a “Public Benefit Corporation” (PBC), legally binding them to pursue positive social aims in addition to churning a profit.

Historically, the term has applied to groups receiving federal charters to pursue some goal in the public interest.  Nowadays, however, the term has expanded outside of nonprofit work into the realm of for-profit businesses.

Currently, only .01 percent of U.S. businesses are incorporated as PBCs. There are several big names among those that have, however, including Patagonia and Rasmussen Colleges. As a result of their novel corporate charters, these businesses are legally required to pursue social good as a part of their mission and guiding principles.

On Kickstarter’s blog, the company’s founders provide more detail on their decision to drop the “inc” from Kickstarter’s name and replace it with PBC:

Until recently, the idea of a for-profit company pursuing social good at the expense of shareholder value had no clear protection under U.S. corporate law, and certainly no mandate. Companies that believe there are more important goals than maximizing shareholder value have been at odds with the expectation that for-profit companies must exist ultimately for profit above all.

Benefit Corporations are different. Benefit Corporations are for-profit companies that are obligated to consider the impact of their decisions on society, not only shareholders. Radically, positive impact on society becomes part of a Benefit Corporation’s legally defined goals.

As part of Kickstarter’s new legal charter, it must subscribe to a number of pro-social policies. For example, it must donate a full 5 percent of its profits to arts organizations and groups that work to eliminate poverty.

The company will also pursue certification from B Lab, a nonprofit that certifies businesses as “Benefit Corporations.” A number of PBCs – including Patagonia – have been certified by the group.

On its website, B Lab displays its “Declaration of Interdependence,” outlining the vision of Public Benefit Corporations:

We envision a global economy that uses business as a force for good.

This economy is comprised of a new type of corporation – the B Corporation –

Which is purpose-driven and creates benefit for all stakeholders, not just shareholders.

As B Corporations and leaders of this emerging economy, we believe:

That we must be the change we seek in the world.

That all business ought to be conducted as if people and place matter.

That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all.

To do so requires that we act with the understanding that we are each dependent upon another and thus responsible for each other and future generations.

Kickstarter’s surprise move contravenes the common tech start-up story, in which companies strive to become “unicorns” that sell to larger companies for massive profits. This relatively new model – which blends the purviews of nonprofits and private enterprise – is certainly an exciting take on the character and identity of the 21st century business. Whether or not Kickstarter’s reincorporation heralds a more general revolution in business practices, the company will certainly contribute to the operations and missions of the nonprofit recipients of its donations. 

Key Elements Group LLC will continue to cover this exciting trend and explore how it fits into the world of philanthropy and nonprofit development.

Nonprofits Play Role in Patent Troll Debate

(Photo: Two Vermont nonprofits were threatened with a lawsuit if they did not pay licensing fees stemming from an obscure part of their office scanners)

It’s hard enough for business and nonprofit leaders to keep their organizations afloat without completely erroneous charges of patent infringement showing up in the mail. But that is exactly what has been happening to professionals around the country. Practiced by so-called “patent trolls,” these stunts involve shell companies that attempt to extract royalties from patents of dubious value. In many cases, the arguments are completely absurd and blatantly disingenuous. Two Vermont nonprofits play a big role in one of the most illustrative cases.

Lincoln Street and ARIS Solutions – Vermont nonprofits that provide disability-related assistance – were targeted by a Texan-owned, Delaware-based firm called MPHJ Technology Investments in 2012. The letters accused each nonprofit of owing thousands of dollars in payments stemming from the licensing fees of an obscure, MPHJ-owned patent relating to a specific part inside office scanners.

These patent-trolls may have stepped too far. The Vermont Attorney General has requested a federal court to dismiss a previous ruling that held that MPHJ could continue its duplicitous campaign. More businesses are starting to pay notice now that patent trolling has gained more traction in the media. Congress may also be taking serious steps to counter the phenomenon.

The trend continues, however, with many organizations simply choosing to pay for fear of costly legal services. This is awful and parasitic, stifling legitimate innovation and the work of fair-playing business and nonprofit leaders.

An online organization called Trolling Effects offers advice to victims of patent trolling. If you or an associate has received a confusing letter alleging patent infringement, consult their website, and contact other consumer advocacy organizations.

The Crowdfunding Debate Affects Nonprofits

(A still from Kickstarter, a popular crowdfunding platform.)

It’s hard for one to miss the proliferation of crowdfunding campaigns. They have become part of the popular landscape, with friends and families running fundraisers through a number of online portals that allow them to raise funds for all manner of projects. Nonprofits stand to benefit from this fundraising model, which generates excitement and grassroots curiosity for compelling campaigns and ideas. Some are even arguing it’ll help solve many of charity’s failures.  The crowdfunding landscape, however, is quite complex, and certain legal and tax issues remain unsettled. Let’s take look at some of the nuances surrounding crowdfunding, including what may happen to the industry in the near-term future.

A crowdfunding campaign can take on many different forms. In its most popular incarnation, it involves individuals soliciting what are essentially gifts to jump-start a project, product line, business, or organization. Popular platforms for this model include Indiegogo, Kickstarter, and GoFundMe. Campaign hosts may offer later perks, guaranteeing a product that will in part be developed with gift donations, delivered to the donors after project completion.

Entrepreneurs and startups can also offer equity interest in their companies. This type of crowdfunding has people excited, with some analysts arguing that it heralds a democratized approach to raising capital, pulling more people than ever before into equity markets. The Obama Administration’s 2012 JOBS Act was meant to ease some SEC tax regulations, including those affecting taxes on crowdfunding. The debate is far from over, however, and taxation on crowdfunding campaigns is yet to take a firm shape.

Taking cues from the crowdfunding exemption movement, architects of the JOBS Act sought to formalize crowdfunding’s privileged status as a more-or-less unregulated method of raising capital. Protected in Tittle II of the JOBS Act, the unregulatory character of crowdfunding was sharply opposed by regulators and SEC officials, largely over concerns that a complete absence of regulation would expose inexperienced investors to fraud.

With the approval of Title IV earlier this year, all aspects of the JOBS Act have been formally approved, reviewed, and deemed ready for implementation. A couple of facts – however – have complicated the debate and all but guaranteed that the discussion is going to continue. Many investors are skeptical that there will be any benefit for small business, who – under SEC rules – have no state-exemption for offering securities. In other words, an individual raising capital would face far too many fees for compliance across the country to even make a crowdfunded equity campaign feasible.

Furthermore, a number of frauds have spotlighted the potential for crowdfunding abuse. The industry is a little confusing, with some funders evidently buying into jokes more than products. Take for example the potato salad that raised over $50,000. There is – in a word – an informality to the crowdfunding world. On a less humorous note, consumers have into projects and groups that never came to fruition.

Washington recently required Ed Polchlopek, III to pay $54,841 in damages to defendants who donated to his crowdfunding campaign. Allegedly run to construct a specially-designed set of playing cards, his campaign never followed through on its promises.  The Washington state  Attorney General’s office has decided that the case infringes rights guaranteed in the Consumer Protection Act.

This and other scandals – including fake accounts that raised money for Eric Garner’s family following his tragic death, disappearing the money into cyberspace – will likely bring regulation (and taxation) back to the forefront of discussion. As states offer different and conflicted rulings, regulators and legislators are sure to reenter the debate.

The Pope Comes to Philadelphia

In his first-ever visit to the United States, Pope Francis will travel to Philadelphia to attend the World Meeting of Families. The event – which occurs every three years – will take place in the United States for the very first time. City officials expect up to 2 million people to visit Philadelphia for the Pope’s public appearance on the Benjamin Franklin Parkway, in effect doubling the city’s population for the weekend.

Boosters were expected to raise as much as $45 million for the Pope’s visit. This large sum will cover the expansive operational costs, including security and the management of 10,000 volunteers that will be working around the clock to ensure a smoothly run three day tour.

The World Meeting of Families – while sponsored by the Holy See’s Pontifical Council for the Family – depends on private contributions and in-kind gifts in order to fund the events. Many of the details concerning the funders for the Pope’s visit will not likely emerge until after the World Meeting of Family’s next tax filing. The organization is registered as a 501(c)3 nonprofit. Archbishop Vincenzo Paglia – who heads the nonprofit – is under investigation by Italian authorities for embezzlement. The case involves Paglia’s tenure in Italy and, according to the World Meeting of Families, is in no way connected to the organization or the planning for the Philadelphia event. 

Government resources and personnel will also play a big part, as the Secret Service and other federal agencies have contributed significantly to the security planning process and will staff the implementation of the security plan, The extent of the primary security perimeter could stretch from the Schuylkill to the Delaware rivers, and from South Street all the way to Girard Avenue. Officials have indicated that a fence will be constructed that completely surrounds City Hall. Analysts believe this is because the influx of people will begin shutting down parts of the city as early as Friday evening.

Despite the logistical head aches and non-stop, city-wide organizing, the visit is expected to provide quite the financial boon for Philadelphia, with a projected $418 million impact spread across the city’s service, hotel, retail, and transportation industries.

Nonprofits and foundations are also leveraging Pope Francis’ visit to improve their fundraising.

The Pope – a veritable media sensation – has helped raise the profile of a number of area charities tackling basic needs issues and other worthy causes. The executive of HOME – an anti-homelessness organization – announced a $1.5 million fundraising campaign in June in conjunction with Francis’ visit. Also known as the Francis Fund, the campaign has contributed $700,000 to more than 40 human services organizations serving Philadelphia and Camden.

The actual extent of the philanthropic and financial impact of the visit will not emerge until months from now, but if the number of passionate faithful inspired by Pope Francis’ message traveling for the event are accurate, there will be a massive pool of generous donors ready to make a difference in the lives of the less fortunate.

Refugee Relief Efforts Face Bankruptcy

(Photo: Arbat Transit Camp for Syrian Refugees in Sulaymaniyah, Iraqi Kurdistan)

As part of our ongoing coverage of the global refugee crisis, today we look at how UN agencies are quickly running out of cash and consequently edging closer to bankruptcy.

In an interview with The Guardian, UN High Commissioner for Refugees António Guterres relayed a dim situation marked by increased need and declining budgets:

If you look at those displaced by conflict per day, in 2010 it was 11,000; last year there were 42,000. This means a dramatic increase in need, from shelter to water and sanitation, food, medical assistance, education. The budgets cannot be compared with the growth in need. Our income in 2015 will be around 10% less than in 2014. The global humanitarian community is not broken – as a whole they are more effective than ever before. But we are financially broke.

As world governments struggle to cope with the glut in refugees fleeing war torn countries including Syria, Afghanistan, and Eritrea, it is unclear how aid agencies will be able to raise the necessary funds to keep aid programs afloat. The Syria Regional Response Plan – the overarching program to assist Syrians displaced by their nation’s intractable civil war – is barely 23 percent funded. Funding across the board is inadequate: relief efforts in Yemen are only 20 percent funded, programs to help internally displaced populations in Iraq are only 30 percent funded, and aid for Nepal earthquake victims is currently only 33 percent of the overall projected amount necessary.

Budget shortfalls take a large toll on refugees’ living standards, with UN agencies and aid providers cutting food rations and medical services. Refugees from Darfur received the distressing news that their food rations may end toward the end of the year. The World Food Program – the UN’s food agency – will suspend aid to 1.7 million Syrians because of funding shortages. Considering that displaced peoples possess virtually no means to generate income or sustenance, these realities pose tall and difficult challenges.

Unlike other arms of the UN, humanitarian efforts do not receive regular contributions from world governments. In other words, relief agencies – including the UNHCR and Unicef – depend on additional voluntary gifts from governments, as well as philanthropic contributions from individual global citizens.

Underfunded programs impact ongoing crises in a number of ways. Refugees that make the risky and potentially fatal trip by boat to Greece’s archipelago have told frontline UNHCR workers that they were compelled to flee camps in Jordan because of a dearth of food rations, declining living conditions, and the fraught and tense situation with native residents resulting from these worsening social conditions. This means that underfunded aid programs contribute to the mass migration fanning out through the Middle East and Europe.

Additionally, analysts are concerned that harrowing camp conditions could be a large boon for extremist organizations. Reports from refugee camps inside Turkey indicate that ISIS recruiters operate with relative impunity, attracting disaffected and hungry refugees lured by the promise of steady pay and food.

The amount of funding needed to fully support relief programs will unlikely come from private and voluntary gifts The total necessary is simply too high. Guterres and others are openly calling for reform that would require governments to contribute more mandatory funding for relief efforts. The commissioner remarked that to not “spend more on humanitarian aid is a bad strategy, not to say a suicidal one.” As programs begin unraveling due to the stress of higher demand sapping fewer resources, relief programs may indeed make situations even worse than they currently are.

Migrant Crisis Calls for Bold Philanthropic Action

Europe was rocked by tragedy on August 28, when Austrian authorities found 71 dead refugees inside the back of a truck that had passed from Hungry into Austria. The truck was abandoned two days earlier, but the degree of decomposition of the bodies indicates that the migrants may have suffocated and died even before August 26. Authorities believe the victims to be Syrian refugees.

This tragic event was just one of many over the last month that has illuminated how pressing and massive the global refugee crisis is, as well as the problems facing EU member nations. Increasingly complex trafficking schemes are emerging to meet the demand of refugees, who are entering southern Europe at an unprecedented rate. Indeed, analysts are calling the crisis the single largest movement of people through Europe since World War II.

As Key Elements Group LLC has previously covered, the migrant crisis in Europe poses profound questions. The traditionally open-border mentality of many European nations is dissolving under economic strain and populist backlash – evident with the emergence of nativist, anti-immigrant and (in several nations) fascist political parties. What course that is both humane and politically feasible is possible? What role does philanthropy play in alleviating the suffering of migrants and helping host nations cope?

Over 72 hours at the end of August, cash-strapped Greece rescued over 2,500 migrants making the risky Mediterranean crossing between Turkey and the Greek archipelagos. Since June 1, approximately 142,000 migrants have entered Greece by sea, a number that amounts to nearly 13 percent of the Greek population. While migrants enter through several different points along Europe’s southern boarder – including Italy and Spain – Greece bears the brunt of the influx, a situation exacerbated by its fraught financial and political crises.

After entering Greece, many migrants pass into Macedonia, move through the Balkans and try to make it into wealthier European countries. The stress, difficulty, and complex social circumstances revolving around this system emerged on August 21 when Macedonian riot police fired stun grenades near a border crossing, causing a brief period of chaos and fear.

In the absence of meaningful public funding to address the crisis, philanthropic Greek citizens are stepping forward and offering what support they can – even while  tensions rise and some Greeks are losing patience. On the island of Lesbos, islanders have formed a nonprofit relief organization called Angalia – or “Hug” – that provides basic needs support to migrants rescued off the island’s shore. Yet balancing their own responsibilities (as well as the turmoil of their country’s political and economic systems), volunteers can only do so much, as one Lesbos resident and organizer for Angalia recently told the Wall Street Journal.

Fleeing the convoluted and violent civil war in their own country, many Syrians are effectively stateless, and require an immense and fully international assistance in order to regain a semblance or order and stability in their lives. As the Economist recently suggested, greater EU investment in refugee processing centers in Greece is a logical first step. Authorities will also probably have to expand current plans to resettle around 22,000 migrants. In order to break through the bureaucratic morass that prevents swift action on these sensitive and contentious issues, authorities should also invest in nonprofit initiatives that strive to assist and acclimate refugees entering Europe. This situation calls for a holistic, multi-lateral approach that integrates philanthropic relief across the entire geographic migrant route from Syria to Germany.

Nonprofit and NGO relief organizations are incapable of preventing the rising tension between refugee communities and Middle Eastern host countries such Jordan and Turkey. With increasingly hostile natives and crowded conditions, experts expect the situation in Europe to get even worse as people begin traveling north in the hope of better living conditions. Without bold action now, it may be difficult for future solutions to include the humanity and comprehensive assistance that the refugees deserve.

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