Wider Impact

Cameron McWhirter on the impact of the Mortenson scandal:

Grass-roots nonprofits across the country now find themselves under intense scrutiny because of the Mortenson scandal. Many are considering going to new lengths to demonstrate to potential donors that they are on the up-and-up. All are bracing for an impact on giving. Many foundations and wealthy donors now are cautious because of “reputational risk” if they give to an organization that falters.

The scandal is the talk of the nonprofit community—though many won’t talk about it on the record. More extensive auditing is likely to result, according to Jim Zoiklowski, founder and president of BuildOn, a nonprofit that runs afterschool programs in American cities and builds schools abroad.

“Anything like this out there in the media can shake stakeholder confidence,” he said. “It’s going to elevate the scrutiny, elevate the expectations.”

Several groups that rate charities are rethinking the way they assess organizations, and others are working hard to get the word out about their rankings. Charity Navigator, one of the largest charity-watch sites, gave Mr. Mortenson’s institute four stars—its highest rating—but now has a large “donor warning” label in red for the group, with links to the recent stories.

For what it’s worth, we’re keeping Mortenson on our summer reading list at Patterson. The reasons are to indicate the difficulty of monitoring NGO behavior, as well as to familiarize students with the controversy over Mortenson’s work. We’ll certainly be supplementing with a selection of articles about Mortenson and CAI.