Building Trust, Connections and Relationships
PANO response to Washington Post "Scandal" article Oct 2013
PANO became aware that it was listed in a databank of charities compiled by the Washington Post listing nonprofits that checked "yes" on Question 5 of Part VI of Form 990, a question that asks “Did the organization become aware during the year of a significant diversion of the organization’s assets?” Unfortunately, the title of the related article (“Millions missing, little explanation”) and the commentary that was included was misleading. It seemed to indicate that most charities listed had encountered fraud and did not properly publicly disclose the amount and cause on its 990. We are disappointed in the unnecessarily inflammatory and misleading framing of the article and wish to clarify the circumstances leading to PANO’s inclusion on the list.
In PANO’s case, we encountered fraud, not internally but related to an external partner. Our internal procedures identified and dealt with the situation and a clear explanation of what occurred and how we handled it was provided in our 990: The organization’s payroll servicing company failed to remit the association’s tax funds to the Internal Revenue Service for the association and its employees. The payroll servicing company has filed bankruptcy and the association has re-paid the required taxes to the Internal Revenue Service at an approximate cost to the association of $8,100. This default by the payroll servicing company affected not only the association but other organizations that were using this service as well.
This text is available on the Washington Post listing if you click on “financial disclosure,” which appears if you hover over our organization’s name and can be seen in our publicly available 2011 Form 990.
PANO prides itself on adherence to the highest standards of ethical and transparent conduct. The disclosure noted in the Washington Post’s story is an example of such transparent conduct. Our nationally recognized Standards for Excellence accreditation program is an important tool in battling dishonesty by increasing the operational excellence, accountability and therefore trust in our nonprofit sector. The Standards include a set of evidence-based and thoroughly reviewed documentation and procedures. A voluntary national task force of nonprofit experts oversees the program while peers rigorously review Seal of Excellence applicants. The Seal recognizes the outstanding level of operational Excellence, accountability and ethics we all want to see in the nonprofits we donate to, or volunteer with. PANO is fully committed to Excellence though strengthening, educating and engaging our nearly 700 organizational members in these best practices so that our nonprofits maintain their credibility, and therefore, your trust.
The National Council of Nonprofits responded to the Washington Post article in the Chronicle of Philanthropy