According to the Chronicle of Philanthropy, the House Ways and Means Committee is planning to hold hearings based on committee chair Charles Rangel’s (D-NY) interest in asking “nonprofit organizations to show why they deserve to be tax-exempt and what they do to help the poor and elderly.”[1] That sounds very tough, akin to his predecessor, Bill Thomas’s (R-CA), frequent and pointed inquiries into what nonprofit hospitals were doing to merit their status as nonprofits.[2]

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As, NPQ recently noted in two articles in its spring 2007 issue, nonprofit conflicts of interest come in many forms and they are not always easy to identify. Sometimes malfeasance tips right over into verifiable criminal behavior, but more often there is a accumulation of self interested behavior—stopping just short of the criminal, perhaps, but nevertheless enormously costly both in terms of philanthropic dollars and public trust.

This article identifies a number of interconnected concerns—the problems that can occur when philanthropic dollars are tied too closely to business and personal interests through interlocking directorates, and the gaps and shortcomings of current regulatory mechanisms when it comes to spotting and addressing these complex situations.

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