NGO “dissolves” after questions raised over corporate funding

prescription drugs in bottle

By Somegeekintn. Creative Commons license

The Washington Post reports today on the demise of the nonprofit group, the American Pain Foundation, that used its funding from big pharmaceutical and medical device companies to play down “the risks associated with opioid painkillers while exaggerating the benefits from the drugs.”

Today’s story follows up on an exposé published last December that used the foundation’s annual report to explain how more than 90 percent of its $5 million budget came from the makers of such drugs as Oxycontin and Vicodin. Those revelations led to a Senate Finance Committee investigation launched yesterday. Also yesterday, the foundation reportedly announced it could no longer remain “operational” and would “dissolve.”

Had its corporate funders fled from the scandal? The post report says the foundation was not taking questions yesterday. But it would not be the first time a corporation has ditched a nonprofit partner after issues of propriety arose.

The example that comes to mind is The Nature Conservancy’s Land Legacy program with Centex, the homebuilder. For every home the company product, it kicked back $35 as a donation to TNC. Eyebrow-raising considering that other environmental groups had criticized Centex as a purveyor of suburban sprawl, a scourge to nature preservation. The deal created internal tension and discord among Conservancy staffers, according to a 2003 Washington Post expose on the nature group. What did Centex do? It took the program over to the Conservation Fund, and after Centex and Pulte Homes merged in 2009, forming PulteGroup, the fund was renamed the PulteGroup Land Legacy Fund. Besides renaming the arrangement, the company and the NGO have gotten savvier in how they discuss it. Today, they tout it as a $2.5 million “revolving fund” paying for “the protection of more than 73,000 acres, achieving dramatic results for wetlands, forests and waterways coast to coast.”

Questionable corporate funding of nonprofit groups is so often in the news these days (THINK: ALEC, Heartland Institute, the American Diabetes AssociationEnvironmental Defense Fund, and the Sierra Club, among others.) new revelations seem to have lost much of their shock value. For instance, you’d think CF’s dealings with the PulteGroup could tinge its reputation just as it sullied TNC’s, but apparently that’s not a good enough reason to turn down the cash.

Questionable corporate largess isn’t just limited to nonprofit groups. Tom Philpott has a post on Mother Jones today questioning the independence of universities that take research grants from Big Ag companies such as Monsanto.

Nonprofit groups are embedded in nearly every aspect of life these days (even ProPublica, the investigative newsroom that produced today’s exposé, is an NGO). But  the Internal Revenue Service doesn’t require nonprofits to tell the public much about their funding sources, which  leaves reporters and other watchdogs reliant on the information the groups choose to share. Many groups voluntarily publish at least a partial roster of donors, which ironically, exactly what ProPublica did; reporters used a donor list in its annual report to connect the dots between its corporate relationships and its public advocacy.

But how often do organizations leave out donations that might lead to awkward questions about corporate cash? As last year’s $26 million Sierra Club-Chesapeake Gas scandal illustrates, it’s much too easy to hide these relationships and obscure their influence.

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About greendistrict

I'm Christine MacDonald, a journalist and the author of the book: "Green, Inc., An Environmental Insider Reveals How a Good Cause Has Gone B

Posted on May 9, 2012, in Business ethics, Corporate Citizenship, Corporate Social Responsiblity, Corporate sponsorship, Environment, health, Nonprofits, Sprawl. Bookmark the permalink. 3 Comments.

  1. They would argue that the funding is used for good works, I guess.

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