What would you think about a newspaper that printed a first-person rant on its op-ed page from someone complaining about overreaching law enforcement without mentioning the author had been convicted of murder? Or a magazine that published an article criticizing due diligence in accounting without stating the writer had done the books for Ponzi artist Bernard Madoff? As a reader, isn’t this background you would want to know?
These hypothetical examples aren’t too far off from what in my judgment the editors of the 108-year-old Journal of Accountancy did–or didn’t do–with an article by a top financial manager at the Seattle area’s biggest public charity.
In its August issue, the JofA published an article about the difficulties of valuing of donated goods entitled “Gifts-in-Kind: What Are They Worth?” The subhead was “How to avoid pitfalls of GIK valuation.” The author was described in an accompanying bio as “associate director for financial accounting and operations for World Vision, a relief, development, and advocacy organization that works to fight poverty.”
Here’s my problem with this: Over the past decade World Vision, a faith-based charity headquartered in the Seattle suburb of Federal Way, has been one of the world’s biggest exaggerators of GIK value, especially in the realm of deworming medicines like mebendazole. The charity took pills that cost 2 cents a pop on world markets and reported them on its financial statements as being worth as much as $10.64. That’s a 53,000% exaggeration, which had the effect of making the charity look to would-be cash donors larger and more financially efficient that it really was. World Vision ran into GIK valuation problems with other items, including, memorably, 100,000 misprinted NFL T-shirts sent to Africa that the charity initially said it it would book at $20 each instead of a wholesale-shipping-and-processing value of maybe $2 each.
Many articles have criticized World Vision for various aspects of its GIK operation. Yet there is no specific mention in the JofA piece or the bio of World Vision’s highly controversial practices. The closest thing is a reference in the first sentence to “a number of investigative articles” about GIK. I happen to be the author of some of those articles, for Forbes here and here, and even for New To Seattle, the blog you’re reading right now. This sentence in the JofA article does not state or even imply that World Vision ever has been cited specifically, which it has. In fact, the wording of that sentence, and indeed the entire article, has an innocent, above-the-fray tone, which I suspect is exactly what was intended. Continue reading
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