Who's Minding the Nonprofit Store: Does Sarbanes-Oxley Have Anything to Offer Nonprofits?

IN JUNE OF 2003, nonprofit public benefit corporation PipeVine, processor of charitable donations for dozens of charities, closed its doors, admitting it did not have enough funds to distribute what it owed to its clients. The California attorney general filed suit and the San Francisco Superior Court appointed a receiver to take over the affairs of the corporation. The receiver's preliminary report indicates PipeVine (formerly known as United Nonprofit Operations or "UNO") likely owed over $18 million, with cash and assets worth just over $3 million, placing PipeVine among the most costly nonprofit failures ever. In the post-Enron world, where increased scrutiny of forprofit corporations has attracted judicial and legislative attention, the unique attributes of charitable nonprofit corporations have left those entities largely free to handle extraordinary sums of money intended for a wide variety of charitable and philanthropic ventures with little or no public accountability and virtually no ability to discover problems before they become catastrophic.