Posts filed under ‘Investigative Reporting’

Investigating the business world: for-profit, nonprofit and religious organizations

By Patrick McCabe

Written April 5, 2009

Investigating For-Profit Business

There are a couple key things to analyze when investigating a profitable business. Theses include annual reports, public documents and human sources. If the business is a publically traded company documents will be much easier to access.Top 10 Tips

The annual report that all companies must publish will show signs of the companies stability or lack there of. Other public documents are also great sources to examine during an investigation. It is almost impossible to start any business without leaving behind a paper trail, from licenses to tax records. By following this trail a good reporter may dig up some crucial information.

When examining a paper trail don’t be afraid to look at all sorts of documents, public and private. If you can get your hands on it, use it. Human sources are also a great way to find information. Written records lay the foundation for a story but human sources provide the essential details.

Companies employ all sorts of individuals to perform tasks like auditing, accounting, security, maintenance and legal affairs. These individuals are often bound together as a part of associations and as a reporter you may be successful in forming a relationship with an entire association. This would give you a huge advantage in business reporting.

Investigating Nonprofit Organizations

One of the primary reasons nonprofit organizations are so successful is because of the advantage they possess by not paying taxes. When investigating a nonprofit there are five big questions to consider:

·      What percentage of the funds raised by a nonprofit goes to administrative costs?

·      How much money does a nonprofit spend to raise funds?

·      What percentage of total donations is spent on charitable activities?

·      Is the nonprofit helping the people it says it will help?

·      How well is the nonprofit managing its money?

These are key questions to ask yet many journalists do not ask them enough. Because charities and nonprofits receive the most tax breaks they are limited in the types of activities they can do.

A journalist should look at any suspicious activity as an opportunity for investigation. It is recommended that these groups spend at least 60 percent of annual expenses on activities that donors think they are supporting. This information can be found in a company’s audited annual report but percentages can vary widely.

The Washington Post began an investigation into potential healthcare fraud within the nonprofit organization, the Institute for Behavioral Change and Research.

The organization has paid more than $100,000 in restitution to settle the charges that it billed the D.C. government for services it never provided. The services were supposedly to help families and children at risk of drug and alcohol abuse.

The organization’s chief executive, Howard Mabry has paid restitution as a part of a plea agreement he entered in January 2009.

The institute was found to have submitted 19 fraudulent invoices to the D.C. Department of Health’s Addiction Prevention and Recovery Administration for the services that were never provided.

Investigating Religious Organizations

Religious organizations often try to slip by without notice to tax issues. These organizations host unreported, unregulated activities ranging from local bingo games to the multimillion-dollar operations of television evangelists.

In the past ten years investigative reporters have used business records, court records, property records and government contracts to create portraits of abuse within religious organizations.

Because religion is such a sensitive topic, investigating religious organizations can evoke a wide range of emotions. Journalists should not be dissuaded from examining the conduct of religious leaders, the finances of religious institutions or their political activities.


April 6, 2009 at 12:49 pm Leave a comment


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