Money Misappropriated at Two Charities

In unrelated cases, misappropriations of money at two national charities are coming to light this week, with one organization disclosing the theft of nearly $1-million that it had tried to handle internally, reports The New York Times.

That organization, Acorn, a neighborhood organizing group, says it lost nearly $1-million, which Dale Rathke — brother of the group’s founder, Wade Rathke — embezzled in 1999 and 2000, according to the Times. That sum showed up as a loan on the books of Citizens Consulting, a company that provides bookkeeping and other services to the charity, the newspaper reports. When the theft was discovered — eight years ago — some of Acorn’s executives decided to keep the matter quiet after a deal was brokered to have the sum repaid to the charity by the Rathke family.

Dale Rathke remained on staff until a month ago, when whistleblowers forced the issue to become public. Wade Rathke stepped down as chief organizer for Acorn last month as well.

“We thought it best at the time to protect the organization, as well as to get the funds back into the organization, to deal with it in-house,” Maude Hurd, president of Acorn, tells the Times. “It was a judgment call at the time, and looking back, people can agree or disagree with it, but we did what we thought was right.”

By contrast, when the management of the Points of Light Foundation realized that a related entity — run by a former fund raiser for the organization — may have been auctioning off fake vacation packages to unsuspecting donors on eBay, it disclosed that information to federal authorities in less than a month, the Times reports.

The charity has been unable to estimate a value of the loss due to the vacation-package sales but has taken down the online sales business. The Times was unable to reach the former fund raiser, but Points of Light’s president, Michelle Nunn, says the charity is working to repay customers for packages that were sold.

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