60 Minutes Raises Tough Questions about Greg Mortenson and Central Asia Institute
Last Sunday evening’s broadcast of the CBS news show “60 Minutes” raised some important questions about “Three Cups of Tea” author Greg Mortenson and the governance of the charity he founded, the Central Asia Institute (CAI). I watched the episode, reviewed the Central Asia Institute’s latest 990 form, and also read the CAI’s response to 60 Minute questions, which is now posted on their website.
Both CBS and the Central Asia Institute agree that only 41% of the Central Asia Institute’s spending actually went to build schools in Afghanistan and Pakistan. Furthermore, while the CAI spent $1.7 million for book related expenses (i.e., advertising, events, film, publications, and travel) what is much murkier is how much of Mr. Mortenson’s royalties from sales of “Three Cups of Tea” have been donated back to the charity, raising the very reasonable question of whether Mr. Mortenson is deriving excess benefits from the charity he founded.
I personally felt the 60 Minutes segment was the product of some outstanding investigative journalism while I did not find the responses posted on the CAI website very reassuring. Read them both, decide for yourself, and add a comment here, or on the 60 Minutes website, which has 379 viewer comments, and counting.
Greg Mortenson’s response that the concern was primarily generated by the Form 990 filing for one year is misleading. I reviewed the Central Asia Institute’s 990 filings back through 2006 and the same problem persists.
By claiming that educating the U.S. population about school issues in Pakistan and Afghanistan represented part of its program activities, in its 990 filing, the Institute allocated the costs of Mortenson’s domestic travel as program related rather than fund raising expense.
I served for six years on the Board of a major U.S. non-profit and that approach is not uncommon. It was my general observation that in every “educational” presentation the emphasis was on the actions of the non-profit to cure the problem being discussed. In that sense, the actions were more motivated by marketing than education and should in all fairness be classified as fund raising.
In the year’s that I reviewed, Central Asia Institute never spent more than 50% of its actual expenditures on the construction or support of schools in Asia. In addition, in each year, it created proportionately large reserves by failing to apply a significant percentage of donations to any expenditures. In terms of donations actually received, the Asian school expenses sometimes represented less than 20% of donations received.
If Greg Mortenson cares about this cause, he should most definitely pay his travel expense out of the speaking fees and royalties that he earns. Donations should be applied as directly as possible to the work that the agency claims to be committed to.