Ineffective Philanthropy in Asia
Because nonprofit organizations receive millions in donations and funding, it is important that nonprofits use their funds effectively to complete their mission. Unfortunately, many nonprofits working in developing countries purposefully do not spend enough funds on the intended purpose. A controversial example of an ineffective nonprofit in Asia is the Central Asia Institute (CAI).
Co-founded in 1996 by Greg Mortenson and Jean Hoerni, the CAI works in Asian countries such as Afghanistan and Pakistan to increase accessibility to education, especially for girls. Greg Mortenson went on to write best-selling books titled Three Cups of Tea and Stones into Schools, detailing his experiences in encountering and eventually fighting poverty in central Asia.
However, in the early 2010s, a scandal broke out surrounding Greg Mortenson and CAI's finances as multiple organizations and people, such as CharityWatch and John Krakauer, started investigating the charity. In 2009, CharityWatch began investigating CAI and claimed that Mortenson misused the organization’s funds for personal gain and expenses ("CharityWatch Calls").
In fact, according to Montana Attorney General’s 2012 investigative report, Mortenson, Mortenson used about $2 million on charter flights, which CAI’s board approved of (Bullock 10). Additionally, while CAI was paying for Mortenson’s travel expenses for speaker events, Mortenson received money for travel costs from event sponsors (Bullock 10). For Mortenson’s books, CAI spent $3.96 million buying copies of Three cups of Tea and an additional $4.93 million on advertising (Bullock 8, 12). In 2008, he agreed to compensate CAI the same amount of money he earned from royalties on the books CAI purchased, but at the time of the investigation in early April 2011, he had not completed any payments (Bullock 9). The Montana Attorney General’s office and Mortenson reached an agreement stating that Mortenson must pay a total of $1 million to CAI and will not be allowed to handle CAI’s finances, among other conditions (Bullock 1).
Ultimately, due to Mortenson’s misuse of CAI funds, a disproportionate amount of funds was used for advertisement and furthering Mortenson’s career than actually promoting education in central Asia. For instance, in 2009, more money was spent on tours and gaining support in the United States than supporting schools in central Asia ("Central Asia Institute").
