60 Minutes had an expose Sunday on Greg Mortenson and his Central Asia Institute. Mortenson became famous after co-writing Three Cups of Tea, the inspiring story of how he came to build schools for girls in Afghanistan and Pakistan. Apparently piggybacking on the work of author John Krakauer, 60 Minutes quoted key personalities in Mortenson's story who said he made stuff up. As I recall, the program also noted that the institute paid Mortenson's expenses for promoting his books and that the institute got little if any book royalties. It found that some of the schools the institute built were empty.

I recommend Kraukauer's written account, Three Cups of Deceit, which is even more damning than the 60 Minutes piece. It's a classic tale of a nonprofit gone wrong: Inspiring story and charismatic founder bring in millions. Charismatic founder runs roughshod over a spineless board and jeopardizes the organization and the mission. Lots of disturbing allegations, including one that Mortenson used the nonprofit as his personal ATM. (Mortenson says he stands by his book, and the CAI board, such as it is, says a lawyer found he wasn't gaining "excess benefits" from the nonprofit.)

Among other problems, CAI seemed to have pursued widespread and dirty nonprofit trick -- that of classifying its fundraising and promotion costs as "program" expense. Because selling Mortenson's books spread the message of educating young people in rural parts of central Asia, that was supposedly part of the "mission" -- on an equal footing with building the schools and hiring teachers. This kind of shuffle lets nonprofits claim they're spending a high portion of donor money on the mission even when they're just panhandling for dollars.

Here's Krakauer:

What this statement fails to
disclose is that for accounting purposes, CAI reports the millions
of dollars it spends on book advertising and chartered
jets as “program expenses,” rather than as fundraising or
other overhead. Were they reported honestly, CAI’s fundraising
and administrative expenses would actually exceed 50
percent of its annual budget. In 2009, according to an audited
financial report, CAI spent just under $4 million building
and operating schools in Pakistan and Afghanistan, a sum
that includes construction costs, school supplies, teachers’
salaries, student scholarships, and travel expenses for program
managers. In the same year, CAI spent more than $4.6
million on “Domestic outreach and education, lectures and
guest appearances across the United States”—an amount that
included $1.7 million to promote Mortenson’s books. CAI
reported all of this $4.6 million on its tax return as expenses
for “programs.”...

(Since 1998, Mortenson has served as both CAI’s
executive director and as a board member; presently, the
board of directors consists solely of Mortenson and two other
members.)