Public records released over the past several weeks describe a charitable sector absorbing a level of federal and state scrutiny it has not seen in decades — and a set of accounting questions that are older than any of the current cases. Court filings, tax returns and peer-reviewed research all point in the same direction: the money flowing through tax-exempt entities has grown faster than the systems built to account for it.
This week’s watch covers eight items, each tied to a public filing or an agency record. Allegations are identified as allegations. Where matters remain pending, we say so.
1. A $118 Million Homelessness Contractor Draws Federal Charges in Los Angeles
The Justice Department announced on September 16 that law enforcement had arrested two of three defendants charged in separate federal homelessness fraud cases in the Central District of California. According to the department’s announcement, Michael Young, 46, a founder of the Culver City-based nonprofit Home At Last, was arrested on a federal criminal complaint charging one count of wire fraud.
The complaint alleges that Young’s organization received more than $118 million in public funds from the Los Angeles Homeless Services Authority, the City and County of Los Angeles, and the U.S. Department of Housing and Urban Development, with LAHSA alone paying the nonprofit over $75 million. Prosecutors allege Young used a network of sham vendors — entities the complaint describes as having no employees, no locations and no legitimate operations — to misappropriate more than $7.5 million, including more than $1 million spent to open and operate a restaurant and nightclub in Inglewood. LAHSA cancelled its contracts with the organization in June 2026.
Two related matters were announced the same day. Lakiya Malone, 48, an employee of the nonprofit Special Service for Groups, was arrested on a 21-count indictment alleging she accepted more than $180,000 in bribes and kickbacks in exchange for priority housing referrals, including for “ghost” participants who prosecutors say never lived at the sites. Alexander Soofer, executive director of the nonprofit Abundant Blessings, has agreed to plead guilty to wire fraud and money laundering; according to the department, he admitted obtaining $23 million in public money intended to combat homelessness and pocketing at least $2 million. A third defendant, Donye Mitchell, is described as a fugitive. An indictment or complaint is merely an allegation, and all defendants are presumed innocent until proven guilty.
2. Dark Money Sets a Record: $33.1 Million Through Thirteen Shell Nonprofits
An analysis published August 11 by Citizens for Responsibility and Ethics in Washington found that a connected network of 501(c)(4) organizations has routed more than $33.1 million to 31 federally registered super PACs in the 2026 cycle. Federal Election Commission records cited in the analysis show that figure already exceeds the roughly $14.6 million the same network moved in the 2024 cycle and the more than $22 million it moved in the 2022 midterms.
The largest single concentration was in Kentucky, where five network nonprofits channeled more than $14.5 million into the Republican Senate primary. FEC filings show $10.64 million of that reached a single super PAC from three nonprofits — American Jobs and Growth Fund, Conservative Agenda for America and Defend US, Inc. In Texas, America Works Fund contributed $8.9 million to a super PAC supporting Sen. John Cornyn’s unsuccessful primary campaign.
The Form 990 filings themselves are the more instructive document. ProPublica’s Nonprofit Explorer shows that American Jobs and Security raised and spent more than $9.8 million in 2024 while reporting no employees, no website and a sole board member devoting roughly two hours a week. Of that, more than $4.6 million was distributed as grants to other nonprofits in the same network or their subsidiaries. CREW reports that the 13 network nonprofits collectively disclosed control of 30 disregarded entities on their most recent returns. None of this is unlawful on its face — the IRS permits a 501(c)(4) to devote a substantial minority of its spending to election activity — but the structure makes the ultimate source of the money unknowable to voters by design.
3. The $37 Billion Question: New Research Finds Hospital Exemptions Don’t Buy Charity Care
Nonprofit hospitals receive an estimated $37 billion a year in federal, state and local tax exemptions. A peer-reviewed study published this month in the Journal of Regulatory Economics and summarized September 2 by Georgia State University’s Public Finance Research Cluster tested whether that subsidy purchases what it is meant to purchase.
Researchers Sukriti Beniwal, Federico Corredor and Meghna Paul tracked 150 hospitals that converted from for-profit to nonprofit status between 2010 and 2023, using Medicare cost report data and Census local-government finance data. Their findings: conversion produced no meaningful increase in charity care; total uncompensated care actually fell by roughly 4 percent after conversion, driven mainly by hospitals writing off less bad debt; and local school districts lost property tax revenue averaging $25 per capita once a hospital became exempt.
The result does not establish wrongdoing by any hospital. It does establish a measurable gap between the statutory theory of the community-benefit standard and its observed effect — a gap that Congress has examined repeatedly, most recently in a Congressional Research Service report issued in March 2026.
4. Executive Pay: Raises Track Budget Size, and the Gap Widens at the Top
Candid released its 2026 Nonprofit Compensation Report on August 13, drawing on 2024 Form 990 and 990-EZ filings covering more than 200,000 positions at nearly 120,000 tax-exempt organizations. It remains the most useful available benchmark for judging whether any individual executive’s pay is an outlier.
Median CEO salary increases ran 3.1 percent or less at organizations with budgets under $5 million and 3.3 percent or more — often near 4 percent — at organizations above $5 million. On gender, the data splits: women CEOs at nonprofits with budgets under $1 million now earn 93 to 96 cents per dollar, up from 85 to 92 cents in 2014, while women CEOs at organizations above $50 million earned 75 cents per dollar in 2024, down from 77 cents a decade earlier. Across all budget tiers the figure was 73 cents, unchanged since 2021.
Candid’s researchers attribute part of the divergence to board composition — women hold a majority of board seats only at organizations with expenses below $1 million, and boards set executive pay. For readers assessing a specific 990, the practical point is this: a raise materially above 4 percent at a large organization, or compensation well outside the range for its budget tier, is the kind of figure that warrants an explanation in Schedule J.
5. A $200 Million Special Needs Trust Administrator in Bankruptcy
The case that best illustrates the stakes of weak nonprofit financial controls remains pending in the Middle District of Florida. According to a Justice Department announcement, Leo Joseph Govoni, 67, co-founder of the Center for Special Needs Trust Administration, and John Leo Witeck, 60, an accountant at the organization, were charged in connection with an alleged scheme to steal more than $100 million.
The indictment alleges the nonprofit managed over 2,100 special needs trusts containing approximately $200 million as of February 2024, with beneficiaries in nearly every state, and that from June 2009 through May 2025 the defendants misappropriated client-beneficiary funds while sending account statements with false balances to disabled victims. The organization filed for bankruptcy in 2024 and disclosed that more than $100 million in client funds were missing from its trust accounts. Both defendants are presumed innocent; the matter has not been tried.
6. Enforcement Is Rising Faster Than Oversight Capacity
The Justice Department reported more than $6.8 billion in False Claims Act settlements and judgments in fiscal 2025, the highest on record. Federal attention to the charitable sector has followed. In April 2026, a federal grand jury charged the Southern Poverty Law Center with wire fraud and false statements; the organization denies the charges and the case is pending. The Alabama attorney general subsequently opened a civil inquiry under state charity law.
Set against that enforcement volume, routine oversight is thin. As University of Dayton accounting professor Sarah Webber documented, the IRS audited roughly 660 Form 990 filers in 2024 out of an estimated 1.9 million tax-exempt organizations — an examination rate near three one-hundredths of one percent. The Association of Certified Fraud Examiners puts the typical loss from a reported nonprofit fraud at about $76,000, roughly half the $145,000 average across all sectors, and finds that only 52 percent of nonprofit staff receive fraud-awareness training, versus 83 percent at publicly traded companies.
Webber’s point is worth stating plainly, because it cuts against the easy narrative in both directions: there is no reliable evidence that nonprofit fraud is increasing. What has increased is the rate at which it is being found and charged.
7. State Attorneys General: Small Cases, the Same Pattern
Because nonprofits are chartered by states, primary oversight sits with state attorneys general — offices that, per the most recent comprehensive survey by the Urban Institute and Columbia Law School, employed roughly 355 charity regulators across 48 states and territories, with about one in three states lacking even a single full-time position dedicated to the work.
The cases those offices do bring share a recognizable shape. Minnesota Attorney General Keith Ellison sued the nonprofit Act for Cause and its president in January, alleging that upon dissolving the organization he transferred title to its $1 million commercial property to his own for-profit corporation without compensating the nonprofit, and used nonprofit accounts for tuition, gym memberships and car payments. The complaint also alleges the organization operated without a functioning board, held no annual meetings and kept no financial records. In the District of Columbia, a 2024 consent judgment requiring the NRA Foundation to establish an audit committee, adopt a conflict-of-interest policy and report policy changes to the attorney general remains in force through December 2026. In each matter, the failure point was governance before it was accounting.
8. Donor-Advised Funds Outgrow the Disclosure Regime
Candid reported on September 16 that donor-advised funds are now the fastest-growing form of charitable giving in the United States, publishing a dashboard comparing national DAF sponsor grantmaking with foundation grantmaking. The structural issue is that a DAF sponsor files a single Form 990 covering thousands of individual accounts. A contribution is deductible when it enters the fund, but the identity of the advisor directing the eventual grant is not disclosed on the recipient’s return. As DAF volume grows relative to private foundation payout — where grants are itemized on Schedule I of the Form 990-PF — the share of American philanthropy that is traceable through public filings declines.
What TIJ Is Watching
Four organizations and one data set warrant a closer look in the weeks ahead. First, the remaining LAHSA subrecipients: the Justice Department has now charged three individuals connected to Los Angeles homelessness contracting and secured one plea agreement, and the task force’s stated jurisdiction covers seven counties. Second, the 30 disregarded entities disclosed on Schedule R by the 501(c)(4) network CREW identified — subsidiaries of this kind are where issue-advocacy spending goes unreported at the federal level. Third, the roughly 150 hospitals that converted to nonprofit status in the Georgia State dataset, whose individual Schedule H community-benefit reporting can be checked against the study’s aggregate finding. Fourth, the successor entities to the Center for Special Needs Trust Administration and the disposition of its bankruptcy estate. And finally, the IRS automatic revocation list, published monthly, which remains the single most underused public record for identifying organizations that took in money and then stopped filing.
The Investigative Journal contacted no individual defendant for this report; all charged individuals are presumed innocent and the allegations described here are drawn entirely from public charging documents, agency announcements and filed tax returns. Organizations named in pending matters have publicly denied wrongdoing where noted. TIJ welcomes correspondence from any organization or individual discussed above.