Reading Between the Lines

Liz Smith’s Star-Studded Literacy Charity Flunks Better Business Test

Three of the charity's top officials—Higgins, president Harris Herman, and Marylee Raymond Diamond, the chief financial officer—don't appear embarrassed in the least at violating the nonbinding standard. "We can look the Better Business Bureau in the eye," insisted Higgins. "We respect them for their rules, but that's not the way we look at it."

In the case of Literacy Partners, the dispute isn't about the numbers, but about how the numbers are used. For example, during the charity's 1999 fiscal year, it spent $1.7 million on program services and set aside $1.1 million for its endowment. All three of the charity's officials said the money for the endowment should be counted as spent on literacy programs. But Higgins acknowledged that, like other organizations' endowments, the growing clump of money is not likely to be tapped for direct services.

Higgins and two other top officials of the charity defended their decision to pump up the endowment and pointed out that Literacy Partners has increased the number of people it serves from 400 only a few years ago to more than 900 today.

The charity's response, included in the Better Business Bureau's formal report, states that the Literacy Partners board simply set a policy of not spending the $1.1 million, which it described as "segregated ininvestment accounts." The charity noted that it had set aside over $300,000 "to fund program expansion." But it added that it expects to spend "more than $250,000" on "a major renovation of . . . administrative space."

The glossy financials of Literacy Partners are a stark contrast to the grim figures submitted by many other charities struggling to raise funds. Tax returns submitted by the Haitian Enlightenment and Literacy Project, of Brooklyn, show that during 1997 the agency spent $64,000 helping people learn to read, but only drew $18,690 in contributions.

Along with other charities that fight adult illiteracy, Literacy Partners cites frightening statistics: 36 percent of adult New Yorkers read at the fifth-grade level. But Liz Smith's pet project is "somewhat unique" in its powerful collection of celebrities and rich contributors, said Tracy Carman, a spokeswoman for Literacy Volunteers of America. "Very few of our local affiliates have those kinds of conditions. It's tough to get celebrities interested. It's easier to get interest in diseases."

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