Archive for the ‘Personnel Issues’ Category
January 27, 2011
If fundraising is concentric circles, as consultants often say (you ask your friends and then their friends and then their friends’ friends), then it seems to make the most sense to start asking right in the bosom of the family: from your staff and volunteers. Indeed, this is what most nonprofit executives think of when they hear the phrase “Charity begins at home”!
But staff and volunteers are in quite different positions with respect to your organization, and so they can’t be treated alike in terms of asking for money.
Often agencies are afraid to ask their volunteers for money on the grounds that they’re already getting the volunteers’ time, and it would be greedy to ask for more. But in fact no one is in a better position to appreciate the value of the work you do, or the scarcity of resources under which you labor, than a volunteer. Further, though not all volunteers are privileged, they are at least people who have leisure time to donate, which suggests they’re not grindingly poor. If your volunteers show up at the office with a cup of Starbuck’s in hand, consider what that represents: 1 Venti/day@$2.50 x 5 days/week x 52 weeks/year = $650. So they’re probably spending more on coffee than you’d think of mentioning in an initial ask.
Will any volunteers take umbrage at being asked to give money as well as time? Sure; a certain percentage of the population finds discussion of money distasteful and crude, and such people may well be represented in your volunteer corps. But you’re not any poorer for asking them, and there’s very little reason to think they’d stop volunteering at an activity they enjoy because you asked them a question to which the answer was “no.”
Don’t extend this blithe attitude, though, to asking your volunteers to ask for money. Direct-service volunteers are apt to be offended if they’re asked to do other kinds of volunteer work, such as fundraising, because the request suggests that they’re not already working hard enough. You understand the difference between time and money, and your need for both; your volunteers are equally sophisticated. So ask them for money, not for more time.
Staff members are a different issue. People who work in nonprofit agencies are already donating enormous sums to the agency, in the form of foregone income–-the money they could be making working in the for-profit sector. In this sense they are almost certainly the top donors to the agencies at which they work.
The Nonprofiteer took a nonprofit executive job for half the salary she had been earning as a practicing lawyer—a not inconsiderable sacrifice, though one she was glad to make. But when members of the Board suggested that she also write a check to the agency, her attitude was, “The very second the Board gives $25,000 a year to the agency–-collectively, let alone individually!—it will have the right to come back and ask for something more than the $25,000 worth of lost wages I’m already giving.”
To be fair, hers is a minority view. Many agencies regard staff donations as some sort of measure of staff commitment to the agency. But staff members indicate commitment every day through the work they do, the salaries they accept, the health insurance they lack. At some agencies they even demonstrate their commitment by working overtime for which they don’t get paid—and by not ratting out their employers to the U.S. Department of Labor or the state agency charged with regulating wages, hours and working conditions. The fact that our agencies do socially valuable work doesn’t entitle us to exploit our laborers, though of course for many years nonprofits have survived their lack of financial capital by consuming human capital instead.
So don’t ask your staff for money, and do ask your volunteers. Maybe they’ll donate enough to make it possible for you to offer the staff health insurance, or paid sick leave, or even a raise.
Well, one can dream, anyway.
Tags:501c3, Board of Directors, charity, donors, Executive Director, Fundraising, human resources, nonprofit, nonprofits, not for profit, personnel, philanthropy, Relations with funders, social services, volunteer, volunteering, volunteers
Posted in Boards of Directors, Executive Directors, Fundraising, Management Advice Day tip, Nonprofit management, Nonprofits--General, Personnel Issues, Private Philanthropy, Relations with funders, Social Service Agencies, Volunteers/Volunteerism | 7 Comments »
December 13, 2010
The Nonprofiteer first learned of the work of catchafire.org several months ago through our mutual colleagues at Mission Research. She’s been getting around to writing about Catchafire’s work placing high-skill volunteers at New York nonprofits. Now that founder Rachael Chong has been interviewed on NPR’s Marketplace, the Nonprofiteer realizes that time waits for no blogger.
Rachael describes her organization as “Match.com for volunteers and nonprofits.” A nonprofit pays a low fee to have Catchafire figure out its needs (“scope its projects,” in site jargon) and find a volunteer with the right skills to accomplish the task. (At the moment the group operates only in New York, which mysteriously has one of the lowest volunteering rates in the country, but it hopes to expand to other communities in fairly short order.) Volunteer in, do project, volunteer out, bada-bing, bada-boom—the whole thing happens in a New York minute.
The Nonprofiteer applauds Catchafire’s mission and part of its approach–the part about helping nonprofits figure out what they can actually do with high-skill volunteers other than asking them to stuff envelopes. But for every volunteer who wants to root, shoot and leave she knows two who are looking for a long-term volunteer home, and though obviously a Catchafire volunteer isn’t precluded from becoming a permanent volunteer, s/he comes in branded as a person who will, and therefore probably only can, do one thing.
The Nonprofiteer is also concerned about sending a single volunteer to do a project, even if it seems apparent that a single pair of hands is all that’s required. Many people volunteer to alleviate their loneliness (or, more positively, to connect with others) and a single-person project—even in the midst of an agency with lots of people—is likely to be isolated, and isolating.
The Taproot Foundation, which likewise uses a project-based model of providing assistance to nonprofits, addresses the isolation concern by assembling a team to complete each project. The good news is, each volunteer gets to know and work with other high-skill volunteers. The bad news is, teams of volunteers are to nonprofits as hairballs are to cats: tolerable on a temporary basis but unlikely to be integrated permanently into the system. High-skill volunteers searching for a cause about which to stay passionate and a home in which to express that passion instead find the opportunity to be coughed up.
The Nonprofiteer’s theory is that both groups are treating the symptom [failure to use high-skill volunteers] rather than the cause [staff hostility to the use of volunteers]. It may be that only the symptom can be treated; but in her own practice, the Nonprofiteer works to help organizations identify and overcome the sources of staff resistance, so they can make use of high-skill volunteers on an extensive and long-term basis rather than a restricted and short-term one. We all know that staff turnover is expensive because every new person has to be trained; the same must be true of volunteer turnover, and therefore solutions requiring constant orientation of new people create problems of their own.
But may the best model win! And if nonprofits use some high-skill volunteers better as a result of any of these approaches, we’ll all win.
Tags:501c3, charity, human resources, Marketing, nonprofit, nonprofits, not for profit, personnel, social capital, volunteer, volunteering, volunteers
Posted in Coverage of nonprofits, Current Affairs, Management Advice Day tip, Mission, Nonprofit management, Nonprofits--General, Personnel Issues, Volunteers/Volunteerism, Women's Issues | 4 Comments »
November 4, 2010
Dear Nonprofiteer:
Recently I started serving on a board of a small social service organization. In the last six months our board president has slowly retreated from his leadership duties due to a variety of personal issues that he’s facing and I find that I’m essentially left driving the bus. What resources are there that you would recommend for those seemingly newly anointed to oversee a nonprofit?
Signed,Nickeynewguy and Lost
Dear Nickey,
Of course the best resource is the Nonprofiteer it/herself–the site has no search function, I’m sorry to say, but if you just keep trolling backwards you’ll find numerous bits of advice for Board presidents. But here’s the central thing to remember: even if you’re suddenly the Board PRESIDENT, you’re not suddenly the whole Board.
So the first thing to do is call a meeting of the Board (with the Executive Director in the room—s/he will be your most valuable partner) and say, “Well, I appear to have become president by default. This wasn’t your choice and it certainly wasn’t mine; so let’s figure out what has to be done and divide up the tasks.” In other words, make it clear from the word Go that you’re not going to be in this alone.
Second, if you’re the sort of person who ends up leading by default, that means you’re a natural leader in one way or another. I’m going to proceed on the assumption that your leadership flows from quiet competence rather than noisy charisma (otherwise you’d have been Board president to begin with). So use that quiet competence to help the Executive Director and your fellow Board members think through:
- What do we have to do that’s urgent?
- What do we have to do that’s important?
- Are we letting the urgent get in the way of the important?
- If so, is the urgent really so urgent?
- If so, do we need more people to address things, urgent and important alike?
- If so, who will lead a brainstorming session to identify and recruit prospective new Board members?
Note that I’m not suggesting you do the recruiting, though you may be the most motivated to do so, having suddenly awakened to a whole set of unasked-for responsibilities. Nor should the Executive Director do it—s/he’s got plenty to do already. But the only way you can do your job is to make sure other Board members do theirs, and the best way to get them activated is to give them the fun job, namely, thinking about who else would just love the work you’re doing if only they knew about it, and then talking to those people with great enthusiasm about what you do.
Any Board member who can’t run, or at least participate whole-heartedly in, a recruitment campaign should be given some essential but boring task like reviewing budget vs. actual expenses or assuring compliance with the Federal and state filing requirements. That person should have to report at the next Board meeting, as will the recruiters. As soon as you’re having Board meetings where Board members talk to each other (instead of sulking, or reporting to the Executive Director or to you as though you were the only responsible parties in the room), you’ve got this presidency stuff down pat.
For more detailed guidance, the Nonprofiteer strongly suggests checking out any of the sites on the blogroll (in the right margin), as well as going to boardsource.org, which as its name suggests specializes in making Board service as straightforward and resource-rich as possible. The Boardsource “Knowledge Center” is chock-a-block with guidelines, forms and checklists to help you make sure the essential bases are being covered—even in the center fielder’s absence.
And as further questions arise, please feel free to write again!
Tags:501c3, Board of Directors, Executive Director, governance, human resources, nonprofit, nonprofits, not for profit, personnel, strategic planning, volunteer, volunteering, volunteers
Posted in Boards of Directors, Executive Directors, Management Advice Day tip, Nonprofit management, Nonprofits--General, Personnel Issues, Social Service Agencies, Strategic Planning (and the tactical kind, too), Volunteers/Volunteerism | 2 Comments »
October 27, 2010
A recent publication in Contributions Magazine of the Nonprofiteer’s rant “Board Members are not Hypothetical Constructs” produced the following helpful comment from Pamela Hawley of Universal Giving:
I recently read your article on board members, reposted in Guidestar. What a helpful post to nonprofits, encouraging them to find board members who can both fundraise and be passionate about the mission. I’d also add a key criteria is strategy, and, integrity/values. We’ve had people try to give us millions of dollars and join our board, but the ethical fit was not right. Money coming from not the right source could derail your organization for years, if not permanently.
Patience, too, is helpful. One board member stated he wouldn’t be fundraising. His motives, track record and relationships were so strong, it was more than worth it to have him engaged. And five years later, he just made a huge introduction to a high networth donor. So, it might be all right to have some board members join without fundraising at the beginning.
Thank you again for such a helpful article.
Ms. Hawley is absolutely right about patience, a quality the Nonprofiteer notoriously lacks. It’s always worth remembering that “Board development” is a phrase encompassing the effort of fostering the Board members you have as well as that of attracting excellent outsiders.
And thanks to Ms. Hawley for reminding us all that the real essential for a good blog is smart readers.
Tags:Board of Directors, charity, Fundraising, governance, human resources, nonprofit, nonprofits, not for profit, personnel, volunteer, volunteering, volunteers
Posted in Boards of Directors, Fundraising, Management Advice Day tip, Nonprofit management, Nonprofits--General, Personnel Issues, Volunteers/Volunteerism | Leave a Comment »
October 26, 2010
The Women’s Philanthropy Institute at Indiana University’s Center on Philanthropy has just released a study showing that at all income levels women give more than men—both more frequently and more generously when controlled for income.
This study’s headline is that across nearly all income levels women 1) are more likely to give and 2) on average give more than men.
Specifically, women who make $23,509 or less (Q1) are 28% more likely to give than men; women who make $23,509 – $43,500 (Q2) are 32% more likely to give; women who make $43,5000 – $67,532 (Q3) are 49% more likely to give than men; women who make $67,532 – $103,000 (Q4) are 43% more likely to give than men; and women who make +$103,000 (Q5) are 26% more likely to give than men.
In every income group except for Q2, women give more than men. In Q1, women give 92% more (or almost twice as much) than men; in Q3, women give 95% more (or almost twice as much) than men; in Q4, women give almost 45% more (or almost one and a half times more) than men; and in Q5, women give 94% more (or almost twice as much) than men.
The study’s authors resist the temptation to make bold claims about why this is the case, though they note that generosity tends to increase with education and that women now earn more than half of all bachelor’s degrees. Generosity also increases with income, and more women are employed now, and therefore earning their own income, than ever before. But even controlling for income, education and wealth, in what principal investigator Debra Mesch calls “pure terms,” women are the more generous half of the population.
[Digression: Women now make 80 cents for each male dollar. This represents an increase from 62 cents in 1979, at which rate we'll achieve wage parity in 2043. Only the most ridiculously strident feminists regard this as a problem.]
What’s the source of women’s greater generosity? When prompted, Mesch is willing to indulge in a bit of speculation:
Women are socialized to take care of their families and their communities, and because of that socialization process we see the motives of empathy and caring. We’ve done another study that looks at difference in motives for giving, and women score much higher on empathy and principle of care.
Her new study’s results comport with the trend to focus international aid on women because they’re more likely than men to spend surplus income on their families instead of themselves. Mesch is unsurprised: “I think that’s an international phenomenon, that women are the caregivers and nurturers; they have more of those prosocial behaviors.”
So what difference does any of this make, except the sheer giggle value of demonstrating female superiority to the male of the species? Mesch is the Queen of Tact on the subject:
I think what we need to understand is that one is not better than the other, just different. Women give for different reasons, give differently, are much more egalitarian in their approach. As girls, we’re taught to be nice and share. Men have been taught to be much more competitive, and to communicate status. Men are strategic and women want to be equalizers.
[Oh, right, of course: no one's better, we're just different. But the Nonprofiteer defies anyone to offer an example of how "less generous" can be better than, or even equal to, "more generous."]
If we’re lucky, the study will help eliminate the prejudice afflicting most professional fundraisers: that women are timid askers and chintzy givers who never donate without asking someone’s permission. Not only will cultivating a female donor be more likely to yield a “yes” than comparable effort spent on a man, but women’s giving will increase faster than men’s relative to their economic power. You’re betting on a stock that’s going up.
But you can’t treat your female donors like men in drag. As Mesch notes,
If you’re a fundraiser, you have to communicate with women in a different way than with men. You need to involve and engage them, because if you feel involved as a woman, you contribute not only your money but your time.
Thus the study suggests a lot more than it claims: that today’s efforts to find meaningful work for female volunteers will produce tomorrow’s major gifts. That achieving equal pay is essential not just to women but to the charities we support (so, a little help here, guys?). That female-headed households can be a resource to be tapped and not just a problem to be solved. That the future of philanthropy rests in women’s hands.
What makes this more than a parlor game is the extent to which it reveals the role of empathy in giving. Just as poor people give a greater proportion of their income to charity than rich people—presumably because they know how it feels to be on the needing side of the give-and-need equation—so women may give more generously because we know what it’s like to be dependent. Women are less likely to imagine that having been born on third base means we hit a triple; and the feminist mantra that every woman is one divorce away from welfare makes most of us acutely aware that there but for the grace of God go I.
Part II of the study, scheduled to be released in December or January, will address gender differences in the kind of charities supported: secular or religious? Large or small? Do women’s gifts go to operating expenses, while men’s go to bricks and mortar on which they can carve their names? Says Mesch,
What I can tell you is from the previous research, men and women do give to different causes. We find women seem to give more to the social service areas, to helping the needy. Plus women seem to spread their giving out [among multiple charities] and men are much more strategic.
The results of her research leave Mesch hopeful.
My ideal wish is that at some point, we won’t have a need to study women’s philanthropy. It would be wonderful if philanthropy is just philanthropy, and we understand that women have caught up in terms of their income and education and wealth.
We can really change the world––women are at the tipping point. It’s going to be a huge movement where women can really see themselves as making an impact and being philanthropists.
Tags:501c3, charity, donors, Fundraising, generosity, International, nonprofit, nonprofits, not for profit, philanthropy, Poverty, Relations with funders, volunteers, women, Women's Issues
Posted in Coverage of nonprofits, Current Affairs, Finances, Fundraising, International, Nonprofit management, Nonprofits--General, Personnel Issues, Philanthropy and Taxation, Poverty, Private Philanthropy, Relations with funders, Social Service Agencies, Volunteers/Volunteerism, Women's Issues | 3 Comments »
October 21, 2010
Dear Nonprofiteer,
Several friends and I have started a new musical arts ensemble and are seeking to incorporate as a non-profit. There are 8 artists in the ensemble, so we are a very small organization. Since starting the ensemble was my idea, I have been serving as “Artistic Director,” choosing music, organizing rehearsals and performances, etc., as well as being an Artist in the ensemble.
We are currently working on our Bylaws and so have been thinking about how to structure our Board. We have decided to have all the usual positions (President, VP, Secy, Treas) plus an Artist Representative, and a variable number of at-large Board members (no more than 5). We have a provision in our (in-process-of-being-written) Bylaws where the Board can only select or remove the Artistic Director with a 2/3 consensus of the Artists.
At this point, all of our Artists will serve on the Board in some capacity (either as Officers or as at-large members), though we want to allow for a future time when the Artists get to be just Artists and let other people run the business side of things. The other Artists want me to have a say-so in the running of the organization since the group was formed by my “vision”.
So my question is this: Is it legal, ethical, practical, etc., for me to serve as both President AND Artistic Director (and an Artist in the ensemble)? Or should one of the other Artists serve as President and I (as Art Dir) be only ex-officio with no vote?
I should also mention that my husband is also an Artist in the Ensemble, and so would also sit on the Board (for now).
Thank you very much for any advice you can give. Signed,
Wearing Many Hats
Dear Hats:
Last issue first: it is never a good idea to have a married couple on the Board of a nonprofit, nor is it a good idea for one-half of the couple to serve on the Board while the other is employed by the agency. (I gather you’re not getting paid as Artistic Director, but if you can be selected or fired by the Board, you’re an employee.) A husband and wife on the Board stacks the voting since more often than not they will vote together, and the more important the issue the more likely they will march in lockstep. Majority or not, they constitute a bloc, and blocs or factions create trouble on any Board.
And if your husband’s on the Board and you’re the Artistic Director, you’ve stacked the deck in your own favor on every issue while at the same time guaranteeing the maximum damage to the Board (your husband’s resignation) in case of any disagreement. Don’t start out your nonprofit life with a built-in conflict of interest.
Further, as you seem to realize, no staff member (including the Artistic Director) should serve on the Board at all (whether President or not) except in an ex officio, non-voting capacity.
But let me suggest that you pause here to consider why you want to create a nonprofit structure at all. Don’t become a nonprofit because “all arts groups are nonprofit;” the Nonprofiteer did that for a client once and it was a disaster. As soon as there’s any money involved, you’ll find yourself fighting with the Board over whether those dollars should go directly to you, as Artistic Director; to the artists, in some proportionate way; or back into the institution. So imagine yourself confronting that question now, and build the structure that will get you the answer that you want.
It’s fine to fill your Board with ensemble members and thus guarantee complete artistic and financial control of the agency by its artists. But if you do, an “ensemble representative” would be redundant and should be omitted from your bylaws.
You might further consider that if you’re entirely ensemble-governed, you’re missing the opportunity to use the Board for its central purpose, which is to connect the group to the wider community (and, yes, raise money from that wider community to support the work you do). You do your art for people; perhaps some of them should be represented on the Board—not just to do “the business stuff” but to help you maintain perspective about the relationship of your work to its audience.
In other words, as the Nonprofiteer has said in other contexts: nonprofit and 501c3 status are not mere legal trivialities to permit you to collect donations tax-free. They’re statements about the kind of organization you are, namely, one answerable to the community through its Board. You’re trading a certain amount of freedom for a certain amount of stability. If you’re not ready to do that, skip nonprofit status and live hand-to-mouth til you’re ready to be a full-blown community institution–or until you figure out how to support your art entirely at the box office.
Tags:501c3, arts groups, Board of Directors, charity, Conflict of Interest, Executive Director, Fundraising, governance, nonprofit, nonprofits, not for profit, personnel, volunteer, volunteers
Posted in Arts Organizations, Boards of Directors, Conflict of Interest, Earned income, Executive Directors, Fundraising, Management Advice Day tip, Nonprofit management, Nonprofits--General, Personnel Issues, Volunteers/Volunteerism, Women's Issues | 8 Comments »
September 14, 2010
Long ago the Nonprofiteer had a client hire her to manage the transition from the founding Executive Director to—well, to whatever future awaited the agency in his absence. It was impressive, actually, that the founder himself was the one who realized first (and persuaded the Board) that transition planning was necessary.
But it turns out that recognizing the need for transition planning is quite a long way from being prepared for actual transition. While the founder was theoretically in favor of Life After Him, in practice he was working to set in stone the practices, policies, goals and programs of Life During Him. Though he would have denied this, his purpose was to prevent transition. The person at the helm would change but first the founder was going to assure that the new pilot’s heading would not deviate a single degree from his predecessor’s course.
The only surprise here is the Nonprofiteer’s failure to expect this absolutely predictable occurrence. (Well, no one expects the Spanish Inquisition, either.) But even the smartest consultant isn’t a mind-reader, and so we mostly undertake to do what the client articulates as the job. Of course there will be undercurrents and cross-currents and breakers and riptides, but at least we’re all sailing in the same direction.
Except in this case we weren’t. When the Nonprofiteer met with the Board and challenged its members to move beyond the founder and take true ownership of the agency as essential preparation for hiring a successor, she found them champing at the bit to do so. They had little experience with governance because they’d let the founder run things pretty much as he pleased; but that didn’t mean they had little interest in the subject. In fact, once they began to talk about things that could be done more or less or differently or better, they were neither to hold nor to bind. And, having gotten precisely what he’d said he wanted, the founder was furious—at, of course, the Nonprofiteer.
So here’s a warning to all you consultants out there: when you’re doing transition planning, assume that any founder who purports to be okay with leaving is lying like a rug. And to all you Baby Boomer founders out there, approaching retirement faster than we ever thought possible: if you’re serious about transition, find a consultant and go for it, but don’t expect the process to be smooth. Having a baby taken from your arms is a difficult experience, so don’t go through it til you’re confident that the nanny—your Board of Directors—can be trusted not to drop it.
What if you’re ready to retire and don’t trust the Board? (You shouldn’t have a Board you can’t trust, but that’s water under the bridge at this point.) Then shut the agency down. If the only way it can operate is your way, and you’re about to leave, end of story.
But if you want your creation to outlast your own tenure, brace yourself: with transition, you’re in for the ride of your life.
Tags:501c3, Board of Directors, charity, Executive Director, governance, human resources, nonprofit, nonprofits, not for profit, personnel, social services
Posted in Boards of Directors, Executive Directors, Management Advice Day tip, Mission, Nonprofit management, Nonprofits--General, Personnel Issues, Social Service Agencies | 6 Comments »
July 26, 2010
The Nonprofiteer has a piece in the new issue of Contributions Magazine.
Tags:Board of Directors, charity, donors, governance, human resources, nonprofit, nonprofits, not for profit, personnel, philanthropy, volunteer, volunteering, volunteers
Posted in Boards of Directors, Coverage of nonprofits, Current Affairs, Nonprofit management, Nonprofits--General, Personnel Issues, Private Philanthropy, Volunteers/Volunteerism | 2 Comments »
June 1, 2010
In Our Prime, the essay anthology by and about women 50 and over to which the Nonprofiteer contributed, now has its own Website and therefore has achieved Internet validity. Copies of the book would have made a great gift for Mother’s Day but unfortunately the timing didn’t work out–so maybe you know a nice father who would want one?
The Nonprofiteer still has copies for sale, and the book is also available at Women & Children First bookstore in Chicago and on Amazon.
Tags:advertising, human resources, women, Women's Issues
Posted in Current Affairs, Marketing, Nonprofits--General, Personnel Issues, Women's Issues | Leave a Comment »
May 21, 2010
Dear Nonprofiteer,
The quick and dirty is this: a local AIDS charity has an ED who facilitates a hostile environment. She fires people and then back-fills their employee record with negative things. She makes her assistant accompany her on personal errands, such as to the fertility specialist. The entire executive team has turned over in less than two years, many of us leaving with no job lined up or taking a pay cut of $20-30,000 per year. She gives “presents” to herself and her favorite staff, mall gift cards, in excess of $500. She takes herself and co-workers out for dinner at a $100/head steak house because “we are working so we deserve it.”
In winter 2009, the Board conducted an investigation, wherein one Board member was in collusion with the ED and told her all of the items that were being investigated and in essence helped her to side-step the issues. The majority of the Board resigned, so as not to be tied up with her, with the expectation that her contract would be terminated in Feb 2010. However, the new Board president, her buddy who helped her through the investigation, has asked her to write up her own contract extension. The only reason we haven’t gone to the IRS is because the clients will pay the price.
The federal grant monies are allocated and spent correctly. She seems, however, to use the private donor funds much like they are her personal discretionary spending. The Board took away her use of the company credit card a year ago. One more issue is the fact that she has been promoted within the ranks to the ED position, and has had a personal bankruptcy that is not disclosed to anyone on the Board; she told me because I was the CFO (quit for ethical reasons) and the company was denied for a corporate credit line because of her personal credit history.
Her statement when she took the reins in Feb 2008 puts it best: “I am the CEO of my own company.” Unfortunately, it is my belief that she has fiduciary responsibility to the taxpayers and donors, a responsibility of which she seems oblivious.
Signed, Escaped From Alligators But Still Up to My Ass in Concerns
Dear Escaped:
The only exception to the rule that employees shouldn’t talk to the Board is when there’s evidence of mis-, mal- or nonfeasance on the part of the Executive Director. What you’ve described seems to include all three: interfering with personnel records, helping herself to unaccounted-for petty (and maybe more than petty) cash, and collusion with one Board member to evade the legitimate concerns of the rest. So even if you were still an employee, the Nonprofiteer would recommend that you draft a fact-intensive letter and send it to every member of the Board of Directors, outlining what you know to be true about the Executive Director’s mismanagement and suggesting that it may endanger the agency’s nonprofit status under state or Federal law.
Make sure the letter contains ONLY what you KNOW to be true; talking about other people’s misbehavior is defamatory if it’s false. Err on the side of leaving out anything you heard from someone else and didn’t witness yourself. Also err on the side of maintaining confidentiality from your days as CFO, which is to say, don’t announce the Executive Director’s personal bankruptcy. If you think it necessary, merely report on the agency’s inability to secure credit and suggest that the Board look into the source of this difficulty.
There’s no question that a nonprofit’s Executive Director–just like its Board members–owes a duty to the agency that precludes her using it as her personal piggy-bank, or even her personal source of doing good. People who find nonprofit governance restrictions too confining are welcome to take their chances in the for-profit marketplace; they’re not permitted to transfer the perks of sole proprietorship to the nonprofit arena.
As for “being the CEO of my own company,” that’s all very well; but any for-profit company with stockholders has a Board of Directors authorized–indeed, required–to keep the CEO under control. It may authorize expense accounts (even $100 steak dinners) but it’s also obliged to keep track of where the money is coming from and where it’s going.
For these purposes, there’s absolutely no difference between Federal funding and funding from private donors–it’s all accepted in trust (as it were) for the agency. Presumably some of that private-donor funding comes from members of the Board, and in your letter advising the Board of the Executive Director’s wicked wicked ways you may want to emphasize that. “I know your own generosity goes a long way toward supporting this agency, so you wouldn’t want to have your money wasted or spent on items that don’t benefit our clients.” You probably also want to emphasize that the agency’s reputation is being jeopardized by the behavior you describe, because eventually murder [i.e. financial shenanigans] will out.
Once you’ve done that, you’ve done all you can. (You’d actually done all you could by quitting, but this is the one extra mile you can go without becoming an officious intermeddler.) The IRS has bigger fish to fry, though your state’s Secretary of State or Attorney General may not. But as you’ve noted, the important thing is to restore the agency to its duties to clients, and that’s better accomplished by sounding a clarion call to the Board than by ratting the group out to the cops.
Tags:Board of Directors, charity, Conflict of Interest, credit, donors, Executive Director, Fundraising, governance, grants, human resources, IRS, nonprofit, nonprofits, not for profit, personnel, social services
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