The New York Times piece about the resignation of the Smithsonian’s director reads like a primer on the management problems of nonprofits, even though the Smithsonian is unique in holding a Congressional charter and receiving 70% of its funding from the Congress. The good news about that unique situation is that once he’s able to document excessive compensation of the top executive, Senator Grassley (scourge of charities great and small) is able to apply direct pressure for his removal (i.e., no appropriation til this guy accounts for expense reimbursements for heating his swimming pool); the bad news is that in replacing him the Smithsonian faces exceptional pressure from the people in charge in Washington. So far the Republicans haven’t demanded that a scientist who believes in intelligent design be placed at the head of one of the nation’s most visible repositories of knowledge; but you never can tell.
Meanwhile, just a quick review of the items in the Smithsonian story that may bear on the operation of other charities:
- Retiring exec Lawrence M. Small came from Citicorp and Fannie Mae. We’ve already discussed problems in acculturating for-profit business people to the nonprofit way, which includes not being reimbursed for private jets. Add in this case someone who was a veteran of the notoriously ill-managed Federal home loan agency, and you’ve got a recipe for disaster.
- The Board includes two people who obviously weren’t paying attention–Vice President Cheney and Chief Justice Roberts–along with a whole bunch of other people who probably weren’t paying attention because Mr. Small was raising oodles of money and therefore they didn’t have to. The Times reports the Board is now thinking about creating a governance committee. What’ll they think of next?
- Mr. Small led an attempt to "run the Smithsonian like a business" by selling exclusive access to its collections to commercial interests, thus excluding scientists and scholars. Way to be business-like when your business is the advancement of knowledge.
- The competitors to succeed him include a scientist, on the one hand, and a former senior aide to Republican Senator Bob Dole, on the other. So what is the Board going to do: choose leadership committed to the mission and use its own energies and influence to secure the necessary resources, or choose leadership with "contacts" and "connections" and fundraising power and use its own energies to roll over and go back to sleep? Ladies and gentlemen, place your bets.