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Commentary May. 19, 2006
By Laura Otten
As hurricane season nears, the issue of preparedness again confronts us. And we're not talking about the government here. We're talking nonprofits.
Last year, the Red Cross' reputation suffered along with the Gulf Coast. It was condemned for its unresponsive culture, poor communications and cursory reactions to the issues that have been looming since 9/11. And with that came more head-shaking, cynicism and disenchantment from a betrayed public.
This disillusionment isn't limited to the American Red Cross, nor are the abuses. The former CEO of United Way of New York City was recently found to have misused organizational assets. And another United Way CEO resigned after accusations of theft. These are just a couple of the scandals to tarnish the good works of the nearly 1.5 million nonprofits in the country – and more than 20,000 in this region.
So, the question is: Are nonprofits prepared to hold or regain the trust of the communities they serve?
Whenever abuses occur, the entire nonprofit sector is painted with the same negative brush. Yet just as Enron doesn't represent all of corporate America, the vast majority of charities aren't living large on the donors' dime. And the best tool to ensure that organizations stay on the right track is its board of directors.
While nothing excuses the behavior of CEOs who are arrogant at best and criminal at worst, boards must also be held accountable. In the cases mentioned above, the boards failed their own nonprofits' staff, clients and donors, as well as the general public and their nonprofit brethren. They failed to execute their basic duty to be smart and responsible stewards of the organization, its mission and its dollars.
In our 25 years, we've found most nonprofit board members to be well-intentioned, skilled and committed individuals. So how could so many be asleep at the wheel?
The most likely answer is that board members don't know what their job fully entails. Most people join boards because of their strong belief in the mission of an organization. But to assume that passion brings with it knowledge of the job is an error that many organizations and individuals make.
Board members either don't recognize or don't act with the knowledge that they, not the executive director, are at the top of the organizational chart. They don't realize that they have the responsibility not only to determine how dollars are spent, but also to ensure that those dollars are spent rationally and proportionately to the work, mission and overall budget of the organization. Considering that many board members do something quite similar in their daily lives in managing professional or personal budgets and making spending decisions, this task shouldn't be so difficult.
But too many board members mistakenly see themselves as volunteers who don't think they have the right to get that deeply involved in the nonprofit's operation. So they attend meetings, listen to reports and don't ask the harder questions, make challenges, or perhaps even demonstrate sufficient courage.
This is not meant to be an indictment of people who give their time and means to serve on nonprofit boards. To the contrary, they are the foundation of community service. But it is meant as a wake-up call to every civic-minded individual who adds nonprofit board service to his or her resume.
Just as most of us wouldn't accept a new job without adequate understanding of our responsibilities and liabilities, board members should make the same demands of the nonprofits they serve. When you join a nonprofit board, your commitment is not just to the staff and clients of that organization, but to the community that has tacitly put its faith in you.
Those who give their money to nonprofits do it in exchange for a promise. A promise to improve reading or school performance, to end homelessness, to cure a disease, to provide access to a museum or theater. The dollars given are to fulfill that mission. And ultimately it is the sacred responsibility of the board of directors to see that the promise is fulfilled.
Laura Otten is director of the Nonprofit Center at La Salle University.
Hear Director Laura Otten, Ph.D., speak on WHYY-91FM's Radio Times about nonprofit boards of directors. Download the MP3 file, or hear streaming audio with RealPlayer.
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