Dear Nonprofiteer, Is "nonprofit ethics" an oxymoron? How to handle a conflict of interest?

Dear Nonprofiteer, Is "nonprofit ethics" an oxymoron?  How to handle a conflict of interest?

Dear Nonprofiteer,

I am contacting you because I have become embroiled in an nonprofit ethics situation and I found you on the internet during one of my insomnia-fueled web searches.

I recently got fired from my volunteer position on the Finance Committee of a San Diego nonprofit by its board president. (I am not on the board of directors.) The board president is the Interim Executive Director’s mother. The treasurer, until recently, was the ED’s grandmother and president’s mother.

Although technically the President leaves the room when personnel matters are discussed, when the daughter “applied” for the Interim ED position, the mother communicated to board members that the daughter would quit suddenly (throwing their program into turmoil) if she was not named to the post. I’m not sure how coercive she intended to be, but it worked. Recently, the president told board members that her daughter would quit if it goes through with an ED search rather than naming the daughter to the permanent ED position.

Further, by firing me, she is suppressing negative information about her daughter’s management capabilities to the full board. I have extensive experience in nonprofit management and consulting. In my committee work, I had uncovered many, many examples of the interim ED’s financial and management mistakes. Several weeks ago, I sent a grievance to the Board of Directors and demanded that the President resign from her position and that the board members provide greater scrutiny over the ED. I also asked to be reinstated. The way I figure it, the board president should not be controlling information the board receives relating to her daughter’s performance. I haven’t heard anything at all about my complaint.

The local nonprofit I volunteer for in San Diego is an affiliate of a national youth-serving nonprofit. I believe that the Board President received bad advice from the national office about the potential conflict of interest when her daughter was first up for the job. I think someone told her it would be fine to continue as board president as long as she left the room during personnel discussions. Obviously, she is exerting influence in other unhealthy/unethical ways.

Is the Prez guilty of self-dealing? Is the manner that she’s protecting her daughter by shutting down one of her critics illegal? Most of the board members are fairly clueless, but there is one new guy, an attorney, which makes me both hopeful and nervous.


You Can’t Fire Me–Slaves Must Be Sold

Dear Can’t Fire:

You’ve outlined nearly the perfect no-win situation. First, you’re giving advice to people who didn’t ask you for it. Second, you’re working in a family business, however it masquerades as a nonprofit, and family businesses are notoriously unkind to non-family members on the premises. Third, you’ve gone over the head of your “supervisor,” who technically would be the chair of the committee on which you serve or the employee who staffs the said committee. Fourth, you imagine there’s a solution somewhere in the law. And finally, you’ve allowed the situation to keep you up at nights.

Let’s assume for the moment that this is the World’s Best Nonprofit serving the World’s Most Appealing Population in the Best Manner Possible. (Unlikely, given the management mess you’ve outlined.) It’s STILL not worth your time to stay involved. The people who are supposed to be governing the organization (the Board) have demonstrated that they’re spineless ninnies, responding to an extortion demand (“Give us what we want or we’ll destroy this nonprofit”) by caving in to it. As President Obama has learned painfully over the past five years, giving in to demands merely serves to assure that you’ll be faced with many more of them.

Meanwhile, the people who actually are governing the institution–the Board President and her Executive Director daughter–have already demonstrated their opinion of you by “firing” you. (And let’s take a second here to be clear: the Board President can’t actually fire anyone. Members of the Board serve terms based on their independent election. The Board collectively can fire one of its number, or the Executive Director, under conditions outlined in the bylaws–generally for cause. And a volunteer can be asked to step aside if s/he’s disruptive or useless, but this request should come from someone actually working with the volunteer: the volunteer coordinator [if there is one], a senior volunteer or group of volunteers on the project, or the Executive Director if all else fails. The ED’s job is to make sure things get done at the agency, and s/he has final authority over the doers. This may be a distinction without a difference in your case–even if the ED fired you, the Prez was behind it–but it’s important for Board presidents in general to realize that their title doesn’t actually make them King of the Universe.)

Even if the national organization with which your group is affiliated told the Board President her conflict of interest was acceptable, she should have known better: her interest as mother conflicts with her job as President, period. If you want to contribute one final thing to this institution, you might write to the national organization and tell them about the debacle going on at this chapter; but be prepared to be threatened with, and possibly even subjected to, libel litigation.

Let the Board drive the agency into the ground–or, conversely, let the presence of a lawyer cause it to straighten up and fly right. As a lawyer herself, the Nonprofiteer doubts the presence of one will have that effect, and she urges you to find somewhere else to donate your time, talent and treasure.

She is reminded of The Amityville Horror, in which the house keeps going, “Get out . . . Get out!” Any sane moviegoer wonders why the hell the family doesn’t just take that advice. They didn’t–but you should. GET OUT!

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    The Nonprofiteer is Kelly Kleiman, principal of NFP Consulting, which provides Board development, strategic planning and fund-raising services to charities and philanthropies. Through her consulting practice and in her guise as The Nonprofiteer, Kelly has spent the past 25-plus years helping small and mid-sized nonprofits organize themselves better and raise more money. These days she focuses especially on helping them use high-skill volunteers. Kelly is also a lawyer and freelance journalist whose reportage and essays have appeared in the New York Times, Wall Street Journal, Washington Post, Christian Science Monitor and other dailies; in magazines including In These Times and Chicago Philanthropy; in the alternative press; on websites including the Huffington Post; and on the radio, including the BBC and WBEZ Chicago Public Radio. She and her fellow "Dueling Critic" Jonathan Abarbanel present a weekly podcast of their reviews of Chicago theater at Earlier in her career she was dean of admissions of IIT Chicago-Kent College of Law and Executive Director of the Chicago Children’s Choir, and practiced real estate and zoning law with the firm of Rudnick & Wolfe. Kelly holds undergraduate and law degrees from the University of Chicago. She was a founding Board member of the Association of Consultants to Nonprofits and also served for 5 years on the Board of the Association for Women Journalists–Chicago. She can be reached ("Dear Nonprofiteer . . .") at

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