I’m working through an emotionally difficult career phase lately. Normally I would not be a guy who allows emotion to interfere with my career so this is unusual. Over the past four decades, I’ve helped establish and grow at least several dozen nonprofit businesses. Until now, this was something that was a source of pride. But over the past year several of them have ‘gone dark’. That is, they’ve abandoned normal good governance principles and some, I suspect, have even engaged in improper or illegal activities. I had to disengage and disassociate with them, of course.
I take some blame for not ensuring that stronger management was not established from the beginning. Now, in seeking to ensure that my bruisings do not recur in the future, I adapted a strategy to standardize screening for all of the nonprofits which I am associated with. That screening includes basic items like review of strategy statement, organizational documents, financial policy and internal financial controls. My best idea on how to prevent this from happening again in the future is to establish a governance review in the beginning of the relationship before even accepting another engagement.
The immediate spill-over consequence is that I have also disengaged from a handful of others who did nothing wrong, but simply were not large enough to handle the minimum quality standards I’ve enforced since then. I’ve also had to cut down my planned donation of $50,000 in nonprofit support services through Raising Nonprofits and freeze that activity for the rest of the year.
Reflection on this issue leads me to conclude that I have been naïve in ignoring the possibility that nonprofits, in general, are a common vehicle of financial abuse. Published estimates say that about one out of three encounters some type of financial mismanagement difficulty over its lifetime.