Nonprofit apologists choose to see no evil

By Rick Cohen

The practice of nonprofit omerta — silence about the misdoings

of colleagues on a board or staff, or within the sector — is ultimately self-defeating.

Conflicts of interest do not emerge as isolated instances.

If many of the news reports in the past year on nonprofit conflicts of interest are to be believed, most conflicts were surrounded by other inappropriate, if not illegal, nonprofit muck and mire.

Conflicts of interest generally don’t sneak up by surprise; it is part of organizational culture, usually embedded in layers of misbehavior.

The defense of some alleged miscreants that they had publicly disclosed their conflicts of interest – and then blithely pursued the self-aggrandizing booty nonetheless — fails to provide the immunity of “hide in plain sight.”

A nonprofit’s mere adoption a conflict policy — one of the recommendations of charitable accountability reform efforts such as the Panel on the Nonprofit Sector at Independent Sector – means nothing if the policies aren’t remembered, tested and implemented by the board members that adopted them.

In many press reports, the nonprofits had conflict policies, board members were vaguely aware of them and may have even signed off on them, and even controlling government statutes contained explicit conflict of interest provisions.

Clearly, the self-regulators and peers of these nonprofits seem to have turned a blind eye to the thievery occurring in the sector’s midst.

The prevailing wisdom articulated by some sector leaders is that nonprofit conflict of interest occurs when malefactors slither their way into positions of power and plunder the nonprofit storehouse.

Nonprofit-sector apologists are shortsighted in attributing these excesses simply to human nature and the justification that some percentage of the population is going to engage in petty larceny whether they work for charity, business or government.

No, there are dynamics in our sector that unfortunately and sometimes inexorably encourage practices that can evolve into conflicts of interest — and they require all of us to be specially attuned to make sure that things do not go horribly awry.

Funders, for example, constantly talk about making decisions based on the person leading an organization rather than on the institution itself.

Funders, board members and others feed the personal identification of the executive director with inducements, perks and indulgences that grow over time, sometimes crossing the line between empowering talented leaders and permitting self-aggrandizing behaviors that constitute conflicts of interest.

We have a moral obligation to call out conflicts of interest in our sector — institutional as well as individual — and to adopt a critical posture toward activity that undermines the probity of charity and philanthropy.

The sector needs an ethic of honoring and supporting the truth-tellers and whistle-blowers willing to call out the miscreants.

In our own organizations, the baseline protection against conflicts of interest should start with the board of directors, particularly the chair.

Boards constitute our sector’s and our society’s early-warning system against these depredations.

Beyond the specific organizations involved, peer organizations sustain the collateral damage of conflicts of interest.

So it should be incumbent on nonprofits and nonprofit associations to raise questions with an organization sliding into the morass — and sound the alarm publicly if the descent into this circle of hell continues.

Rick Cohen is national correspondent for The Nonprofit Quarterly. This article is adapted from a longer article in the spring 2007 issue of The Nonprofit Quarterly.

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