Recently the news has reported that the Wounded Warrior Project Board of Directors fired both the CEO and chief operation officer after reports of lavish spending. My initial reaction like many others was a combination of disbelief and anger. In part it was because of my personal support to this organization and high ethical standards I hold for nonprofits. These sentiments were similarly expressed at our Board Boot Camp last Saturday. As a group we took a moment to discuss our opinions and why the news of the Wounded Warrior Project is a big deal.
First, it is an issue because it’s the public’s money. Numerous individuals gave money to an organization that assists veterans. When we hear that a lot of money (in this case $26 million reported for conferences, conventions, and meetings in one year), it is concerning. Our intent is that our money go to the cause we support instead of a big bill for the CEO to make a grand entrance into an event on a horse. However, all nonprofits have overhead and need so to operate. As Mike Stone said in Board Boot Camp, overhead does not mean that an organization is irresponsible, it’s just how you use it. In the Wounded Warrior Project case, I would have no issue if it was used for professional development. However, I do have a problem when the CEO used it to repel down a building to make another grand entrance.
A second point raised was blurred boundaries between the Board of Directors and the CEO. In the nonprofit sector we must remember that the CEO or Executive Director is an employee of the organization and the Board of Directors are the “bosses.” As per the 10 Basic Responsibilities of Nonprofit Boards, the Board of Directors are to hire and evaluate the CEO or Executive Director. Not to mention, they are fiscally responsible for the organization. In an op-ed, the author called for the Board of Directors to resign because of the lapse in their fiduciary duty.
Unfortunately, Wounded Warrior Project is not the only example of nonprofits getting caught up in unethical practices. Why is an example like this a big deal to you? How would you proceed as a donor, an employee of the organization, or even as a board member?
*Post was written by Elise Alabbas for the Paul Clarke Nonprofit Resource Center in her point of view.