Nonprofits need real financial support and accountability to succeed

Published 4:57 pm Thursday, March 5, 2020


Contributing columnist

I have worked in different capacities in the non-profit, tax-exempt world for 17 years. I’ve worked for large non-profits like the Alzheimer’s Association, and small ones, like The Great American Brass Band Festival. In 2016, I had the great privilege of starting an organization for children who don’t have access to preschool in Boyle County called The Gladys Project, named after my mother and grandmother.

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Non-profit organizations have several things in common: Their supporters are die-hard and unwavering. Many of their directors are from the die-hard and unwavering pool of supporters. The orgs are always searching and competing for new funding.

And it is often a challenge for the boards of directors to view their organizations from an objective, fact-based, data-driven perspective. Sadly, hard decisions almost always come down to money. 

We don’t like to talk about money in the nonprofit world. It seems to tarnish the image of doing good for those who are served. However, nonprofits are businesses. Money allows them to work their missions. The passion of the people often creates a blind spot when money is mentioned.

I worked as a fundraiser for Big Brothers Big Sisters of the Bluegrass (BBSS) in 2007-08. Bowl for Kids Sake was the major fundraiser for BBSS. My territory included Boyle County and surrounding counties, but I also helped with other bowling events within other Bluegrass territories. I never touched the money. The office manager was at every bowling event. She collected the bags of coins from children and the checks from adults and sponsors.

Even though I didn’t handle the money, I kept a general tally of how much was raised at my events. As we progressed through the year, there were persistent money issues. Staff was let go because the organization couldn’t support the salaries and benefits. Program materials became scarce.

These issues made no sense given the amount of money being raised. Another BBBS fundraising worker and I started asking the director of development (our boss) questions. Those questions were deflected, ignored and definitely unwelcome. She and I sat through the BBBS annual meeting with the full staff and full board. We listened to our boss make a lot of grand statements about how wonderful it was to serve these children in the Bluegrass. We also listened to him present a wildly inaccurate financial statement.

My fellow fundraising worker and I became more persistent. We met with the executive director. I talked to the board chair on the phone for over an hour. Something wasn’t right with the money and no one wanted to talk about it with us.

The final straw came when we asked to see the bank statements. She and I were simultaneously fired — she from the Lexington office and I from the Danville one.

The org continued to struggle until the day, about six months after we were fired, that a bank employee called to verify a signature on a BBBS check.

As it turned out, the office manager had been embezzling funds for about 18 months to the tune of over $400,000. You can research this in past newspaper articles from 2008.

The very sad part of this story is if anyone within BBBS had done their due diligence, the damage would have been far less. The board fully trusted the office manager, asked no questions, didn’t question the financial statements and never looked at the bank statements.

I share this story NOT because I think funds have been mishandled within our local nonprofits, but to raise the issue of money-blindness in the nonprofit world.

We like to think that those who sit on the boards and those who volunteer are completely trustworthy and always tell the truth.

Boards of directors are the fiduciary agents of non-profits. Truly healthy nonprofit boards welcome questions about their missions, operations and finances. Healthy boards function with clarity of the full weight of their responsibility to those who are served by the organizations. This is not a small responsibility no matter the size of the organization or its budget.

Grant availability fluctuates with the economy. Grant funders are notoriously finicky. Many grants funders won’t award money to festivals or for general operations. Grants disappear at the drop of a hat. I read a Facebook post from Wilderness Trace Child Development Center that said two grants they normally have received are no longer available. That’s hard to come back from.

I have seen several online petitions asking for virtual signatures in support of the child development center. If you truly want to support the WTCDC, the Brass Band Festival or whatever your favorite nonprofit may be, write them a check. Write them a check once a month for $5, $10 or $25. A signature on a petition doesn’t pay for professional services for children who require special attention. A signature on a check will.

How much do you love the WTCDC, the Great American Brass Band Festival, The Gladys Project, or your pet project? Send them money. Every month. That is where the rubber meets the road.

If you are a board member, start asking questions about everything. If you don’t know how to read a financial statement, ask someone to explain it. Don’t be money blind. Get trained and know that your allegiance is not to the executive director, but to the organization and those it serves.

“A person may cause evil to others not only by his actions but by his inaction, and in either case he is justly accountable to them for injury.” — John Stuart Mill

Elaine Wilson-Reddy, JD, is a professional educator, consultant and advocate. She lives in Danville.