2007 News -- Most Bizarre, Disheartening and Important

In the boring, quiet of mid-summer, one way to mix things up is to give out a few awards. I’d like to offer three for nonprofit news stories so far this season - Most Bizarre, Most Disheartening, and Most Important.

Most Bizarre goes to a story on the cover of the New York Times last month, in which they revealed that a faith-based nonprofit organization in California received two decommissioned Coast Guard cutters with the express intent of the ships being used for medical missions in the South Pacific. In fact, the nonprofit, Canvasback Missions, sold both cutters without ever using them for their intent. One boat went to a pig farmer, and the other to a couple who does ecotourism. (New York Times, 13 June 2007, “US Grant for a Medical Mission Winds Up as 2 Ships Gone Awry.") Adding to the complexity of this story is the fact that the contribution of the cutters was the result of a Congressional earmark. This story offers a whole bundle of accountability and stewardship issues to choose from, and covers nonprofits, government and the private sector.

To my mind, the award for Most Disheartening goes to the executive compensation scandal at the Smithsonian. See my previous posting on this story for a summary of what happened. During my time in nonprofit research, I have found that the general public carries strong, preconceived notions both about what appropriate compensation is for a nonprofit executive, and what criteria one should use in making that judgment. It will surprise few practitioners in the sector to hear that the thrust of those preconceptions is that nonprofit executives should be fairly significantly underpaid, and are betraying the moral code of the sector if they wish it otherwise. In truth, the average compensation for nonprofit executives, while growing, has remained relatively low. In one report, the Urban Institute noted that the median 1998 nonprofit executive salary was $42,000. That lagged behind dental hygienists and construction managers, and was less than half of what managers in the federal government’s Senior Executive Service earned. The expectation that senior executives earn as little as they can bear in order to be good financial stewards of their organization’s resources, while understandable at one level, gives a different meaning to the “soft bigotry of low expectations,” and can be harmful to the field’s success, especially when applied in fields with very high leadership burnout. When stories like that at the Smithsonian come along, then, they shake the public’s trust, driving them back to a set of notions that can hold back dramatically the sector’s ability to build long-term capacity.

Finally, as for the Most Important, I’m sure there are a range of candidates. For me, it came down to Bloomberg’s story about the Robin Hood Foundation, versus the last minute crackdown on Harry Potter book parties. While I’m a Muggle at heart, I’m going with the Bloomberg story, if for no other reason than to keep my professional credibility. It is a complicated story, but in essence, Bloomberg reported on Robin Hood’s practice of investing its rainy day money in hedge funds run by board members. Nothing illegal there, but it raised questions about the appearance of a conflict of interest. The story came out Monday, and by Thursday, Robin Hood had ended that practice. Nonprofits across the country with significant assets are going to be looking at their own investment practices as a result.

Half-way through the summer, it was not difficult to find candidates for my three, somewhat randomly chosen award categories. I fully expect to be able to add Most Silly, Most Inspiring, and at least a Most Surprising by the first of September.

Tiziana Dearing