The Nonprofit Ethicist | On Founder Over-Involvement

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NPQ's The Ethicist

Dear Nonprofit Ethicist,

I am the executive director of a nonprofit that was established in 1991. But until my hiring in 2007, we had no paid employees and were completely board run, with 99 percent of the work being done by our founder. Although our founder is very supportive, we continue to work through issues of founder over-involvement in operations and founder’s syndrome carryover. I inherited two husband-and-wife teams on the board;? one was the founder and her spouse. Our founder believes that as long as we disclose these conflicts on our 990, we’re fine and on the up and up. I have an issue with even listing these board members on the 990. All parties involved are lovely people and contribute substantially through donations and volunteer support. I just don’t want to be behind the curve on what’s acceptable. As the first executive director, I want to set a model that my successor would want to inherit should I leave.

Just Wondering

Dear Just Wondering,

The Ethicist feels for you. This is not a good situation, because you are not likely to get diverse points of view and a critical analysis of strategic decisions. But small organizations have difficulty recruiting board members. So where to go from here? To be safe, check your state laws on board membership. The last time I checked, only New Hampshire has a law about related individuals serving on the same board. By all means, disclose on IRS Form 990 (refer to part VI, number 2). If everything else is in order, no one will think ill of your organization. And expand the board with unrelated individuals to get the diversity you need. Seize the opportunity to achieve some racial and ethnic diversity.

Woods Bowman is a professor of public service management at DePaul University.

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  • Alan Arthur

    I completely agree with the Nonprofit Ethicist’s proposed solutions to this problem, but I respectfully nitpick about one of his comments. Any functional nonprofit organization, small or large, with a mission that is clearly positive for the community should NOT have trouble recruiting board members. If there’s trouble recruiting it’s never because of size, but because of serious organizational dysfunction, or the proposed organizational purpose is not real or appropriately communicated.

    Best Always,
    Alan