A Nonprofit Board Faces up to its Lapses: Fresno Opera Endeavors to Re-establish Trust

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June 25, 2016; Fresno Bee

When taking the helm of a nonprofit or major program, seasoned nonprofit professionals expect to uncover a few interesting “things that go bump in the night.” An entrenched staff, some difficult volunteers, or a stale signature fundraiser are typical of the obstacles that bubble to the surface after a change in leadership. However, the situation Matthew Buckman found upon his December 2014 arrival as the new general director of the seventeen-year-old Fresno Grand Opera required far more—not just from him, but from the board.

Allegations have been directed at Ronald D. Eichman, the opera’s former general director, and Thi Nguyen, the former associate director. These allegations include:

Fabrication of board minutes

Falsification of tax forms

Failure to disclose an outside business relationship with a for-profit company owned by key employees

Improper accounting methods misrepresenting the organization’s true financial health

No suspicion has been cast on the board at the time—there’s no evidence they knew what was going on—but there’s obvious room to improve internal controls, policies, and board governance. In fact, it appears that at every pivotal opportunity, the Fresno Grand Opera took relatively quick action. Not only did they do a full audit when they suspected something was amiss, they self-reported the findings to the California state attorney general, making them appear proactive. As part of their crisis management, the organization posted on their website a plan of corrective action. Buckman’s featured front and center on the website, too, with his own blog, Off the Cuff, where he is all business. Taking time for an audit seems to have favored Buckman, too, as the donors had time to buy into his vision and new direction for the opera. Some donors have grown even more committed to the organization, increasing their donations after the alleged bad actions came to light.

Even though the organization is not yet in the clear with donors or the regulating authorities, this is hardly a “worst-case scenario.” In fact, this situation serves as a pretty good model for responsible board behavior in the face of apparent lapses. One thing boards should keep in mind from here on in is that it’s dangerous for any organization to depend too much on an any executive, whether that’s in a way that ends in a relaxation of their oversight or one that leads to seeing a new hire as a savior. The board’s role in recovery is pivotal but it should not include an enthusiastic handing over of their own fiduciary responsibility.—Carrie Collins-Fadell