“Transforming Nature Exhibition–Etherow Park, Compstall, England,” Val Kerry

April 3, 2018; Financial Advisor Magazine

When internal battles erupt in nonprofits and the issues are aired publicly, the consequences can have both immediate and long-term impact. This may be the case with the New York chapter of the Financial Planning Association, which is currently embroiled in a dispute raised by the chapter president that says leaders discriminated against her and engaged in unethical behavior. The chapter president has also filed a complaint with the NY attorney general’s office saying that the organization’s executive board members used organization events to prospect for new clients for their own benefit.

To quell this, a number of local New York board members asked the national Financial Planning Association (FPA) to help them resolve this situation. Mediation efforts were unsuccessful. The next step, coming from the FPA, was to end their affiliation with the chapter in the hope that new, future leadership would work with them to reorganize and reconstitute it. The FPA sees its regional chapters as a source of great strength; as a result, it’s given them great autonomy and independence. As a consequence, its options are limited in times of controversy.

David Brand, FPA’s chief operating officer, also appointed Scott Kahan, the former president of FPA New York, as a volunteer to oversee the chapter during this period.

The lines of control between local chapters and FPA National are defined in an ambiguous, legalistic fashion that could be potentially confusing. “It is complicated,” Brand said. “We do not have the authority to oust anyone as president, but we had executive members pleading to us for help. What we can do, and did, is rescind the affiliation agreement with the existing FPA New York chapter and give the local members support to reform the organization.

Who benefits in all of this? One of the purposes of local chapters of the FPA is to provide a platform and place for members to share best practices and exchange ideas. It also serves as a means of promoting financial planning and financial literacy to the broader community. Continuing these practices would seem to be critical to the general membership, and indeed, to the public in New York and would indicate a stable organization that is carrying out its purpose. And yet, even with the interventions already put in place, the controversy seems to continue in spite of the direction of the national organization.

Harold Evensky, chairman of Evensky & Katz/Foldes Financial in Coral Gables, Fla., and Lubbock, Texas and a leader in the financial planning profession, said Tuesday, “The FPA should immediately have an independent professional investigate and report to the board and the membership regarding this issue.”

Assurances are being offered from the national FPA that the NY chapter’s budget is secure and the organization is not being dissolved. FPA spokesman Ben Lewis said in a statement:

Given the challenges facing the New York board of directors, we were asked to step in by many of the board members to help guide the chapter towards a resolution of the deep differences that were afflicting their board of directors.

When it became abundantly clear that the New York chapter board of directors could not resolve their differences and operate effectively to serve the needs of its members, FPA acted through the authority granted to it by the affiliation agreement to ensure that New York chapter members would continue to receive quality programs and services.

The affiliation agreements that allow autonomy and independence of local nonprofits from their national organizations may or may not be clear when it comes to these kinds of controversies. A question remains as to whether or not this organization will be able to continue to operate. Will it have leadership? Is the appointed interim president an accepted leader? Is there a plan for resolving what mediation could not?

The complications of internal disputes are, most likely, now a component of the work of both board and staff. Clear paths for how to deal with these kinds of disputes would be helpful, but are not simple to design and implement. Resolving these kinds of issues is complicated, time-consuming, and costly in terms of people and funds. And when this happens (as it clearly does from time to time), the general members and clients of the nonprofits may be the ones left out in the cold while things are being settled.—Carole Levine