NPQ repeats that board members of a nonprofit should not do business with that nonprofit or on the basis of their influence with the nonprofit. It is unethical and threatens the reputation of the organization.
According to the Arizona Republic, the board received a number of complaints about the former CEO for sexual harassment over a period of years while he continued to receive raises and bonuses. Why exactly is this board still here?
Even as this nonprofit was pulling off a remarkable growth spurt, the board was making some moves that were not worth the risks involved.
Even if the conflict is disclosed, is it ever a good idea for a board to invest a third of its endowment in a hedge fund linked to one of its members? Duty of care, anyone?
In most fields, there is a common business model; the one that appears to be used in some sheltered workshop settings only barely sounds nonprofit.
A law professor at Fordham surmised, “The existence of this 501(c)(3) organization is to provide benefits to the for-profit company, and…that is not acceptable.”
Founders are indeed strange beings at times, but these two appear especially unclear about the collective nature of nonprofit decision-making, which generally includes a board with a say.
Nonprofit hospitals manage both large budgets and unusually frequent conflicts of interest with their own board members.
