It appears Nonprofit Quarterly must keep beating the drum about conflicts of interest, since nonprofit executives continue to damage their reputations and their institutions by disregarding those rules.
The director of Cooper Hewitt Smithsonian Design Museum in New York, Caroline Baumann, resigned on February 7th after an investigation by the Smithsonian’s inspector general. An anonymous complaint by a staff member brought up questions about the venue and dress for Baumann’s 2018 wedding.
Baumann has worked at the museum for almost 20 years, seven as director. Baumann released comments through her lawyer, charging the investigator with sexism.
Seven of Cooper Hewitt’s 27 trustees stepped off the board in protest of Baumann’s exit. The trustees are not fiscally responsible; they serve in an advisory capacity only, with the Smithsonian’s secretary, Lonnie Bunch III, making most of the decisions. Still, some of the departing trustees feel that even though Baumann may have made some decisions that were less than wise, the board should have been consulted before Baumann was asked to leave.
The advisory board members are donors, and some provide significant gifts. One of those who quit in protest is philanthropist Judy Francis Zankel. In her resignation letter, Zankel wrote, “Caroline’s treatment violates every principle of decency, and I feel that remaining on the board tacitly condones this behavior.” She continued, “I cannot stay on the board and just shrug my shoulders and move on.”
Zankel also concurred that sexism played a part in the dismissal. “Can you imagine all this brouhaha about a dress and a wedding directed toward a man in the same position?” Zankel wrote. “I think not.”
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Another donor, Arlene Hirst, who is not on the board, threatened to cut the museum from her will. “I have willed a substantial amount of money to the museum—not in the same league as the trustees, but a lot for me—and I am angry enough at these trumped-up charges to change the bequest,” she told the New York Times.
Even in the face of potential donor anger, Bunch had to act on the inspector general’s report.
Conflicts of interest had to have come up over the 20 years Baumann spent at Cooper Hewitt. There are policies and rules to follow, similar to federal agencies, since the museum is a part of the Smithsonian, which was created by Congress, And yet she made three glaring errors—one is a conflict at least in perception, another is a glaring conflict, and the third is the fact that the board did not hear about possible conflicts directly from Baumann, but from an anonymous tip.
The perceived conflict was the dress, which Baumann bought a discount. She paid $750 to a designer whose wedding gowns start at $3,000. The designer told the inspector general’s representatives that the price was appropriate for a simple garment, but Baumann subsequently asked her staff to provide the designer with a free ticket to an annual gala. Although as many as a fifth of the tickets for this event are given away gratis, which is acceptable, giving the $1,700 ticket to the dress designer appears to be an exchange of favors. Even the appearance of what may be conflicts of interest can damage the reputation of a nonprofit.
The venue is more clearly a conflict of interest. Baumann got a favor personally from an organization, which then got favors from Cooper Hewitt. Organizations often barter, giving each other things like meeting space. However, Baumann was able to have her wedding on the property of the nonprofit LongHouse Reserve, a 16-acre preserve and sculpture garden which usually brings in up to $25,000 when rented for events. LongHouse then used Cooper Hewitt space for a couple of meetings for free. It was not an exchange of favors between two nonprofits, since Baumann received the gift.
That third error is the most significant misstep. Conflicts of interest happen often, as nonprofit vendors are often brought in by board members or staff. Communication often alleviates those conflicts of interest, which is why nonprofit board members fill out annual conflict statements. If the director had brought these plans to Secretary Bunch and the advisory board before the wedding, before the ticket went to the designer, before LongHouse used Cooper Hewitt, better decisions could have been made to avoid the conflicts and their sad aftermath.
In the end, as it is described, there may be more privilege than sexism at work in this situation. (On the other hand, when isn’t sexism at work?) We hope the donors eventually come to understand that this all-too-basic ethical slip is indeed a problem that should never have been visited upon the organization by its leader.—Marian Conway