Last week in Knoxville, Tennessee, the Federal Trade Commission (FTC), of all institutions, directed its attention toward The Cancer Fund of America and its three affiliates. The Fund used telemarketers to collect $187 million donations nationwide, promising that funds would provide cancer patients with medication and transportation to and from chemotherapy session. The FTC was joined by all 50 US States in the lawsuit now pending against the directors of the Fund, a husband, wife and their son who "allegedly spent 97 percent of the donations on cars, cruises, college tuition, and gym memberships."
What does this crime story have to do with nonprofit board diversity you might ask? I'm willing to bet that the Cancer Fund board is made-up of the three directors and maybe a relative or friend or two of the family. This ability to just not spend the money as donors intended can only happen when a nonprofit board is singularly of "insiders" who likely, given the amount of money involved and assuming there are other board members, could only happen when no one else is watching and essentially, not watching because they are "in on the scam". All of this to reinforce why homogeneity on a nonprofit board does not singularly lend itself to good outcomes. Yes, I'm going to the extreme but.
Meanwhile, I'm impressed that the cost of nationwide telemarketers was only 3% if I do the math If others who use telemarketers could get this kind-of return, they would likely be very satisfied. I'm also wondering why more donors haven't asked what happened with their money -- asking for concrete evidence that the monies they gave were used as promised. I'm also wondering why the IRS wasn't involved and a lot earlier given the 990s should have been somewhat revealing with questions.