Nonprofit Board Crisis

Nonprofit Board DNA #NonprofitBoards

My colleague Dr. Fram offered the following entry regarding a nonprofit board's DNA.  The concept was discussed in two publications back in 2017 and while its luster may have faded there are elements I believe that may be worth considering.  Dr. Fram's framing leans toward how to adjust the DNA and presumably that's factoring in the thought that not all of any nonprofit board's DNA lends itself to a board being fully excellent - a concept that may well have some rationale.   

That said, do take a glance and ponder how accurate this factor may be in affecting board performance.  One other takeaway, be it referencing DNA or some other factor, change takes time and will power/intent and maybe be default, with board turnover, both are likely.  But without board turnover - hm....

From Dr. Eugene Fram:

 

CAN A NONPROFIT BOARD CHANGE ITS DNA

Can A Nonprofit Board Change Its DNA?

By: Eugene Fram        Free Digital Image

Genetic codes aside, the term DNA is now commonly used to describe distinctive characteristics and qualities in almost anything –living or inanimate. Every nonprofit has a DNA! And every board member, if questioned, will probably have a different take on that invisible life blood which — for better or worse—impacts the  actions of his/her board. One author goes so far as to suggest that   “…one common element to create sustainable success is evaluating and interjecting the right DNA.”

He goes on to recommend three steps to make the necessary changes in the nonprofit culture: Assessment, New Genetics and a Gestation period— the last step being essential …“for the new approach to take hold and grow.” * Following,, as an example, is how it might apply if a nonprofit board needs to move from a traditional Community Board to a Policy/Strategy Board.  This is a situation where the board increases its overview responsibilities and decreases or eliminates its involvement in operations, i.e. micromanagement.  

Assessment: Evaluations involve defining what the agency is doing well and what systems need to be removed or modified.  Listing the former is easy, but dropping long embedded practices can lead to unproductive board conflict.  Logically, board members still need to be in their third year of a median four or six-year tenure before sustainability assessment (5 to 10 Years) can be undertaken.Too much legacy culture has been embedded in the Board operations, calling for three to five year strategic plans. At that point, most or all of current board members will have been termed-out of their positions

I once observed, as an example, a board that made a strategy decision about changing the timing of an annual fund raising event.  Once the decision was made, the board took the remaining meeting time to review and formulate new platforms for the event, presenting management with implementation suggestions.  The prolonged discussion, in effect, was simply perpetuating a standard community board micromanaging process.  When I called this to the attention of the Executive Director, he claimed that it is part of the nonprofit’s culture to be operationally involved.

Assuming it will take about two years for a board member to become acclimated to the new board organization, it is clear that no single director can bring about a sustainable long-term approach until his/her third year of a six-year term. There should be two or three other older directors who strongly support the change.   Most importantly, the ED must see the value in it.  Otherwise, it will have to wait for the appointment of a new ED that may probably take place outside of the tenure periods of current board members.  Management and staff leadership who can take a broad view of the future also need to become involved.

New Genetics Include:

Growing the Future.  Early adopters are critical to change.  These are board members who, for example, fully understand the line between policy issues and operational ones.  They can be helpful to the board chair in keeping meeting discussions out of the operational “weeds.”

Equip, empower and encourage:  Allow the CEO to have full operational responsibility, with the understanding that a rigorous evaluation of quantitative and qualitative impact impacts will be reviewed each year.  The board and CEO should jointly develop these issues. ** Under no circumstances should the board singularly establish them.  

Assuming all these changes are in place and board members support them in their fourth or fifth tenure years. it’s then important to make sure that newer board members have a similar mindset.  Some new directors who may have had experiences in other more traditional nonprofits  might want to revert to the legacy operations because it is the way that “all nonprofits operate.”

Vet New Directors Carefully:  Make certain new directors understand the new board environment that is being developed so they are comfortable with it.  It can attract highly qualified directors and staff, with the DNA’s focus in creating sustainable long-term success.  Some, however, may have quite different views.  For example, I once encountered two board candidates, with social work backgrounds, who wanted to supersede management personnel and directly evaluate staff members, because they had field experience.

Gestation Period

It takes four to five years to firmly install the new system.  These environmental movements do not take place quickly. By then, the original directors leading the change will likely have termedout of their board positions. The recruitment committee will have to seek candidates who are attracted by the new environment and understand the need for substantial operational delegation to management.  Most of the problems will have been eliminated from the DNA, and it should set the nonprofit on a course for sustainable success.

 

Board Being Fully Informed #NonprofitBoards

Making strategic decisions requires in my opinion, being fully informed.  The following noozhawk discussion about mission drift and strategy noted the following:

However, ensuring the mission continues to reflect the needs of the constituents can only be accomplished by regularly checking in with board and staff members.

Board members are connected to the larger community and, therefore, bring a valuable perspective to evaluating the need of the organization. Staff members are the ones who implement the mission and, as such, bring a practical viewpoint to the discussion.

Don’t forget about community members and stakeholders. They can provide a broader assessment of the community’s needs, as well as a high-level opinion about potential changes that would strengthen the organization.

I was concerned that it was only the board and staff who should be consulted but yes, the community gets 3rd place mention while I think that it is not the question of who but how.  Staff are indeed in a position to be collecting data and providing it to the board during their generative conversations (you know, discussions about what is going on outside the organization towards informing strategic decision-making). And board members are also in good positions, depending on their networks and roles in their community, to pull collect information about what is happening and what might be needs as they perceive them.  But additional efforts should be made to ensure that the actual voices of those served are heard. 

Customer satisfaction surveys, not unlike those that medical institutions are sending right and left after a visit or procedure, are a good first source.  But unlike what is done by the medical community think more like Popeyes or Burger King and conduct on-line immediate after-use phone multiple choice questions.  These could then be an ongoing up-to-date source of information at least on how services are being received and a source of identifying what else is needed or wanted.  An occasional focus group of volunteer community folks with a single "design" question (like if what would we suggest to help you get here" can also provide helpful information.  Finally, be sure to consult the other providers about what their customers are saying and integrate their findings into your own.

Yes, your board and staff, depending on their composition and approach, should be helpful sources of strategic information.  But a board has to be intentional and active in ensuring the data comes in in a timely and regular way.

 

 

Lawyers and Nonprofits #NonprofitBoards

I am still scratching my head a bit over the following missive to lawyers about service to nonprofits both as attorneys and board members.  Some of what is said I agree and some I am unclear.  Take a look.  I have offered my own edits in red.  From Legal Scoops.

7 Things Lawyers Should Know Before Taking Non-Profit Organizations as Clients

PRACTICE MAY 17, 2021 BY JACOB MASLOW

Experienced lawyers make ideal members on nonprofit boards, but defending them can result in a conflict of interest.

Nonprofit organizations deserve to carry out their charitable work with peace of mind. However, starting a well-intentioned nonprofit and ensuring it is accountable is more complicated than most people think. Incorporating funding plans, keeping proper financial records, getting IRS tax-exemption status, and putting together an effective board is part of the process.

Dedicated nonprofit lawyers have the experience required to assist these organizations at every level. These are seven things lawyers need to know before taking on nonprofits as clients.

1.      Conflict of Interests

Lawyers know that they cannot represent a nonprofit in litigation if they are on their board of directors. Even though their legal backgrounds and experience can be invaluable in advising on board decisions, that is as far as they can help. Additionally, the legal counsel representing a nonprofit can only describe the organization, not its officers or individual directors.  ABSOLUTELY and something all folks recruiting lawyers seeking pro bono help should keep in mind.

It is essential to offer written legal advice to the charitable organization. This helps ensure effective communication with the board and other decision-makers.

2.      Laying a Proper Foundation

From the start, nonprofits require a proper foundation if they are to flourish. Lawyers with nonprofit experience can assist with the necessary research to ensure the organization is viable. Legal counsel must discuss every aspect of the organization’s creation and all the beneficial alternatives. These alternatives may include the option of working with fiscal sponsorship, existing organizations, or donor-advised funds.  uh, sure but certainly not necessary - there are plenty of others who know this sphere.

3.      Importance of the Purpose Statement

The purpose statement is an essential document for the nonprofit. But care is needed to ensure it doesn’t create problems later for the organization. This can happen if it is peculiar and restrictive. These restrictions are not too difficult to amend, but risks are involved if a charity forgets to amend articles as decisions are made.

An attorney’s advice can help the organization carefully consider the advantages and disadvantages of the purpose statement and accommodate future changes to its mission. Also, board members must be aware of the need to amend governing documents and the restrictions they face in asset usage should any changes occur.

A broad purpose statement can help avoid overly restrictive constraints on the mission, activities, assets, and article amendments over time.  I am afraid I am very unclear as to what is a purpose statement as described here: mission (what results are desired)? activities? Articles of incorporation?  For my reference I think of purpose as not what problem is to be solved or necessarily what results will be produced as much as what will be the core business - what will be the focus of the work to solve a given set of problems and/or produce a specific set of results.  Confused I am by the language.

4.      Compliant Bylaws

The bylaws of every nonprofit are their main governing document and must be established from the outset. They are meant to supplement the laws defined by the state (and sometimes city) where the nonprofit is based.  I think of bylaws as THE rules for the organization and then consult an attorney to ensure I haven't missed in state or federal (e.g. whistleblower) rules.  Supplement versus frame - big difference.

These legal documents are created to ensure the protection of the organization. They outline the authority levels, rights, and expectations. Non-voting directors cannot be included in the bylaws of the organization. Each director has a right to vote on all matters of the board, except in minimal situations.  Lots of folks do describe folks who may not vote particularly the CEO and that is for good reason.  And what are "minimal" situations?

Lawyers review these governing documents to ensure that it complies with the state laws if there is a written consent provision. This is vital since unanimous written consent is required in most states, not just from a few directors.  Hm - haven't really heard of this but this author should know.

5.      Value of Lobbying Election

Charities need the correct advice when it comes to utilizing tools allowing them to advance their missions. Lobbying is one of these tools but can often not be used by nonprofits. This is because they haven’t made the 501(h) election when filing the Form 1023 exemption application with the IRS. This exemption allows the organization to spend money on lobbying within the defined general limits allowed, and these are pretty generous. Good legal advice can make them aware of the need to keep a clear record of these.  I think this limitation is over-stated.  Nonprofits have limits for how much they can spend on lobbying (e.g. staff or lobbyists) before challenging their nonprofit tax status.  But they can lobby and their boards can lobby without restriction.  And everyone can educate. This is not rocket science and State Associations are the first stop to be clear about the rules.

6.      Directors and Other Classifications

A good lawyer offers their client recommendations on how directors should be elected and on their roles. The board of directors must share the vision of the organization and provide fiduciary duties. Making organizations aware of the importance of orientation processes for new directors is also one of the duties a lawyer can offer their nonprofit clients.  Really?  I can't imagine seeking out an attorney's opinion on this task.  It's in the bylaws.

Understand the difference between independent contractors, volunteers, and employees is vital, and lawyers can help ensure these classifications aren’t mismanaged.

7.      Financial advice

The ability to give financial advice is invaluable for nonprofit clients. This advice includes:

• Recommendations on how clients must invest prudently for overhead expenses, organizational policy creation, risk management, and technology.
• Tax advise about certain circumstances where directors may be held personally liable. Directors are also responsible for failing to act against excess benefit transactions, unpaid payroll taxes, etc.
• Good financial advice includes encouraging the nonprofit to obtain insurance protection for its directors and officers.  

Yes and no.  There a bunch of professionals that are equally qualified to advise on these matters.

Conclusion

Nonprofit organizations are on the rise. ???? They benefit from the proper legal representation and advice, ensuring their day-to-day tasks are not putting their charity goals at stake. Lawyers experienced in representing these organizations understand the expectations of legislation and ensure they comply.

 

 

Community Board: Excellent Intentions, Poor Nomenclature #NonprofitBoards #ABoardIsABoard

Antrim became the first town in the state to establish a community board after voters overwhelmingly approved the measure at Town Meeting Thursday night. The board is tasked with enhancing public health, prosperity, quality of life, safety, and general welfare of all town residents. Residents passed all articles on the warrant, and all five zoning ordinance amendments passed during ballot voting on Tuesday.

via nonprofitboardcrisis.typepad.com

From March 31, 2021

Analysis of NRA Governance and Management Issues #NonprofitBoards

I've been saying it for awhile but because this story of bad governance and management is so much in the news it's worth it to reiterate the issues from every lens.  The following is how Ms. Schmidt did a great job speaking to the situation in Fast Company Magazine.

 

• 05-18-21
• FUTURE OF PHILANTHROPY

Why I use the NRA as a case study for how nonprofits shouldn’t operate

The gun group has violated four key legal and management principles.

[Source Photo: Vladimiroquai/iStock]

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The National Rifle Association (NRA) keeps getting itself into trouble by flouting the best practices all nonprofits should follow.

 

 

As I often explain to college and graduate students who are learning the basics of nonprofit management, all nonprofit boards of directors should ensure that those groups uphold their missions without wasting money. These students also learn that it’s against the law for nonprofit board members or staff to benefit through the personal use of the group’s assets.

I began to use the NRA as a case study when serious allegations about its mismanagement emerged in 2019. The gun group’s wobbly finances and other woes make it the epitome of a poorly run nonprofit, because it violates four key legal and management principles.

Moving forward, I’ll draw on new information that emerged from the NRA’s bankruptcy trial, which a federal judge in Texas dismissed on May 11. The trial’s dismissal means that the NRA cannot carry through on its bid to use bankruptcy protection to get out of being sued by New York state authorities for alleged misdeeds.

 

1: NO ONE RUNNING OR OVERSEEING A NONPROFIT SHOULD MAKE A PROFIT

During the NRA’s bankruptcy trial, Wayne LaPierre, its top executive, admitted he personally benefited from the organization’s assets beyond reasonable levels of compensation. He also suggested that he had stopped doing so—after “self-correction.”

Information the NRA disclosed in its 2019 tax filings shows that LaPierre, to whom the NRA paid $1.9 million that year, had reimbursed the NRA $300,000, plus interest, for improper expenses, and that he faced another $75,000 in federal tax penalties. That same paperwork indicated that current and former NRA executives had received at least $1.3 million in “excess benefits,” as the organization had improperly paid for their meals, travel, and sporting events.

New York authorities allege that LaPierre and others have diverted millions of dollars for themselves that should have been used to fund NRA operations. Among the lawsuit’s allegations is that LaPierre frequently took personal trips on private jets on the NRA’s dime. He procured personal benefits, including lucrative contracts, for board members, vendors, and former employees.

 

On the list of LaPierre’s inappropriate expenses were golf memberships and millions of dollars of home-security measures, including $800 for mosquito treatment on his property. In 2019 the NRA began to negotiate to buy him a $6.5 million mansion in Dallas before the deal fell through.

New York’s complaint also alleges that the NRA had improper business dealings with board members and their firms. Approximately one-fourth of the 76-member board had contracts or made deals with the NRA, a practice that is legal only as long as the board determines the deal is “fair, reasonable, and in the corporation’s best interest.”

A board this size is inadvisable. Experts recommend that nonprofit boards have between 8 and 14 members so they can act as one group, with each member feeling responsible. After critics blamed scandals at the American Red Cross in the early 2000s on the board’s large size, it was scaled back. That board now ranges between 12 and 20 members, down from about 50 in 2005.

 

2: NONPROFIT BOARDS ARE RESPONSIBLE FOR GOOD GOVERNANCE

A nonprofit board’s fiduciary duties include overseeing operations and ensuring that missions are upheld. Members must act in the organization’s interest rather than their own. They hire, supervise and, if necessary, fire the top executive.

Had the NRA’s board done its job, I doubt the gun group would be in all this trouble.

Instead of ensuring good governance, the NRA board has allowed it to be run as “Wayne’s Kingdom,” in the words of Phillip Journey, a Kansas judge and NRA board member who testified during the bankruptcy trial. LaPierre actually hid the bankruptcy filing from most board members, the NRA’s top lawyer and its chief financial officer. In his decision to dismiss the bankruptcy case, Judge Harlin Hale said he found this lack of communication “nothing less than shocking.”

 

Board members who raised questions about the NRA’s activities say they lost committee assignments and were, on one occasion, told to “sit back, shut [your] mouth, stop asking questions, and trust that NRA management had everything under control.”

LaPierre also secured a $17 million post-employment contract, without the board’s knowledge, according to the New York lawsuit.

Among the additional details regarding these transgressions that came to light during the bankruptcy trial, perhaps the most stunning has to do with a vendor’s 108-foot boat called Illusions. LaPierre said he sailed to the Bahamas on that yacht because he “was looking for a place to be safe” following mass shootings like those at Sandy Hook Elementary School in Newtown, Connecticut, and Marjory Stoneman Douglas High School in Parkland, Florida.

 

New York’s NRA complaint reads like a textbook case of governance failure. It alleges that the board neither followed its own procedures nor documented its compensation decisions. Its audit committee ignored its obligation to oversee internal controls, failed to review related-party transactions and brushed off whistleblowers.

It’s no wonder that several board members have resigned since 2019, when irregularities became harder to ignore.

The NRA now says it is making strides in the right direction through a “renewed commitment to good governance.” But with LaPierre remaining at its helm, and a board that’s still loyal to him after all these allegations, I question whether the organization can fully clean up its act.

 

3: NONPROFIT LEADERS MUST MIND THE FINANCES OF THEIR ORGANIZATIONS

Unsurprisingly, the NRA’s finances have suffered and its membership dues have fallen in recent years.

The NRA’s legal troubles cost $100 million from mid-2018 to mid-2020, according to a leaked recording reported by National Public Radio. That figure, of course, doesn’t include expenditures tied to the dismissed bankruptcy trial.

Other signs of financial mismanagement are surfacing. The NRA’s former chief financial officer, Woody Phillips, declined to testify at the bankruptcy trial. When his successor, Craig Spray, testified, he said he wasn’t informed in advance about the decision to file for bankruptcy and that he had concerns about the accuracy of the NRA’s 2019 tax filings. Spray left the NRA in January 2021.

 

Nonetheless, the NRA has insisted it is in its “strongest financial condition in years.” In turn, Hale said that this solvency would mean the NRA should be able to pay its creditors in full.

4: THE PURPOSE OF A NONPROFIT IS TO ADVANCE ITS MISSION

A nonprofit with shoddy oversight undercuts its mission. At the least, the NRA could have devoted the money it’s spending on legal costs on its mission, which largely consists of protecting the Second Amendment rights of U.S. gun owners.

Whatever you think about that mission, that’s not related to the NRA’s legal troubles. Because the nonprofit sector has room for opposing views or causes, it includes both groups that support abortion rights and groups that want abortion banned, just as there are organizations that want more restrictions on gun ownership and those seeking fewer such rules.

 

But all nonprofits have something in common. They agree to pursue their mission in exchange for tax breaks.

Any nonprofit that loses sight of that mission, as the NRA has done, runs the risk of losing that exemption and even of the right to keep operating. Given that the New York lawsuit asks for its dissolution and the Internal Revenue Service entered the bankruptcy proceeding as a creditor—which indicates it is examining the NRA’s actions—those outcomes have now become a real possibility.

---

Elizabeth Schmidt is a professor of practice, nonprofit organizations; social & environmental enterprises at the University of Massachusetts Amherst

 

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

 

 

How short-sighted were/are white nonprofit volunteer leaders? #Nonprofitboards

My thought for the day revolves around the subject of historical lack of diversity on nonprofit boards.  By now almost everyone in the sector is aware of the HUGE disproportionate lack of representation by people of color on nonprofit boards.  Huge! 

We also have become aware that one of the contributing factors to this situation is that those who are on boards and recruit new members work within their networks.  Clearly, folks who are white have networks more composed of those who are white than people of color.  This appears to be as true now as it must have been in the early days of nonprofits AND equally interesting, is true for organizations that are developed by people of color as much as those developed by white people.  It's all about network limitations.  Now, as I am not a social scientist I can not speak informed enough about why networks are so race or ethnically limited in their diversity.  I can guess.  The Hungarian Club is made up of Hungarians and like other ethnic clubs (Irish or Polish or Russian) tends not to be inclusive of other ethnicities but possibly races except through possibly marriage.  

Now there is an equally and perhaps more important consequence of this lack of diversity on boards and one which also interestingly harks back to the early history of nonprofit boards.  The early boards, as I understand it, were largely comprised of the "richer" community folks who saw a "problem that needed fixing".  These folks got their other "friends" together to address the problems they saw and most certainly, these problems were likely the issues concerning the have nots. (Of course I could comment that the have nots were borne of an economic reality largely created by the, most often, spouses of these good problem solvers.  And the problem: rarely if at all did the problem solvers actually ask their beneficiaries what they needed or wanted to be better off.  And thus the cycle begins.

So while it is simpler to speak to the visible disproportionate composition of boards, what is equally at the surface of problematic composition is a failure to have those who are to benefit from a nonprofit's offerings at the table to cite needs, wants and solutions.  Let us be aware then that diversity is about having all involved at the table - not just those who think they have the solutions and come from one lens.

 

 

Board and Exec HUGE FAIL #NonprofitBoards

By now you are likely aware that the US Bankruptcy Court turned down the NRA's request for bankruptcy on the grounds that it was looking for a way out of its troubles in New York.  In New York the CEO, effectively backed by the board, has gone on a rampage through the assets of the NRA to his own good, at least for now.  And the board just twiddled its trigger fingers.  Should all be canned?  Absolutely!  But more eloquent is the following opinion statement from 

The Milford Daily News:

Although we oppose pretty much everything the NRA stands for, the organization, the leadership and its members are entitled to their political positions. But the NRA’s leaders are not free to bleed the nonprofit organization for personal gain, nor to flout laws governing how such organizations must operate, as New York alleges.

The best outcome for the NRA at this juncture would be excising LaPierre and his self-dealing cronies, then reorganizing to become more transparent and responsive to its members, hew to accepted norms and laws governing nonprofits, and become a more responsible and mainstream voice for gun owners.

That may be quixotic, though. It could just be that the best future for advocates of responsible gun ownership is the dismantling of the NRA and the distribution of its assets.

Exec and Board in Trouble #NonprofitBoards

In what I believe a good and noteworthy concept, staff of this nonprofit are calling on the board president and vice-president to resign or at least recuse themselves in the case of the currently on-leave executive who has been accused of inappropriate behavior with staff.  What is particularly noteworthy are the claims by staff against the board - holding these members accountable.  What I can't make out from the article is why staff are suspicious of the board who have at least suspended the exec until further notice (not clear what that is and what steps are being taken).  As one of those folks who actually does work on affirming or disclaiming situations like this, I certainly applaud the suspension but would need to know more about the board members.  Anyway, it is definitely in my opinion the correct step for staff to call upon the board for constructive action.  The exec is after all their employee.

From the Tampa Bay Times:

Veterans charity staff seek ouster of CEO and board members

An attorney representing Veterans Alternative staff said they want their mission to help veterans to continue, but without Brian Anderson.

 

 

By Barbara Behrendt

Published May 14

Updated May 14

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HOLIDAY — Staff of the Pasco charity Veterans Alternative see each day how their work helps veterans struggling to re-enter civilian life.

That work has run into a roadblock. And the barrier, according to staff at the nonprofit, is the organization’s leadership.

On Thursday, attorney Nikhil N. Joshi issued a statement to the Tampa Bay Times, saying that Veterans Alternative staff have sought corrective actions from the organization’s board of directors for the behavior of charity co-founder and chief executive officer Brian Anderson. Joshi represents all the staff at the charity except Anderson.

 

The letter alleges that two board members, chairperson Thomas May and vice chairperson Patricia Thompson, “have engaged in a pattern of conduct with the sole goal of protecting Mr. Anderson and his personal interests, instead of exercising their fiduciary duties.”

Joshi’s letter was sent a day after a Times’ story described claims of Anderson harassing three women who worked at the charity.

Anderson has been on personal leave from the nonprofit for most of the last six months, after massage therapist Mariah King reported to New Port Richey police that Anderson had touched her inappropriately during an October massage. Anderson faces a misdemeanor battery charge, to which he has pleaded not guilty.

The charge prompted the three charity workers — Sarah Thomas, Christina Brenia and Jeannine Laurence — to come forward with their experiences.

May and Thompson both said they take the accusations against Anderson seriously and are waiting for the conclusion of an outside investigation, which the board authorized.

“The allegations that have been made about Mr. Anderson are extremely severe, and the board is dedicated to treating such allegations with the appropriate amount of gravity,” May said in an email to the Times. “The board is toward the end of a formal investigation, and, once it is completed, we will take all steps appropriate to allow Veterans Alternative to continue to fulfill its mission.”

Added Thompson: “The investigation remains ongoing, but our goal is to conclude that investigation as quickly as possible. Our Board’s goal remains to protect the organization so that it can continue to do wonderful, important work.”

Joshi wrote that staff hoped that Anderson would not be retained in any position. If he were, Joshi wrote, it would be seen as “an utter slap in the face to all staff who have bravely raised their voice in good faith to protect VA and its stakeholders.”

Anderson did not immediately respond to a request for comment nor did his attorney in the criminal case, Christopher Blaine.

“Mr. Anderson is completely innocent,” said Shane Vogt, another attorney representing Anderson. “We cannot try his case in the court of public opinion or comment further because of pending and forthcoming litigation, but the truth will come to light.”

The letter said concerns about Anderson’s behavior had been brought to the board before by staff, by a volunteer in the program and by Joshi before the story appeared.

Joshi’s letter to the board demanded May and Thompson’s resignation, or at the least for them to recuse themselves from any action related to Anderson. Joshi also called for an independent investigation of the nonprofit.

“The staff want to make it clear that they are definitely appalled by the criminal charge filed against Mr. Anderson as well as the information contained in the recent news article, among other items previously conveyed to the VA board concerning Mr. Anderson,” Joshi wrote.

“Veterans Alternative Inc. has been and should remain, bigger than one person — Mr. Anderson, or, for that matter, May and Thompson,” Joshi wrote, “and we hope the behavior of a few individuals will not impact VA’s ability to deliver crucial services to our nation’s heroes.”

No Board? #NonprofitBoards

There's a big fuss going on in St. Louis over a nonprofit charter school that is not, in the eyes of every other educator, playing ball in the same field.  The founder is a guy with lots of credentials and lots of passion and really good answers to every criticism.  But this does not make all the other players happy and the debate may not end well for someone.  The article on the chaos is below but the one element I see really absent: a board.  There is not one reference to this school's board and if wanted to make all the anti-claims levelled against this founder, I would start with learning all I could about the board - that is after all the owners - is it not?

Here's the article:

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Education

St. Louis Education Nonprofit, The Opportunity Trust, Has Plenty Of Skeptics

St. Louis Public Radio | By Ryan Delaney

Published May 12, 2021 at 5:16 AM CDT

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Eric Scroggins returned to St. Louis after a 14-year career with Teach For America to found the Opportunity Trust. In its first three years, it's garnered lots of skeptics.

The Opportunity Trust has been involved in St. Louis’ fractured public education scene for about three years. In that time, its deep coffers and controversial priorities have stirred deep distrust and claims of a hidden agenda, especially from passionate supporters of traditional school districts.

The teachers union in St. Louis says the organization's founder, Eric Scroggins, is entwined with billionaires bent on privatizing public education. Former school board members similarly say the Opportunity Trust has brought an outside agenda to local education. And community activists claim it’s just an arm of a national movement to dismantle urban school districts.

Scroggins insists his organization simply has the mission of making sure every child has a chance to get into a great school and thrive.

“I believe in public education,” Scroggins said. “The whole entire point of our organization is to ensure that our public education system actually is responsive to kids and families.”

He’s quick to reference his own story, having grown up in a small town along the Mississippi River near Alton, Illinois. Scroggins attended Washington University, the first in his family to go to college. But, he said, public education didn't work for his two brothers, one of whom dropped out of high school.

“You can point to me to say, look, (public schools) work, and yeah, I can pull myself up by my bootstraps,” Scroggins said. “But the reality is, we actually have a system that isn't designed to support everyone’s success.”

He became a science teacher and then worked his way to being a top administrator with Teach For America. After 14 years with TFA, he returned to St. Louis in 2017 and launched the Opportunity Trust the next year.

Helping or hurting public schools?

The organization soon drew the ire of St. Louis Public Schools backers by supporting the opening of new charter schools and expanding successful ones, including City Garden Montessori. For supporters of SLPS, it is salt in the wound as the district undergoes a large consolidation and school closures.

“The Opportunity Trust doesn't share the objectives of SLPS, which is a high-quality public education system that supports all of our students in St. Louis, because they don't have the same interest,” said Ben Conover, a political organizer who helped form Solidarity with SLPS over the winter.

Solidarity with SLPS has no financial backers, Conover said, leaving it to rely on social media as it rallies support for the district and school board candidates. That’s in stark contrast to the Opportunity Trust and its large budget.

“I think that their goal is to get rid of public education, as we understand it, in terms of democratically elected school boards,” he said.

Scroggins counters that it's not about being anti-public schools, but rather about supporting different models of delivering education and governing schools, which could include boards that are not elected.

“I think there is no one answer,” he said. “But I think we do know that the current system as it's designed is not working. And actually the role of the Opportunity Trust is to be a part of those conversations to inform the change effort in St. Louis.”

The Opportunity Trust looks to back more innovation within existing schools. It’s done that so far through several programs, including educator fellowships and grants to community and parent advocacy groups.

For instance, WEPOWER, which is pushing SLPS to be more transparent in its budgeting process, has received at least $85,000 in grants from the Opportunity Trust. Yet a former employee of WEPOWER, Gloria Evans Nolan, said she grew disenchanted with the organization and left over concerns about its relationship with the Opportunity Trust.

In an essay on Medium, she said that during a conversation with Scroggins about her ideas for improving SLPS, he told her: “That won’t work. We have to burn it down,” referring to SLPS.

Scroggins denied making the comment but says he often speaks “emphatically and passionately about this work and about the real need for fundamental and transformational change in our systems.”

Nolan was unavailable for an interview for this story.

School partners

The Opportunity Trust has not partnered with SLPS, though Scroggins and other staff have had conversations with district administrators. Dorothy Rohde-Collins, who was president of St. Louis’ school board until last month, said after several meetings that she could never totally get behind the strategy.

“If I am running a school district and everything I do is public, and it should be and I believe in that, I can't partner with organizations that don't share those same ideals because this is public tax dollars,” she said.

File photo / Ryan Delaney

A teacher works with students at City Garden Montessori in 2019, a high-performing charter school in St. Louis. The Opportunity Trust is funding a major expansion effort by City Garden.

The Opportunity Trust has partnered with two districts in the St. Louis region. It gave University City’s school district a $175,000 grant in 2018 to support the development of a new strategic plan. It’s also helping to cover the cost of new reading and math curriculums in the Normandy school district.

Normandy’s new superintendent, Marcus Robinson, is a former Opportunity Trust employee. And that’s irked municipal leaders in that district, such as Beverly Hills Mayor Brian Jackson.

“They want to operate in a clandestine way,” Jackson said, “and they continue to do that. And we continue to push against that.”

Jackson is among several municipal leaders who were furious when they learned Robinson lacks full credentials to be superintendent, though he's working toward a doctorate. They also strongly oppose the new charter school that plans to open in Normandy, the Leadership School, whose founder Robinson advised while with the Opportunity Trust.

Officials with the Opportunity Trust say they’re not hiding a thing.

“Put simply, the Opportunity Trust is about great schools for all kids. And great schools can be in the form of charter schools, and they could come in the form of district-run neighborhood schools,” said Jesse Dixon, who oversees district and community partnerships for the organization.

“When we see an opportunity where there is a visionary superintendent, who wants to take bold steps on behalf of kids in that district based on evidence-based practices, we want to be supportive of those superintendents,” he added.

Leaders of schools that partnered with Opportunity Trust said they don't feel the funding comes with strings attached.

National funders raise questions

But not everyone is convinced. There’s suspicion about whether the Opportunity Trust is truly local or just an arm of a national group. Cities including Indianapolis, Denver and Memphis have organizations that advocate for similar things as the Opportunity Trust. “We share best practices, and we problem-solve together,” Scroggins said. “So we're certainly in community with other organizations that are doing similar work.”

But Tracee Miller, a former St. Louis school board member, went so far as to say the Opportunity Trust is not a Missouri organization.

It’s a charge Scroggins said has no basis.

“The Opportunity Trust is a Missouri nonprofit organization,” Scroggins said. “We were incorporated here in Missouri. We are funded mostly by major local philanthropic donors in St. Louis.”

About a quarter of its funding, however, has come from a national organization that’s raised eyebrows. The Opportunity Trust raised a total of $6.3 million in 2019, according to tax filings. Of that, $1.7 million, came from the City Fund, which supports charter and more autonomous public schools in cities around the country.

The strategy is supposed to help low-income students, a 2020 profile by the education news site Chalkbeat reported, but it’s also been seen as an attempt to undermine teachers unions and elected school boards.

Sarah Reckhow, a Michigan State University professor who studies the influence of philanthropy on public education policy, said that while the Opportunity Trust and the City Fund are not formally linked, there are close ties.

“At a certain point you start to speculate and want to understand, how much are all these folks talking to each other, they sure have a lot of common threads,” she said. “And usually, there are some connections.”

Rohde-Collins, the former school board president, said she’d like the Opportunity Trust to be more transparent about its funding and objectives. She urged the state legislature to not include $2 million in the state budget for the Opportunity Trust “until we have a clear idea about what their goals are, and how they perform on those goals.” She added, “I didn't say never, ever, ever give them any money.”

The money was ultimately included in the budget. The Opportunity Trust has 10 lobbyists in the Capitol; SLPS has two.

While the Opportunity Trust hasn’t won many allies on St. Louis’ school board, Dixon said it's still open to partnering.

“At the end of the day,” he said, “that sort of a relationship needs to be built on trust.”

Follow Ryan on Twitter: @rpatrickdelaney

Nonprofit Independent Boards #NonprofitBoards

One potential problem with nonprofit boards is that while the rules say they should be independent having no personal gain, it doesn't mean that the "best friends" can't create an organization that in fact facilitates the personal gain by one of their own and call them the leader to make this so. 

It appears that in this soundly divided country the US has become, one of the tools for facilitating the creation of vehicles that can collect money to further causes that in the end don't actually further the mission of the US (democracy), nonprofits can serve the purpose.  The Heritage Foundation is a long standing example as might the NRA be considered.  But in more recent times the My Pillow Guy and Trump advocate Sydney Powell have adopted the same tactic - creating a nonprofit that in essence promotes ideologies that in the short and long run are anti-democratic - and ironically, federal law permits this.  While we would otherwise believe that nonprofits are about doing no harm, the same cannot be said of these two if not many other ore recently created nonprofits.  

But let's put that aside for the moment and look at the issue I started with in today's blog - the creation or use of a nonprofit for personal gain.  Sydney Powell may have done just that in the creation of her pro-trump anti democracy for everyone nonprofit.  And while the Star Tribune I've copied below does explore a couple of board members (one prospect that turned down the job to do his own pro-trump anti-democracy nonprofit) an equally helpful article might be to reveal the full backgrounds of those who have agreed to serve as directors and why they are willing to at minimum "turn a blind eye" toward what may be doing little more than generating wealth for Sydney Powel in addition to being anti-democratic.  But the most telling sentence in this whole article: "the IRS doesn't police this very closely".  Well IRS maybe it's really time to start policing - especially the very nonprofits who are touting anti-democratic philosophies using this legal cover that was granted because there still remains a democracy.

From the Star Tribune:

Company: Ex-Trump lawyer raiding nonprofit for personal use

By MICHAEL KUNZELMAN Associated Press

 

MAY 13, 2021 — 1:55PM

 

DREW ANGERER, GETTY IMAGES/TNS

Attorney Sidney Powell speaks to the press about various lawsuits related to the 2020 election, inside the Republican National Committee headquarters on Nov. 19, 2020 in Washington, D.C.

Former Trump attorney and self-proclaimed "Kraken releaser" Sidney Powell has told prospective donors that her group, Defending the Republic, is a legal defense fund to protect the integrity of U.S. elections.

But the company suing Powell over her baseless claims of a rigged presidential election says the true beneficiary of her social welfare organization is Powell herself.

Dominion Voting Systems claims Powell has raided Defending the Republic's coffers to pay for personal legal expenses, citing her own remarks from a radio interview. The Denver-based voting technology vendor sued Powell and others who spread false claims that the company helped steal the 2020 election from Donald Trump.

"Now, Powell seeks to abuse the corporate forms she created for her law firm and fundraising website to hide funds that she raised through her defamatory campaign, shielding those funds from the very company that was harmed by the defamatory campaign," Dominion lawyers wrote in a May 5 court filing.

The dispute shines a light on how Trump allies continue to support, spread and allegedly profit from lies about fraud in the 2020 election. Although the election is settled, and all major court challenges have been dismissed, Powell's legal defense fund continues to raise money, with help from conspiracy-minded supporters like QAnon adherents.

Her group will receive a cut of proceeds from ticket sales for a Memorial Day weekend conference in Dallas called the "For God & Country Patriot Roundup," the event's website says. Some leading purveyors of far-right conspiracy theories are headliners, including Powell, pro-Trump attorney Lin Wood and former national security adviser Michael T. Flynn.

Event organizer John Sabal, known as "QAnon John" to followers of the QAnon conspiracy theory, declined to explain the decision to financially support Powell's nonprofit, also known as DTR, but said the money isn't for her personal benefit.

"As far as I know, DTR is benefiting a bunch of different causes. Those I will not speak on, but you can talk to her about that," he said.

Powell didn't respond to interview requests, but one of her attorneys said she denies Dominion's accusations. Powell's personal legal bills are covered by her malpractice carrier, and her nonprofit has a proper corporate structure with a board of directors, said her lawyer, Howard Kleinhendler.

"She does not have unfettered control over its funds or how the funds are spent," Kleinhendler wrote in an email. "DTR intends to comply with all federal and state filing requirements when they are due. At that time you as well as the rest of the world will see the necessary financials."

Trump and his allies filed more than 50 lawsuits in multiple states over the election and lost at every turn. Powell and Rudy Giuliani were among the lawyers behind the cases claiming a conspiracy by Democrats, despite Republican state leaders, and Trump's own attorney general and other administration officials, publicly stating there was no major election fraud. Powell appeared with Giuliani at a press conference and made multiple TV appearances.

But after Powell threatened to "blow up" Georgia with a "biblical" court filing, the Trump legal team distanced itself from her, saying she was not working on their behalf. She later made the comment on how she would release "the Kraken," an apparent reference to the film "Clash of the Titans" in which Zeus gives the order to release the mythical sea monster.

In a November interview, Powell noted she was not being paid by the Trump campaign but "by the people of the United States of America."

Tickets for the Dallas conference cost $500 for general admission and $1,000 for VIP passes. The event's website doesn't name other beneficiaries or specify how much money goes to Powell's nonprofit. Much of the conference was supposed to be held at a complex called Gilley's Dallas, but Sabal said the venue canceled his booking after news coverage of the event's QAnon connections.

QAnon followers believe Trump has been secretly fighting a cabal of Satan-worshipping "deep state" enemies, prominent Democrats and Hollywood elites operating a child sex trafficking ring.

Logan Strain, a conspiracy theory researcher who co-hosts the "QAnon Anonymous" podcast, said Powell has appeared on QAnon promoters' YouTube channels and is viewed as a "hero of the republic" among QAnon followers. It wouldn't surprise Strain if Powell is trying to harness the movement as a fundraising source.

"There is a great deal of money to be made in promoting and catering to QAnon," he said. "This is why a lot of people suspected it was sort of a money-making grift, at least in part, from the beginning."

Defending the Republic describes itself as a 501(c)4 nonprofit, but it isn't listed in an IRS database of tax-exempt organizations. Groups recognized by the IRS as a 501(c)(4) are exempt from paying taxes on income, including donations, but those donations aren't tax deductible as charitable contributions.

Powell's website says donors can mail checks to an address in West Palm Beach, Florida, that corresponds with a UPS Store. Under the same address, Defending the Republic Inc. registered in February with Florida's Division of Corporations as a nonprofit formed for "social welfare purposes."

Records link other leading conspiracy theorists from Trump's orbit to Powell's nonprofit. Powell, Wood, Flynn and Flynn's brother, Joseph, were named as directors of Defending the Republic in December 2020 filings with the Texas secretary of state's office.

Joseph Flynn said in a text message that he's no longer a director but declined to explain why.

"We are not interested in talking to the fake news media," Flynn wrote.

Wood recalls Powell asking him to serve as a director, but said he hasn't done any work on the nonprofit.

"She didn't follow up with me about it," he said,

Articles of incorporation filed in Florida in February listed MyPillow founder and CEO Mike Lindell as a director. But Lindell said he asked to be removed as a director of Defending the Republic after less than one week because he decided to form his own legal defense fund. Lindell is also being sued by Dominion.

"I went on my own because I don't have time for other people's stuff. I want to focus on what I'm doing," Lindell said.

Defending the Republic's chairman and CEO is former Overstock CEO Patrick Byrne, whose comments about the "deep state" led to his resignation from the company in 2019.

To support its claim that Powell is using nonprofit money for her personal legal defense, Dominion cited her remarks during a Dec. 29 appearance on "The Rush Limbaugh Show." Powell told the radio show's guest host that listeners could go to her website to donate to the nonprofit "that is working to help defend all these cases and to defend me now that I'm under a massive attack from the attorney general of Michigan and the city of Detroit and everything else."

Michigan's governor, attorney general and secretary of state — all Democrats — have urged state bar officials in Texas and Michigan to permanently disbar Powell for ethical violations over election lawsuits.

Meanwhile, Eric Coomer, Dominion's security director, has filed a separate defamation suit in Colorado against Powell, her law firm, Defending the Republic and others. Another voting technology firm, Smartmatic USA Corp., sued Powell in New York over her bogus election-fixing claims.

Wisconsin Gov. Tony Evers, a Democrat, asked a federal court to order Powell and other lawyers who challenged Wisconsin's election results to cover $106,000 in state legal fees. Powell called it a frivolous request. A judge hasn't resolved the dispute yet.

Dominion sued Powell in federal court on Jan. 8, seeking over $1.3 billion in damages against her, her law firm and her fundraising website. The company claimed Powell treated Defending the Republic "as her personal funds, redirecting them to the law firm she controls and dominates ... and raiding them to pay for her personal legal defense."

A nonprofit organized under Section 501(c)(4) of the tax code, as Defending the Republic claims to be, can engage in some political activities provided that's not its primary activity. Unlike political committees, tax-exempt social welfare groups don't have to disclose donors. Forms notifying the IRS of a group's intent to operate as a 501(c)(4) aren't public records, according to an IRS spokesman.

Samuel Brunson, a tax law professor at Loyola University in Chicago, said the IRS bars 501(c)(4) groups from spending money for the benefit of private individuals. Doing that could jeopardize its tax-exempt status, he added.

"In general, the IRS doesn't police it very closely," Brunson said.