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The board wasn't to blame...or were they?
A former board member of Kool April Nites will pay back the money he was accused of embezzling from the nonprofit organization, the Shasta County District Attorney’s Office said.
On Tuesday, Jeff John Allen, who was in charge of the annual car show’s finances for several years, pleaded no contest to one misdemeanor count of embezzlement with additional terms, DA spokeswoman Briona Sisneros said.
Allen must pay Kool April Nites $46,852.73 and it cannot be reported as a charitable donation no matter who pays it, Sisneros said.
Allen was charged in September.
The district attorney’s office said that while Allen was handling the car show’s finances, he refused to let other board members have access to the group’s finances.
The DA’s office launched an investigation in late 2022 after receiving reports of possible embezzlement in the organization.
Kool April Nites is one of the largest classic car shows in the West, drawing thousands of participants and spectators to the North State each year in late April.
Sisneros said that Allen must pay $20,000 of the $46,852 he owes to Kool April Nites within 20 days.
Additionally, Allen can’t serve on nonprofit boards or have access to financial information for people who are not family members, Sisneros said.
David Benda covers business, development and anything else that comes up for the USA TODAY Network in Redding. He also writes the weekly "Buzz on the Street" column. He’s part of a team of dedicated reporters that investigate wrongdoing, cover breaking news and tell other stories about your community. Reach him on X @DavidBenda_RS or by phone at 1-530-338-8323. To support and sustain this work, please subscribe today.
I believe this a good thought piece worthy of full board discussion!
Helping nonprofits scale gen-ops dollars to fund the infrastructure they need to grow. Connect with Sherry Quam Taylor, CEO of QuamTaylor.
Fundraising isn’t easy, but that doesn’t mean it has to be hard.
It’s important to look at the types of fundraising methodologies in the nonprofit sector to better understand which ones bring the most revenue—more importantly, unrestricted revenue—to the organization.
For example, the nonprofit sector often relies on the “give/get” model, which requires board members to either give a financial donation or help raise a specific amount (or services equaling that amount) on an annual basis. While this approach may ensure some level of board contributions, it can also limit a nonprofit's fundraising potential.
Why leave money on the table? As a nonprofit leader, it’s worth exploring other approaches to maximize fundraising effectiveness.
The give/get model is designed to ensure board members are financially invested in the organization. It has been a staple among nonprofit organizations for decades, so questioning its value can be a difficult path to navigate. Yet, not having that conversation can lead to unintended consequences that hinder more effective fundraising strategies.
One essential factor to consider is that the give/get model is purely transactional, with an emphasis on meeting fundraising targets through direct contributions or securing in-kind goods and services. This approach can undermine fundraising goals for several reasons, including the following:
Give/get teaches board members that fundraising is about transactions rather than relationships. Board members are uniquely positioned to introduce their networks and foster connections with donors, which is critical for cultivating long-term support.
Focusing on transactional activities—such as email marketing blasts, social media campaigns and large events—diverts attention from relationship-based fundraising. Relational activities have a greater potential for unrestricted gifts and sustained support. These might include:
• Meeting in person.
• Sending personalized email updates.
• Conducting private fundraising solicitations.
• Organizing intimate gatherings for small groups.
• Engaging in high-level fundraising conversations.
• Holding one-on-one meetings, including on Zoom.
• Providing tailored impact reports and thank-you messages.
The “get” portion of the give/get model may seem valuable but can be misleading. For instance, getting $5,000 worth of graphic design services from a local design agency may sound beneficial, but if those services are treated as “charity” work, they might be low priority among agency staff.
Similarly, in-kind contributions, like a transport vehicle, may incur additional costs for maintenance and operation, diminishing their perceived value. This reliance on "gets" can detract from a focus on raising funds through traditional methods.
A better alternative? Develop an annual budget that consistently funds the services and contractors essential for growth. It's well understood that unrestricted donations are most beneficial to your mission. Your team should be trained and focused on meeting the comprehensive financial needs of your organization, rather than adhering to a limited give/get target.
A predetermined give/get target can condition board members to aim low when soliciting contributions from their networks. If a board member's requirement is $5,000, they might not push for more significant donations, even if donors are capable of giving much more. What if that donor could give $10,000, $15,000 or $20,000?
A quota mindset limits fundraising potential and can lead to missed opportunities. However, your board's restrictive mindset might not be entirely their fault. Removing give/get constraints can pave the way for boundless generosity.
When give/get targets are in place, fundraising staff may avoid soliciting board members, leading to a disconnect in how fundraising should be approached. Board members might be hesitant to ask for donations because they view fundraising as overly aggressive. In this case, leaders should ensure their staff members are modeling what relational solicitations look like. It’s not twisting arms or begging for money. This misperception hinders the development of effective fundraising strategies and reinforces negative stereotypes about the process.
The give/get model reflects a broader problem in the nonprofit sector, where outdated approaches and transactional thinking can impede growth and innovation. This mindset often focuses on short-term gains and meeting basic financial requirements.
Nonprofits that rely solely on a transactional approach to fundraising may struggle to build lasting relationships with donors, causing them to miss out on opportunities for larger and more flexible contributions. Isn’t it time for more of a “thinking outside the box” strategy?
To fully capitalize on fundraising opportunities, nonprofits should consider moving away from the give/get model and embrace relational fundraising strategies. This shift involves training board members and staff to cultivate relationships, rather than relying on transactional activities.
Ultimately, the key to successful fundraising is fostering a culture of philanthropy where every contribution is valued and every donor is encouraged to give their best gift. By challenging these outdated legacy traditions, organizations can unlock new fundraising opportunities and ensure their boards are equipped to meet their financial needs.
Forbes Nonprofit Council is an invitation-only organization for chief executives in successful nonprofit organizations. Do I qualify?
Helping nonprofits scale gen-ops dollars to fund the infrastructure they need to grow. Connect with Sherry Quam Taylor, CEO of QuamTaylor. Read Sherry Quam
Maybe??
Victoria Burkhart, CEO at More Than Giving Co, Nonprofit Executive Director, Nonprofit Fractional Staffing, Executive Coach.
Nonprofit boards spend time and resources searching for the right professionals to fill their nonprofit's C-suites. They create comprehensive position descriptions to cover every manner of oversight, including financial management, operations, facilities management, human resources, communications, fundraising, program development and more. They thoughtfully consider and outline the skills, education and experience they feel are required to do a great job.
In addition, they spend considerable time ensuring that the nonprofit professionals they hire will “fit” with the culture of the organization. They want to recruit people who understand and appreciate the values and mission of the organization. They want their organization's executives to share their vision and passion for the change they want to see in their community.
With all of that detailed preparation, it would be reasonable to assume that every C-suite hire leads to a long and successful executive-board partnership. Right?
Not necessarily. The sector’s workforce shortage continues. Nearly three out of four nonprofits responding to the National Council of Nonprofits' 2023 Nonprofit Workforce Survey reported job vacancies. The pinch can be felt at the chief executive level as well: A national career transition firm reported an alarming 73% increase in CEO exits when comparing January 2024 to January 2023.
If you are a nonprofit professional, you likely know chief executives who enjoy highly effective partnerships with their boards (I hope you are one!). It is equally likely that you have witnessed or even experienced an uneasy and unproductive relationship between the volunteers who are ultimately responsible for an organization’s success and the executive they retained to lead it.
There is tension built into the very structure of a nonprofit, to ensure that the organization behaves as promised in its charter. One of the board’s main duties is to hire and oversee the chief executive; the chief executive reports to and is accountable to the board.
It would be unrealistic to expect that the board and chief executive would be in complete agreement all the time. In fact, serious debate around critical issues is healthy. But for the organization to move forward, the agreements and compromises must outweigh the points of contention. When the discord goes too far, there will be telltale signs:
• Board meetings become unproductive.
• Fundraising baseline metrics are missed.
• Strategic initiatives stagnate.
• Everything seems to be a crisis.
• Leaders stop communicating; messaging in general becomes fuzzy.
• Staff are boxed out and begin to feel disengaged and burned out.
• It becomes increasingly difficult to retain staff.
• Decisions are made in a vacuum and without the needed expertise.
• The board’s confidence in the staff is weakened.
While it is true that the board is responsible for overseeing their chief executive, they must also be willing to place their trust in that individual to guide the organization toward mission and vision fulfillment. Of course, trust is a two-way street—the executive must also be able to trust that they will have the board’s support and that the members will meet their responsibilities, particularly those related to ensuring adequate funding to achieve the organization’s goals.
The relationship between a nonprofit board president and the counterpart executive staff member is so key to the success of the organization that it should not be left to chance. Yes, large decisions—especially about funding or strategic direction—rest with the board. But it is the expertise of the hired professionals that will ensure these decisions are implemented successfully. Here are a few guidelines for ensuring that the board-executive partnership starts, and stays, on the right path:
• Put into place and nurture a succession plan for all leadership positions, both staff and volunteer.
• Include a thoughtful leadership transition plan for board leadership and top executives to help ensure a smooth transfer of responsibilities.
• Clarify lines of responsibility. Come to a mutual decision about what responsibilities will fall to the board president and which will land with the chief executive, and respect those lines.
• Assume that lines of responsibility will need to be reviewed and possibly reclarified to accommodate leadership transitions. What might seem obvious in one partnership may need to be adjusted for another pair.
• Collaborate on strategic planning to encourage deep thinking and alignment about the current state of the nonprofit, where it ultimately wants to go and the right pathway to get there.
• Identify and capitalize on the expertise at hand. Everyone has something of value that they can contribute.
• Provide regular professional development for board leaders and executive staff to refresh everyone’s understanding of their roles while introducing new knowledge about nonprofit effectiveness. Include sessions where the board and executive staff learn together.
• Consider professional co-coaching for the board chair/president and chief executive to grow their ability to lead in partnership with one another.
• Communicate regularly! Schedule conversations if necessary. The organization’s top leaders need to be open and honest with one another and transparent and consistent with the board and staff.
• Model the type of commitment you want the rest of your board and staff to demonstrate. In a nonprofit, everyone needs to be ready to roll up their sleeves when it’s all hands on deck.
A nonprofit is best positioned for success when there is a strong, collaborative relationship between the board president and the chief executive. When that level of alignment is achieved, an organization will achieve a higher level of sustainability and will have a greater impact on the community it serves.
Forbes Nonprofit Council is an invitation-only organization for chief executives in successful nonprofit organizations. Do I qualify?
Victoria Burkhart, CEO at More Than Giving Co, Nonprofit Executive Director, Nonprofit Fractional Staffing, Executive Coach. Read Victoria Burkhart's full executive profile here.
It's no secret that in recent times faith-based nonprofit leadership in particular has crossed all kinds of lines. Well, maybe times are about to change. Take a look at the following article
The accreditation agency for over 2,700 evangelical nonprofits wants to raise its standards to address “one of the greatest financial risks” posed to churches and ministries today: moral failures by leadership.
For decades, the Evangelical Council for Financial Accountability (ECFA) has established guidelines around financial transparency, stewardship, and governance. This year, the organization announced plans to add a new requirement to address the integrity and character of a ministry’s leaders.
It’d be the biggest change to ECFA’s standards in 45 years.
First introduced in March 2024, the proposed standard states, “Every organization shall proactively care for its leader and support the integrity of its leader in conformity with ECFA’s Policy for Excellence in Supporting Leadership Integrity.”
ECFA members and experts in the Christian nonprofit agree with the idea of the new standard but aren’t sure exactly how to implement it.
In an interview with Christianity Today, ECFA president and CEO Michael Martin likened the standard to a guardrail. While no written policy or accountability measure could eliminate sinful behavior by leadership—each leader ultimately bears responsibility for their own integrity—organizations can be doing more to help keep them in check.
In 2021, ECFA surveyed more than 800 of its member ministry leaders and board chairs, and 94 percent said leadership failures are impacting donor trust. Respondents also said they needed more resources for supporting the integrity of ministry leaders and wanted ECFA’s help.
A three-page commentary on the new standard includes the following direction for member churches and ministries:
ECFA accreditation can provide a level of assurance to donors and participants, but it does not exempt a ministry from high-profile moral failings. In 2021, ECFA terminated RZIM’s membership because the ministry’s resources “were improperly used in relation to sexual abuse and misconduct by the ministry’s late founder,” Ravi Zacharias.
In 2019, Harvest Bible Chapel lost its standing with ECFA in the wake of controversy over founding pastor James MacDonald, which culminated with his firing.
Last month, Pursuit Church in Denver, North Carolina, an ECFA member, fired a pastor for sexual misconduct. Pursuit Church remains an ECFA member.Scott Rodin believes ECFA’s approach to leadership integrity represents the kind of “holistic thinking” that keeps ministry leaders and boards in healthy relationships.
Rodin is a senior consultant and chief strategy officer with The FOCUS Group, which helps faith-based organizations connect with their donors. He said leadership failures have a ripple effect through ministries, impacting employees, donors, and the larger community that ministries are trying to reach.
Though the emotional, spiritual, and physical well-being of a ministry leader might not seem directly connected to donor trust, Rodin believes the health of a leader is reflected in the health of the organization. He said the proposed standard represents the kind of thoughtful work that boards of directors should be doing in the first place.
“A leader’s relationship with God, with themselves, their neighbors—it has a massive impact on how they do their work,” he said. Leaders encounter opportunities for compromise every day, Rodin said. “Fuzzy ethical edges turn into cliffs really quickly.”
Since announcing the proposed standard in early March, ECFA has solicited feedback from members through a form on the ECFA website. Martin said most of the organizations that have responded have affirmed the need for such a standard and asked ECFA for guidance on what implementation should look like.
The integrity standard would be eighth on ECFA’s list of standards of responsible stewardship. The seven existing standards cover doctrinal integrity, governance, financial oversight, legal compliance, financial transparency, compensation and third-party transactions, and stewarding financial gifts. ECFA did not specify the kind of integrity questions a board should ask a ministry CEO.
Frank Sommerville appreciates the intent behind the standard, but he says it is unclear what compliance should look like. As a practicing lawyer and CPA, Sommerville’s clients, about 70 percent of whom are faith-based organizations and ministries, are contacting him for advice about implementation.
“I applaud the effort of ECFA to address the issue of leadership integrity. I have seen in my 30-plus years that the lack of integrity in the senior leader can harm or destroy an organization,” he said.
Still, he wonders how ministries will implement a standard that ECFA intentionally left vague and open to many interpretations.I n its commentary on the standard, ECFA says its members have “much latitude to care for and support the integrity of their senior leader … in a manner that is best suited for their context.” The commentary also clarifies that the board does not need to be a leader’s accountability group. But ministries might struggle with where to draw these lines.
Sommerville thinks ministries might have a hard time determining what type of integrity they need to monitor. Financial integrity? Sexual integrity? Daily Bible reading?
“Is it the job of the board to hold a leader accountable for non-work, non-job performance activities?” Sommerville says. “Is that the best use of the board’s time?”
As Pursuit Church illustrates, ministry leadership failure does not disqualify a ministry from ECFA accreditation.
Though cases of corruption and financial mismanagement grab headlines, Sommerville believes they represent a small percentage of ministries. In almost every case of failure, he says, board members believed it was their job to support the leader without question.
“You don’t need a board that serves the vision of the leader; you need a board that ensures the leader is implementing the vision of the organization.”
Sommerville hopes organizations will take the standard seriously and not treat it as a box to check without addressing root issues.
Most of ECFA’s members are parachurch ministries, though the group says churches make up the fastest-growing member segment, just over 10 percent. Members are able to comment on the proposed standard through the end of May. ECFA expects to officially roll out the new standard in the fall.
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Several years ago I wrote an article titled "Seven Warning Signs that something may not be right". Based on the following latest article from the FORBES Nonprofit Council there may be 20 signs which is essentially a whole lot to track. That said, this is a pretty exhaustive list.
Nonprofit organizations can sometimes face the risk of failure, and staff and executives must be aware of the telltale signs. When it becomes apparent that a nonprofit is headed toward trouble, effective leadership can be the saving grace between staying afloat and shutting down operations for good.
To that end, 20 Forbes Nonprofit Council members highlight critical indicators that can signal a nonprofit's failure, from donor fatigue to internal strife. Read on to discover these signs, as well as these experts' top strategies for turning the ship around.
You know you are in trouble when the board becomes weak. This means there is a lack of leadership and no strategy for building a strong pipeline. The organization recycles board members and presidents and there is no commitment to recruiting new leadership. A lack of leadership will cause the decline of a nonprofit. Some find term limits and mandatory rotations harsh, but fresh and motivated board members keep organizations growing. - Victoria Burkhart, The More Than Giving Company
One key consistent indicator a nonprofit is heading toward failure is poor communication. Without communication, no one is able to fully execute their role responsibly. This is particularly true when it comes to board and executive leadership dynamics. When leaders of a nonprofit board restrict open lines of communication, disaster is surely on the horizon. - Lacette Cross, Diversity Richmond
Nonprofits that don't operate like a business risk failing. They are mission-driven, but when decisions to provide services are based on emotion and not ensuring the service will be effective and fiscally sustainable, they run the risk of operating in the red, which often depletes reserves held for a “rainy day.” While it may be unpopular to say no, sometimes it is necessary to do just that. - Stacy Bliagos, HANAC, Inc
An organization's demise often happens slowly, then suddenly. Leaders often don't react until it is too late. Symptoms include: Your organization has stopped growing, you never have enough funding, you are chasing dollars outside your mission, you can't keep key team members and you dread going to work each day. Spotting the signs of trouble early can enable leaders to make necessary course corrections. - Tom Ulbrich, Goodwill Industries of Western New York, Inc.
One prevalent sign that a nonprofit organization may be on the path to failure is financial instability. Leaders should focus on optimizing operational efficiency by identifying cost-saving measures, streamlining processes and eliminating redundant activities. This can help maximize resources and ensure funds are directed towards impactful programs. - Jason Fields, Madison Region Economic Partnership
A toxic work culture that is left unchecked is one of the sure signs that an organization is at high risk of failure. The toxicity can be a product of harmful and undisciplined actions and/or consistent inaction in the face of harm. A leader must disrupt behaviors that normalize the bad culture and reinforce systems and structures that reflect the desired organizational culture. - George Hsieh, Community Resource Exchange
One of the most telling signs that an organization is going to fail is if the chairperson and the executive director are at odds. The relationship between the board and the executives is critical, and when that relationship is in danger, the entire organization is in danger. - Caroline Boudreaux, Miracle Foundation
Nonprofit resilience, or the ability to continue in its service, is essential. I have often seen nonprofits fail because they are too reliant on one stream of revenue—be it a major event, a campaign or grants. Work hard to diversify funding sources. Relying on a mix of donations, grants, earned income and other sources is a key strategy to turn this around. - Erin Mote, InnovateEDU
Forbes Nonprofit Council is an invitation-only organization for chief executives in successful nonprofit organizations. Do I qualify?
As the adage goes, “Cash is king." One way to fail is to not plan for operational disruptions. It is important to have the financial discipline to create reserve funds of three to six months minimum. We saw during the pandemic that some nonprofits didn’t have enough cash on hand; this led to staff furloughs and layoffs, as well as impacts to program delivery with some organizations closing when the community needed them the most. - Dawn Reese, The Wooden Floor
The heads of departments—development, finance, marketing and programs—have been hired for their expertise. I've seen suggestions be made that deviate from "what we have always done," and boards choosing to stick with their comfort zone. This limits nonprofits from being able to grow and adapt to current circumstances. - Kristin Salkil, Black Women's Health Imperative
Nonprofits can never forget why they exist and what their mission is. Trying to obtain funding that is not aligned with the mission is the first sign of real trouble. Before long, the organization may shift its priorities and therefore stop being true to its members, supporters and stakeholders. It is hard to come back, so leaders need to stay vigilant about serving the cause. - Magdalena Nowicka Mook, ICF (International Coaching Federation)
One early sign that a nonprofit is trudging towards trouble is when the organization stops listening to its data stories. Stakeholder and constituent research, along with a regimented data evaluation process, will help nonprofit leaders avoid slow-moving icebergs. Regularly challenging assumptions and developing new insights from that research can lead them forward confidently in a data-driven way. - Michael Bellavia, HelpGood
Nonprofits fail when values are not applied internally. If you prioritize equity, collaboration and generosity in your programming and fundraising but not with your staff and other internal stakeholders, it will eventually cause challenges. Low staff retention and morale, unsustainable workloads and underinvestment in operations must be addressed or they will lead to a decline and serious challenges. - Matthew Gayer, Spur Local
A lack of transparency around operations can quickly lead to failure. The first role of a leader is to tell the truth about the organization's condition, then identify problems and enlist leaders to implement immediate solutions. It starts by recognizing the truth internally and externally and declaring the real condition of the nonprofit at any given moment. - Albert L. Reyes, Buckner International
One sign is when leadership, team members, key donors and partners start to remove themselves from the organization and its work. This may be a sign that a shift is taking place. Being aware of your partners' engagement level can help to stave off disaster. - Jamee Rodgers, Urban Neighborhood Initiative
Nonprofits fail when the leaders stop paying attention to financials, staff retention, the board and community engagement. It's a similar effect to "quiet quitting." Any of these factors can lead to the demise of an organization, but many times, two or more of these distractors are taking place and are not being dealt with in a timely manner. - Kimberly Lewis, Goodwill Industries of East Texas, Inc.
In my experience, not diversifying your financial portfolio can lead to failure. Relying on one funder, funding source or major event is good for a small nonprofit but if you wish to grow your capacity, you must include multiple revenue streams and build a strategy that clearly defines your growth plan and the revenue needed. Hold intentional conversations with existing and new funders. - Erin Davison, Big Brothers Big Sisters of Southwest Louisiana
A negative perception can become a negative reality. If you have a decline in volunteer engagement, donor support or staff retention, it is time for a rebrand. Strong executive leadership and boards should consider revamping the organization with a new logo, promotional campaign or giving strategy to rebrand the organization to the public. It's okay to reboot for a great cause. - Aaron Alejandro, Texas FFA Foundation
Nonprofit leaders must curate and nurture its board of trustees to ensure continued success. The old adage, "The body rots from the head down" is a testament to this. A culture of support comes from the top down. If a board is disengaged, unsure of the nonprofit's mission and not invested in its success, failure will be imminent. - Tara Chalakani, Preferred Behavioral Health Group
An organization falls into The Big Rut, according to Les McKeown, when it stops understanding its reason for being—serving the cause—and viewing its own existence as primary. Nonprofits can return from frustration around the loss of creativity, innovation and vision. When it’s actively discouraged, it’s unlikely that the existing leadership can course-correct since they can’t self-diagnose. - Cherian Koshy, Kindsight
David Benda
