A Nonprofit is Not a Sandbox

15 Jun A Nonprofit is Not a Sandbox

A nonprofit is not a sandbox in which to play out personal dramas with public monies. “Not a sandbox” is by Gregor Shapiro and was found on Wikipedia Commons.

We write to solve problems of peaceful, ethical money management and nonprofit fundraising. We invite your problems, please!

The Public Trust is a Peaceful, Ethical Nonprofit Essential

A soul-colleague wrote to us with a problem I’ve summarized and stripped of identifying details:

A nonprofit Board I am on get together outside of regularly scheduled meetings and make decisions. Some of the decision include ostracizing and making demands of members who aren’t present, upon threat of expulsion. One of our former officers gets together with current Board members outside of meetings. They develop plans to sabotage other members’ participation. I’ve shared with them that this is not Board-like behavior and violates best practices. It looks like they will ostracize me next. Is there anything to do but resign?

For peaceful, ethical money management and nonprofit fundraising, let’s remember that nonprofits exist by the grace of government acting on behalf of the public trust.  Nonprofits get special postal rates and don’t pay tax because they provide public good. We as citizens benefit from tax monies businesses provide but we forego them from nonprofits because of the public good nonprofits provide.

The good a nonprofit provides doesn’t have to be targeted to all citizens. But they do have to benefit people beyond their Board.  So our soul-colleague is on the Board of what amounts to a sandbox, not a nonprofit. The Board have violated public trust and likely also the law.

Board Members’ Peace of Mind is a Money Management Essential

What is the peaceful, ethical solution for our soul-colleague in the sandbox?

Get off the Board immediately, for two reasons:

1. 1. 1. If a nonprofit is sued, Board members are financially liable. (Every nonprofit should protect its Board by having Directors’ and Officers’ insurance. I would never serve on the Board of an organization that didn’t.)
      2. If a nonprofit is behaving badly, its Board are responsible. They are assumed to know and approve of what is going on. That’s why we as citizens put our trust in nonprofits: we expect Board members to be “watching the store” on our behalf. If you are on a Board that is acting badly, know better and get off! This protects your peacefulness and your ethics, which are also your wealth just like your money.

Starting Over, Peacefully & Ethically, is a Joyful Option

Once you are off the Board, you can still make a difference in this situation. In fact, you can make more of a difference.

First, you can do nothing but respond if you are asked why you left that you were unhappy or uncomfortable being on the Board. You don’t have to explain why you left. The public are not stupid and people make an assumption about the Board and not you if you are a generally peaceful, ethical person.

Second, you can start a nonprofit that actually serves the people you sought to serve when you were on the Board of the sandbox. You don’t have to explain why and you should only do this if you feel moved. You will start to gather beneficiaries, members, allies, supporters, and donors. If you operate transparently and provide the good you promise, you will find your desire to serve fulfilled.

Third, you can mention what you know about the operation of the sandbox to a government regulator who will investigate them. If they are part of a national network, you can contact the national office regulating them. There is a risk the sandbox will suspect you of doing this.

Summary

The ethical money management and nonprofit solution is to separate yourself from the Board’s wrongdoing, which is monetary wrongdoing because nonprofits are supposed to use the public’s money in a way that upholds public trust. Even if the sandbox are only raising money from their own Board, they are benefiting from nonprofit status by not paying taxes.

You cannot be peaceful if you are unethical, with money or with anything else. But peaceful can be joyful where ethical doesn’t have to be. A joyful way of handling the situation may look like moving on, lessons learned from the sandbox, to serve the people you wanted to serve in the first place through your Board service, in collaboration with others who feel as you do. Gradually, the sandbox will probably disappear or simply lose its nonprofit status, as it should, and just be an increasingly smaller group of individuals playing out a sandbox drama.