Healing Arts Intiative, a New York non-profit, was shut down due to corruption. More than $750,000 had been embezzled over years. It’s a useful example of bad management. HAI’s story helps demonstrate the need of three essentials for good management. One, the need to have financial controls. Second, have lawyers if relationship with board is bad. Third, have good culture.
Key Takeaways:
- A few simple processes for handling finances can help keep things in order—requiring multiple signatures on checks above a certain amount, segregation of financial duties, making the finance staffer go on vacation (to note potential discrepancies in the staffer’s absence).
- “No question about what to do here,” says consultant Glenn Tecker. “Consult the organization’s attorney, notify the officers, then notify the board of the course of action you are taking upon advice of counsel.”
- here aren’t any easy answers for a situation like this one. But understanding the reasons why organizations go off the rails—and how best to get them on track—can go a long way to keeping your organization’s name out of the papers in a bad way.
““The deeper issue is what allowed it to happen,” Tecker says. “We always assume [in cases of nonprofit scandals] the board was unengaged. But we’ve also seen scandals where boards have taken an adversarial relationship with staff rather than a consultative partnership.””
