December 18, 2012

Nonprofit Leaders Must Speak Out About What’s Wrong

Brendan Smialowski/AFP/Getty Images/Newscom

Candles with the names of the victims of the Sandy Hook Elementary School shooting were part of a makeshift memorial near the school's grounds.

Nonprofit leaders, as well as those in the corporate world and government, seem unwilling to accept responsibility for their decisions and actions.

We got an all-too-painful reminder of this over the weekend after the Newtown tragedy, as officials of the nonprofit National Rifle Association refused invitations to speak to reporters and to explain why they have acted to block assault-weapon gun-control laws. A few days later, when it released an unapologetic statement, it continued to refuse to speak to its record.

This followed soon after the founding president of the nonprofit Social Accountability International vaguely defended her organization’s award of its highest certification to the Bangladesh garment factory which, just weeks after its last inspection, burned down, killing over 260 workers.

As in so many other scandals, instead of accepting accountability and consequences, leaders make every effort to push responsibility down the line and pass it off onto others—and then try to impose only minimal repercussions on those assigned blame.

While the public’s attention has often focused on corporate wrongdoers and government officials trying to dodge blame for their actions, Americans are now noticing that nonprofit leaders are also seeking to avoid responsibility for making tough decisions and accountability for their actions.

In the government’s fiscal-cliff discussions, for instance, most nonprofit leaders have been shamefully absent from the debate. Sinking to the lowest common denominator, they have spent all their time working mightily to defend the charitable tax deduction for themselves and their members. They have remained silent on the larger and much more consequential battles involved as elected officials talk of cutting services to the needy while preserving tax breaks for the wealthiest Americans.

In doing so, nonprofit leaders abet the hyperpartisan politicians who continue to ignore the public will and paralyze our nation, working for their campaign contributors instead of saving our economy or solving other problems.

We should expect nonprofit leaders to speak out when both government and business do wrong. And they should speak even more loudly when their peers don’t act responsibly.

For example, why have nonprofit leaders allowed college executives to go unchallenged in their avarice? Twenty percent of private-college presidents now earn more than $600,000 a year, with better than 7 percent pulling in over $1-million annually.

University presidents and other administrators draw these large salaries while higher education has close to 750,000 workers paid less than poverty wages. Those executives ostensibly lead charitable institutions, but they are known to best serve students of privilege while failing to provide affordable opportunities for upward mobility to so many who desperately need them.

Many health and cultural institutions as well as other large charities also pay such outsized salaries. Executives seem set on enjoying their perks rather than championing their institutions’ charitable missions. To whom are they accountable?

Occasionally outside organizations do assign blame. The New York Attorney General has just forced the president of one organization, Educational Housing Services, to repay millions in excess compensation and self-dealing gains while also requiring derelict board members to pay $1-million for their “stunning” negligence in allowing such abuse.

And punishment may come to Graham Spanier, the former president of Pennsylvania State University. He was indicted last month, joining other administrative colleagues also scheduled to be tried, for helping to establish and maintain a “culture of silence” surrounding the then-continuing child sexual abuse committed by a coach in the university’s renowned football program.

But these consequences are among the rare exceptions.

Instead, too many Americans perpetuate and blame an amorphous “institutional culture” instead of ascribing responsibility to individuals.

We fail to hold miscreants to account for their sometimes criminal, certainly selfish, decisions and actions. Rather than demand accountability from people with personal responsibility for gross malfeasance, we instead act as though it is the faceless institutions and organizations that cause abuses.

It’s as if entities do wrong, not people—banks and not bankers, Wall Street and not investment brokers, corporations and not their CEOs, Congress and not elected legislators, universities and hospitals and not their administrators, charities and not their board members or executives. We even talk of a sector’s culture as if people are powerless to do anything but acquiesce—often to their own benefit—to dysfunctional practices that profit the individual over the common good.

It is time for that to stop. America continues to be confronted by serious abuse in some of its most important institutions, including charitable ones. While many people are harmed by such sometimes calamitous actions, the responsible individuals appear to face few meaningful consequences. That is wrong.

Too many nonprofit organizations allow personnel and operating practices that victimize the people they should be serving. This remains even more often true in the market and in politics. We’re much more likely to lock up a street criminal than a corrupt executive—although on balance it’s the latter who has caused the greater harm. We need to change that.

Charity leaders should encourage and support efforts to hold one another accountable for serving the common good over private interests. Those efforts must extend to elected officials and other government leaders, and to corporate executives. We need powerful and effective new mechanisms, both voluntary and regulatory, to accomplish those purposes.

If as a society we don’t prevent bad practices by insisting that organizational leaders take responsibility and face the consequences of their decisions and actions, it is always others who instead will suffer.

That may be in the interests of organizational and institutional elites, but it victimizes the rest of us.

Mark Rosenman is an emeritus professor at the Union Institute & University, and directs Caring to Change, an organization that seeks to improve how foundations serve the public.