A few months ago, I made an offer to the founder and executive director of a nonprofit: Shut the nonprofit now or my office will seek serious financial penalties from you.
The nonprofit executive had worked for three years to build his organization and donated a significant chunk of his life savings to it. His wife had volunteered for it, as had several friends. His goal was to help domestic-abuse victims, and he thought his approach was different—and better—than others. He had great plans, such as building a ranch for kids harmed by domestic violence, running a 24-hour crisis hotline, and creating a fund to provide financial assistance to victims. He set up the organization, got tax-exempt status, and then proceeded to solicit donations.
So why did the attorney general’s office take such a harsh action and force the organization to close?
In short, his solicitations for money were deceptive and he posed a significant danger to domestic-violence victims.
He sought donations by saying the kids’ ranch was hard at work when it did not even exist. What’s more, domestic-violence experts say such a place is unworkable and ill-advised.
He also had a toll-free number for his 24-hour hotline, but the line was rarely answered, and when it was, the operators lacked any sort of training. This was downright dangerous since a victim may have only one call to make. And he never awarded money to victims as he told donors he was doing. He had ideas for three other programs that were nowhere near reality, yet his fund-raising pitches said all three were fully functioning.
This episode offers lessons for others:
Don’t confuse dreams with reality. This executive director got in trouble because he represented his dreams as though they were reality. It is fine to solicit money for programs you wish to start, but it is not OK to tell donors those programs are operating when they are still just ideas.
Be honest in fund raising. This nonprofit went astray when the executive director succumbed to the temptation to make his programs sound better than they were. Soon his fund-raising pitches were becoming ever more distant from reality. He told donors what they wanted to hear and not what was actually going on at his nonprofit. And sometimes he was just wrong, such as when he said that many domestic-violence shelters separate mothers from their children. No legitimate shelters do that, and fear of separation could prevent victims from seeking aid at his organization—or anywhere else.
Recognize that dreams alone are not enough. People with big dreams make my state work, so I know we need them. But the best dreamers take small, tangible steps toward their goals. They don’t overreach and always seek to grow.
In this case, however, the wayward executive director wanted it all right away. He overreached, and now he cannot work on a mission he claimed to care deeply about. He tried to create a full-service domestic-violence advocacy organization from scratch. He did so without prior experience in domestic violence or in nonprofit management. He didn’t even consult with those who did. Had he focused on one program or, better yet, devoted his energies to helping an existing group, he might have succeeded.
Social-service groups must do no harm. The Hippocratic oath should not be just for doctors but also for anyone who helps people in vulnerable situations. Social-service leaders need to evaluate their programs and ask if they are truly helping those they serve. For those who have the resources, hiring an expert to conduct an evaluation is a great way to go.
In this case, the executive director believed his two high-profile programs, the hotline and kids’ ranch, would help domestic-violence victims. But the untrained hotline operators could easily lead a caller astray. And any domestic-violence expert would have told the nonprofit founder that a ranch for kids harmed by domestic violence is unworkable because such youngsters could face severe anxiety if they left family members for extended stretches.
All told, the executive director in this case collected $20,000 for a bunch of programs that didn’t exist or that could actually harm domestic-violence victims. His fund raising was taking money away from legitimate groups, and his actions were making all of Missouri’s domestic-violence advocates look bad. He made matters worse by resisting any expert advice on how to tweak his programs, and he refused to alter his fund-raising pitches. Thus we knew we had to act.
Of most concern to us was that his ignorance about domestic violence could lead a victim of abuse to stay in a bad situation, potentially followed by horrible consequences.
No law compels the government to act when a nonprofit doesn’t accomplish its program objectives. But attorneys general do have discretion when choosing a remedy or punishment. And harming innocent victims through fake or inept programs, while lying to donors, can make us choose a much harsher remedy.