As director of a nonprofit in LaPlata County, I was dismayed to read the headline “Former director of Southwest Colorado nonprofit suspected of embezzlement.” The director of the local nonprofit, 4 the Children, which helps abused and neglected children, allegedly stole more than $20,000 from the organization from 2018 through 2022.
LaPlata County alone has approximately 100 nonprofits, entrusted with millions from combined revenue, donation and grants. It is a special relationship between the nonprofits and the community, as we depend on the community to help fund us, and the community entrusts us to “fill in the gaps” that government services don’t provide –from childcare and afterschool programs, to helping the homeless, pet adoption, conservation efforts and cultural programs.
As director of Riverhouse Children’s Center, I see our staff and board of directors as responsible for our clientele’s children, their hard-earned money, the other monies donated to us and – most importantly – everyone’s trust. We need to do our very best for the population we serve, which includes using every dollar as efficiently as we can. This is what we’re entrusted to do.
Accountability must be a priority for all nonprofits. At Riverhouse, we have several measures in place to be accountable for every dollar. Our board looks over our financial information on a monthly basis. Our board president receives notification every time our credit card is used, or a deposit or withdrawal is made from our bank account.
Our local accountant looks over our books each month. If we have a cash withdrawal, she emails me and another administrator to clarify exactly what the funds were used for. We use two-party check signing and do not accept cash. We have yet another accountant who conducts our annual audit.
There are other things that can be done, too. There can be clarity between the board and the director regarding for what purposes food or drink can be purchased, and what the maximum allowance is for such expenditures. Any bonuses or “extra money” that goes to employees should be 100% transparent so every board member knows of the allocations – not only when they’re to occur, to whom and for how much, but all the other options for such funds, too.
When San Juan Basin Public Health received $846,000 for “emergency pay compensation,” there was a lot of controversy over how those funds were distributed as more than half the money ($442,000) went to the top three administrators (on top of other salary increases and bonuses already received). One of the board members said, "We never looked at anyone’s salary, we have never (done that) and that is the operational part of the shop and we’re not an operational board.“
There were no details in the finance reports about the size of the payments or the individuals who were receiving them.
My problem with what happened with SJBPH is that this type of occurrence erodes the trust that nonprofit and public organizations alike must hold sacred. I understand that most boards exist to primarily do governance, and to a large degree rubber stamp the CEO’s budget and plans.
But I don’t understand how a board can think it is not responsible for knowing an administrator’s salary (not even the executive director’s) or overseeing the fiduciary systems watching almost a million dollars in emergency pay.
Most of us who are working for nonprofits are doing so because we are placing the very real needs of our community over our own personal profit. SJBPH’s top administrators and the woman who ran 4 the Children are not “bad people.” But if they lost sight of the need to place their clientele first, if they lost sight of the ever-present question of “What’s the very best use of every dollar?” and if they failed to fully communicate to their board anything even remotely controversial or questionable, then they eroded some of the collective community trust that is the grace upon which we all operate.
I am sorry for that. For the hundreds of community members who so generously serve as board members of our organizations, for the hundreds of nonprofit staff members, and for the hundreds of donors who assume our trustworthiness every time they give, we must call out those who are casual or careless about this relationship of trust, and let our community know that we don’t take it lightly.
There is no excuse. And the rest of us will continue to place service and transparency above all else.
Becky Malecki of Durango has worked for the government or nonprofits for four decades. She serves as executive director of Riverhouse Children’s Center.