Three Cups May Be Too Much

With the airing of 60 Minutes investigative report on Greg Mortenson, author of Three Cups of Tea and CEO of Central Asia Institute, a recognized 501(c)3, we are once again confronted with controversy in the nonprofit sector. Here is an organization with a very compelling and important mission – building schools and educating girls in impoverished central Asian communities – and charitable contributions that would be the envy of the vast majority of the nonprofit sector. It is unfortunate that the ensuing debate over the situation seems to be focused more on the personal actions of one individual rather than the vitally important issue that nonprofits must committed to be well run and responsibly governed in all aspects of their work in order to ensure the efficacy of their work and the trust of the public.

What we have is a mismatch of expectations and a lack of transparency. Clearly what people thought the Central Asia Institute was doing with its money is not what it was doing with it. Sure, it was delivering on its mission, but clearly not to a level that was proportionate to the level of philanthropic support it received. Sure, Mr. Mortenson’s charisma and books were significant assets that the organization leveraged to get that support, but comingling his personal endeavors with the finances of the nonprofit make it look as though these “assets” were actually significantly costing the organization at the expense of fulfilling the mission.

I work with nonprofits daily, and I can attest that their structure and regulation can be confusing. It’s not always clear what’s allowable to do under the tax exempt designation nor are the passionate people who start these endeavors, like Mr. Mortenson, always aware of the unique complexities of running a charitable organization and managing its finances.  Not understanding how a nonprofit should operate and not having the full scope of skills to run a complex organization can lead to unfortunate events like those illustrated in this case.

It is important that those working to improve our world through nonprofit charitable organizations have access to the knowledge needed to be successful, have impact, and remain accountable. Here at the Standards for Excellence Institute®, we work diligently to provide such resources and guidelines so that organizations can build sustainable governance and operations to maximize the social impact of their work, reassure donors that their contributions are used as expected, and keep themselves out of potentially compromising situations by adhering to the highest levels of accountability and ethics. We also provide organizations the opportunity to demonstrate this commitment to the public by earning the Seal of Excellence, an honor held by 250 nonprofit charities in the US.

One thing is clear. Donors, the government, and the public at large expect charities to exist for the benefit of communities and environments, not for the benefit of the people that found or run them. Following proven practices of good nonprofit governance and management reminds us that the best interest of the nonprofit and the community it serves is to take the time to learn about what the community needs and from what it can benefit; understand what it takes to effectively operate; and, when it comes to accepting items of personal benefit it may be better to only accept one cup of tea rather than three when doing so.

This entry was posted in Conflict of Interest, Financial Management, Fundraising, Governing Board, Legal, Openness. Bookmark the permalink.

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