Where can you report unethical or illegal conduct of a nonprofit organization? There has been repeated verbal abuse, threats to other employees and theft by an employee. This employee has been reported by several employees on each incident to the immediate supervisor and the president of the board. There has been no action taken by the president or the supervisor. The employee is related to the board president.
From your statement that there have been threats to “other employees,” I assume that you are also an employee of the nonprofit. If so, the first place I would look is the organization’s whistleblower policy. Since the IRS asks on the Form 990 whether a nonprofit has a whistleblower policy, most nonprofits do. You should ask to see it so that you can see what is covered and how to report.
Most policies will cover reporting of theft but a less comprehensive policy might not cover reports of verbal abuse or threats. It will also tell you to whom to report, which is probably the immediate supervisor first, and then the CEO or a member of the board, perhaps the president or head of the audit committee, if you are not satisfied with the supervisor’s response. If you have already reported to the named individuals without results, you should go to the third alternative or another member of the board who you think might be sympathetic. If the board doesn’t act but you have voting members, you could also go to them with your concerns. The more of you who join in the reporting, the more likely the organization is to take it seriously.
If you comply with the policy, you should be protected from retaliation, but I wouldn’t guarantee it. Most organizations retain the right to modify their policies whenever they want to, and some just disregard the policy when they don’t want to follow it.
If following the policy, or reporting to the board if there is no policy, fails to get results, you can always report the theft to law enforcement personnel. Law enforcement is not likely to take action because of verbal abuse or random threats, but theft, if sufficiently large or pervasive, might get their attention.
Most whistleblowers who go outside the organization are people who got no response to blowing the whistle internally. Organizations who understand this simple fact are more likely to treat employee complaints with respect and to take remedial action where warranted. You can only hope that someone in your governance structure understands that it is better to deal with an issue internally than to wait until the attorney general or local prosecutor shows up.
Comments
I once reported an incident to the Board of a 501c3 I was working at. It involved payment of organization funds to friend of CEO despite the fact that the friend did not fulfill the terms of contractual relationship. As amount relatively small ($5 K), I asked for the CEO to receive a letter of reprimand at minimum so that future conduct was precluded. When nothing happened, I called Board Chair personally also with no result, I resigned my position as CFO the following week.
I would go to the attorney general.
The president of our 501(c)(3) nonprofit is violating by-laws by attempting to treat the organization as his own. He is spending dues and members' money indiscriminately and he has shut down the website where donors and sponsors advertise. He is a founding member and feels it's his club so he can do what he wants. Legal advice: don't report to attorney general, but go to mediation. And use court system as last resort. Is this a good strategy?
I agree that going to court is a last resort, but mediation requires consent of both parties and the president may not be willing. It is certainly worth recommending, however, and may have a better chance if you have others working with you. —Don Kramer
11/19/18
I was employed by one of the most powerful non profit organizations known domestically and internationally. Their motto is to respect and use honesty to drive their goals in assisting individuals who have mental and physical disabilities. Those who are in need of employment, training, education, and transitional support. Their core values sounds like something a preacher would say coming from a pulpit, it makes you want to be part of doing as much as you can to assist your community, however it has been my experience that these core values do not apply to the employees. Before I was terminated I questioned their dress code policy that prohibited wearing a head wrap unless their logo was on it. To me this discriminated against my cultural heritage of African decent. The attendance policy that needs to be addressed because it equates calling in sick as an occurrence which is counted against you. Not only that but you must put in paid time off in advance. How do you know if you're going to be sick in advance? Unless you have a doctor's appointment you cannot pre plan this. This to me is not respectful or illustrating dignity for one's health and the health of co workers health. Not only that there is no sick time available unless it's FMLA so you have to use accumulated paid time off. I fear for the existing and future employees who are subjected to this and possibly other policies that are not addressed by their mission statement. It is my hope that someone who has the power to hold their feet to the fire of decency for their employees as well as the community.
I was a treasurer for the board of a local nonprofit when the president micro managed my duties and did not bring funds from events for my verification and deposits. I resigned my position. Is there any legal standing I have that the president would not allow me as the treasurer to verify monies received from events and deposit the monies to our accounts. I am the one ultimately responsible for all said funds. How do I report the abuse of the president of the board?
If you resigned as a member of the board as well as treasurer, you probably don't have any standing to challenge the president's conduct unless your organization is a membership organization and you are still a member. Lack of standing to bring a suit, however, does not prevent you from complaining to other directors and officers and urging them to straighten things out. —Don Kramer
The president of a nonprofit that we recently separated from has been pocketing donations, falsifying budgets, stealing from other programs, abusing substances at events, having issues with harassment and a recent assault, and misappropriation of funds. A state organization is currently raising a very large amount of money for his program, not knowing that he has been misusing funds for personal reasons. What can be done about this?
You probably know some of the people on the board of the organization to whom you can make a complaint. If that doesn't help, you and others aware of the situation could go to the state organization and let them know what is going on. If you do that, you want to be absolutely positive about your facts so that you can't be acused of libel or slander, but you might provoke a conversation that could help improve the situation. —Don Kramer
I enjoy your very precise and intelligent answer to this question, but with one exception. Depending on the nature of the verbal abuse and threats involved, this could very well be a police matter. It's established that the employee in question is a criminal: are his threats along the lines of "If you tell anyone, I'll say something sarcastic about you at the next board meeting" or are they more like "If you tell anyone, I'll burn down your house"?
When my husband and I sold our home we downsized considerably. I made an itemized list of items for donation to a nonprofit organization. The minister of the org. said to assign a value of what I considered appropriate to each item and I would receive a receipt that I could use on my taxes. I did as requested. I wrote out a description of each item and gave it a value that I would pay if I were to buy it. I then wrapped and boxed the items and he came and picked them up. There were antiques, furniture etc. I mailed him a copy of my list in December. It is now the last part of March and I have not received from him my receipt. He keeps putting me off. He says he has the paperwork but he has not done as he promised. And he has been disrespectful by referring to me a "Mamma" in one of his texts. If he continues to delay in keeping his promise what do you recommend? We do not file our tax deductions without the appropriate receipts.
This is an interesting comment and worth clarifying. See our answer: What do we do without receipt for gift of furniture?
https://www.nonprofitissues.com/to-the-point/what-do-we-do-without-receipt-gift-furniture
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