Fiduciary Magazine

The nonprofit sector is under more scrutiny today than at any time in our history, and yet detailed 990s and audits don’t guarantee that oversight is happening. Why is that? There are as many answers to this question as there are charities, but there are some things that seem to crop up again and again when problems arise. Here are some key reasons why oversight is overlooked:

1. No one wants to admit that oversight didn’t happen in the past so there is never a good time to ‘start’. In other words, things keep getting done the way they have always been done. Pieces of paper get signed and filed, but there isn’t willingness to revolutionize the way the organization does business.

2. Even when there are losses it is usually looked at as an ‘event’. Rarely are governance practices put in place that would prevent it from happening again because the root of the ‘event’ isn’t researched. Everyone points the finger at the ‘event’ and then moves on with only cursory changes, if any.

3. Often everyone will agree at a committee or board meeting that something is wrong with how they are working, but then the topic is never brought up again.

Why do these things happen?  From an outsider’s point of view, the changes seem easy and painless enough, so why aren’t they made? Why don’t companies, and especially non profits who are given so much trust by the community, jump at the opportunity to run more efficiently and effectively?

Because change hurts. It’s difficult; it is an ongoing process – not a one time solution; sometimes it makes things worse; and it can make you wish you’d never had any issues in the first place. We are wistful about how life used to be (before we changed) and yet change is a given. Sweeping things under the carpet is always easier. Changing in crisis when there’s no other choice in some ways is easier because we don’t have to ‘decide’ to change, it is thrust upon us.

If change is so hard, what are the other options? Frankly, there aren’t any. Either companies get with the program and start moving with the times or they will in a few years find themselves quite suddenly out of business. It’s a tough economy out there and nonprofits that don’t change may find that if they wait too long, it’s too late.

Often the board’s first reaction to change is that they do need to do some change, but not too much. The idea of changing puts everyone ill at ease and there is fear that things could get worse; that change in and of itself could threaten the organization. Most boards realize that they need to embrace new ways of doing business, both to be compliant with laws and also to draw in new members.

I understand that no one wants to be Chicken Little. It’s human nature to want to be accepted and to be a part of the group — and nothing sets you apart like questioning leadership. But in today’s economy change is critical to the success of your organization. The bravery of being willing to stand out by asking questions and demanding changes ensures that you won’t fall into the dangerous habit of overlooking oversight.

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