How to Keep Your Nonprofit Out of the Media Spotlight
The Wounded Warrior Project has been under intense scrutiny ever since a CBS News investigation reported that the organization spends 40 to 50 percent of its donations on overhead. The organization was also accused of excessive spending on executive salaries, travel and staff conferences.
In response, the board of directors of the Wounded Warrior Project solicited an independent review and eventually fired the CEO and COO. In a statement, the board conceded that “some policies, procedures and controls at WWP have not kept pace with the organization’s rapid growth in recent years, and are in need of strengthening.”
Pro Bono Partnership of Atlanta clients are unlikely to be accused of excessive salaries or lavish spending, but they can still take away lessons from the Wounded Warrior Project experience. For starters, a nonprofit’s board of directors must exercise proper oversight and ensure sufficient controls to avoid accusations of putting dollars before mission. The board can also take steps to ensure the organization is complying with IRS guidelines on executive compensation. PBPA has numerous resources on our website that can help your organization follow best practices, including:
• Principles for Good Governance and Ethical Practice: A Guide for Charities and Foundations
• Compensating Insiders – How to Avoid Excess Benefit Transactions and Comply with IRS Rules
• Fiduciary Duty of Board of Directors to Oversee Financial Affairs
• Legal Issues for New Nonprofits Webinar 7: Board’s Responsibility for Financial Oversight .