Nonprofits in Trouble Ask: Who Do You Know?
Connections and friends in the right places matter as much in the nonprofit sector as they do in corporate America and the government. Witness two recent instances of nonprofits running into serious trouble — and the very different results that happened to them.
In the first instance, reported by the New York Times, a friend of the founder of the Association of Community Organizations for Reform Now (Acorn) ponied up almost a million bucks to cover the debt incurred when the founder’s brother embezzled scratch from Acorn. Talk about it’s not what you know, it’s who you know:
[Drummond] Pike[,the founder and chief executive of the Tides Foundation,] is a friend of Wade Rathke, the founder of Acorn and its leader until the scandal broke, and he agreed to buy the promissory note that required the Rathke family to repay Acorn the money that Mr. Rathke’s brother, Dale, had stolen.
Mr. Rathke is a member of the board of the Tides Foundation and other Tides-related organizations.
Acorn officials worked hard to keep Pike’s identity as Rathke’s white knight a secret, which tells you something about the fishiness of it all.
Meanwhile, in western Pennsylvania, the Voluntary Action Center “apparently has closed its doors a day after its former executive director was charged with stealing from the agency.” Darla LaValle, who resigned last year, is “accused of inflating her salary and denying retirement benefits to two employees.” Interestingly, she also can boast a connection — her husband is a state senator. Then again, he’s also not running for reelection. | 501(c)
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POSTED IN: Ethics, Illegality
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