So many non-profits (NPs) for even small municipal governments, not the same as a “not profitable company,” are subject to take overs by a team of of “professional leaders” that proceed to draw large salaries, deplete the assets for personal use and basically run the organization into the ground. The careers of employees (aka “Staffers”) are often adversely impacted and at least temporarily damaged, through a latter clean-up effort, extra hours and loss of employment. The latter may include difficulty finding another job once all is public and in the press as there is a career and resume reputation tarnishing via association with the NP, even when the employee was not even indirectly responsible!
How does this happen? Many NPs begin their life with a sincere, legitimate and worthy cause, such as preventing local food hunger, providing shelter for the homeless, protecting the large acreage of a historic farm house, etc. The “creator” was someone dedicated to the mission which was was their all consuming passion. Usually, like minded folks were attracted and supported the mission with their time, talents, finances, etc. The founder often was focused upon the mission to the detriment of developing a real organizational structure for the ensuing growth, lacking sustained continuity and not a real leadership succession plan. Then the NP accumulated some paid staffers that were equally dedicated and drawn to the original great leader, though as the years of employment rolled by, realized their wages were falling behind.
Of course, all good things come to an end. The trusted founder eventually ages and leaves often due to health reasons, and the board of directors seeks a new leader to address the lack of corporate governance and at times shoddy internal controls and financials that are impinging gaining funding grants. An executive search begins, and a charming though manipulative new leader, is selected known now formally as the “CEO.” Well, CEOs even for non-profits do not come cheap, especially those with the well burnished credentials the board was seeking for “adding a donor base and stature via formalization to the mission.” The CEO often requires a large salary, a sign-on bonus for relocating of course, perhaps even a new high-end luxury car (for chauffeuring around wealthy benefactors), etc.
Said new CEO’s first self-directed duty is that of analyzing the non-profit, and finds all sorts of “leadership flaws” which will be corrected by bringing onboard the “right team,” which consist of his / her cronies, who must have exulted titles and accordingly compensated for their superior skills of marketing, strategy, fundraising and finance with real world high highfalutin monikers of Senior Director, SVP, EVP, etc. Soon the NP may not have enough funds to pay the “new leadership team” and the CEO convinces the board via misusing an accounting term stating this is a “timing difference” and there is a”‘need to spend money to make money,” i.e. garner donations from wealthy patrons. The result is the NP curtails support for their program resulting in the hungry become hungrier, the homeless less sheltered and sadly the the historic farm fields and woods around the farmhouse and barn, via real estate cronies, are subdivided and sold for suburban building lots as the new CFO presented the board with persuasive financials and the report of an ‘expert consultant’ that the raw land in a natural habitat was “costing too much for maintaining (!!).” The funds of the mission are rerouted then for paying the exorbitant salaries of the esteemed new management team, and sadly all of this is valid as long as the board approved. Such CEOs are very clever with ingratiating themselves with unappreciated board members and likewise for the long-term employees, flipping them to go along by extolling with long due accolades and giving hefty payraises. Such CEOs know that before meeting the non-profit’s intended goals, the board must first attend to the new management team’s personal financial goals. Of course these CEOs study the board members, the board bylaws and the non-profit charter, and beneficially tweak to “modernize the mission.”
There are staffers that disagree at least initially with the changes due to a sense of unease. Of course, the wage factor comes up … imagine a low level manager complaining to his / her spouse over some evening pillow talk. Spouse responds that the new CEO is doing the right thing by the employees with the wage increases, to stop being so selflessly dedicated to the mission of the non-profit, and consider the good of the family by realizing the costs of raising successful children includes dental braces and college tuition. For the hardcore dissenting board members, they are usually picked off one-by-one by the CEO, and replaced with more “business minded type members with donor / patron connections.” An original board member seeking having the goal of the original non-profit is outnumbered and gaslighted into leaving. Some of these departed board members state they felt as if in the movie the “Body Snatchers” as they were the last “real humans” remaining in the NP!
All of the above may sound a bit sci-fi, though is just as insidious and actually does occur. The ruse is eventually discovered and made public via the press, donors withdraw funding, the non-profit goes into financial crisis as the CEO and his / her leadership team depart “to pursue other interests,” namely exploiting their next hapless non-profit. Also, since the current Board decided to go in a different direction as well, as they fired the CEO leadership team, the team’s contracts require payment of a large severance payment. Generous termination money in hand, they are off to reap the sign-on bonus of the next victim NP and their merry go-round continues in two to three year intervals.
As to the NP that was targeted for this shenanigans, either it goes bankrupt, is merged / taken over by another organization, or there is an effort to revitalize, though in a shell of its past, by the right-minded original board members, employees and donors. Alas, though for example, the historic farm consists of only the farmhouse and the barn on two acres now surrounded by a slew of suburban houses on the former field and woods. The NP then fizzles along, despite stating they now have unpaid and “volunteer leadership”of various local professionals giving their time with their subject matter expertise. However, the press, patrons and the general public have long memories for scandalous NPs and tend to steer clear no matter how much is really operating according to the original and intended mission again.
Several hard lessons here from the organizational governance perspective of course, though I would rather discuss the impact and direction for the employees. For the NPs, what goes on with the CEO and leadership team is perfectly legal, as high compensation, depleting financially the organization, etc, if done by board vote and bylaws, is allowed. For the employees, the approach during phases of the non-profit life cycle include … Consider the best interest of you, your family and your later retirement years as with any job. Best interest includes financially, since I can assure you that dedication to a low paying job, is not the smart move. Society does not reward or provide discounts when buying anything required for a reasonable life in this modern day for low paid and selfless service. One pays the same as any one else for insurance, housing, transportation, utilities, grocers and the every day costs of living. Better to leave a low paying non-profit job after gaining the minimal amount of experience to ‘gain a promotion’ through an external job offer. Staying with a low paying job too long, perhaps for years, and then seeking a new venue, often results in many questions from potential employers as well as not that big a pay raise even though one’s skill set is comparable to a much higher paid role. Leaving the job or the job leaving you due to the non-profit going bankrupt after the CEO and esteemed raiding team does not result in you receiving generous severance pay, etc, as the departed leadership team enjoyed on their way out (as they had that contractually and you tending to the mission did not). Seeking a new job with a tainted past employer is not easy and recruiters and HR types are not interested in your side of the story or even now you as a potential candidate. An internet search on your name and that of the NP employer are easy and fast ways of putting, at least temporarily, the nails into your career coffin.
The only caveat I would have for staying long-term in a low paying job with a reputable non-profit even in the best of times is if independently wealthy, though I could think of better, more enjoyable ways to spend the time or if at the end of one’s career and seeking a true 40 hour or less work schedule for the real life balance that provides some financial income and hopefully has great benefits.