How Not To Run a Registered Charity

When you're starting a charity, most people have really good intentions.

Feed the people. Clean up the river. Save the snails.

But sometimes along the way, things can get sort of…wonky. The original reason you wanted to start a charity is still there, but you can get distracted from the mission by other things.

Like money. That's a big one.

Sometimes charities cross that fine line from fairly compensating employees and vendors, to setting themselves up to benefit certain individuals.

And let me tell you – that's a major no-no.

Take the NRA for example.

There was some internal board conflict within the NRA. Board President, Oliver North, was forced to resign after he called for the termination of NRA CEO Wayne LaPierre. Ollie threatened to release not-so-flattering info about how LaPierre was spending the charity’s dollars and a flurry of lawsuits followed. What a mess.

In the fallout from the board scuffle, the media is now scrutinizing the NRA's financials more than they were ever before, and they found things like….

·         Payments to 18 of their 76 (76!?!) board members between $11,000 and $3,100,000!

·         The org bought an “undisclosed” amount of ammunition from a board member's company

·         $39,000 for LaPierre’s one day shopping spree a Beverly Hills clothing boutique

·         And so much more!

All paid for from member dues and charitable donations made to the NRA.

The NRA’s outside counsel – of course – says all these payments to insiders were in line with IRS regs and conflicts policies. (And maybe that’s true – they paid their outside counsel $24 MILLION in just over a year so I’d sure hope they’re compliant!!) But it stinks to high hell anyway from a PR perspective.

This is the PERFECT example of how people problems (the board squabble) lead to public relations nightmares. Even if it comes out that everything they did was “legal,” the NRA is losing the in court of public opinion.

This…is really bad. Charities exist to serve a public good and to carry out their mission, NOT to benefit any one person (especially if those people serve on the board).

PR and public image are super important for charities, big and small, and it's something I try to make all of my clients aware of. Yes, I can find you a loophole or a legal way to do something (probably) but what happens when somebody shines a light on what you’re doing? It’s not a good look.

You can't just follow the law – you have to make the right choice for your mission and for the public you serve, every time.

So with your new org, learn from others that came before. While you might not aspire to be the NRA – in politics or in size – know that lots and lots of orgs have made these mistakes (hear me talk about the slip-up Brad Pitt made here).

Remember the mission is the reason you're doing this. Keep that as your motivator. Always. Do that and you'll do great!


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