Sunday, April 18, 2010

Great reporting on a cautionary tale...

OK, this is a story every nonprofit board member should read. All of it.

The story, from the Austin American-Statesman, is about the collapse of Austin's Family Connections. It is unusually well written and thorough. It analyzes the causes of the collapse of this successful, acclaimed service organization.

And, unlike much reporting on nonprofits that I have seen, it gets to the many (not just one) root causes.

Although there were signs easier to see in the rear view mirror, the ultimate bottom line (no pun intended, since this is a sad tale) is that there appears to have been a basic breakdown in board oversight. No audit, no audit committee, and the board allowed the ED to control all the financial reporting herself. All easy to see warning signs from the outside, but outsiders never got the chance to get in to take a look.

Again, well worth your time to read the entire article. And, a shout out to Andrea Ball for a great job with her story. I suspect it will help many other nonprofits avoid similar fates.

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