A higher calling means higher financial standards
By Sidni Shorter In Podcasts Posted November 19, 2013 0 Comments

A higher calling means higher financial standards

It’s never a comfortable position when you find yourself defending your financial position as a nonprofit leader. It’s one of the most common concerns among our clients at Execute Now! when we discuss their financial management goals. Our clients want to demonstrate confidence and transparency in all matters relating to their financials—not only to the board but to their immediate community.

Why? Because they know our society raises the bar when it comes to expectations on how a nonprofit is managed. Additionally, a leader’s financial answers have tremendous impact on the success of their fundraising. Respect for the organization’s leadership is still among the top reasons why a donor gives to a charity.

According to community leader and former NPR board member, Chris Boskin, “A U.S. Trust study found that among high net-worth donors–those with $5 million or more in assets–one of the top four determinants of where they contribute money is respect for the organization’s leadership.”

Even former presidents aren’t immune from the scrutiny we apply to nonprofit leadership and financials. In a recent New York Times article, the Clinton family was held to a higher standard:

  • Former President Bill Clinton defended his family’s charity and its finances on Friday amid reports that the group — recently renamed the Bill, Hillary and Chelsea Clinton Foundation — had run up deficits in some years and been mismanaged.
  • “The Clinton Foundation was founded on the belief that we could help people in the United States and around the world solve problems and seize opportunities faster, better and at lower cost,” Mr. Clinton wrote in a message on the foundation’s Web site in an attempt to calm anxious donors.
  • He also defended how donations had been handled, responding to a New York Times article on Wednesday that raised questions about the foundation’s finances. He said that the tax forms mentioned in the article “can be misleading,” partly because multiyear charitable commitments are reported in the year that they are made. That can make financial reports in subsequent years appear skewed, he said.

In an effort to shape public opinion, Bill Clinton made a point of highlighting the recent hiring of Eric Braverman, 38, a former McKinsey & Company consultant, as a positive move in the right direction for the foundation’s leadership. Clinton also called attention to Ira C. Magaziner, the chief executive of a foundation offshoot, the Clinton Health Access Initiative, in spite of being criticized for his management style and his handling of budgets.

Clearly, Bill Clinton is recognizing the critical importance of superior leadership as it relates to foundation activities thanks to the hearty dose of print media attention to his financial reports. Whether Braverman and Magaziner can provide that leadership remains to be seen. What we can learn from observing high profile efforts like the Bill, Hillary Chelsea Clinton Foundation is that our board, donors, stakeholders and community expect us to be unquestionably well-managed. By choosing to serve a higher calling, we commit to a higher standard.

By Erica McGeachy Crenshaw, CEO of Execute Now!

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