Saturday, June 23, 2007

Wow, What A Shock. Another Example of Piss Poor Fundraising...

[The following is based on Ashley Bach's The Seattle Times article, "No Audit at Bellevue Arts Museum Since 2003", dated June 23, 2007. It can be found at:]

It's among about five to ten basics that I repeatedly discuss, in this blog, as critical for non profit organizations to do if they want to be successful fundraisers.

What non profit doesn't want to be an excellent fundraiser?

Well, up until recently, maybe The Bellevue Arts Museum located in Bellevue, Washington; which has been long plagued by some catastrophic difficulties that honestly would have shut most non profits down a bit ago.

My ire has been raised, this morning, so I'm taking my Saturday morning to write this article because you need to consider honestly whether you're setting your organization up for the same errors. To get to the point, if you want to raise money now and tomorrow - you must be ethically managing the organization and overseeing its operations, health, and vitality.

Even more to the point: if you want to raise funds, do not neglect to do an annual independent, professional, financial audit. I don't care if you're not required to (yet) by law. Do it.

Why? The recent leadership at The Bellevue Arts Museum can tell you why. I must admit, the most entertaining thing about the article was at the end. Bellevue Arts Museum Board President, Keith Baldwin, is paraphrased as stating:

"Museum officials said they expect to get the $300,000 back from their insurance company and are exploring restitution options as well.

"In the short term, the museum can use new donors and a new line of credit to make up the hole left by the stolen money and the money that hasn't arrived from the city of Bellevue, Baldwin said."

Ah, ha, ha, ha, ha, HA! Are you kidding?!! I'm not giving your organization a dime. Would you?

It doesn't sound to me like he's fully understood, yet, why he, as a Board member, let alone the President; should a) know his legal fiscal responsibilities to the non profit that he volunteers to oversee, b) understand modern professional fundraising paradigms and reasons for them, and c) expect that donors will be leery of giving to an organization that has repeatedly demonstrated that it neither operates efficiently, nor that its leaderships deems it necessary to take the time to learn the latest in professional non profit leadership and fundraising.

Here's the summation of the story. A Bellevue Arts Museum staffer was embezzling their money. Her antics were sniffed out only after another staffer thought something odd, and the organization conducted an audit, which they hadn't been doing for four years. The board repeatedly voted to not do an outside agency (independent) annual financial audit, claiming (this is rich) that they didn't have the money for it. Well, they really don't have money, now, for anything at all. Guess it would have been worth spending the money to audit annually all of those years, looking back now?!

The Board President explains the experience as 'a dishonest bookkeeper took money, he's learned his lesson, and they need money today'.

That's his take. Here's the rest of the world's perception of the whole thing:

1. BECAUSE the organization had not conducted an independent, professional, financial audit annually the potential embezzler became an actual embezzler and stole funds.

2. BECAUSE the Board was not educated as to the proper management of non profit agencies and their resources, and BECAUSE the Board did not choose to educate themselves about their responsibilities; the embezzler was able to steal money.

3. BECAUSE the Board voted not to spend money on an annual audit for four years - the embezzler was able to take a large sum of money over a good amount of time. The sum stolen IS important, as apparently, the museum is hoping to get it back, NOW. Why they didn't protect it when they had it...who knows?!

4. BECAUSE a staff member, a colleague of the thief thought something was off the mark; only then was an independent financial audit conducted and the stolen money was discovered. The discovery was not because of strong management or oversight on the part of the volunteer leadership. The theft was discovered because of an honest employee who does not bear the same fiscal oversight and management responsibilities as a Board member. Where was the Board?!

5. Now we're supposed to donate because the President says he needs money?! What frick'n non profit doesn't need money?! Just to hold out your hand and hope for donations is NOT GOOD ENOUGH.

I've written, here, repeatedly also all about how today's donors are more savvy than ever. They're not just a smarter bunch. It's that more donors don't want to just hand money over to non profit organizations anymore. They want to see that their money is being spent as it was promised that it would be, that it is effecting change/good, and that the organization is managing their donation and all resources efficiently, transparently, and in a healthy manner. This trend is going to spread and increase across donors of all kinds (foundations, major donors, municipalities, corporate, in kind, etc.). See my post A Shift In Giving: Proactive Philanthropists Instead of Passive Donors

Why am I so angry? I am certain that the good people of Bellevue, Washington would like to have an excellent arts museum in their community. I am sure that the museum's Art Director does his/her best to present some informative, mind-opening, and exceptional art. I am also sure that there are more than a few donors who want to support art, locally. I am angry for all of these reasons because it sounds to me, from The Seattle Times article, that the Board President wants everyone to know that the 'bad guy' has been found out, but everything is OK, now.

As Han Solo says during the Princess Lea rescue in "Star Wars Episode IV: A New Hope", "Had a slight weapons malfunction, but every thing's perfectly alright now. We're fine, we're all fine, here, now, thank you. How are you?"

Nope. You, me, and their Board President need to understand that just because we volunteer or work for a non profit organization, we don't get some 'free pass' to check out, or hope for the best. It is a business. It is not for profit, so we need alliances in our communities because we need resources. We do not just deserve these resources, though, as non profit agencies. WE bear the responsibility of developing strong ties in our communities and that is only done by our properly managing our resources, assets, time, and everything that is in trusted in us to oversee in our organizations. We then also report and provide any information asked of us by potential donors, potential volunteers, governments, banks, and other partners in our work. The only way that we can do any of this correctly is if we know what the heck is going on internally in our organizations. WE non profit staff, volunteers, and donors are responsible for them.

We do not get to just put our hand out, as non profits, and say 'please give us the money we need because we are not capable of managing our organization and its resources well'. THIS fundraising 'approach' is any organization's kiss of death, ultimately.

So, yes, I have a bee in my bonnet this Saturday morning.

The Bellevue Arts Museum's website is at:

1 comment:

Bend Oregon Restaurants said...

"Boring conversation anyway...LUKE, WE'RE GONNA HAVE COMPANY!!!!" - Solo

I liked this article Arl. I recently wrote to the organizer of the Hungry All Year Long food drive that is currently underway. After receiving a reply with the info I requested, I was asked for some ideas to increase awareness for the charity.

After three more emails from me without one reply, I gave up.

I don't get it. I want to help..."Help me help you. HELP me, HELP you"