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Dashboard Courses Module 1: What a Nonprofit Is, and What It Ain’t

Module 1 Case Study: The Board Member’s Wife

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Module 1 Case Study: The Board Member’s Wife

Chase Montgomery sits on the board of directors for ABC, an afterschool youth development program that has 10 physical sites. Up until six months ago, each site fundraised and had separate bank accounts for each of their respective sites. Chase and five new board members voted to close the separate accounts and combine all the funds into one account that only the board would have signing authority over. 

Three months ago, the sites were informed that the rec rooms would be upgraded by a professional interior decorator three sites at a time. Last month the first three sites underwent their remodel. Today, the board president received a letter from all 10 site coordinators with the following complaints:

Dear President Johnson,

The purpose of this letter is to report the gross mismanagement and unethical allocation of program funds to a board member. It has come to our attention that the “professional interior decorator” is actually Chase Montgomery’s wife who was paid $25,000 to remodel three sites. Essentially all Mrs. Montgomery did was hire some day workers to paint the walls with some discounted paint, that is not even the organization’s branded colors and fill the rooms with second hand donated furniture. 

As site coordinators, we take offense to this gross mismanagement of funds that $25,000 could have been used to purchase new furniture and equipment for all 10 sites! First you steal our hard-earned money, then tell us we have to get approval to spend it on the things WE fundraised to buy, only to use it to pay a board member’s wife to make the sites look worse than they did before the “professional interior design services” were administered.

We demand that these monies be returned to our account and used for the purposes intended. We also demand that each site be able to approve the decisions the money is being used for, seeing as though we raised the $600,000 and not the board.   

Respectfully,

ABC Site Coordinators

When questioned, Chase informed the President that he had not secured three bids. He indicated that his wife typically charges twice that amount for her services, so they were getting her at a tremendous discount because he serves on the board. He said she did hire people from the community because she didn’t think it would be right to take money out of the community from people who needed it. And she did go on Craig’s List to purchase gently used furniture to steward resources and help stretch the funds.

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