That’s going to dampen fundraising

In the Doghouse

Flickr user maxymedia

There are a lot of learning moments in this recent story out of Pennsylvania about a grand jury, a nonprofit, and the museum in the middle. And there’s a gut-punching sentence that might encourage you to learn from them: ”The grand jury requested the Pennsylvania Attorney General’s Office investigate and forcibly dissolve the nonprofit if it finds the museum has failed its mission.” Ouch.

At issues is the long-planned and long-delayed National Museum of Industrial History in Bethlehem, Pennsylvania, which allegedly has spent $8-$10 million over a decade without opening its doors. The grand jury suggests negligence on the part of the CEO and the board, as well as self-dealing among board members.

One board member was principal of a construction management company hired by the museum for $2.84 million. A reported $1 million was spent on fundraising firms between 1999 and 2011, raising just $75,000. And the CEO earned a reported $180,000 annual salary, despite lack of progress.

The CEO and board are denying the allegations, and blaming the poor economy and other barriers for the long delays.

Students often ask who holds nonprofits accountable to their mission and their exempt status. I tell them that first in line is the governing board, next up are the donors, constituents, and community members, and then comes the state attorney general and the Internal Revenue Service.

Now I can show them this astounding story to demonstrate the extreme example of the point.