Stonewalling in crisis a risky bet

By Todd Cohen

In the worst of times, some nonprofit and philanthropic organizations seem to fall short of the standards of openness they set for themselves.

Accustomed in good times to positive media coverage, charities in a crisis sometimes seem to believe that avoiding questions about their problems is prudent and acceptable.

But stonewalling can deeply hurt a charity with its donors, supporters and partners, eroding the trust it counts on for the community investment it depends on.

That is the big risk the Triangle Community Foundation in North Carolina’s Raleigh-Durham region currently is taking.

Founded in 1983, the foundation has become a philanthropic pillar of the community, building its assets to over 750 funds totaling over $135 million in the fiscal year ended June 30, 2010, and awarding grants totaling roughly $12 million, down from $15 million in fiscal 2009.

But the foundation now faces a crisis in confidence stemming from a sabbatical deal the executive committee of its board cut with Andrea Bazán, its president for the past six years and one of the leading Hispanic advocates in the state and U.S.

Under the deal, announced two weeks ago in a short email message from Kelly Harrell, the foundation’s communications director, Bazán gets an immediate paid sabbatical for an indefinite period.

Board chair Phail Wynn, an official at Duke University, has stepped in as part-time interim CEO and president, while Lori O’Keefe, who had resigned as director of philanthropic services, agreed to serve as interim chief operating officer, running the foundation’s day-to-day business.

After Harrell distributed her email – which did not mention the sabbatical was paid, or that O’Keefe recently had resigned -- foundation leaders have refused to respond to repeated requests from the Philanthropy Journal for interviews.

The only exceptions were a brief phone interview granted by Harrell, who told Ret Boney, PJ’s deputy editor, that Bazán had been “running pretty hard” in her six years as president and had “requested a sabbatical for some well-deserved time off.”

And Wynn, vice president for Durham and regional affairs at Duke University, sent an email to Boney that said the details of the sabbatical “are confidential, and have not been and will not be shared with the news media.”

That email also said there would be “no further comment from the foundation at this time.”

Thanks to Boney’s reporting, however, we now know the foundation’s executive committee hammered out the sabbatical deal at least in part because of board concerns about staff unrest and turnover, and in part because of Bazán’s frequent distraction from foundation business and her regular involvement in advocacy work and service on other corporate boards.

A crisis can test the character of a nonprofit, and the Triangle Community Foundation is not headed for a good grade.

Accustomed to positive media coverage, leaders at the foundation are dodging reality in the face of its current turmoil, apparently believing they owe no accounting to the foundation’s supporters, donors and partners, or to the community.

Like community foundations throughout the U.S., the Triangle Community Foundation connects donors and nonprofits.

It serves as a home for funds donors create, and it makes grants to nonprofits, often with the advice of donors who created the funds.

It also provides common ground for local groups to talk to one another, and works as a catalyst to address local problems and issues.

Silence, especially on the heels of the disclosure of skeletal details that only raise questions that beg for answers, is easy to misinterpret and can feed the rumor mill, which tends to work overtime in the low-key and often cloistered world of philanthropy and nonprofits.

Wynn’s email about the “confidential” details of the sabbatical suggests a legal fight might be brewing over what led to Bazán’s “indefinite” paid leave.

If it is, the foundation would indeed be smart not to talk about those details.

But hiding in the dark is not a smart move for a public charity that depends on public trust and support.

Most nonprofits do a good job serving people and places in need, and they continually strive to do better. The Triangle Community Foundation, in the past, has been among those.

But nonprofits can and do make human mistakes.

So when problems escalate to dramatic actions like the indefinite departure of a CEO, the leaders of a nonprofit should be prepared to talk openly – to the extent they believe they can -- about what is wrong and their plan for fixing it, and about the general health and operations of the organization.

And if, for legal reasons, they believe they cannot talk openly about some details, nonprofit leaders must be prepared, quickly, to address questions that are bound to arise on the part of concerned donors, grant recipients, and organizational partners, as well as the news media.

As a long line of politicians who have been embroiled in scandals and been less than forthcoming have learned, painfully, the cover-up often ends up doing more damage than the problem kept under cover.