At a prior time, the Three Cups of Tea controversy could have been, and would have been, comfortably ignored by many of us and dismissed by others as a “tempest in a teapot”. That time is long passed.
We have all been subjected to too many nonprofit scandals, over too many years. We find them online, in newspapers and magazines, or on 60 Minutes, like the recent expose alleging malfeasance at the Central Asia Institute (CAI). We are faced with investigative reports, like Three Cups of Deceit, by authors like J. Krakauer-- reports that deprive all but a few us of the luxury of ignoring or dismissing the allegations.
And now the long investigations and lawsuits begin. The federal government (IRS) must step in; the state has stepped in (Montana AG) and two state lawmakers have initiated a class action lawsuit against CAI. And over how many months and years will all these and future investigations take their toll on public trust and confidence in nonprofits? How much more can the public, elected officials and the sector bear?
And the impact of this scandal far exceeds most others. Three Cups of Tea sold over 4 million copies. CAI markets itself to schools and schoolchildren through its Pennies for Peace Program. Who will tell all those children and what are they going to say? No easy answers here. Our President reportedly donated Nobel Prize money to CAI. Our military reportedly promotes the book with soldiers to provide valuable perspective. What happens when government leaders become vested or reliant on a nonprofit-- and then that trust is damaged or destroyed? No easy answers here.
Ignore the scandal we cannot. Learn from it we must. As donors, we must more effectively scrutinize who we donate to. We must be alert to experienced watchdogs that give us much insight into individual nonprofits. One watchdog (AIP) found problems in 2009 and publically exposed them a year ago (Vol. 54, April/May 2010). Any donor who read that report would likely have already written his or her last check. As board members, we must ask: could I find myself in similar shoes as CAI board members do now? When I express a concern at a board meeting, is it taken seriously? When I ask for information, do I have access? Are we handling and scrutinizing conflicts of interest proactively? Do we grasp that the mere appearance of a conflict of interest can be every bit as damaging-- or more damaging-- than an actual conflict?
The burden of improving the status quo lies on all of our shoulders--whether as a member of the public, a donor or, most especially, as a board member where opportunities for improvement can be but a board motion away. We must become more conscious of our responsibilities to choose nonprofits wisely and understand how we can make a difference while expecting more of our nonprofit leaders. Otherwise, the alternative harsh reality will very likely be more government regulation and intrusion that will come at great cost to all nonprofits and the communities they serve.
Note: These views reflect the author’s perspective that self-regulation is far preferable to more government regulation and intrusion by the IRS, or other federal and state regulators that will come at great cost to fragile nonprofits and the communities they serve. His views are contained in Advancing Nonprofit Stewardship Through Self-Regulation: Translating Principles Into Practice (Kumarian Press, April 2011). The book identifies ways to implement the 33 Principles of Good Governance and Ethical Practice issued by Independent Sector’s Panel in 2007 which are relevant to various areas of CAI controversy.