Today, another nonprofit CEO's fallen victim to what we'd consider easy-to-avoid credibility issues caused by compensation, perks and travel: Lawrence Small, secretary of the Smithsonian Institution, has resigned in the wake of news and inspector general reports about excessive spending in a time when the institution itself has been cutting operational costs. A larger-than-normal nonprofit and recipient of hundreds of millions in taxpayer dollars, the Smithsonian has financial, scientific and public responsibility reasons to do a better job managing its credibility with the public audiences that crowd its hallways.
Today's New York Times notes that the institution's board, initially reluctant to take action, has decided on next steps:
In response to criticism, the regents announced this month that they would be setting up a committee on governance. The committee will be led by Patty Stonesifer, who is a co-chairwoman of the Bill and Melinda Gates Foundation, and has been on the Smithsonian board since December 2001. The committee will compare the Smithsonian’s governance with that of other institutions and present a “best practices” plan to the full board.We urge the group not just to cherry-pick policies from other nonprofits -- many are sorely lacking in this area -- but to create policies that build credibility with defensible practices, including checks and balances to enforce them. We hope they'll include communications pros in the process from the start, to offer feedback on how key audiences, from the public to the Congress,will receive their actions.
When was the last time you considered the policies and financial practices that could create credibility problems for your organization? You'll find some ideas in our previous blog posts on nonprofits and credibility issues, here. Today's New York Times story is here, and a complete roundup of the Washington Post's coverage of the issue, which led to the public outcry, is here. Or call us to do a public credibility audit for your organization. Email us at firstname.lastname@example.org