When Carolinians for Reform, Inc. got $100,000 left over from the National Governor’s Association 2006 Charleston conference, Senator Jake Knotts raised hell. The group was not registered with the Secretary of State, and what’s worse, was run by friends of the Governor, who founded it to support his agenda. After Senator Knotts broke the story, Carolinians For Reform agreed to send the money back to the South Carolina treasury which had awarded a $150,000 grant to the NGA conference from the infamous Competitive Grants Program.
In fairness, Senator Glenn McConnell’s assertion that when nonprofits receive government funding, all the organization’s money becomes public funding is not true. Grants used by nonprofits in accordance with their intended purpose are “restricted funding” and are not co-mingled. On the surface, at least, it would appear that the grant was used in the manner intended. It was the “seed money” that helped secure another $1,000,000 or so for the NGA event. That there was money left over from the event did not mean that the leftover money was from the original grant, which was, since it was the first money received, apparently the first spent.
The real problem is how the whole transaction looked. And for nonprofits, that’s what counts. I call it the Doug Nurse Rule. Doug (who also happens to be my best friend) is an award-winning journalist at the Atlanta Journal Constitution. Over the years, I’ve often sought his advice on ethical dilemmas I’ve faced, and I believe that his extraordinary wisdom and Texas-sized conscience have saved me from several potential disasters.
There was one time that I didn’t ask him, and I still regret it. I was still working in Florida, where I was a senior vice-president at a local United Way. It was the day before the Christmas break, and we received a call from a large grocery store chain that they had a truck full of hams they wanted distributed to agencies serving the hungry. We made lots of phone calls and got the hams distributed out–all but a dozen or so.
In the spirit of St. Nicholas, I gave out the rest to staff, and left one in the freezer with a sticky note stating that it was for our boss when he returned from his holiday vacation. I went off, in a particularly magnanimous mood, to spend Christmas week with my family. But when I returned, my boss summoned me to his office.
He was angrier than I had ever seen him. “Tell me about the hams.” I proceeded to tell him what a good boy I had been, spreading Christmas cheer among the staff after seeing that the hungry were taken care of.
“I should fire you, you misused a donor’s gift.” I was, for once, completely speechless. So I slunk off to my office, closed the door and called Doug Nurse. I told him the whole story, stressing how I tried to give all the hams away to the agencies, and when that failed, gave them to the staff. I asked him if I was wrong, assuming that he would use his reasonable reporter’s judgement in my favor.
“Did you call the donor and ask permission to do that? Because it looks to me like you helped yourself to a donor’s gift.” Then came the precious gift of the wound of a friend. “Be glad I’m not there anymore, or I would write a story about this, and the paper would print it.” I was miffed, but I realized that Doug and my boss were right: it looked wrong, therefore it was wrong. Nonprofits have to meet a higher standard than everybody else, and nonprofit leaders have to adhere to it, or risk the public’s wrath.
Governor Sanford learned that lesson this week, too. It looked as if he was misusing grant money to support a nonprofit whose express purpose is to lobby for his agenda. (Whether or not that’s a legitimate purpose for a nonprofit is another question.) He should have known better.
Governor, I’ll be glad to give you Doug’s phone number, if you want to meet me for a ham sandwich at the Senate Street Cafe.