How a Nonprofit Can Attract A Regulatory Probe … Fast
06.08.2023 | Linda J. Rosenthal, JD
In 101 Biggest Mistakes Nonprofits Make and How You Can Avoid Them, Andrew Olsen, CFRE, brings together 26 other industry professionals who have combined experience of over 300 years in nonprofit organizations or the consulting firms that serve them. They are experts in what to do for organizational success and also what not to do.
Mistake #17 is “[a]llowing toxic staff to remain in place,” according to Mr. Olsen, himself, who draws on one particular nightmare experience of his own which prompted his leaving an organization some years ago. “…[T]he Vice President … allowed a horribly toxic employee to remain in place.” She was a technical specialist who “everyone knew … would be difficult and expensive to replace.” But she was “… manipulative, conniving, argumentative, and only looked out for herself.” She routinely misrepresented situations and “blatantly disregard[ed] direction” that he “and other managers and directors gave her, and would lie about it when confronted by our Vice President.” Worst of all, there was her epic temper.
But the straw that broke the camel’s back was the willingness of the Vice President to look the other way because she was considered irreplaceable. Many employees “took note of the fact that she behaved poorly and nothing was done about it. They started to question the organization’s leadership….” So other people including Olsen exited while the cause of the toxicity was permitted to continue her destructive rampage through the workplace.
In addition to possibly sparking costly liability lawsuits, a “look away” attitude is dangerous because it leads to crippling organizational despair and – sometimes – disintegration.
Organizations and Toxic Employees
Of course, there’s no need to look much further than current news headlines in the nonprofit sector to know that Mistake #17 is not an uncommon occurrence in this field that – ironically – likes to present itself as warm, generous, and beneficent.
One such example is the recent crisis at the Southern Poverty Law Center which we wrote about in The Shocking Turmoil at the SPLC. And – as is often the case in these stories – once the dam has burst, it becomes painfully clear that the problem in the organization was deeper and had continued much longer than originally reported.
In Years of turmoil and complaints led the Southern Poverty Law Center to fire its founder Morris Dees, Washington Post reporters detailed the long period that “the “celebrated civil rights organization had been bitterly at odds with its founder….”
According to internal documents, interviews with current and former employees and Dees himself, the battles “centered on his refusal to retire, his behavior toward women and his comments regarding race.” The Washington Post article and others highlight the long path of destruction that – not unlike the situation described by Andrew Olsen in Mistake #17 story – resulted in an exodus of key staff who couldn’t take it anymore, leading to more employees throughout the organization exiting in frustration.
This was, of course, much more than a simple – (though fairly common) – case of an overbearing organizational founder who hasn’t realized his departure is long overdue. This involved looking away from behavior that was both legally and morally objectionable and actionable including the troubling allegations of racism inside a civil rights group.
The result was an organization that was eating itself alive; the fallout will linger for a long time and the group will likely never recover fully.
Organizations’ Toxic Castoffs
A year ago, in April 2018, the high-profile Silicon Valley Community Foundation experienced its own shocking meltdown. The fallout caused by a toxic CEO and his sidekick has continued well past the departure of both of them.
The controversial CEO, Emmett Carson, was forced out partly due to his own shortcomings and also because he tolerated the outrageous antics of the organization’s chief development officer, Mari Ellen Loijens. “In April 2018, it came to light… that Carson allowed sexual harassment and other bullying behavior to take place at SVCF for more than a decade. His own bullying and intimidation tactics were widely reported and documented as well.”
After his ouster, Carson reportedly kept his head down for a while, traveling, but never acknowledged wrongdoing. So, a year later, people who used to work at the Silicon Valley Community Foundation were astounded to learn that their former CEO has landed on his feet at the prestigious (George) Lucas Museum of Narrative Art in Los Angeles as its new chief operating officer. Board members of that organization include Hollywood luminaries including Steven Spielberg and Guillermo del Torro.
On this news, in late April 2019, some twenty-one former SVCF employees, prominent philanthropists, and organizational supporters sent a letter to Lucas and the museum’s board “expressing ‘dismay’ over the museum’s hiring of … Carson,” specifically citing his failure to admit that “his behavior for more than a decade at SVCF was unacceptable.”
“We would urge the museum’s Board,” the signers continued in the letter, “to review all the news articles and legal documentation provided to the public just before and after Carson’s departure,” adding that “[t]he nonprofit sector, the museum’s future patrons, and the citizens of Los Angeles deserve better than Emmett Carson serving in this role.”
For its part, “[m]useum officials quickly defended the decision to hire Carson, despite the board’s awareness of his troubling history.”
There are four main reasons to shed toxic staff: (1) if you let it continue, “you’re normalizing it”; (2) “your best people will walk….”; (3) it “creates confusion at all levels” about what’s ok and what’s not; and (4) “[t]oxic behaviors and attitudes spread like a virus.”
As Andrew Olsen has pointed out, it’s a classic mistake to let toxic staff remain in place. It doesn’t work out well for anyone except, occasionally, the toxic person who may move on to create chaos elsewhere.
And – not to put too fine a point on it – there will likely be lawsuits.
05.31.2023 | Linda J. Rosenthal, JD