Tuesday, November 22, 2011

William Aramony Ushered in a New, More Difficult Era

To the younger generation of nonprofit professionals, the name Aramony may have little meaning. To those of us with more history in the sector, William Aramony’s actions and the public response marked the beginning of the end of a long held public trust in the work and motives of nonprofit leaders. His passing last week provides an opportunity for reflection.

Mr. Aramony's twenty years of leadership had built one of the first national 'brand names' for a nonprofit. But his career ended in disgrace in 1992 and six years in prison when he and two of his executive team were convicted of fraud and other ethical breaches. He shattered the illusion of nonprofit leaders somehow being different from regular people and not subject to the same temptations and failings – a perception that all nonprofits are working under some sort of unwritten ‘vow of poverty’ and always able to place the needs of others before themselves.

His actions and trial either initiated or accelerated a collapse of trust in the nonprofit sector and forfeited the "benefit of the doubt". Within a short period of time, nonprofits were increasingly being asked to prove how funds from donors and finders were used and the media jumped on the headline potential of big nonprofit salaries and hints of scandal that continues to this day. The focus became “how are funds used?” – meaning, are you using funds to enrich organization insiders, rather than a more appropriate focus of "what impact are you having?"

Looking back, I am certain that increased expectations of accountability from nonprofits were already beginning to happen, but it is interesting to consider how it might have evolved differently without this particular incident.


J.E, Smith said...

I generally agree with your observations, but you left out one group that shared responsibility for what happened in the Aramony case: those who served on the United Way of America Board of Directors at that time. They abdicated their fiduciary oversight responsibility, at least in part because Mr. Aramony was living a corporate lifestyle not unlike their own. In hindsight, the Aramony case hastened something that was going to happen anyway.

Anonymous said...

Odd that you did not mention where he worked. I learned that from commenter.