No Truth or Consequences
December 19, 2012
(Mark Rosenman is an emeritus professor at the Union Institute & University and directs Caring to Change in Washington, D.C. You can read some of his other posts on PhilanTopic here, here, here, and here.)
Nonprofit leaders, as well as those in government and the corporate world, seem unwilling to accept responsibility for their decisions and actions. Recently, the founding president of Social Accountability International, a nonprofit that works to advance the human rights of workers around the world, failed to live up to her organization's name when she vaguely defended SAI's decision to award its highest certification to a Bangladesh garment factory that burned down just weeks after its most recent inspection, killing more than two hundred and sixty workers.
As in so many similar situations, instead of acknowledging responsibility for a mistake and accepting the consequences, leaders like the president of SAI are quick to lay that responsibility on others -- and then support only minimal consequences for those assigned the blame. The corporate world saw an example of this after one of the greatest environmental disasters in recent memory, the Deepwater Horizon blow-out that released nearly five million barrels of crude oil into the Gulf of Mexico. Executives of BP, which had leased the rig and owned the rights to the undersea drilling site, remain free while two employees who were on the scene have been indicted for negligence related to the disaster.
Similarly, when it comes to the 2008 financial crisis and subsequent economic meltdown, corporate leaders who contributed mightily to the collapse have escaped responsibility for their wrongdoing. Not one top executive of Countrywide Financial, AIG, Lehman Brothers, Bear Sterns, or any other Wall Street firm has gone to jail, even as millions of Americans continue to suffer the economic consequences of their actions.
Sadly, politicians in Washington continue to ignore the interests of the American public and scramble instead to do the bidding of lobbyists and campaign contributors. Conservatives are bent on preserving low tax rates for their wealthiest supporters while cutting entitlements and programs for the middle class and neediest among us. Rather than raise taxes on the top two percent of income earners, a move favored by a significant majority of Americans, they would rather send the country over the fiscal cliff -- a combination of tax increases and draconian across-the-board spending cuts scheduled to take effect on January 2 -- or play chicken with the economic chaos of national default by vowing intransigence in the coming debate over extending the debt ceiling.
Other politicians are unwilling to even acknowledge their positions when it would be unpopular to do so. NBC reported that not one of the thirty-one pro-gun members of the U.S. Senate was willing to appear on "Meet the Press" following the recent Newtown school massacre to share his or her views on assault weapons or to address the consequences of past votes on gun legislation. CBS also reported that the nonprofit National Rifle Association and pro-gun politicians refused invitations to appear and acted as if they had no responsibility to explain their positions on this critical issue or to accept accountability for them.
Nonprofit executives in general have been shamefully absent from the fiscal debates, working mightily to preserve the charitable tax deduction in its current form while remaining silent on the larger and more consequential fiscal battles before us. Even the last-minute statement in support of higher taxes by one infrastructure group betrays the fact that it and other organizations have steadfastly refused pleas to get off the sidelines and advocate for policies that benefit the less advantaged in society; instead, these organizations poured precious resources into keeping the deduction as is.
What are we to think when nonprofit CEOs fail to lead and instead embrace self-interest -- both theirs and that of their members. What are we to think when they seem to forget that the public interest is more significantly and effectively served by government funded out of the public fisc than by privately funded groups.
A similar dynamic of unaccountable self-interest allows nonprofit university presidents to remain unchallenged in their cupidity. Even in modest-sized institutions, many command eye-opening salaries and benefits. Indeed, over twenty percent of university presidents in America earn in excess of $600,000 a year, with better than seven percent pulling in more than $1 million annually.
These university presidents and other administrators draw large salaries while higher education employs close to 750,000 workers on below-poverty wages. And while they ostensibly lead tax-exempt institutions, those institutions routinely fail to provide an affordable education or opportunities for upward mobility to low-income kids who desperately need both.
Out-sized financial compensation at the executive level is also a characteristic of many large health and cultural institutions as well as some social service charities. It's as if the executives of our largest nonprofits are determined to "get while the getting is good" rather than champion the public good that their institutions are supposed to deliver. To whom are they accountable?
Occasionally, albeit infrequently, responsibility and accountability is imposed from outside the sector. New York State's attorney general recently forced the president of one nonprofit, Educational Housing Services, to repay millions in excess compensation and other benefits achieved through "self-dealing" while also requiring board members to pay $1 million for their "stunning" negligence.
Punishment may also be meted out to Graham Spanier, the former president of Penn State University, in the Jerry Sandusky case. Spanier was indicted last month, joining other administrative colleagues also scheduled to be tried, for helping to establish and maintain a "culture of silence" surrounding years of child sexual abuse committed by Sandusky, a former coach attached to Penn State's renowned football program.
But such consequences are the rare exception.
Far more common is the tendency to blame and perpetuate an amorphous "institutional culture" for wrong or misguided actions. Too often, we fail to hold individuals to account for their sometimes criminal and/or selfish decisions and actions. Rather than demand accountability from those with personal responsibility, we act as if faceless institutions and organizations somehow cause abuse without human agency.
It's as if banks do wrong, not bankers. Corporations, not CEOs. Congress, not elected legislators. Charities, not board members or executives. We even talk of a sector's culture as if people are powerless to do anything but acquiesce -- often to their own benefit -- to dysfunctional practices that profit the individual over the common good.
It's time for it to stop. America has a serious problem with abuse, self-dealing, and lack of accountability in some of its most important institutions, including charitable ones. And while many are affected by these sometimes calamitous actions, the responsible individuals appear to face few meaningful consequences. That is wrong.
Too many nonprofits allow, even encourage, practices that further victimize those they should be serving. This is even more true in business and in politics. We're much more likely to lock up a street criminal than a corrupt executive -- although in most cases it's the latter who causes the greater harm. We need to change that.
Charity leaders should encourage and support efforts to hold one another accountable for serving the common good over private interests. Those efforts must extend to elected officials and other public leaders and to corporate executives. We need powerful and effective new mechanisms, both voluntary and regulatory, to accomplish this.
If we, as a society, don't insist on holding individuals accountable for their bad decisions and actions, it will continue to be others who suffer the consequences. That may be in the interest of elites, but it is of little benefit to the rest of us.
-- Mark Rosenman