The NFP Hall of Shame

Sadly,  it is time to announce my nominees for the Not-For-Profit Hall of Shame.  These organizations or individuals have acted in harmful ways to  their members or extravagantly used their members’  funds to either enrich  management or for clearly inappropriate purposes.   There were many “worthwhile” nominees this year, such as the executive director who rigged the 50/50  fundraiser so she could win.  Unfortunately, there is a one organization standing out head and shoulders above the rest.

This year, the first nomination for the NFP Hall of Shame must go to the Catholic Church in the United States.  It pains me greatly to say such a thing since I am a loyal member of this church and part of its clergy.  Nevertheless, the facts are the facts. Any competent professional looking at the same facts would come to the same conclusions. There is something terribly wrong in the management of the Catholic Church of this country.  Again, I am not speaking about religious matters.  I am speaking purely as a student of management.

Let’s first look at the recent case of  former Cardinal, and now Archbishop Theodore McCarrick.  McCarrick served as a bishop in the Archdiocese of New York,  and then as Bishop of Metuchen, NJ,  Archbishop of Newark NJ,  and Archbishop of Washington D.C.  He was elevated to the “sacred purple”  (made a cardinal) when he was appointed Archbishop of Washington at the age of seventy.  McCarrick was a mover and shaker in not only the Catholic Church, but also on the national stage itself.  Recently, credible accusations surfaced he abused young men and children along the way.  It appears the statute of limitations has passed and the 88-year-old prelate can’t be criminally prosecuted.  Pope Francis recently accepted McCarrick’s resignation from the College of Cardinals, and from the active ministry.

Another recent scandal has broken open in the Byzantine Catholic Archdiocese of Pittsburgh and its suffragan dioceses over the last year. The Byzantine Catholic Church is in union with the Roman Catholic Church, but uses an eastern (Greek) form of worship.  Last year, the Pope appointed a European bishop to shepherd the diocese of Parma, after apparent  financial mismanagement.  This year, the Byzantine Catholic Diocese of Phoenix took the unusual step of suing its health insurance agent and the Archbishop of Pittsburgh, who was the administrator of the insurance plan.  In its filing, the Diocese of Phoenix alleged the insurance agent refused to refund money to it after terminating participation in the plan  and transferred funds to an offshore account in Bermuda.   Using a biblical injunction not to sue another bishop,  the Vatican sadly gave another bishop jurisdiction over the Diocese of Phoenix in order to stop the lawsuit.  Amazingly,  the insurance agent is still servicing at least two of the Byzantine Catholic dioceses as well as other Catholic diocese..  Any competent business person looking at this situation would be shocked by the lack of internal controls over the insurance agent.  This is a complex situation, and is worthy of its own blog entry later on.

In the McCarrick case, a powerful leader was able to abuse people across decades.  He inflicted harm on his victims, and no-one within the church hierarchy had the courage to speak out against the abuse.  His scandalous actions were an open secret within the upper echelons of the Church. The Catholic hierarchy simply closed ranks around one of their most influential leaders to squash any investigation.  The argument was they were doing it for the “good of the church”.  Beware of this Friends! When someone is doing something for the “good”of the organization, they generally mean we have to  do this to protect someone or cover-up some less than savory situation. Any publicly traded corporation would have acted decisively to report criminal activities or inappropriate behavior decades ago.   Controls would be in place to make sure someone inflicting such pain on the corporation would be removed from its ranks.  Sadly, this is not what happened with McCarrick . In fact, the opposite happened.

The financial irregularities  of the Byzantine Catholic Archdiocese are yet another example of clergy closing ranks around actions  that need to be thoroughly investigated.  From an accounting point of view, the control environment in the Church is fatally flawed.  Compliance with law and ethics starts at the top of the organization.  Controls such as finance councils, who are supposed to advise the Bishop work only when the Bishop is committed to make them work.  Often they do not and there seems to be no recourse to these actions.

The “closing of ranks” behind a member of an organization is not unique.  Look at the “blue wall” misguided policemen will sometimes form. Nevertheless, the financial and moral harm the Catholic Church has allowed to occur in the last year definitely propels it to the top of my list for the NFP Hall of Shame.