Many of you recognize this as the title of a famous Spike Lee movie. The movie itself may not be apropos to the topic today, but the title is.[1]  Many years ago, I was the controller of a large bank.  During a financial crisis, the regulators scrutinized the accounting for loan losses.  When the bank’s corporate counsel was asked about my professionalism and his view of the accounting, he responded, “We do Spike Lee accounting.  We do the right thing.”  We did do the right thing.  The regulators finished their work without any adjustments to the financial statements.

I tell my business and accounting students to do the right thing when faced with an ethical decision.  You may not know what the right thing is at once, but there are resources available to help you find an ethical answer. Today’s organizational leaders need to maintain high ethical standards and expect their work to be scrutinized by their managers, auditors, clients and the public.  Anyone’s work product in the current business or not-for-profit (NFP) world should be transparent to the proper audience, whether that is the board of directors or shareholders.  Sadly, that is not always the case.  An organization’s needs strong internal controls to protect not only itself, but all its stakeholders as well.  Any organization lacking proper oversight of its operations and accounting is simply looking for trouble. 

The contemporary issues facing the Catholic Church today is a glaring example of what can happen when vigilance is not practiced. This subject can draw heated discussion, but I hope to look at this from an NFP managerial point of view, starting with financial transparency.  The first audit of the Vatican by a major accounting firm was a debacle.  PriceWaterhouseCoopers (PWC) was fired before completing its work and issuing its report. While PwC has been quiet about this episode due to client confidentiality there are two possibilities.  Either PwC was fired because of what was being uncovered, or PwC concluded the lack of internal control meant the Vatican was unauditable. For instance, secret bank accounts amounting to several hundred Euros were not previously accounted for.[2]  It would be exceedingly difficult to imagine a more corrupt practice.  Who knows how much money could have been siphoned from those accounts for personal gain or misuse?  Unreported bank accounts are a gross violation of good internal control and represent a total lack of accountability. [3] What was the Vatican spin?  This was good news because that means we can pay our bills!

Recent disclosures about operational management of the Church have also raised eyebrows.  The case of former cardinal Theodore McCarrick is one example of how not to run an organization. McCarrick was accused of using his authority to abuse seminarians.[4]  There also have been credible accusations McCarrick abused children[5].  Yet he continued to rise through the church ranks even though much of this information was widely known throughout the priesthood.   He was named an auxiliary bishop in a New York diocese and then the first bishop of Metuchen NJ, a wealthy New Jersey suburb. Subsequently he was appointed the Archbishop of Newark and the head of the church in New Jersey.  Finally, he was transferred to the Archdiocese of Washington D.C. where he was raised to the rank of cardinal. [6]

The reasons why McCarrick was advanced are locked deeply in the Vatican and are not being disclosed.   He was an extremely effective fundraiser and had a successful record of recruiting men to the priesthood.[7] Neither of these reasons compensate for his lack of ethics.  Perhaps the Vatican did not know of McCarrick’s activities, but his defies the evidence.[8]  Even when he was initially punished, McCarrick was punished lightly.  Ineffective organizational controls allowed this tragedy to happen.

What can managers of NFP organizations take away from this sordid episode?  

  1. Pay more attention to “corporate culture.”  All corporate cultures have upsides and downsides.  The Church is no exception. It is an authoritarian regime with all the good and bad that goes with that. While being required on a theological basis,[9] this type of decision making can spawn some bad decisions.[10]  Recent studies have shown diversity of viewpoints and decision makers aides in making good decisions. The Church is run by celibate males in a hierarchical structure.  An example of such bad decision making that readily jumps to mind is the Philadelphia monsignor convicted of hiding sexual abusers using the “I was only following orders” defense.[11]  Upon hearing this most people were incredulous as that defense went out with the Nuremberg trials. Yet, it seemed to be appropriate to the monsignor’s defense team.  I am in no way critical of the theological underpinnings of the church hierarchy, but it is necessary cardinals and bishops understand how advice from a limited group can hurt decision making.  They must make allowance for this and set up mitigating controls. Similarly, leaders of NFPs must always monitor their corporate culture to make sure destructive elements such as this are not emerging.
  2. Have a truly effective whistleblower policy.  The SEC requires publicly traded companies to have a whistleblower line.  Whistleblowers are protected from retaliation. Even though the Pope has recently instituted some measures in this regard, an initial appraisal of these new processes would seem these are more window dressing than real.  What priest will “blow the whistle” on his own bishop, and then must face the bishop again?  The bishop controls the career of the priest.  The possibility of retaliation is a real concern.  The issue of retaliation can be also be a real one at an NFP.  The Board of Directors needs to make sure it can shield employees from retaliation so it can maintain proper governance.
  3.  Accountability is essential. Recently, correspondence has appeared demonstrating McCarrick had been placed under restrictions by Pope Benedict. The former Vatican ambassador to the United States has previously stated Pope Francis asked him about McCarrick, so the Pope should have been aware of the cloud on McCarrick. Francis has recently said he knew nothing of the McCarrick situation or could not remember the nuncio’s warning.  Giving Pope Francis the benefit of the doubt, there were several systemic organizational failures.  A few of these are:
    1. There are only 221 cardinals in the Roman Catholic Church as of May 17, 2019.[12]  After the Pope, this is the “senior management” of the Catholic Church. When Pope Francis seemed to be releasing McCarrick from his restrictions, shouldn’t someone in the Vatican bureaucracy have raised this with Francis?  Not informing the Pope was a failure of the central bureaucracy, the Vatican curia.
    1. Given the papal ambassador saw the restrictions on McCarrick being removed who did he report it too and what did they do with the information?  This was a failure or the Vatican diplomatic corps.[13]
    1. Recent information shows Cardinal Wuerl, McCarrick’s successor to the episcopal throne in Washington D.C. knew of the restrictions and said nothing to either McCarrick or the Vatican when McCarrick started to undertake diplomatic missions for Francis. [14]  His silence was a failure of local management.

In short, there was a lack of effective oversight and a total lack of accountability.

  • Review ethics and harassment policies on an annual basis. Corporations and NFP entities routinely review sexual harassment policies and other conduct issues with their staff and employees.
  • Avoid cover ups. In the modern world of instantaneous communication, only transparency will work.  Managers, up to and including the pope can no longer count on the media for favorable reporting or the hope the story will eventually be buried. It will not.  Twitter, Instagram, Snapchat, Facebook and other social media will always provide an outlet for this information.

What is the final lesson for the NFP manager?  Do the right thing.

Note:  Internet sources for this article were all accessed on June 2, 2019

[1] The content of the movie was controversial, but it was selected by the Library of Congress in 1999 for the National Film registry.

[2] See (Accessed June 1, 2019).  This entire process continues in suspension especially after Cardinal Pell was accused and convicted of abusing altar servers in an Australian Court.

[3] The Vatican has instituted new internal audit norms. See (accessed June 1,2019).  It is interesting to note the previous internal auditor was fired by the Vatican.

[4] In fairness one must note the age of the seminarians, so this was not child abuse. It is an abuse of power.

[5] For instance, see (Accessed June 1, 2019)

[6] Or as it is sometimes referred to, as “being raised to the purple”.  This is reference to the color worn by Roman Emperors and not that worn by cardinals.

[7] Some observers have questioned the results of this aggressive recruitment campaign. Review of results and later adjustment to plans is a basic tenet of organizational management.

[8] For instance, see

[9] While this is not a theological but a management discussion, one can look at the writings of Ignatius of Antioch as early as the second century to see the beginning of this theology.

[10] To be fair, other denominations with an episcopal structure have also encountered these same difficulties.

[11] Again, to be fair, Monsignor Lynn had his conviction reversed by the Pennsylvania Supreme Court and could undergo trial again. What this article is referencing is his Msgr. Lynn’s defense assertion Cardinal Bevilaqua, the archbishop of Philadelphia had the final word on the posting of priests.  The culture of the church made this an ethical defense in the opinion of Msgr. Lynn.  Doing the right thing can be difficult, especially when your boss is a cardinal.  Lynn should have resigned his position rather than carrying out ethically dubious instructions. Business professionals face this every day. Nevertheless, an open mind on this matter should be kept until the next trial.

[12] Cardinals surrender their curial (Vatican management) duties at 80 and become ineligible to elect the next pope. There are 120 electors right now.

[13] An apocryphal story has circulated about Pope John XXIII. When he was told he had the best diplomatic corps in the world he was alleged to have answered, “I would hate to see the second best one.”  Pope John was also credited with a pithy answer to the famous question of, “How many people work in the Vatican?”  He was alleged to answer “about one-half”.

[14] For instance, see (Accessed June 1, 2019).