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Nonprofit leaders: Boards oft out of sync

FLORENCE - People who serve on the boards of nonprofit agencies often don't realize the financial responsibility and legal liability that goes with their positions, according to agency executives who met here Wednesday to talk about restoring the public's trust in nonprofits.

"If there's a problem within an organization, it's a board problem," said Neal Zimmerman, executive director of the Boys and Girls Clubs of the Pee Dee Area Inc. "Whether an organization lives or dies, it's not going to be the executive director or chief executive officer who's accountable. It's the board."

The S.C. Association of Nonprofit Organizations sponsored Wednesday's meeting to get input for ethics and business guidelines it is developing for nonprofit agencies.

Mason Hardy, the association's executive director, said Five Rivers Community Development Corp. in Georgetown might have avoided its current financial and management problems if its board members were more attuned to how the agency is being run.

The association's proposed guidelines say board members should have a written job description; review their executive director's performance and compensation annually; evaluate the board's performance once a year; conduct regular audits to make sure employees are complying with personnel and financial policies; and monitor financial expenditures.

Five Rivers board members, with the exception of one person, say they have never reviewed salaries or benefits given to Beulah White, the agency's executive director. The board members review monthly financial statements, but do not monitor expenses, including $102,496 for travel since 1996 and more than $30,000 since 2003 for a Volvo automobile the agency provides for White.

Sam Livingston, president of the Five Rivers board, said it is difficult for volunteers such as himself to keep close tabs on a nonprofit agency.

"All of us have day jobs and we can't afford to spend that kind of time," Livingston said. "I don't think any board member of any organization knows everything about that organization because they're not overseeing it on a daily basis."

Scottie O'Neal, executive director of Disability Solutions in Hartsville, said such scrutiny goes with the board of directors job, even though most board members serve voluntarily.

O'Neal said he worries that board members don't realize how accountable they are for how a nonprofit operates.

"Some boards I've been on, if the IRS came in and said, 'Are you doing what you say you're doing?', they'd answer, 'I guess,'" O'Neal said. "Well, I don't like guessing. If we're not doing what we're supposed to be doing, I want to know why, because I'm the one who's accountable."

Hardy said the guidelines project was spurred by nonprofit agencies' desire to better regulate themselves instead of letting the federal government dictate the rules.

U.S. Sen. Charles Grassley, R-Iowa, has been leading an effort in Congress to investigate charity regulation and develop tighter rules for the sector, Hardy said.

"Despite their good works, nonprofits have come under increasing scrutiny in recent years, fueled by the misdeeds and excesses of a few," Hardy said. "In response, nonprofits in several states, including South Carolina, have started to take action on their own behalf, to demonstrate to the media, policymakers and the public that charitable organizations can regulate themselves."

The association hopes to adopt a final version of its guidelines later this year.