A cautionary tale for non-profit boards

The board of the YWCA of Greater Des Moines has voted to shut down the organization’s center by the end of March, the Des Moines Register reports today. The YWCA has provided services to vulnerable women in central Iowa for more than 120 years.

Many non-profits are under financial stress because the recession has cut into donations, but the YWCA’s problems go back years before the economy started to slide. Clark Kauffman’s story for the Register recounts some of the agency’s troubles:

• The United Way, a major funding source, placed the agency on probation last March due to concerns over financial accountability.

• The Polk County Housing Trust Fund, a nonprofit that advocates for low-cost housing, in September said that safety and sanitation problems rendered the YWCA residence unfit for homeless women and children.

• The YWCA was temporarily unable to make payroll in December.

• Earlier this month, the agency unexpectedly shut down one of its main programs, a child-care center that once served 100 area families.

Tax records show that since 2004, spending at the agency has exceeded revenue by almost $1 million. The organization now has only four board members, down from the 12 members that it claimed 18 months ago, and it began the current fiscal year with no budget in place.

In addition, the YWCA’s 40-year-old building on Grand Avenue “is in poor repair” because maintenance needs were neglected for many years. An audit also found that the YWCA staff had used a Greater Des Moines Community Foundation grant to pay for ongoing expenses, instead of the targeted purpose for which money was allocated.

Whether the mismanagement of the YWCA stemmed mainly from staff incompetence or from malfeasance, the buck should stop with the organization’s board. Non-profit board members have many responsibilities, including a fiduciary duty to approve realistic annual budgets and make sure the organization is not spending money inappropriately. Board members also should have ensured that the YWCA’s building, a prime asset of the organization, was properly maintained.

I feel for the 40 women who live at the YWCA (some with kids), who have to move by the end of March. It’s not clear yet what transitional housing will be available for them, because the recession has increased demand for shelter space and low-cost housing. I hope that local funders like the United Way and the Greater Des Moines Community Foundation will step up to help cover the costs of finding residents a new place to live. These women are not to blame for the YWCA’s management problems.

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