We have all been there, a project we researched, planned, and executed perfectly fails, a trusted colleague drops the ball, or worse we discover unethical practices in our organization. During my tenure in the nonprofit world, I became an expert at turning failing nonprofits around. Understanding how to stop noncompliance, and fix programming and operations is my specialty. And along this journey, I have learned a lot.
Regardless of your IRS Tax filing, negative news is never something we want to share. It can affect profits, sales, investors, donors, and grants. Yet not addressing the negative can have a deeper, and much longer impact. Overlooking the legal implications of fraud and simply asking the person to resign is not sufficient. Sadly, taking such an action will result in the opposite of what you were striving to accomplish. By brushing the misbehavior aside, asking the person to resign, and moving forward, you are directly implicating yourself and organization in the fraud. You are sending a clear message that as long as you are not caught, anything goes. Yet, if I were to guess, your perspective which drove you to take these actions was “we have eliminated the issue and placed safeguards in place”.
I have worked in countless organizations who took this approach. The results I discovered were employees who had become complacent, cut corners, and regularly practiced unethical behavior. Board members were known to look the other way, and their business practices were questioned. Soon the employees with ethics left, and what was left was the bottom of the apple barrel. Because the perpetrator was not held accountable, it became understood that anything was permissible. Trying to right these organizations was more than a challenge, and often resulted in an audit by the IRS, State Tax Commission, or Department of Labor. While I was able to turn these audits into experience and incredible learning opportunities, working through the mistrust in the community was incredibly challenging.
When fraud, embezzlement, or an unethical practice is discovered, there are proper procedures to take. Document all findings, audit records, and report everything to the correct authorities. While these steps are critical, the next step is perhaps the most important. Rather than wait for the press to come to you, go to the press. When you go the press and share what has happened, you can control the narrative. Rather than leaving it to a reporter to choose what is said, you choose what and how things are said. You create a deeper sense of apology and increase your credibility through your transparency. People, the press included, will respect your desire to right a wrong and keep the community informed. Not only will this protect your name and organization, but it is also the first, and key step, in truly starting over.
As frightening as this sounds, trust me, by going to the authorities and press you are publicly declaring your integrity. People will respect you more. You are also making the journey of recovery much easier. Any audits or authorities you work with will take the time to teach you how to avoid these instances and empower you with the tools you need to protect your organization.
Not everything which appears bad is bad. I have taken this approach on more than one occasion and have never had it backfire. I have had the opportunity to truly learn from the best, preserve organizations, and strengthen relationships. Remember, honesty is always the best policy and when you make the announcement, you are able to control the narrative.