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This advice column offers opinions about the peskier aspects of working in the nonprofit sector.

Is nepotism commonly allowed in nonprofits?

I have just joined a statewide nonprofit organization as an accountant. We have 80 or so employees and I like my co-workers and love our mission.

I have been surprised, however, by how many management employees are related to our CEO. The Legacy Funds director, for instance, is married to our CEO and their two daughters are assistant managers in different divisions of the marketing department. Today, I just discovered that the CEO’s nephew is our IT director.

Is this business as usual? While it’s none of my business, I think it makes our organization seem very “mom and pop” and doesn't look professional. I also noticed that while everyone here earns a market-based salary, including the CEO’s relatives, the combined income of these family members represents a healthy chunk of our overall personnel payroll and benefit costs.

There are also constant "water cooler" conversations about suspected preferential treatment given to the CEO's family members. His wife, for instance, certainly doesn't keep the arrival and departure hours we "outsiders" are expected to follow.  This sort of management-supported workplace laxity creates the perception of favoritism and is bad for morale. Some marketing employees feel there are no opportunities for advancement, for instance, because the daughters will be promoted before they will, regardless of their job performance.

It seems odd to me that the board would allow the CEO to stack management with his direct relatives. I’ve never worked at a nonprofit and am wondering if this is typical? I must say I think it is a mistake!

Kathryn says …

I’ve certainly seen nonprofits that allow employees to be related, although I admit the “management stacking” you describe seems to be a bit over the line in terms of potential conflicts and risk.

Family members working together is not unique, but can be fraught with potential problems, especially when such relatives are not held to the same employee expectation as others. There may be a good reason for your Legacy Funds Director's flexible hours: she may require fluid office hours as her role sometimes demands work on nights and weekends. On the other hand, this should be made clear to all staff, so that the "water cooler" speculation and gossip is minimized.

With that said, this all really depends on your organization's employee policies and procedures. Have you checked out your employee handbook (if there is one)? There should be documented board policies regarding the CEO’s hiring practices. The board may have had good reasons for agreeing to this unusual setup, or they may not be paying attention.

As a former executive director and current CEO, I know first-hand that when I hire my own family members or when other staff member's family are hired (especially management staff), disclosure and transparency are crucial to avoiding morale issues based on suspected preferential treatment.  My own rule of thumb is that family members should not work in the same department, nor report to a family member. For other management employees and for me, the direct report of a family member has caused a variety of problems, which is why I don't prefer that scenario.  That said, there are exceptions.  Nonetheless, it is helpful to the entire organization if such exceptions are few.

Let's face the facts: we can be a bit more blind to the faults of our wife, or nephew or daughters than we are with other unrelated employees.  "Pillow talk" and family dinner work discussions likely impact the CEO's decision making as much, or more, than public feedback at a staff meeting.

At the same time, the nephew might be an IT guru with a passion for your nonprofit's cause and is a dream hire.  Again, your CEO should make sure that he goes above and beyond expectations in providing appropriate info to the staff and board regarding his nephew's unique qualifications and performance. Also (and I am repeating myself) the wife, nephew, etc. should NOT be reporting directly to the CEO.  This is a scenario that could risk the organization's reputation if personnel problems surfaced.

I’m presuming that there are no restrictions on the CEO hiring relatives or having first-degree relatives in management positions at your nonprofit, because he is doing just that (on a regular basis). If you really believe that the nepotism in the organization is causing big problems, you have very few choices.  The board seems either "O.K." with, or blind to, the multiple hiring of this CEO's relatives, so you are likely to receive little support by complaining to them. You will also likely lose your job for going over the CEO's head. So, if this daily family reunion isn’t causing you or the organization any real problems, I’d advise you to mind your own business and keep doing a great job in the accounting department.  Otherwise, you may want to look for another job where the playing field feels more even for all employees.

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Disclaimer

The opinions offered here are based on the author's personal nonprofit experience and may not reflect the opinions of MissionBox, Inc. These opinions should not be considered legal advice or used as a substitute for professional legal consultation. MissionBox readers are invited to submit alternative responses, which may be published here as well.

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Co-founder and CEO of MissionBox, founder and president of MissionBox Philanthropic Fund, founder and past CEO of Community TechKnowledge

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