Governing Non-profit Organizations - Case Study Example

? Problem Organization The paper intends to discuss on Clinton Bush Haiti Fund (CBHF), a non-profitable organization which was established with the aim of fostering development amid people living in Haiti. It was established in 2010, but within two years, the organization had to face problems related to corruption and fraudulent issues which further led to its discontinuation. The organization also faced criticism due to the lacuna of decision makers in assessing the progress of the organization and likewise, monitoring the allocation of funds. The ultimate result was the close down of the organization within only two years of its establishment in 2012. This paper hereby describes the historical context of CBHF referring to its vision and mission along with various other factors to assess the actual problem inherent to its discontinuation suggesting remedial measures which could have assisted in neglecting such a consequence. Introduction Clinton Bush Haiti Fund (CBHF), which was established as a non-profit organization to rescue the victims of 2010 earthquake in Haiti, was on a verge of closing down its operations on December 31, 2012. The reason behind closing the organization of CBHF Bush Haiti Fund was reported to be the insufficiency of adequate funds for the development of individuals in the socio-demographic region of Haiti. It has also been observed that there is further requirement of nation building in the regions of Haiti; however, an insignificant numbers of members are observed to be interested in providing hard work for the organization. In addition, the inadequacy of funds that had been raised for the development of the region and to execute other necessary operations of the non-profit organization can also be regarded as a threat to the sustenance of CBHF. Owing to its deteriorating financial stance, the organization also had to face bankruptcy risks which again caused severe threat to its existence and effectiveness or success in delivering the intended facilities to the community people in Haiti (Daniel, 2012). To make the matter worse, the organization has been disregarded to be eligible to acquire funds in terms of donations from its stakeholders since 31st December, 2012 thus contributing towards its financially deteriorating health (Foundation Center, 2013). Moreover, the organizational members were heavily criticized for inefficiency in providing effective decisions for the betterment of Haiti people in the society along with lacking any report for substantial progress which accumulatively caused the problems for CBHF (Weisbrot, 2013). With reference to this case example, the paper intends to discuss on the history, outcomes, law in practice, and solutions for the problems witnessed by CBHF. The paper also discusses on ethical issues of the organization providing rational recommendations for future avoidance of such problems. History CBHF is a non-profit organization established in the year 2010, with a vision and mission to assist the population in Haiti and therefore contributing towards building the country in a better way. As per its norms being a non-profit organization, CBHF has been utilizing the donation gathered through grants, loans and investments in equity for promotion of growth of job along with sustainable development of the entire economy. On its establishment, the organization envisioned towards fostering diversity and competitiveness of the economy of Haiti with the support of prevalent nonprofit organizations and focusing on partnering with profit entities (Clinton Bush Haiti Fund, 2010). Mission The mission of the organization had been to deliver consistent assistance to the people living in the society of Haiti in deprivation of adequate basic amenities. Moreover, promotion of economic opportunities was also considered as an important mission of the organization (Clinton Bush Haiti Fund, 2010). Key Individuals The key individuals, associated with the organization since its establishment, were reported to be the two former US Presidents, Mr. Bill Clinton and Mr. George W. Bush. The organizations further attempted to work in strong collaboration with the community mainly involving women as the key individuals to execute the operations of the organization (Clinton Bush Haiti Fund, 2010). Organizational Structure The organizational structure of CBHF consisted of board of directors as well as staff in the middle and low level managerial positions in the organization. The management and staff members were held solely liable of providing opportunities for people within Haiti’s economic and social dimensions for elevating the position and condition of the nation at large. To be precise, the organization consists of six members in the board along with two co-chairs and a Chief Executive Officer (CEO), Mr. Gary Edson (Clinton Bush Haiti Fund, n.d.). Programs Focusing on its vision and mission CBHF had sought bring a notional change in the ancient story of thriving and rebuilding within the Haiti region. The funding programs were therefore to assist people to get back for routine work process along with creating an environment to foster sustainable growth in the economic sector. Moreover, the organization also emphasized on promoting growth and opportunities in the economic aspects through programs initiated for assisting institutions of micro finance, providing services in finance and business related assistance for small-sized and running organizations. The funding programs also facilitated in training for job and development of the entire workforce. Programs were also executed by CBHF for delivering the requirements that were underachieved and critical. Moreover, there are other programs that were supported by CBHF which majorly included support for Cholera Prevention Program for AME-SADA in Haiti and assisting local artists to compete internationally. The programs also included improvement in the reachability of insurance programs, making the required equipments for artists readily available for Haiti encouraging sustainable energy, building international partnerships creating a link between the Haiti and the international communities, and assisting tourism among others (Clinton Bush Haiti Fund, n.d.). Governance Characteristics CBHF is provided with good governance system along with five necessary strategies that are implemented in the organization which includes working with government and firms in Haiti, coordinating with undertaken projects, cooperation with Haiti diaspora community and supporting efforts for decentralization (Foote, 2012). The characteristics of governance in terms of non-profit organization such as CBHF can be identified as participatory in nature which was deemed to be highly inclined towards transparency, responsive conscious oriented, efficiency and effectiveness as well as accountability (Smith, 2004). To be precise, with reference to the operations of CBHF, its participation in alignment with public, private and community oriented groups can be considered as one of the main epitomes of good governance. Such a governance structure requires to be organized and informed signifying freedom of expression and association on the part of the people involved in the body (Smith, 2004). Following a notion of transparency means CBHF intended to ensure that information are easily gathered and implemented instantly for executing the business operations in a successful manner. Additionally, good governance requires greater accountability in the organizational context which was duly considered by CBHF (Chait, Ryan & Taylor, 2011). Physical Location The physical location of CBHF was in the US being jointly formed by both the former Presidents of the nation Mr. Bill Clinton and Mr. George W. Bush. The organization was operated from the headquarters in Arkansas and Dallas (Clinton Bush Haiti Fund, n.d.). Assets The total assets gathered by the organization amounted more than US$ 54 million, which was reported as distributed to over 50 organizations and businesses for spurring sustainable development and mitigating the gap between reconstruction requirements in Haiti on the short term basis as well as improvement on the long term basis for CBHF (Foote, 2012). Financial condition The financial condition for CBHF can be observed to quite weak being on the verge of bankruptcy with almost no hope for fund generation. As stated earlier, CBHF had been focusing on assisting financial institutions, building of human capital through development of workforce and training purposes; however, owing to the allegations of fraudulent and misconducts, the organization’s financial dealings have come under strict scrutiny (Inter-American Development Bank, 2013). Size CBHF consisted of six members headed by a CEO and operated as a mid-sized non-profit organization. It can be stated that funds are raised in order to assist the population of Haiti and creation of environmentally diversified and competitive economy which harnessed the spirit of people living in Haiti facilitated with collaborations between public, private and non-governmental organizations operating in the US (Clinton Bush Haiti Fund, n.d.). Description of the problem CBHF had to witness tremendous problems in terms of finances and resource availability primarily because of the scam and corruption practices allegedly carried out within the organization by its top level officials. This resulted in malfunctioning of the organization while performing the activities on an extensive basis. It can be stated that there is also a profound requirement of strong community development with substantial necessity for analyzing the effects of the reliefs as well as recovery in Haiti which makes the operational process of CBHF more challenging within the region. The organization has also been criticized due to lack of decision making efficiency of the top level management which resulted in its poor financial health. Illustratively, the level of corruption reached new heights in CBHF on December, as Lewis Lucke, an official for United Agency for International Development (USAID) was sued. The organization also faced criticism from the leading political party on the basis of its insufficiency to manage emergency situation during the post occurrence of 2010 earthquake in Haiti even after two years of period (Weisbrot, 2013). Outcome To be noted, corruption within the organization, resulting in its bankruptcy situation and wind-up caused unemployment of around 25 million people in Haiti. It is worth mentioning in this context that irrespective of the utmost need prevailing within the Haiti region for organizations such as CBHF, the non-profit organization has been disregarded to avail any finances through its funding initiatives. The reason behind such a decision can be identified as corruption and fraudulent activities which have been allegedly carried out in the organization after since its establishment in the year 2010, resulting in its closing within two years from its establishment, on December 2012. Law in practice The legal issues witnessed by CBHF can be identified to be based on the grounds of corruption, biases and lacuna in the decision making process. In later administration of the legal intervention, it was reported that most of the contracts executed by CBHF went to Beltway contractors located in distinct parts of the US rather than being assigned to small and middle-sized contractors in Haiti as had been promised in the vision and mission statement of the organization which certainly falls under scrutiny in compliance with the related Company Act (Christopher Story, 2013). In relation to CBHF, it can be stated that corruption was the primary problem in the organization which resulted in misguidance of communication among its employees and the community of Haiti. Referring to the case study, it can be affirmed that when operating an organization such as CBHF, it is a must to integrate certain qualities such as sincerity, duty, purity, justice among the associated members. It is also the responsibility of the head of the organization including the CEO(s) as well as other Board of Directors to set examples for integrity and dutifulness in order to maintain organizational effectiveness (E-Pao, 2012). Ethical Issues As evident from the above discussion, corruption can be identified as one of the rudimental ethical problems witnessed by CBHF. The corruption problems had not only raised discrepancies among members in the organization but also hampered effective functioning of the organization which in turn caused the wind-up of the organization. CBHF was founded in order to provide support and opportunities to the individuals in the society of Haiti by assisting the growth of small and middle sized business units both economically and socially. However, inadequacy of funds as well as lack of decision making efficiency imposed strong negative impacts on the functioning of the organization to a considerable extent. Recommendations From the above observation it can be comprehended that the primary problem faced by CBHF had been corruption and fraudulent practices which the authorities failed to justify with adequate rationality by law. In order to mitigate the problems of corruption and fraud activities, the management and the Board of Directors should have been sincere and dutiful towards performing activities in accordance with the defined norms paying due significance towards its vision, mission and corporate governance structure. It is worth mentioning that effective communication and teamwork among employees could have assisted the organization to sustain in the long run. Conclusion From the above discussion, it can be concluded that CBHF had failed as a non-profit organization towards assisting the population of Haiti and building the region towards better sustainability. Owing to the conduct of corruption and fraudulent practices within the organization, CBHF was considered to be ineligible to obtain any future funding from the stakeholders, which further led to its bankruptcy and wind-up. For this the organization had to face severe criticism from people and politicians in the region of Haiti. This needed to be changed in order to maintain efficiency in organizations and provide better productivity that could ensure greater sustainability for CBHF, in the long run. References Clinton Bush Haiti Fund. (2010). About us. Retrieved from http://www.clintonbushhaitifund.org/pages/about/ Clinton Bush Haiti Fund. (n.d). CBHF board of directors. Retrieved from http://www.clintonbushhaitifund.org/pages/board Clinton Bush Haiti Fund. (n.d). Programs. Retrieved from http://www.clintonbushhaitifund.org/programs/ Clinton Bush Haiti Fund. (n.d). Getting your company or organization involved. Retrieved from http://www.clintonbushhaitifund.org/pages/our-friends/ Christopher Story. (2013). Scamalert: Clinton-bush Haiti aid fraud conspiracy. Retrieved from http://www.conspiracyplanet.com/channel.cfm?channelid=46&contentid=6625&page=2 Chait, R.P. Ryan, W.P. & Taylor, B.E. (2011). Governance as leadership: reframing the work of nonprofit boards. United States: John Wiley & Sons. Daniel, T. (2012). Bill Clinton, George W. Bush Haiti fund closing. Retrieved from http://www.huffingtonpost.com/2012/12/07/clinton-bush-fund-closing_n_2258878.html Foundation Center. (2013). Clinton bush Haiti fund announces final grants, ceases operations. Retrieved from http://foundationcenter.org/pnd/news/story.jhtml?id=402800020 Foote, W. (2012). Clinton bush fund leaves Haiti. Retrieved from http://www.forbes.com/sites/willyfoote/2012/12/14/clinton-bush-fund-leaves-haiti/ Inter-American Development Bank. (2013). Clinton-Bush Haiti fund grant operations. Retrieved from http://www.iadb.org/en/projects/project-description-title,1303.html?id=HA-X1029 Naorem, G. (2012). Corruption: problems & solutions. Retrieved from http://e-pao.net/epSubPageExtractor.asp?src=leisure.Essays.Essay_on_Faith_Spirituality.Corruption_Problems_Solutions Smith, M. R. F. (2004). Governing nonprofit organizations: federal and state law and regulation. United States: Harvard University Press. Weisbrot, M. (2013). Haiti and the international aid scam. Retrieved from http://www.guardian.co.uk/commentisfree/cifamerica/2011/apr/22/haiti-aid Read More