Why Nonprofit Boards May Stray From Their Core Missions And Obligations To the Public- Considered Generally And Particularly With Respect To Libraries

Perhaps you have read some of what has been written about the way that non-profit boards can get off course from their mission to serve the public in the ways that were intended.  Some of which we have previously provided in this vein has been written specifically about the straying conduct of the boards of trustees that are supposed to be stewards of our New York City libraries.

We have some our own additional thinking to offer about the reasons such nonprofit boards may be pulled to veer off course, but first here is a taste of some of what has been written already:

    •    The Wall Street Journal: Clueless at the Corcoran- What the museum's latest bad decision says about nonprofit governance, by Eric Gibson, February, 24, 2014.

    . . .  the untold story of our time is the emerging crisis in nonprofit governance, where boards embark on policies that go against-and even imperil-the mission of the institution they are charged to oversee and protect.

    . . . The New York Public Library wants to gut its magnificent Beaux Arts building on Fifth Avenue and change it from a research institution to, as Ada Louise Huxtable wrote in this newspaper, "a state-of-the-art, socially interactive, computer-centered" circulating library, with fewer books, a good number of them moved off-site.

    •    City Limits: New Scrutiny of City's Library Trustees, by Suzanne Travers, June 18, 2014.

Over the last year, library trustees have seen more of the spotlight than usual because of moves that put boards at odds with public opinion: NYPL’s now-abandoned plan to insert a circulating library in place of the stacks at its iconic building on 42nd Street and Fifth Avenue, Brooklyn Public Library’s still-active effort to sell its Brooklyn Heights branch to private developers, and the Queen’s Public Library board’s split vote on whether to require library chief Thomas Galante to take a leave of absence given city and federal investigations into library construction projects and contracts.

These disputes have exposed weak points in the public-private hybrid structure of the libraries, where the non-profit status of boards limits outside oversight and access to information even as the libraries press for more public funding after years of cuts. At a time of growing income inequality, the role of trustees who can give or raise private money to support the libraries also prompts more fundamental questions: How representative of the city are the library boards? Whose interests do they represent?

    •    Noticing New York: Where Are They Now?: Sharon Greenberger, Evercore and the Revson Foundation- Selling And Shrinking NYC Libraries, by Michael D. D. White, June 6, 2015.

Takeover of Charitable Boards By Wall Street Financiers With Not So Charitable Values

There is new study on the increasing dominance of Wall Street financiers on charitable boards. . . by Garry W. Jenkins at Ohio State University's Moritz College of Law. .

From the report:

As financiers come to dominate the boards of leading nonprofits, it is not surprising that their approaches and priorities have made their way, very explicitly and fundamentally, into the governance of the nonprofit sector.

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A May 30, 2015 New York Times Sunday Review Op-Ed, "Who Will Watch the Charities?," by David Callahan, founder and editor of Inside Philanthropy, is far more caustic and cynical.  "(W)e should end the charade that all philanthropy is somehow charitable," says Mr. Callahan. . .   He warns a big problem with modern philanthropy: "how inextricably entwined it has become with politics and ideology."  He says:

    it's alarming how in an era of high inequality, private funders have a growing say over central areas of civic life like education and public parks, and how this influence is often wielded against a backdrop of secrecy.

    •    Melville House: Patience and Fortitude- Power, Real Estate, and the Fight to Save a Public Library- Scott Sherman (Reviews).

Sherman's most shocking revelation is how little the trustees understood the mission of the institution they claimed to be saving."
-Architectural Record

    •   NPR: 'Patience And Fortitude' And The Fight To Save NYC's Storied Public Library, by Maureen Corrigan, June 24, 2015.

Scott Sherman details how “bottom-line business logic very nearly gutted one of the world's greatest public research libraries.”

 . . . the crisis of The New York Public Library stems from the fact that it's a weird entity. It's not a state or city agency; instead, the library was founded as a private, nonprofit institution. It has always been governed by a board of trustees typically drawn from Manhattan's 1 percent.

    •    Reader Supported News (RSN): Wall Street Taking Over Nonprofit Sector, By Dan Wright, (author of Shadowproof), January 5, 2016.

. . .  a new study from the Stanford Social Innovation Review (SSIR) reveals a growing Wall Street takeover of nonprofit boards of directors.

Using data from what are referred to in the study as major private research universities, elite small liberal arts colleges, and prominent New York City cultural and health institutions, SSIR calculates that “[T]he percentage of people from finance on the boards virtually doubled at all three types of nonprofits between 1989 and 2014.”

. . . .  the banksters are not content to just donate to the nonprofit organizations, financial service industry executives are taking positions of influence and control. As one might expect, the vision Wall Street players have of and for the world often clashes with the preexisting culture within those organizations. . . .:

    . . .  it is not surprising that their approaches and priorities have made their way, very explicitly and fundamentally, into the governance of the nonprofit sector … finance practices from board members and donors whose native habitat is the financial services world. . . .  principles upon which donors base their giving …

    Numerous critics have written thoughtfully about the ways in which market-based thinking and approaches applied to the nonprofit sector provide false promise, with the potential to dilute charitable values, undermine long-term mission focus . . .

 . . . . . Wall Street is helping bring dubious management practices to the sector that was setup, in part, to deal with the failures of an economic system run by said dubious management practices. . . .  

It is apparently lost on many donors to the nonprofit sector that if nonprofit work could have been achieved through a business approach it would already have been. For Wall Street, the problem with the nonprofit sector appears to be that it’s nonprofit.

    •    The Leonard Lopate Show: Why Affordable Public Universities Are Vital to Our Democracy, March 2, 2016.

Pulitzer Prize-winning, and National Humanities Medal recipient author Marilynne Robinson:

It’s amazing, the people into whose clutches our civilization seems to have fallen are people who, if they had to basically define their response to the arts and education would say, `I don’t get it.’ It’s sort of like turning over our whole aesthetic sense to people who are color blind. . .

. . .  All these people talk as if the mere fact of being magnates of one sort or another meant that they understood the world better than other people do, you know that it should convey some authority.  And what have they done? . . .  It's a great display of something very different than shrewdness, very different from insight.  But nevertheless they're extremely confident and they are extremely ready to be active to remake the world into something that they think it should be.

    •    New York Times Op-ed via Citizens Defending Libraries: Privatized National Parks as Realms For Advertising? Tim Wu, Author of “The Attention Merchants” Writes About This And The Similar Invasion of Schools and Libraries In NT Times Op-ed,  December 6, 2016

Advertising in our public parks? . .  Tim Wu, writes about this and the privatizing takeover “spaces long thought inviolate” for the assault of commercial advertising, places such as schools, churches, our homes and libraries.

Writes Wu (emphasis supplied):

Over the next decade, prepare for a new wave of efforts to reach some of the last remaining bastions of peace, quiet and individual focus - like schools, libraries, churches and even our homes.

        * * *
  . . .  the leaders of schools, libraries and even the more principled technology firms should understand that there is always a hidden cost to the proposition offered by advertising.

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History and logic suggest that, once advertisers become a major funding source, they create their own priorities, and unless carefully controlled they will warp the underlying space to serve their interests.

Here, in list form for your consideration, are reasons that nonprofit boards may stray from and fail in properly fulfilling their missions, particularly when those boards are comprised of people who are likely wrong candidates for those boards, people who don’t care about or understand the core mission of the charity whose board they are on or who may have interests that don’t coincide with or are actually at odds with the mission of the entity whose course they are setting:

    1.    The board members may be incompetent and this can easily be due to their lack of understanding or their lack of any true interest in the nonprofit’s mission and better informing themselves about it.
    2.    The board members may have an undue focus on understanding the mission of the nonprofit purely in terms of numbers, when, in fact, the mission involves something that instead involves values and culture, a mission that in it more ephemeral way is not subject to expression in numbers.
    3.    Similarly, the board members may focus and think of things in terms of money.  This problem is likely accentuated when, more and more, the justification for selecting certain people for board appointment is that those people are wealthy enough to donate to the charity, whether they do so or not.  Perhaps this is embodied in the exchange at the beginning of Dickens' “A Christmas Carol” between Scrooge and his nephew when Scrooge is asked to make a donation to charity: - Nephew: “Oh I think there are many things from which I've derived some good, by which I have not profited financially, I dare say. There is more in life than money, Uncle." -     Scrooge: "Humbug to that!  More in life than money!  Humbug!"
    4.    The board members may be more focused on themselves than anyone else.  Perhaps a symptom of this, like at the Brooklyn Public Library, is of a grand and opulent fund raising gala that the board members attend that actually loses, rather than makes money.
    5.    The board members, coming from a different economic and cultural segment of society, may have a different world view about what would be good for everyone else in the world.  One example of this is a belief that the world should be managed with top-down decision making, something that assumes that those who have attained and hold wealth know better than the rest of us.  In the case of libraries, this can translate into top-down decision making about which books and we should all be reading.
    6.    There may be board members who are on the board for ulterior motives than involve self interest or conflict of interest.  That can extend to viewing the assets and resources of the charity not from the standpoint of how the charity’s mission can be best served, but instead how those assets and resources can be diverted or used differently with the interests of others, not the public, in mind.

There are a number of converging interests adverse to continuing the tradition of public libraries, especially in New York.  You can decide for yourself the influence of each and how big the respective arrows for each should be. 

Here is a list of  interests that can affect board members making decisions about libraries that can be contrary to the traditional and core mission of libraries as being places that provide books and facilitate research and archive human knowledge:

    1.    Trustees may have interests in library real estate, unlocking and putting into play the real estate that libraries sit on.  This can explain the proposals to sell and drastically shrink important central destination libraries like the Donnell Library and the Brooklyn Heights Library, in each case the sales netting the most minuscule fraction of what it would cost to replace these libraries, a likely net from the sale of each of those libraries of around $25 million, selling recently renovated libraries for far less than the value of a vacant lot. The NYPL Central Library Plan had similar aspirations.  With the shrinkage comes an exile and enormous loss of books, because books take up space and you can’t sell library real estate without getting rid of the books.
    2.    Trustees may wish to use the provision of libraries (and/or other basic civic services like schools) as bait to induce upzonings and other increases to development.  For maximum effect, this tactic actually begins with withholding the services/resources that will then be dangled as a carrot in front of the public.
    3.    Trustees may have an interest in promoting digital books (which are more expensive for libraries than physical books and frequently leased by libraries temporarily rather than bought and available for the future) because they have ties to the digital industry.
    4.    Trustees may have ties to the increasingly monopolistic content industry, that seeks for the public’s attention to be diverted to advertising and/or the content for which they have operative copyright controls. This includes, for instance, Amazon which, when you have to wait for books not at the library, is the place you can go to get books faster, and perhaps more cheaply when you factor in your transportation costs.
    5.    Trustees may have ties with the cable and internet content delivery services.
     6.    Trustees may have an interest in their being a top-down influence or control with respect to what people are reading or thinking about.  Top on the list for exercising influence is probably what people think in terms of politics, elections and things like altering the economic system or distribution of wealth.  It could affect, for instance, what is available to read about climate change. (“Whoever controls the past controls the future.”- George Orwell.)
    7.    Are there trustees with any interest in aiding or complying with the surveillance state by making it so that books and most knowledge can only be accessed in a digital fashion that is possible to monitor?  (Why was the most important private U.S, spy agency hired to overhaul, dismantle NYC's most important libraries?) See this Citizens Defending Libraries resource page for links it article and information about this issue:  Articles About Library Privacy and Surveillance In Libraries.
  8.    Although it is something that few would likely now admit, there may be trustees that would like there to be censorship.

Now that you have been primed with these thoughts maybe you would like to review the composition of the Brooklyn Public Library board of trustees available here: Brooklyn Public Library Trustees- Identified + Biographical and Other Information Supplied.