A Cautionary Tale for Nonprofit Boards

November 28, 2010Articles The Chronicle of Philanthropy
Last year, the attorney general of New Jersey sued the Stevens Institute of Technology, accusing it of financial mismanagement, excessive spending on the personal needs of executives, misuse of charitable funds and breach of fiduciary duty. The action followed a three-year investigation by the attorney general’s office into the university’s financial practices. The kind of trouble the institution got into could face any nonprofit organization unless its board and top leaders are acting effectively, and the lessons of this case should remind all nonprofits to tighten their governance operations.