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How can I stop CEO from padding her pockets?

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How can I stop CEO from padding her pockets?

I used to belong to a 501(c)(3) organization formed to help those who have a rare disease. I left because it seems a little shady. We did a small fundraiser the CEO said was to help patients but we were later told that all the money went to repay the CEO for what she initially put up to start the organization. After another fundraiser, she took a trip she claimed was to be by someone's bedside in a hospital but that wasn't true. She has done media interviews claiming she has this disease and is dying, but it appears that is not true. A lot of projects that were supposed to be done have never been done. The CEO has done absolutely nothing except it appears she is embezzling from what was supposed to go toward patients. Trying to address the board is no help because they are all very good friends of hers, one of them her husband. When I started asking questions, I was just brushed off and was just told things would happen soon. How can I bring this to others’ attention? How can I stop this woman from taking peoples’ money and padding her pockets?

First, be absolutely sure of your facts.  You are getting into an area where you could be liable for defamation if you are accusing her of criminal misconduct and are wrong.  There may be other explanations for what you find to be a little shady.

There are two potential legal issues.  The organization may be violating the charitable solicitation registration act of your state (if there is one) if it is misrepresenting the purpose for which it says it is soliciting.  It is not entirely clear from what you have said that this is actually the case, however, so tread lightly with any complaint to the registration officer.  If she is stealing from the organization, the state Attorney General or the local prosecuting attorney might be interested but you would probably need pretty good proof and would probably have to be talking about a significant amount of money.

As I have said many times, the media may be the best enforcers of the law and ethics of nonprofit organizations.  If she has been misleading the media about her illness, they might be eager to expose her as a fake.  But if she has a different illness, it may not be as much of a story and most people are reluctant to attack a person who is seriously ill.  

Tuesday, July 28, 2015
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Comments

The advice given here is certainly prudent, but it seems almost to suggest that the inquirer would be wisest to sit quietly and allow possible illegal and immoral activity to continue. Fraudulent charities cast a shadow upon all legitimate non-profits in search of contributions; someone in a position to blow the whistle ought not to be discouraged. I hope that the inquirer, yes, will make sure of the facts and proceed with all due caution -- but will proceed.

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