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Boards, too, need to change their practices, experts said. Large and complex not-for-profits like Y.U., the Claims Conference, and the Met Council, can be hard for boards to track and oversee.
According to Teutsch, organizations need to train their boards in proper governance procedures. They also need to select board members who are prepared and qualified to scrutinize their organizations.
“Institutions depend upon board members for a significant portion of the funding [of] the institution,” Teutsch said. “When that becomes too large a portion of the total consideration for [selecting] board members, then the pool of skills and the commitment of time and energy that’s needed from the board sometimes suffer.”
Four people serve or have served on more than one of the boards of the groups that faced scandal this year. Among them, Claims Conference Chair Julius Berman is also a Y.U. trustee; Met Council Vice President Israel Englander is a former Y.U. trustee.
Wealthy and prominent families have seats on more than one of the four troubled boards. Ronald Stanton is an emeritus chairman of Y.U; his son Oliver Stanton is on the board of the 92nd Street Y. Former Met Council chair and current Met Council board member Meryl Tisch is married to the nephew of Joan Tisch, a director of the 92nd Street Y. Ronald Lauder is on the board of the Claims Conference; his nephew William Lauder is on the board of the 92nd Street Y.
The four 2013 scandals and the Madoff scandal are only the most high-profile recent governance flubs in Jewish not-for-profits. There have been plenty of others since 2008, like the IRS’s revocation of the Zionist Organization of America’s tax exemption for failing to file tax returns. In 2011, a clerk at UJA-Federation of New York attempted to steal donor credit card information in an identity theft scheme.
“For many years, the Jewish community looked at the failings of other faith groups and proclaimed with pride that that’s not happening in our house,” Charendoff said. “I think it led us [to] a certain complacency that recent events have proven we can’t afford.”