Since allegations of excessive salaries and bonuses at the Central Iowa Employment and Training Consortium emerged this spring, several state employees have lost their jobs, legislators have demanded answers, public outcry has been loud and persistent, and many are still left wondering, “Is this happening within other publicly funded organizations?”

That question is ringing in the ears of many of Greater Des Moines’ not-for-profit leaders, who fear that the misdoings in one organization could affect the public trust that they so value.

“One situation such as this puts us in jeopardy with the public,” said Tom Kane, executive director of the Des Moines Area Metropolitan Planning Organization. “I think it’s a concern that all of us are going to be painted with the same brush.”

For some, it’s business as usual. But many non-profit organizations are reacting to the CIETC scandal by taking a harder look at financial records, salary structures, granting processes and other policies and procedures that may improve oversight, accountability and transparency, while also making an attempt to regain the public’s trust.

“What happens in one organization helps us re-evaluate and reflect on how our organization is run, but a good organization can’t grind to a halt because another organization had troubles,” said Terry Rich, CEO of the Blank Park Zoo.

Polk County Board of Supervisors Chairperson Angela Connolly said the alleged misuse of public funds by CIETC has resulted in some not-for-profit groups, including some of those on whose boards she serves, reviewing financing reports and checking salary structures. She believes many local organizations will find themselves facing greater public scrutiny, some of which she said is “overboard.”

“Because of one entity, others are getting penalized when they’re already doing good work,” she said. Still, she said, there was a violation of public trust that must be addressed.

Johnny Danos, president of the Greater Des Moines Community Foundation, said the most significant fallout from the CIETC scandal has been that non-profit board members have become more aware of their responsibility to the organization and donor dollars. As a result, non-profit organizations may come out ahead in the long run.

“To that extent, this is kind of a wake-up call,” he said.

The same week that the CIETC story broke, the board of directors of United Way of Central Iowa was scheduled to discuss the procedure for Executive Director Shannon Cofield’s performance review. “We erred on the side of providing more information (to the public),” Cofield said. “As a community-based organization, I want the community to be comfortable with that process,” a sentiment she believes is shared by other non-profit leaders.

Over the past two months, Kane has had numerous discussions about the matter with his board members, and they have determined that the MPO has a “pretty strong set of guidelines, rules, bylaws, procedures in place,” he said.

The agency, funded through federal dollars and contributions from member communities, puts all of its checks and monthly payments before its 34-member board of directors, and all 18 member governments are in the process of conducting Kane’s annual review, which is a public process.

“Everything here goes before the board in some form of fashion, and through our executive committee a lot of this is discussed in detail monthly,” he said.

Jude West, co-director of the Larned A. Waterman Iowa Nonprofit Resource Center at the University of Iowa, said all organizations that receive public funding must, on a yearly if not quarterly basis, communicate to the public what they have accomplished with what they have received, illustrating measurable outcomes, something already required of many of the area’s granting organizations.

At United Way of Central Iowa, Cofield said, “we have one of the most accountable funding processes around,” and one that has served as a model for other United Way agencies nationwide. The results-based accountability model, Cofield said, is an attempt to determine “at the end of the day, is anybody better off because of this program?”

Every two years, more than 100 United Way volunteers are sent to conduct site visits at each of the local organizations that receive United Way funding to determine how those funds have been used and what has been accomplished, with a score given to each organization based on its proven results. The higher the score, the better the organization’s chance of receiving increased funding, Cofield said. During off years, the organizations must submit information to United Way related to its program outcomes and results.

The Greater Des Moines Community Foundation conducts site visits at organizations that are new grant recipients or those that are unfamiliar to the foundation’s staff. They foundation also asks board members of grantee organizations to submit letters in support of the grant, so the foundation knows it is planned for and can be sustained, according to Kristi Knous, vice president of donor relations and programs.

Connolly said Polk County will follow new procedures for monitoring recipients of county grants. The board’s budget manager and the county auditor will monitor all of the grants that are issued to local organizations. Grant recipients will have 90 days to provide audited financial statement, giving a recap on how the grant money is being used, and then must provide audited financial statements. Connolly said the new procedures will affect hundreds of local organizations.

“Not that I think we’re going to find anything different, but this will be a more thorough investigation,” she said.

In addition to a heightened sense of awareness on the part of board members, many local leaders say the resounding message in all of this is a need for improved board member training and education, which falls in line with ongoing efforts by the Greater Des Moines Community Foundation and the Iowa Non-Profit Resource Center.

Danos said the CIETC scandal will create greater demand for board member training, “so we need to increase our efforts to train board members, especially new board members.”

Last fall, the foundation rolled out BoardLaunch, featuring sessions designed to educate non-profit board members on everything from “fearless fund raising” to understanding legal liabilities – all in an effort to help board members better understand how to protect themselves while still performing their best on behalf of their organizations.

“It’s important that people who go on boards of non-profit organizations understand that they have real responsibilities and that potentially there are real consequences for failure to meet the responsibilities,” said Dick Lozier, an attorney with the Belin law firm who spoke at the BoardLaunch series about board members’ legal responsibilities. The next BoardLaunch series will be held this fall.

Ted Lodden, a principal of Brooks Lodden P.C., a West Des Moines accounting firm, works with non-profit organizations on everything from audits to executive compensation reviews. He said the CIETC scandal points to a need for non-profit board members to understand the risks associated with their organizations and make sure policies and procedures are in place to address those risks.

“Board members struggle with trying to maintain a balance of setting policy versus micromanaging,” he said. “In the case of CIETC, the board members may have been looking at this as micromanaging, but they should have been looking at what the risk areas were in that organization.”

Some non-profit leaders fear, however, that an increased emphasis on education will add to the time commitment required of board members and may discourage some people from accepting a board seat.

“People who are busy and active and on quite a few boards, it may prevent them from serving on a board, only because it will take more time in the future to be a good board member,” Rich said.

United Way of Central Iowa is in the process of recruiting new board members to fill seven open seats and, so far, has not had a problem doing so. But Cofield senses that some community leaders are becoming more considerate of the time commitment required of board members, and believes some may reconsider agreeing to take on such a role if they don’t have the time.

“I would rather have someone be thoughtful and decline than have someone say ‘yes’ just to have their name on a board list,” she said.

Knous believes there may be some individual cases in which non-profit board members are stretched too thin and can’t provide needed oversight, an issue that ties back to the CIETC scandal. Some of that agency’s board members claimed they were too busy to attend meetings, review important documents and provide the type of oversight expected of them.

“It’s hard to say ‘no,’” Knous said, “but if you can’t be engaged and provide oversight, direction and vision, then perhaps you shouldn’t participate.”

Iowa Nonprofit Resource Center’s West does not anticipate that non-profit organizations will face a severe shortage in the number of potential board members, but recommends that non-profits maintain a list of potential board candidates, not only for the purpose of filling vacancies but to develop and maintain a diverse board. This is not something that can be done yearly or even monthly, but something that must be constantly revisited by a nominations committee.

The Iowa Nonprofit Resource Center is working with agencies statewide on board development strategies that focus on bringing in board members who are prepared for that role and understand their responsibilities.

“I think no organization will ever be perfect,” Rich said. “That’s why we have boards of directors, and that’s why their involvement is important, because we need the expertise to know what we’re doing and to make sure the direction of the organization is correct.”