Last week’s New York Times article, Romancing the Stars, describes how some New York arts organizations have gone a step further in seeking celebrity support by asking them to sit on their boards.

I cringe every time I read about a celebrity joining the board of an organization.  Board members are trustees and each board member is equally accountable for insuring that the organization is properly governed. These roles include:

• Determining the Organization’s Mission and Purpose
• Selecting the Executive
• Supporting the Executive and Reviewing His or Her Performance
• Ensuring Effective Organizational Planning
• Ensuring Adequate Resources
• Manage Resources Effectively
• Determine and Monitor the Organization’s Programs and Services

I doubt if most celebrities realize that if the organizations fails to pay its payroll taxes the individual board members are legally liable or if the organization is in debt and has to close, the board is the body to blame.  If an organization wants to engage a celebrity they should consider asking them to be on an honorary board or co-chair of an advisory body to the board.

An interesting article in the New York Time today describes various cities’ efforts to get money out of their nonprofits.

It strikes me that when municipal governments start looking to local nonprofits for help with public sector financial problems the end of civilization cannot be far off. What’s next, the mayor standing in line at the soup kitchen?

This phenomenon reminds me of a story I heard from a client who worked for a tech company. He claimed he could track his company’s fortunes by the prices at the soda vending machine in the lunchroom. When he first started at the company the vending machine was left open and the sodas were free. As the economy tightened a modest charge was imposed at the vending machine, basically to cover the cost of the drinks. “But,” he told me, “when they raised the prices again and I figured out that the vending machine was now being viewed as a profit center, I knew the company was in trouble.”

Viewing nonprofits as a revenue source for local government strikes me as the “vending machine as profit center” way of thinking.  The entire tax system is off, yet we look to nonprofits rather than to tax reform. The U.S. has the highest corporate tax rate in the world – yet many large companies pay nothing at all. Let’s look to close those loopholes before we start asking the local community hospital to contribute to the city’s coffers.