Problems with SCLC: A Microcosm of the Management Challenges From Within the African-American Community

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FBI taking two computers and records from the house of SCLC board  chairman Raleigh Trammell

A hat tip is in order for this one to the Politics, Policy, Pathology and Hope WITHIN The Black Community blog authored by a brother out of Atlanta GA going by the handle Constructive Feedback.  The organization that Martin Luther King formerly headed, the Southern Christian Leadership Conference, is in the news in a very public spat between board members over allegations of financial wrong doing.  The Federal Bureau of Investigation is now involved with a probe of a faction of the SCLC board amid accusations of over $ 500,000 having been embezzled from the organization’s coffers.

I “know” the back story.  I don’t mean the specifics here with SCLC necessarily, but I can make a very good guess– actually an educated guess, based on my direct experiences in working within African-American organizations and consulting with them in my role as a CPA.  Here are the problems that most African-American organizations face:

  1. A lack of  appreciation of organizational structures, defined roles and responsibilities and why they’re needed.
  2. A lack of  appreciation of internal accounting controls, periodic financial reporting and why they’re needed.  One can nip many accusations of financial impropriety in the bud with periodic reporting.  Even if nothing awry was done and the issue is that the organization simply can’t produce the reports, the indictment is the same.  If you can’t produce the financial information, that means you don’t have a system for doing so which in turn means that you can’t possibly be managing well. One can not manage what is not being measured.
  3. A lack of appreciation of professionalism and professional courtesy.  These things are willingly brought to those who we might work for, but are promptly discarded when it comes to running “our own things”.  So we don’t want to be on time for meetings or come prepared to participate in them.
  4. A sense of mission and having a mission and purpose aligned directly to the most pressing issues our community faces.

In a word, it really boils down to one thing—leadership. We really shouldn’t wonder why things don’t function well in the African-American community.  It’s really simple; things don’t function well because they’re simply not being managed well.  We need leaders who understand that. All of the items enumerated above are issues that cut across a broad spectrum of organizations we run; from non profits, governments, businesses and etc.

Although I might be proven wrong as the federal probe is completed, I don’t believe for one minute that anyone stole $ 500,000 from the SCLC.  I’m going to give them the benefit of the doubt and say that I  believe that SCLC leadership is guilty of gross mismanagement which was covered up with a lack of  financial transparency.  That’s required when you’re raising money from the public.  Again, transparency is lacking due to a defect in organizational structures and practices.

Generally, non-profit tax reports are public information based on the idea that a potential donor should be able to review how how an organization is handling its money.  Anyone interested in assessing the strength of any organization can do so by reviewing the financial information. Here’s what I’ve determined based on their latest tax filing at Guidestar :

  • SCLC had a funding base of roughly $1.2 million during fiscal 2008.  It spent about $1.0 million of that with roughly 60% of that going towards its programs and 40% going towards administrative expenses, which is extremely high. When you’re donating to an organization, you’d normally like to see 80-85% plus being directed to programs.  As it is, the fact that they’re spending so much on administrative activities speaks directly to a problem, particularly since there’s not that much to administer in the first place.
  • Here’s a breakdown of SCLC’s “programs” and how much was spent on each one during fiscal 2008:
Program Dollars Spent
Criminal, Social and Environmental Justice $    57,197
Economic Development $     57, 197
Non-violent Conflict Resolution $  400,375
Education $     57,197
Total $  571,966
    • I have to stop here for a moment and comment on these “programs” for this itself is an indictment of the organization right here.  They spent $ 400,000 on conflict resolution while the board itself can’t get along?  They only spent $ 57,000 on economic development?  When you look at these programs and consider the large percentage of expenditures devoted to “administration”, you can safely conclude that not much is happening here other than folks getting paid.  Anyone assessing the strength of this organization and its ability to represent African-Americans can pretty much arrive at the conclusion that it’s weak and represents really no one save for those with a pecuniary interest in its existence.
  • The major source of SCLC revenues appears to be from advertising fees for the SCLC magazine that’s published five times a year.  Most of the ad revenue appears to come from major corporations and it appears that this operation is losing significant money.  I suspect that the downturn as well as the move away from printed advertising are the culprits.  Again, this is a management issue.
  • Most non-profits of similar size provide audited financial statements right on their website.  SCLC has none.  Again, a lack of transparency.
  • Every tax return I saw reflects what’s known as a prior period adjustment.   Prior period adjustments are generally corrections of errors in the prior year’s numbers.  I can understand an occasional error, but the errors here are consistent and are material with the last error adjustment being nearly   $ 300,000.  I suspect that these adjustments are behind the allegations being made and I’d tend to agree that they require an explanation.  There are a number of inconsistencies on the returns that would indicate a problem with the organization’s bookkeeping.
  • This organization does not enjoy significant financial support from those who it purportedly represents.  Again, the bulk of its money comes from corporate America and this is a theme with many African-American social service organizations.   Now mind you, based on what I’m seeing here, I wouldn’t donate anything until there was strong management and relevant program implementation, but there’s a question that must be asked here.  How can someone purport to represent your interests when you did not “pay” them to do so?  The only conclusion here is that they only represented you so they could get paid. (See the business of  discrimination).  That’s why their programmatic expenditures are for nothing but a bunch of bullshit (excuse me, but no other word fit).

The bottom line is that even without the fraud allegation, there’d be plenty to indict SCLC on.  The real shame is that all this nonsense is going on while real issues go unaddressed not to mention the sullying of the legacy of Dr. King.  For those of us who know better, it’s time to break our conspiracy of silence.  If we want to be better, we must do better.

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Comments
3 Responses to “Problems with SCLC: A Microcosm of the Management Challenges From Within the African-American Community”
  1. Bar says:

    This is a very good article. It has been my belief for a long time that there must be accountability with the African American community. This should apply not only to so called Black organizations, but also to politicians. Just think, how much good could have been done with the $1.2 million dollars in revenue received by the SCLC.

    I often wondered what was the source of their revenue. Thanks for sharing it in your blog. Surely, the corporations were aware that this magazine has a very limited distribution. Oh well, thanks for sharing the information.

  2. Greg L says:

    Bar,

    Thanks for your comments. You’re correct that SCLC’s magazine must have a very limited distribution as I’ve never seen or heard of it prior to researching for this blog post.

    We have a bunch of pretenders sitting on the throne of leadership in the African-American community and because they’re a joke, we have a major public relations problems. To be sure, outside perceptions matter to a certain extent, but I’m more concerned about how we perceive ourselves. As long as there is no demonstrated evidence that we know how to run something effectively, there’s no model that can be replicated and improved upon. That’s extremely important for black folks to see.

    I’m convinced that nothing short of a “coup” in the African-American community is needed to rid ourselves of this sort of leadership. Although some might feel direct confrontation and calling out is needed—and it is, the more effective way to put the pretenders on trial is to construct something that’s effective at resolving an issue within the community. A group of us need to demonstrate how to run an effective organization while actually addressing a problem and let the public judge the results. The pretenders are no match for a group of folks who know what they’re doing.

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  1. […] In the midst of Abbott’s very successful muckraking, another player burst onto the scene in direct competition for Abbott’s demographic—the disaffected masses of black people.  That player was Marcus M. Garvey with his organization the United Negro Improvement Association (UNIA).  Garvey also met directly a need  of the black masses by appealing to race pride.  Garvey’s response to the virulent racism and lynchings was to encourage his followers to just leave the country and head back to Africa.   His appeal to race pride and his raising of money to purchase ships for his Black Star Line created a rivalry between him, Abbott and a few other prominent African-American leaders.  The rivalry basically started because Garvey was gaining greatly in influence and prominence among the disaffected black masses.  Although Garvey himself was above reproach, there were some charlatans around him and there were problems administering the money being raised and making sure it went for its intended purpose and not to line someone’s pocket. (Garvey’s organization had the same problems with internal accounting controls as we saw here recently with SCLC). […]



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