BOARD OF DIRECTORS OF NON-PROFIT ENTITIES HAVE A FIDUCIARY DUTY
The boards of directors of non-profit entities have a fiduciary duty to assure that the accounting of that non-profit is carried out in a way that guarantees sufficient oversight of the funds that have been entrusted to the non-profit that they serve. A fiduciary duty is the highest standard of care. The person(s) who has a fiduciary duty is called the fiduciary, and the person(s) to whom he owes the duty, is typically referred to as the principal or the beneficiary. If an individual breaches the fiduciary duties, he or she would need to account for the ill-gotten profit.
Evansville’s Echo Housing is in the midst of something that is most certainly a failure of its board of directors to provide sufficient oversight of the taxpayer dollars that have been allocated to its day to day operation. The situation is further complicated by the fact that Echo’s former Executive Director, Stephanie Tenbarge who is alleged to have used Echo Housing funds to pay her personal expenses is also the Secretary (non-voting) of the Echo Housing board of directors. That will put Tenbarge in a doubly problematic position of being both a responsible fiduciary and a staff member who allegedly committed the crime of theft. The other board members have not been alleged to have stolen any money but have most certainly failed in their fiduciary duties.
To further complicate the situation at Echo Housing, the board of directors has thus far chosen to avail themselves of opportunity of cooperating with the Evansville Police Department that is poised to conduct investigation of the alleged crime of theft at the expense of the taxpayers of Evansville, the State of Indiana, and the United States. As donations made to a 501c3 non-profit like Echo Housing are deductible at the state and federal level, theft of said funds would constitute theft from all of the taxing authorities impacted by that deductibility.
It is confounding that the Echo Housing board of directors is refusing to do what is needed to gain the assistance of law enforcement when taxpayer dollars are involved. Perhaps there is an internal investigation going on that is fully comprehensive and the Echo Housing board wants to complete the internal investigation prior to allowing law enforcement to do its duty. Time will most certainly reveal the motive for obstructing any immediate investigation.
Theft from non-profits has been common in greater Evansville. Other instances have resulted in prosecutions, plea bargains, and often in restitution. This is what should happen in this case and the Echo Housing board of directors is responsible to cooperate or even participate in assuring that the taxpayers are made whole. Non-profits are required to have annual audits and file tax returns. The audits and tax returns of Echo Housing would make a good place to start investigating just what happens to the money that is trusted to this board of directors.
There is one thing that is not up to the Echo Housing board of directors and that is to choose whether or not the laws of the land with respect to theft will be enforced. Much like the Mayor of Oakland, California who has chosen to obstruct federal law by resisting the efforts of federal immigration officers to maintain her Sanctuary City stance, the Echo Housing board of directors is aiding and abetting an alleged crime by failing to cooperate with the Evansville Police Department.Â
The EPD can seek a warrant to be granted access to the financial records of Echo Housing. With a warrant, they will be capable of investigating all of the financial transactions of the entity. Let us hope that the Echo Housing board of directors comes to their senses and provides the fiduciary duties that they are responsible for providing. That starts with departing from the current path of running a Sanctuary non-profit agency.
FOOTNOTE: We were extremely impressed how EPD Communications officer Jason Cullum conducted himself at yesterday’s news conference. Lieutenant Cullum was masterful.
We would like to know who are the current ECHO Housing Boards member and who is responsible for appointing them.Â
