Why Is This New Organization Sparking Such Controversy in the Charity World?

He’s at it again.

Outraging many people in the nonprofit world with his controversial views, Jimmy LaRose’s latest stunt—or noble undertaking, depending on who you ask—is recruiting members to his new organization.

The National Association of Nonprofit Organizations and Executives, or NANOE as it’s known, aims to better equip the charitable sector to tackle the serious social problems and related issues it confronts. To do so, it will issue future certifications for nonprofit officials, consultants and organizations that agree to follow new guidelines “to supercharge capacity building.” The guidelines are still in development.

So far, LaRose has recruited more than 140 executives who have paid $198 or $298 to attend a two-day meeting, March 7 and 8, in Columbia, S.C. next year. 

The cheaper price is a reward for the more than 1,400 nonprofit officials who responded to a previous email invitation. They will serve as “governors” and help codify NANOE’s revolutionary new draft guidelines for how the nonprofit world can become better able to solve big challenges.

The invitation spurred Jon Pratt, executive director of the Minnesota Council of Nonprofits, to write a scathing article in the Nonprofit Quarterly back in July.

Pratt’s sarcastic article, titled “New Organization Aims to Lead Nonprofit Sector into the Future from a DC P.O. Box,” took LaRose and NANOE to task for having a Washington Post Office box instead of a physical space in the nation’s capital. Pratt also criticized the email invitation from NANOE as “flattering messages” from a salesman more intent on making money than actually helping the nonprofit sector.

But the PO box is merely NANOE’s initial attempt to establish a presence in Washington for the new national organization, LaRose said, adding, “and I make no apology for it.” A new board member has donated office space and NANOE will occupy it shortly, he said. What’s more, he said, Pratt never called him for comment or input before publishing the piece, which LaRose considers unprofessional. 

However, several other nonprofit officials have joined Pratt on the critical bandwagon. “It’s troubling to have an entity promoting best practices around making money,” said Tim Delaney, president of the National Council of Nonprofits. “It’s so contrary to established norms that it’s jolting.  

LaRose said Delaney and other executives at state-wide associations have spoken critically to one another about NANOE, with at least one urging its members not to join his new organization.

“Intermediary nonprofits,” he said, “are colluding together to monopolize and squash enterprise growth, which is the exact opposite of what should be the spirit of the charitable sector.”

As for the argument that he’s all about making money, LaRose pointed to other associations serving nonprofit organizations that he said offer little in the way of services while paying their top executive 30 percent—or more in some cases—of the fees paid by their charity members. NANOE, he said, will offer members far more at a more reasonable price.  

It’s not easy to determine what’s really going on here, even for this reporter and editor with years of experience covering the nonprofit world.

At least some of the vitriol among LaRose’s critics seems to be fear of the competition NANOE poses to their own financial interests. That’s what some of his staunchest supporters have argued.

Indeed, with the number of associations serving nonprofits rising over the years, along with other trends such as online materials that make conferences less necessary, some associations like the Council on Foundations and the Association of Fundraising Professionals have struggled. 

Other associations for nonprofits “earn a lot of revenue from certifying consultants and issuing their own set of standards and best practices,” said Kathleen Robinson, a retired Clemson University professor with nonprofit expertise who sits on the NANOE board.

“We don’t need more nonprofits,” Robinson said. “We need nonprofits that can go to scale to tackle huge issues. Why aren’t we growing and what needs to change? That’s what NANOE is all about.” 

Robinson, it must be said, is one of five NANOE board members who are paid what LaRose calls “honorariums.” The board members each earn $300 for every hour of teleconference time they spend on NANOE business and $1,000 per day at in-person board meetings.

“We are proud of that,” LaRose declared. “We honor our board members, they are worth it. We firmly believe that if more nonprofits paid their board members, their productivity and effectiveness would dramatically increase.”

Paying board members, critics have argued, is not the only way LaRose and his colleagues are going against time-honored principles and confusing the charitable world in unwelcome ways. 

For example, LaRose has said that chief executives should assume the chairmanship of their board—because that’s the role they’re already playing. 

That rubs Daniel Billingsley, a vice president of the Oklahoma Center for Nonprofits, the wrong way. “While we understand there is room within the sector for discourse and even debate,” he said in a statement, “we would be unwilling to endorse their ideas of regularly compensating board members or taking away organizational control from boards of directors to leave it either partially or solely to paid executive directors.” 

The South Carolina Association of Nonprofit Organizations recently held a webinar, which disagreed with NANOE’s guideline redefining the relationship between nonprofit boards and their CEOs.

“I have major problems with the way NANOE proposes to do governance for tomorrow’s nonprofits,” said Reid Lehman, an association board member who gave the polite but critical presentation.

Meanwhile, Madeleine McGee, president of the South Carolina association, has other problems with LaRose and his colleagues, including what she called numerous spam emails the new organization is sending out.

NANOE, she said, is “a for-profit marketing machine hiding behind a nonprofit mission.”