Reasonably Prudent Hiring Decisions

Do charitable organizations have a duty to spend their grants and donations the way a reasonably prudent business person would spend his or her own money? Do they have any obligation to buy supplies as inexpensively as practicable, for example, or obtain donated supplies to avoid using operational funds except on their primary missions?

Most would agree that charitable organizations should use as much of their financial resources as they can on their primary mission. Donors and grantors have given money, you could argue, to the mission, not the people in the organization, so the more mission per dollar that is obtained, the better. Does that same argument extend to personnel decisions? Is there a similar duty to hire qualified people—and terminate inadequate staff? Charitable organizations typically “settle” for less in many ways, such as used furniture, less-than-ideal office space, scarcity of supplies and limitations on services. The pay in charitable organizations is accepted as generally lower than the private sector, so these employers offer non-financial perks such as extra vacation, flexible work hours, etc.

What about staff who are barely competent to do their jobs, then? They show up at work on time, put in their hours, avoid serious mistakes and leave on time. Their supervisors wouldn’t trust them with anything important, but they continue to occupy their positions—and draw their paychecks—as if they were excellent performers. They are generally nice people and no one would want to see them fired, really. Yet everyone knows they are either limited or unwilling to excel.Should a charitable organization be a dumping ground for people who cannot find suitable employment in “the real world,” then? Is there a higher calling here that says “we exist to _[fill in primary mission], but we also want to help those who are abandoned by the private sector as unfit?” Do they get a pass because they are poor, underfunded nonprofits who try to do good things in the world?

Or is there an unpleasant duty that goes ignored because charitable organizations are used to operating with less than full staffing, with insufficient funding, with inadequate facilities and, by extension, with whatever they can get and keep in personnel? Is it an excuse by people who are typically more sensitive than their private sector counterparts and feel some obligation to keep people on their payrolls even though the employees may never learn to use a computer or that new-fangled phone system, forget the difference between faxing and scanning, or fall asleep during software training class because, “someone will do it for me once I get back to the office?”

Is a duty owed by management to the funders to demand a reasonable effort by employees of charitable organizations to step up, to keep up, to measure up?