Clinton Foundation KSG audit, “operates more like a political operation”, “donors have become more and more focused on the strategic use of their donations”, Organization appears to have been built around individuals not the needs and interests of the Foundation
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From Wikileaks email # 49561.
KSG report to the Clinton Foundation November 10, 2008.
While the Foundation has grown impressively over the past several years, it has a number of fundamental organizational challenges and deficiencies that undermine its effectiveness, expose it to significant risk, and, ultimately, threaten its long-term survival. The Foundation (as opposed to its initiatives, which I have not reviewed) operates more like a political operation focused on immediate situations, tasks, and events, as opposed to a professional, strategic, and sustainable corporation committed to advancing its overall mission. While that may not be a problem while the President is personally involved in the Foundation — and can garner support based on that involvement — it will be a problem when he is no longer involved, and the Foundation has to rise and/or fall on its own name and work only.
If the leadership (that is, the Board and the CEO) intends and wants the organization to survive beyond the President’s personal involvement, then it must take measures to move the organization onto a path of sustainability, starting with revamping both the Legal and Human Resources (“HR”) Departments; reviewing its corporate structure and governance documents; and, perhaps most importantly, having a frank discussion with the President about the current state of the organization, the future of the organization, and his appetite and willingness to allow the Board and CEO to make the changes necessary for it to become sustainable, even great.
The time for making these changes, if they are desired, could not be better: The presidential campaign, which distracted some key employees and caused uncertainty among others about the future of the organization, is now over; virtually all of the employees interviewed are anxious for more structure, professionalism, and mission-focus; and funders are expecting the same.”
“As you know, the Foundation operates in a highly-regulated environment, which impacts its operations in significant ways. Specifically, as a not-for-profit organization, which enjoys tax exempt status under Section 501(c)(3) of the Internal Revenue Code and which solicits funds from third parties, the Foundation is subject to a number of Federal and State laws governing such organizations. As an employer, the Foundation is subject to the various laws governing workplaces and workforces of the Federal government and of the countries and states in which the Foundation has offices and/or employees. And, as a corporate entity with a board of directors, the Foundation is governed by certain laws applicable to boards of directors and by standards and practices that have developed in the area of not-for-profit governance.
The larger philanthropic landscape makes these legal, compliance, and governance issues even more important. Despite the record levels of philanthropic activity in recent years, donors have become more and more focused on the strategic use of their donations, on realizing a real return on their investments (that is, demonstrable impact), and on the actual operations of the organizations to which they donate. Specifically, they are demanding that not-for-profits function with the same level of discipline, professionalism, and transparency as for-profit companies. These expectations are likely to become even more important to funders in light of the current financial crisis.”
“The current structure of the Foundation accomplishes neither. Specifically, the organization appears to have been built around individuals, not the needs and interests of the Foundation, and it has not been reviewed or mapped against needs or interests (much less a real strategy) since the days of its inception. Moreover and significantly, the work of the Foundation and the President are intertwined in a way that creates confusion at, and undermines the work of, the Foundation at virtually every level. As a result, there is no “central command,” functionalities are divided across offices, Foundation offices and initiatives are dangerously independent, resources are not maximized, and a couple of key managers appear to have interests that do not always align with those of the Foundation.
This organization, loosely linked around the President, comprised of many “free agents,” and serving, to some degree, the interests of the President may have been appropriate when the Foundation was in its start-up phase, with few offices, few employees, and few major decisions. It is not, however, appropriate for an organization that operates across the globe with over 500 employees and a budget of $90 million, that is regulated at every level of government, and that depends on outside funders for sustenance.
Absent a clearer structure and greater clarity about that structure, the Foundation will continue to be faced with reputational and legal challenges, and with confusion, inefficiencies, and waste. ”
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