I need help complete a case study.

 Case number #10 


Abstract In this case, a local chapter of a national nonprofit organization continuously struggles with funding and must, therefore, be proactive in seeking out additional revenue sources. The local coordinator encounters a situation involving a potential donor that forces her to weigh the pros and cons of breaking the rules and the best way to communicate her concerns to her superiors and the donor. A chance meeting on a flight leads to a potential conflict-of-interest situation for the local coordinator. 

Main Topics Decision making, Ethics 

Secondary Topic Communication, Intergovernmental affairs* 

Teaching Purpose To discuss the complexities involved in balancing personal and organizational responsibilities within the framework of a nonprofit organization.

The Organization ReadNow is a nonprofit program that promotes early literacy by giving new books to children and advice to parents about the importance of reading aloud in pediatric exam rooms across the nation.

* Main Characters: • Michael Vaughn, Executive Vice President of Johnson Hospital • Dr. Lea Nelson, Head of National ReadNow • Patricia Clay, Local ReadNow Coordinator • Molly Carter, Tillingast Foundation employee • Dr. Katie Nelson, ReadNow Local Director 


In 1962, a group of doctors at a hospital in Phoenix, Arizona, were brain-storming ways to increase early childhood literacy and parent– parent– child interactions among their patients. One doctor had the idea of distributing children’s books to their patients during checkups, accompanied by advice to the parents about the importance of reading aloud to their children. From this modest beginning, ReadNow developed into a national, nonprofit organization that distributes books and early literacy guidance to more than 2.5 million children and their families. ReadNow has offices all over the United States and is currently supported in part through a grant from the U.S. Department of Education. ReadNow opened a branch in Crown City, Michigan, in August with a partnership between the National ReadNow and the Johnson Children’s Medical Center. One of the founders, Dr. Mark Jeffries, still active within ReadNow, approached Dr. Katie Nelson, a pediatrician at Johnson Hospital with the opportunity to bring ReadNow to Crown City. Dr. Nelson soon had more than thirty pediatric clinics participating in the program and hired a coordinator, Patricia Clay, to manage the day-to-day operations of the Crown City chapter.

As a result of its affiliation with the Johnson Children’s Medical Center, ReadNow was fortunate to have its rent, computers, telephones, and office supplies provided by the hospital. Johnson Children’s Medical Center agreed to support the office environment of ReadNow, as well as to guarantee the coordinator a stipend of $ 50,000 each year. However, part of Patricia Clay’s duties included raising funds to purchase books to distribute in clinics across the metropolitan area and to pay for a small staff. The annual book budget for 2010 was $ 74,932, which needed to be raised entirely by private donations and grants from corporations and community foundations. The personnel budget for ReadNow was $ 65,000, which was used to pay for two staff members, an administrative assistant and a secretary. Additionally, the organization relied on volunteers, who were recruited around the area at events that required some funds to plan and execute. Throughout the year, parties were held for the volunteers to build team spirit. Workshops, retreats, and training seminars also were held for staff and volunteers. The total expense of these events in 2010 was $ 50,000. Therefore, the coordinator was responsible for raising nearly $ 190,000 a year mainly through contributions. The Johnson Children’s Medical Center put one severe restriction on Patricia’s fund-raising efforts. Johnson Hospital, a nonprofit itself, relied heavily on support from the community to support its operations. Therefore, the hospital strongly discouraged Patricia from soliciting funds from any organization or individual already contributing money to the hospital. This was done to avoid “double dipping” in fund-raising, since ReadNow was associated with the Johnson Children’s Medical Center, and the center committed itself to major support of the nonprofit. The hospital’s management thought that for ReadNow to ask money from the same corporations or foundations might significantly undercut the center’s own fund-raising efforts. The rationale for the opposition to more than one contribution per donor developed out of an awkward situation that Michael Vaughn, executive vice president of Johnson Hospital, encountered when he first began working for the hospital. At that time, Johnson Children’s Medial Center supported a smoking cessation program, Hugs Not Ashes (HNA), which operated out of the asthma clinic at the hospital. The leaders of that program did not have the same restrictions placed on its fund-raising and were free to solicit funds from whomever they chose. Unfortunately, they wrote a fund-raising proposal to one of Crown City’s most wealthy and well-known donors, Elizabeth Jones, who was on the board of the Johnson Foundation. When she received numerous letters from the coordinator of HNA, she became so offended that she was being solicited twice for donations that she recanted her support for Johnson Hospital and became a large funder of Anderson Hospital, the other pediatric medical facility in Crown City. The loss of Jones’s support, accompanied by the embarrassment the coordinator of HNA caused, resulted in the cancellation of the program and the resulting limitations on fund-raising for ReadNow. The local ReadNow’s support consists of a joint effort of federal funding (25 percent), foundation grants (10 percent), private donations (50 percent), and support from the Johnson Foundation (15 percent). The national center of ReadNow secures roughly 10 percent of federal funding for state and city coalitions, of which the metropolitan area of Crown City is a member. The remaining 75 percent of funding is up to the coordinators to raise from corporations, grants, and individuals. The Johnson Foundation stresses the importance of the coalition’s seeking its own funding because of its large need of funds and the projects it supports. As a result of its affiliation with the hospital, the chapter’s organizational culture is more closely tied to the fortunes of Johnson than to its own national office. This has both positive and negative ramifications for the daily operations of the Crown City ReadNow chapter. On the plus side of the ledger, the chapter feels truly a part of the Johnson Medical Center and is given support for its endeavors. On the minus side, however, the chapter must abide by different guidelines than those that govern typical ReadNow chapters elsewhere. The national office firmly believes in a decentralized approach and, although its fund-raising rules are far less restrictive than the hospital’s, it will not impose them on the local chapter. PATRICIA CLAY AND MOLLY CARTER Patricia Clay, the ReadNow coordinator, works very hard to secure funding to purchase books and to support the other activities of ReadNow. During her first month on the job, she submitted a list of more than fifty possible grants and corporations she wanted to solicit for funds. However, Emily Richards, Michael Vaughn’s assistant at Johnson Hospital, told her that there already was a relationship with most of the funders on her list and narrowed her possibilities down to seven family foundations to apply to for a grant. There was no corporation included on Emily’s list. Undaunted, Patricia began networking with community groups to try to get support for the program. Within a few months, Patricia developed a plan to have local community groups “adopt” a pediatric clinic participating in the ReadNow program. The group would donate enough money for that particular clinic’s book budget, generally between $ 1,000 and $ 2,000. By breaking the budget down into manageable segments, Patricia ensured that clinics could afford to purchase enough books for the clinics. She was also able to increase private contributions. However, there still was a significant fund-raising gap for the staff and volunteer expenses. Patricia approached the end of the year with a budget shortfall of nearly $ 35,000. These funds needed to be raised somewhere, particularly since the holiday season was approaching, always a busy time of year for clinics because of colds and the flu. She took out the master list of foundations that the Johnson Hospital would not let her apply to and sighed in frustration. Any one of these foundations could easily grant her the $ 35,000 she needed. She also knew of several corporations that were willing to make contributions to ReadNow, but she was unwilling to risk alienating the hospital’s officers. She knew the importance of keeping her financial backers happy. To apply to one of these foundations without permission not only could result in offending the staff at the hospital, but also could cause her to lose her job. She also was frustrated that the old-fashioned attitudes of the hospital’s officers restricted her ability to make connections within the corporate community. These things weighed on her mind as she prepared to spend a weekend in Chicago with her sister, Dora. During the short plane ride to Chicago, Patricia sat next to a pleasant-looking woman. They struck up a conversation about the hassles of travel, the new security restrictions, and their mutual difficulties with fitting all of their liquids into a quart-sized plastic bag to get through security. Finally, their conversation turned to what they both did for a living. Patricia explained her job as coordinator for ReadNow, and the challenges of fund-raising for a public service organization. The $ 35,000 shortfall weighing heavily on her mind, she was grateful to have a sympathetic ear to listen to her dilemma. The woman next to her listened patiently, nodding her head sympathetically as Patricia discussed the limitations the hospital imposed on her. “Well, I certainly can understand your frustration,” responded the woman. “Maybe I can do something to help. My name is Molly Carter and I work for the Tillinghast Foundation. We’re always on the lookout for new projects to fund, and we wouldn’t have a problem with the amount of money you’re looking to raise. Why don’t you submit a proposal to me in the next few weeks, in time for our board meeting at the end of the month?” Patricia was excited by the possibility that she might have solved ReadNow’s financial problem during a brief plane ride. She took Molly’s business card and promised to put together a proposal soon. As they disembarked the plane, both wished each other a pleasant weekend and went their separate ways. Back in the office on Monday, Patricia worked furiously to write an impressive proposal for Molly and the Tillinghast Foundation’s board. Looking at the foundation’s income tax returns, she discovered that the board distributed significant amounts of money, upwards of $ 75,000! She didn’t even need half that amount; in her mind, as she sat preparing the proposal, the $ 35,000 looked all but guaranteed. By Wednesday afternoon, Patricia had all of the necessary documents together and her annual budget prepared, and just needed the director, Dr. Katie Jones, to sign off on it. “Looks great!” Dr. Jones exclaimed as she walked into Patricia’s office with the proposal. “Did Michael give it the OK? I’m pretty sure the Tillinghast has given a grant to the center. Check with him first, then you’ve got my OK.” Dr. Jones turned and walked out of the room. Patricia’s face blanched as she realized she never checked to see if Tillinghast was on the list of major donors. Pulling up the list on her computer, her heart sank as she saw the foundation on it. Emily told her that the Tillinghast Foundation already gave money to the Johnson Hospital— but several years ago. Nevertheless, it was still on the list. She hesitated as she considered what to do next. After a few minutes of deliberation, she decided to pull Molly’s business card from her Rolodex to dial her number to explain the situation. Maybe Molly could help her in some way. “What does it matter?” asked Molly making the case that (1) the foundation’s giving occurred several years ago and (2) the foundation contributed to the hospital and not ReadNow. “Why don’t you go ahead and submit your proposal. I really think that you have a great program that fits within the goals of the foundation. If the board agrees with me, you can just explain the situation to Michael. I’m sure he’ll understand. This is an opportunity for you to fulfill your budget requirements, and for me to bring a great organization to the attention of our board members. We have a lot of contacts within the community, and I would hate to see you miss out on this prospect for funding.” Patricia hung up the phone, completely torn about what to do. On the one hand, here was a possible funder who was incredibly positive about the opportunity to get a significant amount of money for ReadNow. She had to raise $ 35,000 by the end of the fiscal year, which was rapidly approaching. She did not have any immediate prospects on the horizon, nor did she develop any other solution for raising the money. Patricia knew if she did not submit the proposal, she would have to work incredibly hard to try to come up with the remaining budget funds, or risk finishing the year in the red.

Furthermore, not only would she lose out on getting a big chunk of her budget funded if she passed on submitting the proposal, Patricia would also risk severing the connection she had made with Molly. She would feel awkward about approaching her in the future given her apparent mishandling of this situation. Furthermore, the points Molly made seemed to make sense to her. Particularly galling to Patricia was the apparently paternalistic attitude of the hospital’s management toward ReadNow. ReadNow was a totally separate organization, yet the hospital officials thought that they could dictate to her who she could and could not contact simply because the hospital helped finance her operations. The policy against solicitation was not written down anywhere, and she had no knowledge if it had ever been enforced in the past. On the other hand, however, she had specific instructions from Michael not to solicit funds from organizations that had supported Johnson Hospital in the past. The Tillinghast Foundation was on the list that Emily had given her detailing to whom she could not submit proposals. If she went ahead and submitted the proposal anyway, she risked the displeasure not only of Michael and Emily, but of Dr. Jones as well. She knew it was a fine line— if she were awarded the grant, most likely her boss would support her because of the amount of money she raised through one proposal. However, she thought their relationship built on trust would probably suffer as a result. Michael would most likely believe that she should have talked with him as soon as she had the conversation with Molly. If she did not receive the grant and her boss found out, she would risk reprimand for circumventing the agreement between ReadNow and the Johnson Hospital, possibly losing her job in the process. Since Patricia was still relatively new at her position, she did not want to cause conflict or confusion during her first few months on the job. The people she was in danger of crossing held a lot of influence not only as her present employer, but in the city and profession as well. These were the same people she would have to work with on upcoming projects. Would crossing them now jeopardize her employment and, possibly, future employability?

Patricia debated her options and many questions swirled around inside her head. What responsibilities did she have to foster development for ReadNow within the foundation and corporate community? What responsibilities did she have to Johnson Hospital, her primary fiscal backer? Was the chance at a great deal of money worth the risk of going against the instructions of her boss and her supporters at Johnson Hospital? Should she have communicated with her superior’s sooner? Would she be crossing an ethical line by seeking funding through such a source? She carefully assembled the proposal and addressed the manila envelope to Molly at the Tillinghast Foundation. As she walked down the hall toward the mailroom, she kept debating her options, unable to decide whether or not to drop the envelope into the mail slot or into the trash can next to it.

Discussion Questions

1. What responsibilities, ethical and organizational, does Patricia have to the Johnson Medical Center? Explain. 

2. How might Patricia enlist the national organization in her efforts to change the hospital’s position? Explain.

3. How should Patricia have communicated her contact with Tillinghast to her superiors? Explain.

4. What would you have done if placed in this scenario? Why?

5. How might your decision affect the organization’s image and networking within the community? Explain. 


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