Rebuilding After Two High-Profile Nonprofit CEOs Step Down

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(From left) Former Tricentennial CEO Edward Benavides and former Centro San Antonio CEO Pat DiGiovanni

Scott Ball / Rivard Report

(From left) Former Tricentennial CEO Edward Benavides and former Centro San Antonio CEO Pat DiGiovanni

Facing a rising tide of protest over his management of the Tricentennial Commission and a lucrative no-bid contract awarded to KSAT-TV, longtime City of San Antonio employee and Tricentennial CEO Edward Benavides resigned his position on Nov. 13.

Centro San Antonio CEO Pat DiGiovanni, the City’s former deputy city manager, faced a different loss in confidence that led to his resignation on Nov. 28: a staff accountant in concert with at least one other individual outside Centro, and perhaps others, embezzled $175,000 over a two-year period without being detected by DiGiovanni or her direct boss, Centro’s COO/CFO Tony Piazzi.

The November resignations of the two high -profile nonprofit leaders offer an interesting juxtaposition.

Benavides was directly responsible for the events that led to his downfall, while Centro Board Chair Don Frost has gone out of his way to exonerate DiGiovanni of any involvement in or knowledge of the theft of funds. Both leaders, however, needed to step down so their organizations can regroup and move forward, according to people close to the two situations.

It won’t be easy in either instance.

Benavides has kept his salary and has been promised a new position at City Hall, so his resignation is really more akin to a reassignment. Benavides is valued by City Manager Sheryl Sculley, whom he previously served as chief of staff, but it’s hard to imagine how he can be effective as a leader in city government after the poor judgment that led to KSAT-TV’s exclusive contract. The deal pushed out WOAI-TV, which had televised the annual New Year’s Eve festivities at no charge for years, an event that benefitted the San Antonio Parks Foundation.

Will a cash-strapped Tricentennial Commission be able to keep its promise to make the Parks Foundation whole on its lost revenue, which in past years has ranged between $50,000 and $75,000? That’s one question without an immediate answer.

Tricentennial Commission Interim Executive Director Carlos Contreras, III, speaks to city council about the future of the Tricentennial.

Bonnie Arbittier / Rivard Report

Carlos Contreras, Tricentennial Commission interim chief executive officer, speaks to Council members.

It’s equally hard to justify Benavides sitting on the sidelines earning a six-figure salary at taxpayer expense. Assistant City Manager Carlos Contreras has taken on acting Tricentennial CEO duties, but probably is eager to see the job filled with a permanent replacement. It will not be easy to find the right candidate less than one month from the start of the Tricentennial calendar of events on Dec. 31.

Yet the no-bid contract between the nonprofit Tricentennial Commission and KSAT-TV is not a contract with the City, so it is probably binding. Nonprofits do not have to seek competitive bids, even if it would have been prudent and ethical to do so. People will have to live with it.

DiGiovanni’s resignation is curious in that Piazzi was not asked to resign. How did the executive with direct oversight of the now former employee survive the house cleaning while his boss took the fall?

The answer to that might become more apparent in the coming weeks. A criminal investigation is underway, which all but guarantees more headlines in the coming months as prosecutors proceed. In most such instances, little or no money is recovered. Investigators inevitably uncover one or more culpable individuals with financial problems that led to the theft.

Crisis creates opportunity for change. Both organizations should embrace it. Mayor Ron Nirenberg already has pledged more transparency at the Tricentennial Commission. Contreras is highly regarded and will be a steadying hand. Public confidence can be rebuilt quickly with new leadership acting openly and fairly.

One suggestion for both nonprofit boards: hire executive directors, not CEOs. Title inflation has become increasingly common at small nonprofits. Executive directors cost less. Voters and donors like seeing more modest pay in the public and nonprofit sectors.

Another suggestion: hire promising young leaders with new ideas and proven experience. There are too many young professionals in San Antonio ready to lead who are idling in second and third-tier jobs. That’s how cities lose good people to opportunities found elsewhere.

The faster the two boards deal with leadership and operational issues at both organizations, the sooner we can get on with the important business of city building and, yes, the big New Year’s Eve party.

 

11 thoughts on “Rebuilding After Two High-Profile Nonprofit CEOs Step Down

  1. The unfortunate and sleazy contract between the Tricentennial Commission and the ethically-challenged Phil Lane at KSAT must not be allowed to stand. It was patently unfair, eliminated the chance of competitive bidding and the possibility of all media outlets promoting our city’s Tricentennial. KSAT alone gets the spoils, all from a crooked secret contract. The executive director lost his job over this. Why hasn’t the contract been terminated? KSAT cheated, our city played along, and we are all losing from this graft.

    • Agree with this.. and more to the fact that the KSAT contract and entire Tricentennial model were based on other organizations in town that should be researched.

  2. I have no knowledge how both the Tercentennial Commission and Centro were legally created. However, if there creation was determined mainly by the city, responsibility for the actions of these entities rest with the city management and not some appointed committee or board chair. No matter how these two organizations were created, the oversight of their activities was a failure. Also, not sure how many people are in the Centro organization, but it appears the CFO was did not perform his fiduciary responsibilities. If I recall correctly Piazzi is also a member of the San Antonio “leadership” club who bounces from job to job within the city making very good salaries in each position. The revolving door needs to stop and city leadership needs to pay attention to what is going on, and publications like the Rivard Report need to focus more on stories like these.

  3. Overall ethics cleanup should includes some attention to board member selection instead of picking some well known person. As other write in emails have hinted there seems to be a “brotherhood” of insiders and connected players in both non-profits.

  4. I have to slightly disagree with some of the ideas brought up in the article. Nationally, the nonprofit sector is starting to take on job titles similar to corporations. This is to help people realize that nonprofits are an important sector and on the same level as a corporation. If San Antonio is indeed a city on the rise, it needs to start looking at national trends and industry standards.

    In any discussion, what is most important is not the title, but how the nonprofit is set up and what are its policies and procedures. Having this solid foundation is vital to how the organization operates. The board of directors has 3 duties – duty of care (making decisions on the best behalf of the organization and the organization is fiscally sound), duty of loyalty(interests of the organization are first and related to conflicts of interest) , and duty of obedience (following laws). The board does not do the day to day operations of the organization – it is why a CEO is hired. The CEO and board chair work hand in hand to keep the staff side and the volunteer side working and making sure the organization is meeting is goals and obligations. The board sets policies and goals and the CEO and staff implement programs and work to meet those goals.

    What is important in the foundation for both sides to agree is on the policies and procedures of the organization. This relates to job descriptions for the ceo, board members, and committees. In addition, the policies should include good financial policies as who can sign contracts, how are checks signed and by whom, how are vendors obtained. It is good nonprofit practice to obtain multiple bids for vendors, just like a business. It also allows for documentation in case there are any issues. The board has the responsibility to make sure that these policies are in place and adhered to and it is the job of the CEO to make sure they are followed.

    A good CEO (and someone with nonprofit experience) would work with the board chair and the board to make sure these are in place and that the staff adheres to the policies. There are local and national candidates that could manage the nonprofit. It is interesting that the nonprofit community in San Antonio has issues in keeping individuals in the top position. Are they all that bad.. are the boards bad.. or is is a mix and not understanding of good policies and procedures and the nature of nonprofits? There are many boards of nonprofits in San Antonio that do not financially give to the organization and it is more of a status to serve on the board, rather than work on strategies and objectives. They even do the day to day work and miss the big picture of the mission of the organization. On the other side of the spectrum, boards seem to be all about status and not keeping tabs on the duties listed above.

    In regards to the audit, this sounds like there was a huge coverup and fraud. There are good procedures in audits of an organization and all nonprofits should follow these procedures. Staff. including the CEO, are interviewed on financial policies and how they are implemented. There should be an rfp for audit services every few years to choose a company. The CEO and the board (audit committee) should be involved in these decisions and document the process. The auditors should present information to the board and have written reports from the auditors. If someone came to Centro acting as an auditor, that is a larger issue than the organization management and it is fraud. What due diligence was done in selecting this person or organization? Was it someone that was a friend of the organization and gee, let’s give work to friends of staff or the board of directors? This is where organizations fall into error as it can lead to nepotism, and to an extreme such as the Centro case. This is why conflict of interest policies are important and the fact that board members of nonprofits should not benefit from serving on the board, both of which are national best practices.

    It is not the title that is an issue. It is setting a proper foundation for nonprofits that follow good industry and business practices. It is finding board members that believe in the mission and strive to follow these practices and are there for the right reason and not for themselves. It is the CEO and board chair communicating and working together to set the proper foundation, follow written checks and balances, striving for good financial policies, and implementing good audit procedures. It is hiring someone with exeperince and providing training for an individual to grow in their management. Again, there seems to be a gap in the national standards and knowledge and implementation going on in San Antonio. The leadership club mentioned earlier just moves from board to board and these two organizations got stuck. There are so many others that have similar issues.

    We need to have good nonprofit training and implementation of business standards of policies and procedures in the nonprofit sector that are followed. There are organizations trying to do this in San Antonio, but much more needs to be done.

  5. Why would you suggest that these non profits target younger candidates. Aren’t there enough organizations that wrongly assume (as you are doing) that older workers don’t have good ideas and won’t work for lower salaries?

  6. This is a very disappointing conclusion. It’s not youth (which is blatantly ageist), but a move away from allowing appointments right out of or requested by city and county government. Those who work in this industry know that these appointments (both paid and unpaid) read like biblical genealogies (so and so who worked with so and so, before working for so and so, before working for so and so, who was married to so and so, who was the son of so and so). You can’t have accountability when the consequences for screwing up are a brief paid hiatus, new six-figure positions elsewhere in government, or a cushy consulting gig with those who put you in your job. As long as you pay fealty to those who put you in the job, you’ll come out of it just fine. The real problem is not a lack of young talent, but a true search for the best leadership. There are a small, influential group of people making hiring decisions with a handful of people on boards and commissions, and so they end up going to the same networked candidate pool rather than looking for leaders who may lack the lineage of connections, but who have fewer chits to pay and more innovative thinking to bring to the table. National searches with a more open hiring process could weed out much of the problem. This sector has always had a “who you know” over “what can you do” attitude. Recruit people who have demonstrated success and are highly valued in their existing positions across the country. And if a home-grown candidate can beat them out on the merit of experience and demonstrated success, all the better. At any age.

  7. So now comes Mauor Nirenberg to try and save the Tricentennial by turning chicken_____into chicken salad by rehiring Benavides as chief of staff
    to Manager Scully at his old salary? And Centro’s DiGiovanni was on the CEO selection committee while he was himself being appointed to that very post! Nirenberg was already on Council and he did not demand “transparency”. Guess he was too busy taking down an old Confederacy statue. Where is the statue Mr. Transparency? Guess he was too busy telling Amazon that San Antonio could not compete for the good paying jobs it would bring!
    Don’t come to San Antonio for a Tricentennial celebration and go to New Orleans where the city is all dressed up like a World’s Fair was going to start!!

  8. Re: 300 Celebration……íf you want to see how it should have been done go to NOLA 300 website and see how New Orleans is celebrating their 300th. NB, their governing structure, activities and the quality of the website.

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