Troubled Nonprofit Group, Essay Example

Summary

The Banana Kelly Community Improvement Association, which was once among the resounding non-profit organizations in the United States is at the verge of collapsing and now wants to merge with Promesa Enterprises, which is also a non-profit organization. In this regard, Promesa will manage Banana Kelly’s service operations, finances, and 27 of its apartments. In addition, the management of 14 of its buildings, which were jointly owned with the Local Initiatives Support Corporation, will be outsourced to a manager from outside the organization. Upon its establishment in 1978, Banana Kelly grew tremendously and got the State’s recognition as a national model through which residents would restore their housing. However, the Organization has recently received criticisms over the financial improprieties and the worsening conditions of its buildings. On the other hand, Promesa was formed with a core mandate of championing the drug rehabilitation program. However, the organization underwent troubles later despite its diversification into the housing and other services. It is in the records that following the discovery of discrepancies in the organization’s financial audit in 1992, an employee hired some teenagers to assassinate the Chief Financial Officer. The investigations that were carried out later indicated that the huge amounts of money were missing. The CEO who took over restored the organization’s reputation later in 1996. It is imperative that Banana Kelly’s economic plans had never been realized whereas its government financing had reduced significantly.

Questions

What led to Banana Kelly’s downfall?  Aren’t the financiers of the non-profit organizations monitoring the movement of their funds? What informed Banana Kelly’s decision to outsource the management of its organization to Promesa which has a dark past? Why would Banana Kelly outsource the management of its premises instead of hiring a professional manager?