The organization at the center of the scandalous separation of migrant children from their parents on the U.S.-Mexico border that President Donald Trump signed an executive order to end last week is a textbook example of issues faced by nonprofit organizations: mission fulfillment, government funding, executive compensation and the public-support test.
According to its website, the mission of Southwest Key Programs is “opening doors to opportunity so individuals can achieve their dreams.” The past few weeks have opened the eyes of our nation to how very differently each of us might describe the notions of opportunity and dreams. If all of an organization’s programming should be in the spirit of the mission, one wonders how exactly the separation of children from their parents is an opportunity in service to their dreams.
The mission of a nonprofit organization is typically determined by the organization’s board of directors, which is ultimately responsible for the operations of the organization. The board of directors of Southwest Key presumably made a conscious decision to wade into the area of serving unaccompanied children and, more recently, children separated from their parents. Their financial support for doing so, however, has come almost solely from government funds, which may have been a deciding factor for their strategic direction.
Between 2013 and 2015, according to the organization’s federal Forms 990, available via guidestar.org, the organization’s revenue grew from $168 million to $242.6 million. The amount attributed to government grants for those same years grew from over $164.7 million to more than $240 million. The figures from 2015 show that government grants represented 99 percent of the total revenue. According to the organization’s website and Forms 990, all of this has been governed by a board of directors composed of just six individuals. These individuals have the fiduciary duties of care, loyalty and obedience, the last of which regards the organization’s adherence to its mission.
In each of these fiscal years, Southwest Key Program had met the Internal Revenue Services test that demonstrates that a significant portion of its budget was met with public support. Meeting the test is key to retaining the federal tax-exempt status. Since that test may also include government support, Southwest Key Program’s public support hovered around 99 percent each of those years. Practically speaking, it is difficult to discern how this is an independent nonprofit vs. a quasi-governmental organization, since the entire budget is effectively managed according to government policies and procedures.
As reported in those same federal forms, compensation for the organization’s CEO/president grew from $471,919 to $786,822 from 2013 to 2015. All of the executive staff listed in this disclosure received significant bonus and incentive compensation, often nearly double their base compensation. The salary, benefits and very idea of “bonus and incentive compensation,” especially in light of the desperate circumstances under which families attempt to flee their countries in search of asylum, are objectively high, and no doubt offensive to some, if a mere fraction of the budgets for which they are responsible.
The United Nations Convention on the Rights of the Child — a convention that the United States has not ratified since signing it in 1995 — contains an article on this topic of separation. Article 9 of the Convention states that “Parties shall ensure that a child shall not be separated from his or her parents against their will, except when competent authorities subject to judicial review determine, in accordance with applicable law and procedures, that such separation is necessary for the best interests of the child.” The U.S. is the only U.N. member country that is not party to the Convention.
The U.S. has an unresolved dark history rooted in historical “good intentions.” The Indian Boarding Schools, as just one example, separated Native American children from their families and oppressed their identities, resulting in a cultural genocide on the heels of genocide. “Kill the Indian, save the man,” said the founder of the flagship Indian boarding school, Richard Pratt, and it became the slogan of the movement.
History will determine whether the situation with Southwest Key was a case of a nonprofit that tried to expand its mission, or one that set its mission aside. Until then, we are all wise to remember that the nonprofit sector is only as strong as our weakest link. And hopefully that link isn’t chain-link.
Kristi Rendahl is an assistant professor and director of the Nonprofit Leadership Program at Minnesota State University, Mankato.