The Callabra Foundation was set up two decades ago as a private 501(c)(3) organization, independent of its parent company, the Callabra Construction and Development Corporation.  The foundation is governed by a board of directors, all of whom are senior management in the company.  Truman Johns is the executive director of the foundation, responsible for overseeing its financial and programmatic activities.  His duties include forwarding recommendations for funding to the board of directors as well as issuing final approval for disbursement of funds.  The board meets three times yearly to review all recommended applications.

One morning, the director of finance for Callabra Construction instructs Truman Johns to process a check for $2.5 million to a well-known national antipoverty organization.  The director of finance explains to Johns that he is making the request on behalf of Hank Weeds, a new member of the foundation's board of directors and part of the new management team brought in by the corporate owners.  The director of finance wants assurance that the check would be sent immediately, questioning the need for a review since, as he made quite clear to Johns, the appeal is from a member of the foundation board.

Slightly stunned by the request, Johns feels that turning down the request would be the right thing to do.  The grant would provide little visibility for Callabra Construction or for the foundation itself.  Furthermore the proposed project does not seem to reflect the foundation's areas of interest nor the company's business objectives.  To approve an application made in this manner would set a precedent for other organizations somehow connected with foundation board members.

On the other hand, Hank Weeds has power and authority within both the company and the foundation.  As a new member, he might not be fully aware of the rules and procedures followed by the foundation to assure equitable and defensible decision making.  Although the grant itself appears to meet the legal requirements of the foundation's operating guidelines and does not involve any self-dealing, this abrupt demand seems somehow wrong to Johns.  He tells the director of finance that he would reach a decision over the next 24 hours.

If you would like permission to distribute or reprint this resource please fill out the Permission Request Form by clicking here.

Read more dilemmas: Business Dilemmas | Philanthropy Dilemmas | Personal Dilemmas