Tuesday, April 2, 2013

The Downfall of Angel Food Ministries

Angel Food MinistriesChristianity Today reports that the founders of Angel Food Ministries, once a high-flying $140 million annual budget distributor of discounted food via church networks, will be sentenced next month in federal court.  We previously blogged about the indictment issued against those founders, as well as about various governance disputes and compensation issues.  According to the news report and an earlier Atlanta-Journal Constitution article, the founding couple and their son pled guilty to various federal charges.

This situation is a textbook example of how an innovative, entrepreneurial, family controlled charity can go off the rails.  We previously noted that the organization's co-founder and CEO defended the compensation and loans it provided to its senior management, its lack of an independent board, and its various conflicts of interest by citing its great success in helping those in need.  Success does not, however, ensure compliance with the law and may in fact provide a justification for providing financial awards and practices that ultimately do not withstand legal scrutiny. Nonprofit leaders and scholars are of course familiar with the tensions that can develop between a visionary, risk-taking founder and more cautious independent board members, but this case is an object lesson in why eliminating this tension by not having an effective, independent board is a dangerous route to pursue.

LHM

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