Serving on a nonprofit board is more than a résumé line or a chance to lend one’s name to a worthy cause. It is a legal and moral responsibility to safeguard the mission, protect the organization’s assets, and ensure the community it serves is not abandoned. Donors, clients, and the broader public place enormous faith in nonprofit boards. When they see respected professionals, community leaders, or government officials listed as directors, they assume accountability and oversight are real.
But when board members fail in that duty, the results can be devastating. The collapse of Casa Ruby, an LGBTQ nonprofit in Washington, D.C., is a powerful case study of what happens when governance fails and why board members must be held accountable—not just legally, but ethically.
What Went Wrong at Casa Ruby
When I served as counsel for the receiver appointed to take over Casa Ruby, we discovered what can only be described as the absence of governance. The board of directors, whose names appeared on tax filings and grant documents, was essentially nonexistent in practice.
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No functional board: There were no records of regular meetings, no agendas, no meaningful minutes. Some individuals listed as directors had resigned years earlier or had no record of participation at all.
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Total abdication of oversight: All authority had defaulted to the founder, who exercised unilateral control over millions of dollars in public and private funds.
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Ignored warnings: The accounting firm raised concerns for years—unpaid payroll taxes, broken payment plans, and unexplained large transfers. These warnings were not acted on.
The results were predictable. Hundreds of thousands of dollars flowed out of the organization through questionable withdrawals and transfers, staff went unpaid, and the doors of a once-vital community resource were abruptly closed.
The Moral Failure of Willful Blindness
This was not just administrative incompetence. It was a moral failure. The Casa Ruby board members lent their names and credibility to the organization. Their presence on paper reassured funders and the public that someone was watching. But in reality, they did nothing to prevent or correct misconduct, even as red flags piled up.
That kind of willful blindness is not passive. It actively enables harm. Vulnerable clients—people who depended on Casa Ruby for housing, safety, and support—were left stranded. Employees and vendors were left with unpaid bills. And the community’s trust in LGBTQ-serving nonprofits was shaken.
Board service is not ceremonial. It carries fiduciary duties of care, loyalty, and obedience. To ignore those duties while allowing one individual to run an organization unchecked is more than negligence. It is a betrayal of the very people the nonprofit was created to serve.
Why Accountability Matters
That is why the receiver sought to hold board members personally liable for their willful blindness. Without consequences, nonprofit governance risks becoming symbolic rather than substantive. Leaders can’t enjoy the prestige of board service without accepting the responsibility that comes with it.
Accountability sends a clear message: if you step into this role, you must do the work. That means showing up, asking questions, reading reports, and insisting on transparency. It means protecting not only the financial integrity of the organization but also the dignity and trust of the community that depends on it.
Lessons for Other Nonprofits
Casa Ruby is not the only nonprofit where boards have failed. But it offers lessons that every director should take to heart:
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Oversight is not optional: Regular meetings, minutes, and financial reviews are basic governance, not formalities.
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Community trust is sacred: A board position is not about prestige. It is about being entrusted with people’s lives, livelihoods, and futures.
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Silence can be complicity: Failing to act in the face of misconduct is not neutrality—it enables harm.
For communities that rely on nonprofits, the board is the last safeguard. When that safeguard collapses, the damage reverberates across the entire sector. That is why the law holds board members to fiduciary standards—and why, when they fail, it is both a legal and moral wrong.
Moving Forward
As an attorney, I often remind my clients that accountability is not about punishing individuals for its own sake. It is about protecting the mission, the clients, and the credibility of the nonprofit sector. If we allow board members to shirk their duties without consequence, we undermine the very foundation of charitable trust.
Casa Ruby’s story is a cautionary tale, but it is also an opportunity. It reminds us that board service is not symbolic. It is substantive, serious, and necessary. When board members honor that duty, nonprofits thrive. When they do not, communities pay the price.
About the Author: Nick Harrison is a Washington, D.C.-based attorney and advocate who represents individuals, small businesses, and nonprofits in complex legal matters. As counsel for the receiver in the Casa Ruby case, he saw firsthand the consequences when nonprofit boards fail in their duties. His work focuses on accountability, governance, and protecting communities from abuse of power.
