I don’t usually find philanthropic scandals in the Washington Post’s Sunday entertainment section. But I found them last weekend when Mark Guarino reported on a controversy that has rocked the New Orleans Public Library Foundation.
At issue is whether jazz musician Irvin Mayfield and his business associate, Ronald Markham, diverted more than $1 million from the New Orleans Public Library Foundation into a nonprofit they headed, the New Orleans Jazz Organization, and used the money for high salaries and high living. Although no indictments have been issued, the U.S. Attorney in New Orleans has been investigating the relationship between Mayfield, the New Orleans Public Library Foundation, and the New Orleans Jazz Organization for three years.
The story, like many in New Orleans, begins with Hurricane Katrina in 2005. The hurricane caused the library system to throw out tens of thousands of books due to water and mold. The foundation, created in 1990, was dramatically expanded to help the city’s library system recover.
According to the Public Library Foundation’s website, its contributors at the highest or “diamond” level include the Sloan, Gates, and Newhouse Foundations, Capital One’s corporate foundation, and Shell Exploration and Production.
The scandal was broken through the dogged efforts of David Hammer, a reporter for WWL, CBS’s New Orleans affiliate. In a series of reports beginning in May 2015, Hammer detailed how Mayfield, who became New Orleans Public Library Foundation president in 2011, and his associate Markham, a member of the Public Library Foundation board, persuaded the remaining board members to divert money intended for use in restoring the city’s public libraries into the New Orleans Jazz Organization.
The critical moment, Hammer wrote in his first report, came in a 2012 Public Library Foundation board meeting, when the board approved a change in the foundation’s bylaws that altered the nonprofit’s mission from solely aiding the city’s libraries into aiding “literacy and community organizations.”
More ominously, the board gave Mayfield, as its president, power to “sign any and all acts, agreements, contracts, and documents that he deems fit and appropriate, all containing such terms and provisions as he, in his sole and uncontrolled discretion, deems necessary.”
Given “sole and uncontrolled discretion” with the Public Library Foundation’s checkbook, Hammer says that Mayfield proceeded to spend feverishly. In 2012, the foundation donated $116,775 to the city’s libraries, from an endowment of $3.5 million. But in that year the foundation gave $666,000 to the New Orleans Jazz Organization, followed by an additional $197,000 in 2013. In those two years, both Mayfield and Markham received salaries from the Jazz Organization in the low six figures, and an amount that remains unclear went from the Jazz Organization to a production company Mayfield headed.
Much of the money going from the Public Library Foundation to the Jazz Organization went to the New Orleans Jazz Market, which also received $1.1 million from the state of Louisiana. The reason why this was technically legal was that part of the market is a community center with a few hundred books and records that can be checked out, which the Jazz Market claims is a branch of the New Orleans Public Library system.
In 2012 Mayfield used the Public Library Foundation money for other things. He tried to donate $5,000 from the Library Foundation to DashTHIRTYDash, a nonprofit set up to aid former New Orleans Times-Picayune employees when the newspaper reduced its frequency from daily to three times a week. The money was returned by the nonprofit, which thought it inappropriate that money earmarked for the city’s libraries was being used to aid former reporters.
When the check was returned, DashTHIRTYDash president Rebecca Theim told David Hammer, Mayfield was “initially defensive that we were questioning if this was an appropriate use of Library Foundation money and then surprised that we were returning it.”
Mayfield also spent $18,713 of the Public Library Foundation’s money on a 2012 trip to New York City, where he stayed at the Ritz-Carlton Hotel. The expenses included $2,820 for six limo rides, $402 for booze and chips from the hotel’s minibar, and a breakfast for Mayfield and his personal assistant that cost $1,435.
After David Hammer’s stories began to appear, Irvin Mayfield and Ronald Markham resigned from the New Orleans Public Library Foundation board. The Public Library Foundation appointed a new board and a new president. Mayfield also resigned from the New Orleans Jazz Organization, and promised to repay the New Orleans Public Library Foundation $1.1 million over five years. However, only $483,000 of this is cash; the rest is supposed to be in-kind donations, although it’s far from clear who will pay Mayfield the high fees necessary to complete the restitution process.
As for the New Orleans Public Library Foundation, according to the Washington Post its endowment is now below $2 million and contributions from donors have largely stopped.
The lesson to be learned from this debacle is that nonprofits have to have a strong board that can stand up to nonprofit presidents that make bad decisions. David Guarino interviewed Indiana University philanthropy professor Leslie Lenkowsky, who said, “Boards have all sorts of problems. But you need a board that can say no. If it’s a board of people that are too close to the principal, or if there are too many of them, it can lead to some very bad mistakes in their decisions.”
Strong nonprofits have strong boards, and weak nonprofits have weak ones.
Photographed above: jazz star Irvin Mayfield, by Mark Gstohl