CASE STUDY

Instructions: Read the case study below and answer the question at the end of the scenario. As you consider your response, think about discussions weve had in class.

The West Tennessee School of Theology, a 501(c)(3) nonprofit organization, is planning to establish a scholarship program to award stipends (financial gifts) to seminary students who attend the school. They have decided to set aside $500,000 each year for this program, and they would like to award individual annual stipends of between $2,500 and $5,000 to deserving students who can demonstrate a financial need. The schools Chief Executive Officer (CEO) has hired a consultant to develop policies and procedures for regulating the scholarship program.

One of the things the consultant has recommended is that, in order to avoid any appearance of conflict of interest or bias, the school should establish a scholarship committee to establish application guidelines for the program. The consultant has recommended that the committee adopt a policy stating that immediate family members of those service on the scholarship committee should not be eligible to apply for a stipend. The schools CEO agrees with the consultants recommendation, noting that it would be in the best long-term interest of the school to adopt this policy. The consultant and the CEO worry that to not adopt the policy might suggest to donors, supporters and the general public that the school is playing favorites in the way that stipends are awarded.

A majority of the schools nine-member board of directors disagree with this policy recommendation. They argue that any student who applies for the stipend should be considered, regardless of their connections to a scholarship committee member. They say that scholarship committee members should be trusted to be impartial and to select stipend recipients based only on merit and/or need. The board decides to commission a survey of donors who gave money to establish the scholarship program to get their opinions on this matter. The survey found that the donors were evenly split on the matter half of them support the proposed policy and half of them oppose it.

The board of directors decide to adopt a set of policies and procedures to regulate the scholarship program, minus the recommended policy.

Do you agree with the position of the board members or of the consultant and the CEO? Explain in detail why you take the position you have on this matter. Reflect upon discussions weve had in class as you answer this question.