Beard Foundation: Cooks' Books?

[fifi]

While I haven't seen the whole article, I find it unfortunate that it appears that they took AB's methadone clinic remark out of context. His 13 points were right on, in my opinion, and bravely stated. The points are a roadmap to credibility.

[Jason Perlow]

Some coverage from the "Celebrity Justice" website, courtesy of SauteWednesday.com:

http://celebrityjustice.warnerbros.com/news/0409/09b.html

[Rail Paul]

The United Way of America had a similar mess 20 years ago, and administered itself some of the harsh medicine Tony suggests. The CEO was way overpaid, there were questions about the relatives, and the board was exceptionally disengaged from the charity.

The medicine?

1) certified financials. There was a reconciliation of donations to charitable expenditures, and it was published. A CPA isn't a guarantee, but it's better than nothing. Donors know where there money is being spent.

2) term limits for directors. Two terms and you're out. A few new directors each year means new questions, new eyes.

3) Shared objectives. The national objectives and the regional UW objectives were developed to support common goals. Donors know why the money flows to specific charities

4) organizational effectiveness. The charity is evaluated yearly on how effective it has been, and the results are shared.

Members and member organizations got involved, and forced changes with their gift witholding. Until known and trusted people were on the board and in management, donors sat on their wallets. It worked there, and can work here...

Nonprofits have been well known for entrenched and untouchable managements with their own agendas. Unless the participating chefs, the food professionals and writers, the members of the JBH/F are willing to assert their demand for change, the clique which runs it won't change much.

just MHO

[weinoo]

When I was a student at Peter Kump's in the early 90s, we did our graduation dinner at the Beard House. I also volunteered there on a number of occasions for visiting chefs that I thought were cutting edge at the time. For me, it was a pretty cool honor and privilege just to be able to work in Beard's kitchen.

So it's kind of a drag that the place has been so mismanaged - let's hope they can clean house and maybe bring in a president and some new board members with some integrity, who actually know what they're doing.

[TrishCT]

Living in Connecticut, our Governor recently resigned for receiving hundreds of thousands of dollars worth of "gifts" from state contractors and employees. He blamed his problems on the media for harrassing him.

At my son's school, SUNY Maritime College, the new President, Vice Admiral John Ryan, took on the Alumni Association because they refused to open their books. (The Alums' tax records from last year showed over $500,000 in revenues yet they only gave $60,000 back to the school in scholarships.) The Alums claim they don't want to be micromanaged by SUNY. Ryan has told them they either open their books or they are no longer affiliated with the school.

Sadly, unaccountability and mismanagement by people with power and authority is too common nowadays.

The Beard House needs a good sweeping of the dirt (and not under the carpet) and all new furnishings need to be installed. Their by-laws need review to allow in fresh air and openness. But if upon review, the foundation turns out to be too shaky, the House may not be salvageable, and a once grand palace will be reduced to rubble.

Lessons learned.

[jhlurie]

The solution is obviously to shave all of those Beards.

Really, the way that organization is run it's almost possible to understand. Is their agenda even clear? If they've got more going for them then a creaky old building and hot air, could they please be a little more explicit in explaining what it is?

[Fat Guy]

The Beard Foundation's plan for fixing itself appears to be:

JAMES BEARD FOUNDATION RESTRUCTURES; GEORGE P. SAPE ELECTED CHAIRMAN, DIANE D. KERN AND ROBERT W. JONES ELECTED VICE CHAIRS

LONGTIME PRESIDENT LEONARD PICKELL RESIGNS BEFORE BOARD OF TRUSTEES MEETING; TRUSTEES RECEIVE DETAILS OF INTERNAL INVESTIGATION OF FINANCIAL AND OPERATIONAL ISSUES, PLEDGE MODERNIZATION AND ACCOUNTABILITY FOR ONE OF THE NATION’S BEST-KNOWN CULINARY ARTS ORGANIZATIONS

New York (9-09-2004) - NEW YORK, NY (September 8, 2004) – In a significant restructuring, the Board of Trustees of The James Beard Foundation met today and announced major governance changes. The changes come as Trustees were briefed on the results of an internal investigation of financial and administrative issues facing the organization.

The new positions of Chairman and two (2) Vice Chairs of the Board of Trustees were created. Trustee George P. Sape, a New York attorney, was elected Chairman and will oversee financial and operational strategy. Longtime Trustee Diane D. Kern—who is also Chairman of the House Preservation Fund—was elected First Vice Chairman; Robert W. Jones, Vice Chairman—Investment Banking and Managing Director at Morgan Stanley, was elected Second Vice Chairman. Ms. Kern will also assume the role of acting Executive Director, responsible for the day-to-day management of the foundation. The Board expects to name a fulltime executive director in the coming months. Trustee Anne Byrd was elected Treasurer, and founding Trustee Kathleen Perry was elected Secretary.

The Board also accepted the resignation of President and Trustee Leonard Pickell, who notified the Board of his intention to resign on Tuesday afternoon of this week. Pickell had been President of the Foundation since 1996.

The Board also assigned to Mr. Jones the role of Chairman of the Finance Committee, and appointed Trustee Marcie McNelis as Chairman of the Governance Committee.

“These are first steps toward resolving the financial and operational issues facing the organization, but they are important steps,” said Mr. Sape, who is managing partner of Epstein, Becker & Green, a large New York law firm. “Separating the operational and oversight functions of The James Beard Foundation is critical to ensure that our accounting and financial structure is properly repaired, and will remain sound, transparent and effective as The Foundation continues to grow.”

“And let us be clear: The good work of the James Beard Foundation continues,” Mr. Sape said. “There is no organization in this country that has had a more positive impact in promoting the culinary arts. We intend to keep it that way.”

Trustees were briefed on the results of a three-month internal investigation conducted by outside counsel Michael Berger that showed that certain expenditures of The Foundation were not properly substantiated or documented. The investigation produced no findings of wrongdoing on the part of the paid staff of The Foundation, or the many outside volunteers who donate their time in support of The Foundation.

The Trustees took quick action to address the investigation’s findings by improving internal controls for foundation expenses and addressing management oversight of various of The Foundation’s programs.

The Trustees also retained new accountants, Goldstein, Golub and Kessler (GGK) to act as The Foundation’s outside accountants. The new auditing team has been charged with addressing The Foundation’s delinquent filing of financial documents at both the state and federal level. The Trustees and Mr. Berger also have been working with the office of the New York State Attorney General to resolve issues relating to The Foundation’s failure to file annual reports in 2003 and 2004.

Once the proper accounting and auditing of The Foundation’s finances are complete, the Board of Trustees will consider appropriate next steps.

Mr. Sape said: “We have a foundation whose administration and financial oversight functions did not keep pace with the rapid growth of the organization. That changes today.”

“The Trustees are committed to ensuring that The James Beard Foundation remains financially strong, culturally vibrant, and dedicated to preserving James Beard’s legacy and commitment to the culinary arts.”

[Mayhaw Man]

Would you say that I am correct in this is all being summed up by the interim/current administration as a "little accounting error" and that no major changes in operational systems are being considered?

“And let us be clear: The good work of the James Beard Foundation continues,” Mr. Sape said. “There is no organization in this country that has had a more positive impact in promoting the culinary arts. We intend to keep it that way.”

This doesn't seem much like Tony's wished for mea culpa. More like a, "Darn it, sure we had some problems, but we can handle it. Just a few bad apples in this otherwise fine and august organization. We will keep on doing the good work just as we have in the past. We'll just count better this time around."

I would think that fundraising might be a bit more difficult in the near future for Beard House unless there are able to announce a little more of a change than this announcement apparently indicates.

[Fat Guy]

I agree, Brooks. It seems to me that the Beard Foundation has taken significant steps to right its fiscal situation, and deserves credit for that. But unfortunately, it does not seem that this crisis has caused any introspection regarding the actual role of the organization. It seems the goal is just to get the finances sorted out and then get back to business as usual.

[maggiethecat]

It seems the goal is just to get the finances sorted out and then get back to business as usual.

←

But what is Business as Usual? When I was reading about the shenannigans in the Times today, I was stopped dead in my tracks.  A lousy twenty seven grand for scholarships? What do these people do? It had the feeling of the Renaissance Council of Cardinals, with a hidden agenda, a secret handshake and a lot of good eatin' in the Curia.

Of course, let's see some financial clarity, but folks, even good non-profits can screw up their books.  What I want to see is a mission, explicated clearly, and some real involvement in the cooking community, along the lines Bourdain suggests.  It's not the books that disgust me, it's the lazy in-crowd self-congratulation, the big whoop- it -up parties and the zero contribution to the culinary scene.

[Fat Guy]

Regarding the library, I found this on the Beard site:

"At the House, both the library and its archives are open to members, food writers, and students."

There are also a bunch of other worthy sounding causes enumerated on the "About" page, for example:

"True to Beard's spirit of helping new talent, the Foundation offers and administers an extensive program of scholarships, volunteer opportunities, and workshops—all part of our ongoing commitment to further elevate American gastronomy."

and

"The Foundation, in cooperation with other national food and culinary organizations, also works around the country to educate children about nutrition awareness and food appreciation and to introduce them to the world of fine dining."

[Mayhaw Man]

That's really not very much money for even a minimal scholarship program. While I understand that many institutions give scholarships in kind to Beard, it still doesn't seem like much support given that part of their mission is to:

"To foster the appreciation and development of gastronomy by preserving and promulgating our culinary heritage, and by recognizing and promoting excellence in all aspects of the culinary arts"

How much "promoting excellence in all aspects of the culinary arts" can you foster when $27,000 won't even get two people a year of tuition at Johnson and Wales or CIA?

[Fat Guy]

The issue isn't so much the absolute dollar amount -- even a $2,000 scholarship would surely be appreciated by most any culinary student. It's just that the $27,000 figure is totally out of proportion to what one would expect from an organization the size of the Beard Foundation.

[Squeat Mungry]

I had been working at United Way of America's headquarters in Alexandria, VA for about a year and a half just before the events Rail Paul recounts.

Appointing longtime trustees to newly available chairs and offices is not going to solve the JBF's problems.

Accountability is the issue here, as it was at UWA, and nothing will be solved until they at least address the points articulated in Rail Paul's post, which, at least to me, that press release does not do.

Just my opinion,

Squeat

[skchai]

One reason why the Beard House managements may feel it can get away with such pallatives is that the source of its influence has never been about scholarships, outreach, or other charitable works. It has been a very successful trade organization for the high-end restaurant industry, specializing in networking and PR, one that has taken advantage of loose federal standards to adopt the guise of a non-profit. Hence few people were willing to show public concern, despite the fact that it was obvious for many years that main things the Beard House had to show for all the money coming in, besides great food for those lucky enough to attend a dinner, was a lot of schoozing and glitz. Presumably many people already realized at some level that this was the "real" mission of the Beard House.

Which is not to say that the organization won't be hurt severely by the revelations. However, it does raise a lot of doubts whether the Beard House can reform itself in the way that the United Way did. It's not simply a matter of differences in scale; the United Way, despite all its problems, still had its primary identity as a charitable organization. For the Beard House to orient itself to a charitable mission, it would have to change itself into a completely different kind of entity. Which may in turn impact on its ability to engage in PR and promote networking. Which may then render it irrelevant to many of its would-be "donors".

[Jonathan Day]

The Beard Foundation press release is I am far from an expert on institutional PR, but tan almost exact clone of dozens I've seen in corporate situations where malfeasance has been discovered. "We've sacked the CEO, we've replaced the accountants, we're committed to honesty and transparency, and we're back to business as usual."

It would have been hard to admit, at this juncture, that the Foundation needs strategic redirection, even though I agree with Tony and many others on this topic that this is the case. I guess the Board could have said, "We had no idea why we were raising all this money, and, by the way, funds were being fiddled from inside, and we were too comatose to see either problem" -- but after an admission like that, the only reasonable thing would be for the entire Board to resign.

Even if they do realise that a clearer purpose (etc.) is needed, I doubt they have a clear idea of where they want to take the Foundation. That will require debate, and will surely be affected by the next Executive Director. So it's at least conceivable that this press release will be followed, over time, by further statements that help the Beard Foundation clarify its charitable purpose and find better ways to deliver it. Meanwhile we can keep up the pressure from outside, and establish the eGullet Society in a way that sets a high standard.

[bourdain]

Sounds like the usual " I didn't know--It was the other guy" strategy.

[Jonathan Day]

When this kind of thing happens it's almost always a case of simultaneous rot on the inside (management) and on the outside (board). Now and then one thing goes wrong; more often things go wrong together. It may be possible for a restaurant to deliver great food and fine service from a dirty kitchen, but it's more likely that if the kitchen is dirty, the food is bad and the front of house staff are lackadaisical. In management-speak this is known as the principle of complementarity.

Put yourself in the position of a board member. They could admit that the whole thing had gone wrong, and the entire board could step down, turning the operation over to a new group. Even if that act had no adverse consequences for the board members -- loss of reputation, for example -- it would be hard for them to admit. Simple human nature. Hence the position that a few things were wrong but they've been smoked out and are being fixed. It may not be an accurate representation of the true state of the foundation, but it's easy to see why they arrived at such a position.

It's striking that they have only just appointed a chairman, to lead the Board in supervising the Executive Director. Not having an independent chairman, for a foundation of Beard's size and reputation, was a major governance error.

[scott123]

Come on, we're talking about James Beard here. As much as we love him and value his contribution to the culinary arts, the man had no scruples. He would have collaborated with the Nazis for a phenomenal Coq au Vin. One glance at his foundation reveals his legacy of ramificationless consumption to be very much alive and well. Let's face it, they're going to bury their heads in their plates until they keel over and die.

"And let us be clear: The good work of the James Beard Foundation continues," Mr. Sape said. "There is no organization in this country that has had a more positive impact in promoting the culinary arts. We intend to keep it that way."

Mr. Sape obviously doesn't get online much.

Hmmmmmm *making a scale with my outstretched hands* Which has impacted me more?

Discussing food with some of the best culinary minds in the world... sharing reams of gastronomic wisdom that cleave a path directly to my brain as they send me to my knees... at the same time putting better food on my table...

OR

Knowing that so-in-so just won an award/had a dinner.

Hmmmmmm... That is really a tough one.

Edited September 11, 2004 by scott123 (log)

[Carrot Top]

One thing that any corporation (or any organization that was put together in ways that closely resemble such a thing) will avoid like the plague is to admit malfeasance or wrongdoing. To do so leads right smack dab into a wide variety of expensive and time-consuming lawsuits. (Not to mention the loss of face.)

Therefore comes the corporatespeak. It admits no wrong, says not too much of anything specific, and has no 'mouthfeel' at all, if you could taste it.

It is what one can expect, and it is always served up in the same fashion. Standardized recipe, you know.

Could be that there will be a different direction taken by the Foundation now, but also could be that there will not be. It would be interesting to hear the meetings that are going on behind closed doors.

Their first priority is to keep themselves 'safe', legally and financially. After that, the field is wide open. Will they change their previous style and philosophies?

That will depend on whether they believe that in doing so they will become more of what they 'should be', whether they believe that in doing so it will bring in more money to support such changes, and bottom line, the Board's own personality itself including which person on that board has the most persuasive and determined personality during those times that they are meeting together.

The only soft spot I can see is that this is not quite a 'private' foundation in ways that some others are. If money is coming solely from individual contributions, there is no way to say 'hey we don't like what you're doing'. But if there is money coming from more generalized places or groups that give because they want to see this Top Dog Name Food Arts Foundation be...a broad-based non-exclusive agent in moving forward the state of this art...then there is something to put one's teeth into and bite at.

Edited September 11, 2004 by Carrot Top (log)

[cdh]

Yes... all that sounds nice. The library would be more useful if its opening hours and access policies were publicized, rather than just its existence.

The Beard folks were actively soliciting applications for their scholarships over the past year... a full page ad in every publication that they sent for a while, separate postcards, etc... If one wanted to get into the application process for one of their scholarships, that would be easy.

They should make accessing and using the rest of their facilities and programs equally easy.

[elfin]

Musical chairs with the same folks who did not keep an eye on the ball? Mere reshuffling the board demonstrates they don't want change. I can not believe that there is no library? I thought that a library was a given!

[Dave the Cook]

We've received the following from Phyllis Isaacson, Director of Information Services at The James Beard Foundation. (Since we're in a membership hold at the moment, she wasn't able to join and post herself.)

Dear egullet:

. . . I would like to correct through this email some widespread misconceptions that are pervasive in your forum discussions about the Beard House:

1) There IS a 2600-volume cookbook library at the Beard House. It is open to the public from 10 to 5 Monday to Friday on a research basis. The only requirement for use is that you contact the librarian  to make an appointment.

2) ALL of our events - dinners, brunches, lunches,  workshops - are likewise open to the public by reservation; this is subject to availability, naturally.  Our website lists the monthly events.

3) Our Greens program holds food and wine-related events at venues around the city which cost much less and our geared to a younger group. Click on "Greens" on the James Beard website to register an email address for an invitation.

4) The New York Times was incorrect in stating that we give away only $27,000 in scholarship money. (A correction was posted online, in fact.) We actually administer over $200,000 in scholarships, most of which has been raised through our fundraising efforts and awarded by a scholarship committee.  We do plan to increase the amount that comes from our general fund.

5) From the level of discussion it seems that not many of your forum members have ever been to the Beard House or understand our mission. Many people forget that The James Beard Foundation has been instrumental in launching the careers of many of today's top chefs, let alone in helping to create the industry.  Becoming a chef was not a popular career choice fifteen years ago.

[Dave the Cook]

Thanks in large part to Bruce Cole (at sautewednesday.com), we've received the following from Melanie Young, James Beard Foundation Awards Director:

While the news about The James Beard Foundation is upsetting to the organization's many staff, volunteers and supporters throughout the nation, I want to clarify that The James Beard Foundation Awards are not under any questioning or investigation. The Awards has its own operating budget, management staff, hardworking volunteer committees and  offices. 100% of all sponsorship dollars for the awards goes into the underwriting of the year-long program which includes all program operating costs as well as the event costs, from the start of the call-to entry process in the Fall to the last medallion placed on an award winner in the Spring. The remaining revenue for underwriting the roughly $1 million in operating costs for the Awards comes from: entry fees, awards event ticket sales and The James Beard Foundation's general operating fund.

What many may not realize is that the awards are not a fundraiser for the Foundation, and we have never positioned the awards as such. They are one of the several programs of the Foundation, and the mission of the Awards is specifically to recognize and honor achievement and distinction within the culinary industry.

JBF Trustees and staff do not vote on any awards programs, and membership in and service to the James Beard Foundation is neither a requirement nor criteria for awards consideration.

All programs of The James Beard Foundation are continuing as planned and, as for the awards, we are about to launch our call-to-entry. The forms will be on www.jamesbeard.org later this month.

I have been in charge of the management of the Awards since their inception in 1990 and I  truly hope the current challenges facing JBF, which I am confident will be addressed and resolved quickly, do not tarnish the reputation of the Awards in the eyes of our food community.

If anyone has any questions about the awards, they are free to email me at melanieyoung@myoungcom.com.

Our current membership hiatus prevented Melanie from posting this herself.

[Chris Cognac]

Maybe somebody ought to make a new foundation and shun the "old school" once and for all.