When the Compass Goes Dark: What the Seneca Babcock Collapse Teaches Every Nonprofit Board
The story coming out of Buffalo is heartbreaking — and preventable.
The Seneca Babcock Community Association, which served more than 1,200 youth and seniors through a variety of human service programs, lost its nonprofit status after its Executive Director failed to file the required IRS Form 990 for several years. According, to the same article, senior lunch programs, workforce development, youth and after-school athletic programs, and daycare services have all ceased or are shutting down. A community that depended on those services is now scrambling. The organization received over $4 million in city and county grants during the years the nonprofit status had lapsed.
The Executive Director has accepted full responsibility and resigned. But we have to ask the harder question: Where was the board?
I recently had the privilege of presenting a board training for NexxtOne Academy built around a simple but powerful metaphor: the nonprofit as a ship. The Executive Director is the Captain, responsible for steering, managing the crew, and making day-to-day decisions. The Board of Directors is the Compass, setting direction, ensuring the ship stays on course, and providing the oversight that keeps the whole vessel from drifting into danger.
The compass doesn’t steer. But it must be working.
One of the three core responsibilities of any nonprofit board is oversight, specifically: protecting assets, providing financial oversight, and ensuring legal and ethical integrity. An annual IRS Form 990 is not a minor administrative task. It is the single most visible document of a nonprofit’s financial health and legal compliance. It is publicly available. It is due annually. And its absence — for nine consecutive years — should have been caught.
As a Buffalo News editorial rightly asked: where was the board when the tax forms weren’t being filed? Even when the association did turn in its 990 for the 2017 tax year – filed in 2020 – the auditing firm attached a disclaimer because detailed accounting records had not been maintained. That was a five-alarm warning. Someone on that board should have pulled the fire alarm.
This is not about blame. It’s about understanding the function boards are meant to serve. As I tell every board I train:
- A misaligned board creates organizational drift.
- A passive board creates vulnerability.
- A controlling board causes chaos at the helm.
- A clear board creates capacity and confidence.
Seneca Babcock is a cautionary tale of what a passive board looks like in practice. Not malicious. Not corrupt. Simply not actively fulfilling its oversight function.
What could an effective board have done differently?
An engaged board would have asked annually: Has our 990 been filed? Can we see confirmation? A simple agenda item. A simple question. It would have reviewed financial statements regularly, not just approved budgets, but actively read reports and asked follow-up questions. It would have insisted on an independent audit process with teeth, not just a rubber stamp. And when an auditing firm refuses to vouch for your financials, the board should treat that moment as a crisis, not a footnote.
The Executive Director’s role is to steer the ship. The board’s role is to make sure the ship knows where it’s going and that it’s still seaworthy. Those are not the same job.
To every board member reading this: your role is not ceremonial. The communities you serve are counting on you to ask hard questions, review compliance documents, and hold leadership accountable.
The compass has to work. Lives depend on it.
If your board would benefit from a training on roles, responsibilities, and governance best practices, reach out. This work matters.