Economy as Scapegoat for Nonprofit Leaders Behaving Badly

The paragraphs below are excerpted from this NYTimes article about charities filing for bankruptcy due to the economy:

http://www.nytimes.com/2009/02/20/us/20bankrupt.html?_r=1&scp=1&sq=nonprofit%20bankrupt&st=cse

Glass Youth and Family Services had been living off its credit cards for several months. “The Internet was down for two days last week because we couldn’t pay the bill, and a repo man showed up for one of the vans we use to transport the kids around,” Ms. DeCrescenzo said.
The reasons for Glass’s financial woes are similar to those causing other nonprofits to go bankrupt. Ms. DeCrescenzo said the state of California, which accounts for almost 70 percent of the organization’s revenues, had not raised the rates it pays for services in nine years, while expenses had increased.
Aggravating those problems was a decision Glass made some time ago to allow only six beds in its group homes.
“We have held out for more than a decade against moving to a group home model with 12 beds or more because we thought smaller homes create a family environment that was better for the kids,” Ms. DeCrescenzo said. “That was a mistake.”
American Express has been calling her repeatedly, she said, seeking payment of $100,000 that has been charged to the corporate credit card for hotel rooms for teenagers who had aged out of group homes; the company is also threatening to seek a lien against Ms. DeCrescenzo’s house.
The I.R.S. also wants her house because Glass has failed to pay its payroll taxes.
“The one thing I have is my home,” Ms. DeCrescenzo said, “and now I lay awake at night thinking someone is going to take it away from me.”

EXCUSE ME - THIS GROUP IS NOT BANKRUPT BECAUSE OF A BAD ECONOMY!  THEY ARE BANKRUPT BECAUSE THEY ARE EXCEPTIONALLY INEPT!

This article really put a crease in StrategyGirl's cape.  Let's review:

• This organization has been in a 9-year decline.  
• They fully recognized that their expenses were outpacing their income 
• They intentionally chose a business model that is not sustainable; nor, apparently, one they are capable of subsidizing by convincing donors their approach is more effective  
• They have racked up $100K in debt on credit cards 
• They have not paid their payroll taxes  

Hmmmm, seems to me that over the past 9 years when the economy was hopping along they were still in a (somewhat slower, but no less certain) death spiral.  The fact that they are blaming this failure on the economy is insulting and does a grave disservice to the sector and, most importantly, to their clients.  How does egregiously mismanaging this nonprofit into the ground help their clients?  And, WHERE WERE YOU, BOARD MEMBERS?  I hope the Attorney General has some very serious conversations with those charged with exercising "duty of care" of this organization.  Shame on you, NYTimes, for getting suckered into this sob story - please, check your crocodile tears at the door.  Let's focus our attention and energies on those organizations that are doing great work, in a responsible way, and who need a bit of assistance to get through a particularly rough time.