How duty of obedience and care collapsed in Chicago’s nonprofits — letting DEI dogma eclipse mission, law, and accountability
To outsiders, boards of directors resemble a curious blend of Montessori circle time and Davos-lite: self-important gatherings where members sip sparkling water, nod solemnly, and pretend to grasp balance sheets with the confidence of a pre-med major faking their way through organic chemistry.
Picture a Zoom room full of high achievers doing their best to pass as experts while secretly working on their Wordle streaks. Buzzwords swirl like snowflakes: "Impact," "belonging," "resilience," "strategic alignment." Translation? Nobody wants to be the one to say the emperor has no clothes — especially when the emperor just funded a new “safe space” diversity lounge.
Mary Kay Ash once said: "There are two things people want more than sex and money: recognition and praise." And that, dear reader, is why so many people join nonprofit boards in this town. It's not for oversight. It's not to question staff ideology. It's not even to guide strategy. It's to be seen. And heard, but only at gala dinners.
Unless, of course, you're Steve Easterbrook, former McDonald's CEO, who — let’s say — allegedly enjoyed more than just the boardroom snacks. According to McDonald's own internal investigation and public SEC filings, Easterbrook was terminated in 2019 for violating company policy after acknowledging a consensual relationship with an employee.
That might have been the end of it, but a subsequent review uncovered what the company later described as “evidence of additional inappropriate relationships with employees,” along with allegations that he approved stock grants for at least one individual with whom he was romantically involved — and then deleted communications to conceal it.
The McDonald’s board, presumably deciding they weren’t “lovin’ it,” filed a civil suit for fraud and breach of fiduciary duty — ultimately clawing back over $100 million in severance. A reminder that when you serve on a board — or lead one — fiduciary duty isn’t just a PowerPoint bullet. Sometimes it’s the difference between keeping your bonus and needing a good attorney.
I'm no stranger to boards myself. My wife and I have served on a dozen, across nonprofits, startups, and public companies. And I can tell you: In Chicago, the upstanders — those willing to challenge bad governance, ideological overreach, and mission drift — are the minority.
The real problem? It's not the radicals on the board. It's the majority of seat-warming cowards too scared of being labeled "racist," "transphobic," or some other social media death sentence to do their damn job.
And yes, there is a job. In a nonprofit, the job of a board member is legally defined by three fiduciary duties:
Duty of Care — Do your homework. No self-dealing. Show up. Be competent.
Duty of Loyalty — Act in the best interest of the nonprofit, not yourself or your ideology.
Duty of Obedience — Stick to the mission. Uphold the bylaws.
Don’t swap the donor wall for a feelings wall.
You violate any of these? You might be personally liable. And good luck claiming D&O insurance if your defense is, "But the DEI consultant said it was okay."
A pattern emerges: Fiduciary failure in the name of progress
Read the summaries for the highlights. Skip to the legal breakdowns if you're a lawyer, donor, or trustee wondering whether your D&O policy covers "sex toys for 8th graders.”
Let's walk through some of the most egregious examples of fiduciary failures in Chicago-area nonprofits, with each case showing how boards — often in the name of progress — abandoned their mission, forgot the law, or simply didn't show up for their jobs.
Art Institute of Chicago – firing the docents
Summary: The Art Institute fired its long-serving, unpaid docents in 2021 for being too white, too old, and too traditional. They were replaced with a paid, diversity-prioritized cohort. The move alienated donors, confused the public, and sacrificed educational programming for virtue-signaling optics.
Legal Analysis:
Potential Duty of Obedience Issues: The museum's mission includes expanding public access to art and education. Critics argue that dismissing experienced volunteers based on demographic considerations and replacing them with paid staff may have introduced ideological considerations that could be seen as deviating from that mission.
Potential Duty of Care Concerns: Loss of major donors and national backlash suggest the board may not have adequately assessed reputational and financial risks. Under Illinois nonprofit law, directors must act "in a manner they reasonably believe to be in the best interests of the corporation." Such outcomes raise questions about whether this standard was met.
Risk Considerations: Alienating volunteers and contributors, particularly without meaningful consultation or mitigation strategy, could potentially expose directors to claims of negligence. D&O policies may exclude coverage if courts determine ideological motivation replaced mission compliance.
Francis W. Parker School — sex ed, but make it uncomfortable
Summary: Francis Parker invited a guest speaker who discussed sex toys with middle schoolers as part of "health class." Parents were not informed beforehand. The administration celebrated it; the public did not.
Legal Analysis
Potential Duty of Care Issues: Boards have oversight responsibilities for programming that affects minors, especially in areas involving sexual content. Questions arise about whether such programming was adequately vetted or approved, or whether appropriate guardrails were in place.
Potential Duty of Obedience Concerns: Critics argue that program content may have materially diverged from the educational goals stated in the school's charter and mission.
IRS Considerations: For 501(c)(3) educational nonprofits, the IRS requires programming serve a "charitable, scientific, or educational" purpose. Controversial programming could potentially trigger scrutiny of the institution's tax-exempt status.
Newberry Library – diversity, equity & incunabula
Summary: The Newberry, a serious research library, declared that DEI would now guide "everything we do." Even acquisitions. Even cataloging. Scholars scratched their heads. Donors started looking elsewhere.
Legal Analysis
Potential Duty of Obedience Issues: Observers note that shifting from a research-driven mission to an ideologically framed one could introduce mission drift concerns. This is particularly relevant when programmatic or financial decisions are filtered through frameworks not explicitly stated in the founding documents.
Restricted Funds Considerations: If donor-restricted gifts or grants for collections, preservation, or research were redirected toward programs or hiring priorities inconsistent with donor intent, this could potentially raise questions under Illinois charitable trust law.
Board Oversight Questions: Boards should proactively evaluate whether shifts in institutional tone or purpose are consistent with long-term mission — especially when public statements suggest "everything" is now interpreted through a new lens.
Victory Gardens Theater – when identity politics meets institutional collapse
Summary: The theater prioritized demographic considerations over artistic qualifications in hiring decisions, then found itself unable to manage the predictable conflicts between ideological mandates and operational realities. When the experiment failed, both the leadership and the institution collapsed — proving that mission-driven arts organizations cannot survive as political laboratories.
Legal Analysis
Potential Duty of Obedience Questions: The theater's mission centers on artistic excellence and community engagement through theater. Legal observers note that allowing hiring decisions to be driven primarily by demographic considerations rather than artistic merit may have diverted the institution from its core cultural mission.
Potential Duty of Care Issues: The board appears to have failed to anticipate the operational and reputational risks of prioritizing ideology over institutional stability. Fiduciary responsibilities include maintaining organizational continuity and protecting the institution's ability to fulfill its artistic mission.
Governance Failure Concerns: The complete institutional breakdown — including leadership departure, mass staff resignations, and operational shutdown — suggests the board may have lacked adequate oversight of management decisions and crisis planning. Such comprehensive failure raises questions about whether directors exercised reasonable business judgment in their governance approach.
Lurie Children's Hospital — when mission creep meets medical ethics
Summary: Lurie expanded into controversial gender-affirming treatments for minors without robust board oversight of the medical, legal, and ethical implications. When public scrutiny intensified, they reversed course — proving they never should have waded into ideologically charged waters that had little to do with their core mission of pediatric care.
Legal Analysis
Potential Duty of Obedience Questions: Lurie's mission centers on comprehensive pediatric healthcare. Legal observers note that expanding into controversial treatments in politically charged areas without clear medical protocols or explicit board-approved policies could raise questions about mission alignment.
Potential Duty of Care Issues: The board may not have adequately assessed the legal, reputational, and medical liability risks associated with offering treatments that lack long-term outcome consensus. The subsequent policy changes suggest the original expansion may have lacked comprehensive governance review.
Governance Considerations: The decision to reverse course raises questions about whether the initial expansion received proper board oversight and due diligence regarding potential risks and controversies.
American Library Association – tweet first, ask questions never
Summary: ALA's new president tweeted about being a "Marxist lesbian." States pulled funding. Library systems cut ties. The board issued half-apologies. The optics? Book-burning with better fonts.
Legal Analysis
Potential Duty of Care Questions: The board may not have adequately evaluated reputational risk associated with highly political public statements by institutional leadership. Nonprofit presidents serve as spokespersons for organizational mission rather than personal ideology.
Financial Impact Concerns: Multiple states ended institutional affiliations following the controversy. This creates both fiscal risk and potential mission execution challenges. Under IRS rules, nonprofits must demonstrate continued capacity to serve their exempt purpose.
Board Oversight Issues: Questions arise about whether adequate policies existed for executive communications and whether the board provided appropriate oversight of public statements that could affect institutional relationships.
Benet Academy — the abbey departs
Summary: Benet hired a married lesbian coach. Then reversed. Then re-reversed. Their founding Catholic abbey said goodbye — and took their funding and governance with them.
Legal Analysis
Potential Duty of Obedience Questions: As a Catholic nonprofit, Benet operates under expectations to uphold core tenets of faith. Legal observers note that making significant policy decisions without consultation with the founding religious order created institutional conflicts regarding mission alignment.
Potential Duty of Care Issues: The board appears not to have anticipated significant donor and sponsor reaction or planned for potential transitions in governance and funding relationships.
Mission Alignment Considerations: When religious nonprofits face ideological transitions without updating governance documents or securing alternative religious sponsorship, they may face challenges including donor disputes, changes in tax benefits tied to ecclesiastical relationships, and community divisions.
Boards: Put down the jargon and pick up the bylaws
What all of these situations share is not bad intention — it's questionable governance. Boards potentially rubber-stamping progressive overreach, arguably derelict in their responsibilities, more concerned with reputational management than mission fidelity.
They may have forgotten their job. They may have forgotten the mission. They may have forgotten the law.
Fiduciary duty isn't a bumper sticker. It's a legal framework. It's what separates a functioning nonprofit from a personal branding exercise for the LinkedIn-influencer-in-residence otherwise known as the board chair.
It's time to put up or shut up. Either you serve the mission — or you serve your social calendar.
And here's what some well-heeled trustees may not fully appreciate while sipping a white burgundy at donor galas: if a board potentially breaches its fiduciary duty, especially around mission drift or negligence, directors could face personal liability. D&O insurance doesn't always cover willful misconduct or dereliction.
The next time a board considers rubber-stamping a "reimagine the mission" DEI resolution written by a freshly hired Director of Radical Inclusion, they might remember: what sounds good at the staff retreat might not hold up in a deposition.
Want to fix it? Start with training boards on their actual legal duties. Require mission audits. Write stronger bylaws. Better yet, nominate trustees who read the bylaws. And if your Governance Committee thinks it's the Vatican, remind them it's the judiciary — not the nomination committee.
If that fails? Call the lawyers. You just might need them.
