Don’t apologize, don’t explain: A social justice leader evades responsibility

Marc Gunther
Oct 11 · 5 min read
Tessie Guillermo

What, exactly, does it take to lose a plum seat on the board of a national nonprofit?

A lot, it seems, at least in the case of Tessie Guillermo, the former chief executive of ZeroDivide, a $50m foundation based in San Francisco that collapsed abruptly in 2016, leaving troubling questions in its wake.

Missing money? A failure to file tax returns? Unpaid staff? All this and more are part of Guillermo’s legacy at ZeroDivide, which is being investigated by the attorney general of California.

Yet Ms. Guillermo remains chair of the board of CommonSpirit, a nonprofit hospital chain with $29bn in revenues and 150,000 workers, and a board member at the Marguerite Casey Foundation, a social-justice grant-maker. Together, the two board seats pay her more than $120k per year.

The problem is not that Ms. Guillermo made mistakes. We all make errors. The problem is, she has steadfastly refused to take responsibility for her actions. And, as best as I can tell, neither CommonSpirit nor the Marguerite Casey Foundation have held her accountable.

A stellar resume

Before ZeroDivide ran into trouble, Ms. Guillermo was a well-regarded leader of California nonprofits. For 15 years, she was the chief executive of the Asian and Pacific Island American Health Forum, an advocacy group that seeks to improve the health of Asian Americans, Pacific Islanders and Native Hawaiians. She spent a decade on the board of The California Endowment, including three years as its chair. President Clinton named her to a White House Advisory Commission on Asian Americans and Pacific Islanders, she has spoken at the Aspen Ideas Festival and she served on other boards, including the Lucile Packard Foundation for Children’s Health.

“I have,” she once said, “an immeasurable sense of accomplishment from gaining leadership positions and achieving tangible results with organizations that share my goals to promote health and economic equity for disadvantaged people.”

But, as the president and CEO of ZeroDivide for 13 years and as a board member of the foundation for its entire life, Ms. Guillermo screwed up, badly. There’s no other way to put it. When ZeroDivide shut down in the spring of 2015, it held more than $600,00 in funds entrusted to it, most of which was intended to go to Renaissance Journalism, an organization that aims to “advance equity, give voice to the voiceless, illuminate injustice and move people to action.” That money disappeared.

ZeroDivide subsequently failed to file federal income tax forms in 2015 and 2016. It failed to follow state law in California when it was dissolved. It owed a handful of employees vacation pay at the end.

Ms. Guillermo has never apologized or explained what went wrong — not to funders, not to Renaissance Journalism and not to the public.

The Ford Foundation, the Whitman Institute and the Vesper Society, all of which entrusted money to ZeroDivide, took the extraordinary step of filing complaints with the attorney general of California.

All of this was reported (by me) a month ago in the Chronicle of Philanthropy. The headline: A Foundation Collapsed. Its Money is Gone What Happened is Shrouded in Mystery.

Unpaid taxes

There have been a couple of developments since then. First, Guillermo has temporarily given up her seat on the board of the Nonprofit Finance Fund, a New York-based nonprofit. Board members there are unpaid, so that was not much of a sacrifice. By email, Henry A.J. Ramos, the board chair, told: “I can report that Ms Guillermo is on a leave of absence from the NFF board pending resolution of the California Attorney General’s inquiry.”

Second, it has come to light that Guillermo failed to pay personal income taxes to the federal government. The IRS says she owes $37,294 in taxes from 2009 and $31,493 in taxes from 2010. It placed two federal tax liens on her San Francisco home in 2015, as ZeroDivide was falling apart.

Boards are important. It should go without saying that board members of a nonprofit organization ought to pay their taxes. Serving on a board is a privilege, not a right.

In Guillermo’s case, it is a lucrative privilege. She was paid $80,500 in FY2017–2018 by Dignity Health (which has since merged with Catholic Health Initiatives to form CommonSpirit) and $40,733 in FY2017 by Marguerite Casey, according to their most recent federal tax returns.

I asked Anne Wallestad, the president and CEO of BoardSource, which works to strengthen nonprofit boards, whether boards should police the conduct of their members. While making clear that she was not referring to the Tessie Guillermo situation, she offered these thoughts:

Who should or shouldn’t serve on an organization’s board is an important decision that the board itself must make. Part of the context for that decision making must be the impact that the board’s composition will have on the way that the organization is viewed by others and the extent to which the board — and individual board leaders — cultivate trust and respect for the organization, its leadership, and its work.

There’s no question that a board member’s personal and professional pursuits can have a positive or negative impact on the way that an organization is perceived by external stakeholders.

While not a decision that should be taken lightly, there are times when the only solution to a challenging board situation is to remove a board member from their position on the board.

I’ve tried repeatedly to ask Ms. Guillermo about all this and had no response.

PR people at CommonSpirit and the Marguerite Casey Foundation also did not respond to emails asking about Guillermo’s role on their boards.

If I hear from Ms. Guillermo, CommonSpirit or the Marguerite Casey Foundation, I will post a response here.

Again, the point is not that leaders should be punished for their mistakes. But we can expect them to take responsibility for their actions, and, importantly, we can expect nonprofits to hold leaders accountable.

Just this week, Neal Keny-Guyer resigned as CEO of Mercy Corps because he failed to thoroughly investigate allegations that one of Mercy Corps’ founder, a man named Ellsworth Culver, had sexually abused his daughter many years ago; this letter of resignation from Keny-Guyer exemplifies responsible leadership. Sadly, responsible leadership is precisely what has been lacking from Ms. Guillermo.

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