posted on: Tuesday, August 26, 2008

Reference Checking is a Must
By Gary Snyder

We have seen an inordinate amount of charitable fraud because many fail to check references. Most hiring organizations either do not trust the information that they obtain or they believe that there is no need to even go through the process. In any event, the consequences can be catastrophic.

Take a look at some recent charities that failed to gather references:

• The Heartland Latino Leadership Conference, in Nebraska, treasurer and finance chair was arrested for embezzling an unknown amount of the conference’s funds. They were excited when hired but all his credentials were falsified.

• If the board at the Martin Luther Christian Day School, in Wisconsin, had checked the background of its principal, it would found that he was charged for taking money from collections at the Hope Lutheran Church. The two organizations have pressed charges.

• The director of residential life was in jail on aggravated assault charges after taking $48,000 from the Southern Oregon University. Had they done a reference check they would have found out that he had also defrauded a bank of $13,000 prior to his university appointment.

• Citizens for Affordable Housing, in Nevada, would feel a lot better if they had checked references before hiring the director that embezzled $1 million. The director had a history of similar problems.

• The CEO at the Mission House for Women in North Carolina had previously served prison time for drug charges.

• At Riverdale County School the bookkeeper took $930,000. Had the school checked references they would have found out that she had a record for Medicaid fraud.

The reference check can reveal information that causes you to eliminate someone as a candidate. You need to spend time up front with the reference to introduce yourself and to explain the specific opportunity. Though you’re clearly looking for specific information, you may find that references are more forthcoming when the process feels like a conversation. It is helpful to do a number of references–ideally five to six for senior-level candidates.
Here is some of what you need to gather:

1. confirmation of the candidate’s track record, skills, and competencies,
2. management and communication style, track record, and both strengths and areas for improvement
3. as a former professional recruiter, I always zeroed in on financial issues, particularly for those in positions of financial trust such as executive directors, chief financial officers, treasurers, accountants or anyone that has signing authority.

Frequently your intuition tells you more than that which you are being told. Drilling down below the surface of initial comments will make a reference truly useful. Listen not just to the overall comments a reference makes, but also to the specific word choices and the tone and enthusiasm. Ask follow-up questions.

Reference checking has its own set of confidentiality and legal issues. You must always get permission from the candidate before taking references. You should ask them to sign a release giving you permission to check both named and un-named references as well as to conduct credit and background checks, and can not legally start that process until they do.

Your personal notes from a referencing conversation are not to be shared. Instead, write up a summary of each reference check to share with the full search committee. To protect the reference-giver, do not attribute sources of specific quotes or comments, and destroy hand-written notes once the referencing report is written. Note that candidates can request a copy of the reference report and any stored information in their files. And of course, EEOC guidelines on discriminatory questions for interviews apply to reference checks as well.

Many organizations turn to professional third parties for reference checks. Why? Professional recruiters are able to gather information objectively that allows the organization to benchmark the candidate’s skills and personal qualities against the job description. In addition, while candidates generally do not offer references that would not give glowing testimonials, professional recruiters have extensive personal and professional networks that often allow the organization to benefit from references that have not been named by the candidate. Furthermore, as professional recruiters tend to do reference checks much more frequently than any given nonprofit leader, their expertise and comfort in making reference calls may help get the most out of each one.

This is by no means a comprehensive approach to reference checking. But be assured, if you this approach you more than likely will not face the heartache of the 6 agencies previously mentioned.

(a thanks to BridgeStar.org for information, structure and provoking this article)

Gary Snyder is the author of Nonprofits: On the Brink (iUniverse) and articles in numerous publications. He is the publisher of Nonprofit Imperative, a twice-monthly publication on the state of the charitable sector. His email: gary.r.snyder@gmail.com; website: www.garyrsnyder.com; phone: 248.324.3700.