The Town and Country Inn and restaurant in Chattanooga, Tennessee (USA), was a for-profit business. Then it laid off 14 of its paid staff, who were being paid minimum wage ($7.25/hour) and room and board. It then asked these former employees to sign papers formalizing their transition from employee status to “residency volunteer status” with the newly formed Town and Country Foundation, and agreeing to undertake tasks in return for their housing — tasks that are the same as what they were being paid to do before. The motel claims to have organized a nonprofit foundation, but there’s no listing of a board of directors anywhere for the public to read, no mission statement, no volunteer recruitment strategy, and the owner of Town and Country, David Bernstein, seems to believe he still owns the organization, even though, as a nonprofit, it’s now owned by the board of directors — whomever they are.

I have talked about the appropriateness — and inappropriateness — of increasing volunteer-involvement in response to budget cuts before, most recently in this blog, Going all-volunteer in dire economic times: use with caution, which focuses on local volunteers in a small community in the state of Washington that mobilized to get a national forest center operating again, staffed entirely by members of the local community. While the national forest center went all-volunteer for all the right reasons (though I still had a lot of cautions about that), the Town and Country Inn and restaurant is exploiting volunteers and its nonprofit status, period.

An organization should involve volunteers because the organization wants to involve the community in its work and give people without a financial interest in the organization a firsthand look at how things work. It should involve volunteers to reach constituencies/demographics not current reached among staff and clients. And, most importantly, it should involve volunteers because volunteers are more appropriate to undertake certain tasks, rather than paid staff, not to save money, but because clients prefer to deal with volunteers, because it gives the community ownership of the program, etc.

Give certain nonprofit organizations all the money they need to hire all the paid employees they need and the Girl Scouts of the USA, the American Red Cross, and many other organizations, large and small, would still deliver the majority of their services with volunteers. Why? Because there are many services that are best delivered by volunteers, and because the strength of these organizations comes from the volunteers being the primary owners of these organizations.

The US Department of Labor is, supposedly, investigating what’s happening in Chattanooga. One question on the IRS form to establish a nonprofit in the USA asks whether the new entity is the successor of an old entity and, if it is, the business must explain that transistion — I think we all should see that answer.

Let’s hope these federal agencies are, indeed, investigating. Because this is wrong in every way.

More at the Nonprofit Quarterly and Chattanooga Free Press.