On Monday, December 7, Sean Donaher was reinstated as executive director of CEPA Gallery after a monthlong paid administrative leave precipitated by the CEPA board’s concerns about the arts organization’s financial situation.

Donaher’s suspension caused quite a commotion in Buffalo’s tight-knit cultural community, in large part due to the reaction it provoked from one staffer in charge of special projects, Joanna Gillespie, who resigned and made public her incendiary letter of resignation. Social media lit up. A story appeared in the Buffalo News. 

In the absence of facts, speculation rushed in, and the stream of innuendo was brisk. The board and Donaher declined to discuss the issue until this week, when Donaher and CEPA’s board president, Nancy J. Parisi, met with The Public to discuss the suspension, the external audit of CEPA’s finances that took place during Donaher’s absence, and what’s next for CEPA now that the episode has been resolved.

[Read the CEPA board’s public statement on Donaher’s return at the bottom of this article.]

Tell us what happened. What led to the suspension and what led you out of it?

Parisi: Three CEPA staff members sent Sean an email, and they CCed me and they CCed the board treasurer, John Pellish. They had some concerns because creditors were calling the CEPA office. It was getting pretty heavy. Because of a credit card, someone got a call at home; their spouse flipped out…There were a lot of financial questions.

Was that staffer’s name on the credit card?

Donaher: Yeah, it was an old card that we weren’t using too much anymore. What led up to the letter that the staff sent was our getting behind on accounts payable due to a cash flow issue.

Parisi: It’s the kind of cash flow issue that every nonprofit goes through. There are periods where you have a major fundraiser and then things are real flush and sweet, and then things kind of go down. It’s part of a natural cycle. We were in a down cycle; we still are, but we’ll come back.

Donaher: Cash flow is always a cyclical thing. The way the CEPA budget is designed, with auction happening every other year, we have a budget that fluctuates year to year. When we typically see our biggest cash flow crunches is when we’re in an off-auction year, which we are, and toward the end of the year—because a lot of granting agencies are calendar year, so they pay out their grants at the beginning of the year.

So that was happening. What’s typical in an instance like that is we have to prioritize who’s getting paid when, to ensure that staff is getting paid, artists are getting paid, etc. That of course leads to phone calls from people rightfully wondering when they’re going to get paid. Unfortunately a lot of that was falling on staff, in terms of answering those calls. I would be out of the office, or whatever. And that’s not really a place that staff needs to be. Those calls should be handled primarily by me.

By the person making the financial decisions.

Donaher: Absolutely. Staff should be removed from that.

Parisi: We have a person who comes in weekly [to review finances], Marilyn Littles, she’s great. She’s been a part of the CEPA family for a long time. She was concerned because Sean started writing checks. She was not happy with that, and it raised a red flag, especially with our board treasurer, who’s a CPA. So John and I came in to talk with Sean and Marilyn and figure out what was going on.

And the concerns raised in that meeting led to what?

Parisi: I called a board meeting and we decided that the best thing for us to do, on outside advice, because of the questions we had, was to have a third party come in, an accounting firm, to take a look. But we were advised to ask Sean to step away during that review.

Was the meeting you called the full board or the executive committee?

Parisi: The full board. And that was a vote to ask Sean to go on paid administrative leave.

And that was the day before we had our [Community Supported Art] pickup party, which had been in the works. It was party for people to pick up the work that they had already paid for, and maybe to make some more money from people who wanted to be at the party. I said that I’d prefer we do it after that party but others felt we had to be more expeditious.

We expected that this process would be short and sweet. Then there was [Gillespie’s] letter.

Sean, did you understand this would be the course of action?

Donaher: No. That was a little bit of a surprise. A little bit—it wasn’t totally out of left field. Admittedly I don’t think the board was aware of the severity of our cash flow problem as they should have been.

Parisi: It’s not that our 21-member board is not capable of reading the financial statements; it’s that our dear sweet Sean didn’t want us to know how serious the situation was. We didn’t have a clear picture of everything, so there was this big “holy shit” moment.

Donaher: That’s true. There’s a degree to everything, but that’s certainly true. The way that the board meetings work is that they get the financial statements and John, the treasurer, analyzes those. But you get as much out of the financial statements as you’re looking for. I am certainly one to internalize and deal with situations on a day-to-day basis. When we’ve had cash flow crises in the past—and we certainly have, and some have been severe–it’s been a similar situation: We get through it. 

The thing that was different at this point, and what led to this action—which, as I’ve said to Nancy, I certainly don’t resent any of it—is the staff concerns being conveyed to the board and the process being opened up. And in order to get a clean slate picture of the finical situation at CEPA, they felt they need to bring in a third party.

Parisi: And again to reiterate: This was supposed to be a swift internal process. Look at things, get a clear picture as we had not had, then reinstate him. But the Buffalo News story, plus the letter…

Was Gillespie, the letter’s author, one of the staff members concerned about finances?

Donaher: No. It was some of the longer-serving staff members. Joanna had only been there since March.

Parisi: And I think that was part of the problem. She was unaware of the behind-the-scenes things that had been happening. She also had no real contact with the finances of the organization. She wasn’t privy to some of this information, so it was a big shock to her and to David Mitchell on the staff.

So the auditors come in and look at the situation—cash flow, debt, projections. What was their verdict?

Donaher: I don’t get the impression that they recommended anything. They just said, “This is the state of affairs. Now you deal with it.”

How did the board react to the external review?

Parisi: After the report came in the executive committee convened and talked about it. We decided we had to present the finding to the board, which we did.

With a recommendation, or did you just present the findings?

Parisi: Just presented. Then [John Pellish and I] met with Sean; I still had some questions. We had Sean come in and speak to the board. It was interesting: The board felt hat it really needed to hear from Sean an apology, accepting responsibility for the financial state of affairs. I’d presented these concerns to Sean before the meeting, and he agreed and addressed our concerns, sent the executive committee his responses, which I shared with the board, we came together, and we voted to reinstate him.

CEPA has, under Sean’s directorship, been held up as an example of a well run arts organization.

Donaher: I think that’s a sentiment that’s shared pretty far and wide in the community and I would hesitate to counter it. I think CEPA is well run. We hit our potholes every now and again.

What do you do now as a board and as an executive director? You have this reputation for a well run organization, but it’s a small community, and there was quite a kerfuffle. So how do you erase or explain the episode?

Parisi: I don’t want to erase anything. I feel very strongly two things: One is that, when there was this righteous anger that came up from the arts community, which I shared with my board and with Sean, people were angry but they didn’t know what they were angry about. I kept coming back to that: They don’t have the details. And Sean didn’t seem very angry. 

There was a process that needed to be followed, and our funders should be glad that we took matters on the path that we did, that we didn’t just try to sweep it away. I think we handed it professionally and we handled it well. I think that other nonprofits in town should look at this situation and make sure that their checks and balances and their process are in order as well. It was huge learning experience for everyone on the board.

And I think only good has come out of it, honestly, because there is more transparency and we definitely realize we have to communicate better—the board with the staff, the staff with the board.

Donaher: I tried to stay as net neutral as a possibly could during all this. I recognized people reaching out, but I stayed off of Facebook, I stayed off of everything. Just to let the process happen.

I agree with Nancy: We’ve gotten to this point, and it’s early in the process. I think there’s lot of room to look at positive aspects to all this. I have a very good relationship with all of CEPA’s funders, most of which reached out to me very early in this. So we need to deal with CEPA’s funders and reassure them. 

But they real opportunity here is internal. What this has brought to the fore is that, despite the advances that CEPA has made and its reputation in the community, there are always better ways of operating. In terms of communication, in terms of committee structure on the board, in terms of creating an active engagement that really cements that true staff/board partnership, which ultimately is going to maximize any organization’s success.

Despite the awkwardness of this process and any damage that it might have done due to publicity, I think that’s reversible. Buffalo does have a penchant for reverting to that sort of small-town back-and-forth, but at the same time it has great capacity to move on.

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Statement from the CEPA baord on Donaher’s return:

The board of directors of CEPA Gallery wish to release the following statement at this time to its many and continuing supporters, stakeholders, and students.

At a special meeting of the board of directors on December 1, a vote was held and Sean Donaher was reinstated as active executive director of CEPA Gallery — effective December 7. The board’s vote at this special meeting was unanimous.

Moving forward, the CEPA Gallery board of directors has set in place safeguards and new institutional practices to improve financial management and oversight. The CEPA Gallery board and staff welcome any questions.

Since its inception in 1974, CEPA Gallery has been an integral institution of the arts community of Buffalo, New York and beyond as part of the national art scene. The sterling reputation of CEPA Gallery’s exhibition schedule and award-winning educational programming are known far and wide: In 2013 CEPA Gallery was the recipient of a NAHYP (National Arts and Humanities Youth Program) award, presented by First Lady Michelle Obama during a ceremony held at the White House.  CEPA Gallery continues to impact the lives of young people in Buffalo through its in-school and after-school arts classes, adult workshops and much more.

CEPA Gallery’s board of directors and Sean Donaher stand united to assure our many community stakeholders that the gifts and funding we so generously receive continue strengthening this revered — and necessary — organization and its inclusive mission.