Jewish group pays PR firm co-owned by its president

James Abruzzo, co-director of the Institute for Ethical Leadership at Rutgers Business School, said that aside from a nonprofit's obligation to vet multiple firms in a "competitive-bidding process," someone in Mr. Ben-Ami's position would at a minimum have to disclose his stake in the firm and recuse himself from any decision to hire it.

Even if those conditions were met, Mr. Abruzzo said, "it still doesn't feel right."

"There's a certain amount of trust that is one of the assets of a nonprofit," he said. "And if you undermine that trust by doing something that even seems like it's self-dealing, that's injurious to the organization."