Archive for the ‘Better Boards’ Category
Posted by Gayle Gifford on February 22, 2010 in Better Boards
I was just talking to a board chair who was lamenting the lack of attendance at board meetings and general lack of engagement overall.
One of the conditions I always query for is whether the board has any clear objectives for what it plans to accomplish over the coming year (or longer).
Board meetings are not in and of themselves meaningful work. I’ve attended a lot of meetings where I’ve left thinking “really, did they need me here for that!” Usually all I did was listen to reports where there was no action required. And any decisions before us were pretty inconsequential and didn’t really rise to the level of board work. A year of meetings like that and I’d be surprised if you had any attendance at all.
Every board can benefit from a set of annual objectives. I’d put the usual suspects on that list:
- providing performance feedback to your Executive Director
- setting with your Executive Director his or her goals and objectives for the coming year
- reviewing and approving the audit and other critical monitoring of the health of the organization
- recruiting and electing a high quality board
All of these are important fiduciary obligations of any board.
But what is the added value, the real difference that your board will make? Read More >>
No Comments »
Posted by Gayle Gifford on October 27, 2009 in 100 Things We've Learned, Better Boards
Advice to business people joining nonprofit boards.
Congratulations! You’ve just joined the board of directors of a charitable nonprofit.
If this is a new experience for you, you are in good company. Many businesses today encourage their staff to serve on nonprofit boards. You’ll share the experience of board service with individuals from all walks of life.
A few of your fellow board members may already be old hands at nonprofit governance. A rarer few have attended workshops or studied some of the literature on nonprofit board governance.
Many, however, are learning on-the-job…just like you.
… Perhaps your organization provided you with a comprehensive orientation to help you start your work on the board
… Maybe you were teamed with a more experienced director who is serving as your mentor?
With luck, you joined a superb board that’s filled with great role models.
It’s not unusual to feel a little unsure of yourself at first.
You should find the reception welcoming, as most nonprofit staff and directors relish the opportunity to benefit from the business savvy, strategic mindset, professional connections, and access to resources that directors from corporate backgrounds can contribute.
Yet, I frequently hear complaints that all of those desired qualities seem to evaporate as soon as a business person is elected to a board. And I often hear business people describe their frustration with their board service.
So here are a few insights about nonprofits that I’ve realized over the last 30 years — and a few tips to help make your board service more rewarding.
Let me start with the insights.
Nonprofits have a different bottom line.
In business, the bottom line is easy to understand – it’s all about profit. Even if your business advocates a dual bottom line (social responsibility and profit), profit doesn’t take second place.
In a nonprofit, there is no private inurement. The bottom line is the delivery of a public benefit – for example, an artistic contribution, environmental protection, or health promotion.
Determining what that public benefit is, how to deliver it and how to evaluate performance isn’t always easy. Imagine you are on the board of an organization dedicated to the promotion of practices for good mental health. Can you concretely define what success looks like? What evidence would you point to? What changes would your small agency claim responsibility for? These are the challenges that will face you as a director of a nonprofit board.
Nonprofits are valued for their prudence, commitment to service and fiscal restraint, yet are expected to produce significant community benefits.
In the for-profit world, business owners are rewarded for taking risks – usually with other people’s money (venture capital). Under-capitalization is warned against. And a personality like Donald Trump is lionized for his opulent lifestyle and forgiven for past business failures.
Not so in the nonprofit world. Here, individuals are expected to make sacrifices for the common good in the name of service. 
Making do with less is a familiar mantra. Pick up a business publication, and the virtuous charities are the ones with the lowest overhead.
Meanwhile, nonprofits are being admonished to “act more like businesses.” In reality, most nonprofits are extraordinarily small, much more comparable to “micro-enterprises.” According to data available through the National Center for Charitable Statistics, over 80% of registered US public charities had annual revenues below $250,000 in 2004.
At these smallest of nonprofits, nominally-paid staff or their volunteer leadership often have limited experience in nonprofit management and resource development — yet they are expected to operate as efficiently and effectively as multimillion dollar, professionally staffed organizations.
It’s surprising that these tiny organizations get anything accomplished at all. But they do! From the neighborhood soup kitchen feeding the hungry to the volunteer land trust preserving hundreds of acres of open space to the volunteer ethnic organization staging an annual cultural festival for 20,000 participants, many tiny nonprofits are making significant and valuable contributions to their communities.
Nonprofits are expected to consult with their stakeholders and to collaborate with their colleagues.
It’s not unusual for business people to comment on the pace of decision-making that occurs at many nonprofits. Change may happen more slowly than they are used to.
Because nonprofits are accountable to their community for doing good, stakeholders (like consumers, funders, politicians) expect to have some say in their functioning. Read More >>
No Comments »
Posted by Gayle Gifford on October 8, 2009 in Better Boards, Effectiveness
Are you ready to be rated on your results?
There is a snowball gathering momentum and mass rolling down the hill in the USA. Your board needs to pay attention to it now.
That snowball is the growing movement by independent intermediaries to develop simple rating systems for the very complex world of nonprofit performance and social impact.
As charitable giving has grown to over $300 billion annually in the US, it seems that the business world is now taking great interest. Those individuals who brought you the financial crisis have now decided that most charitable giving is misdirected (see this Fox Business News clip and you’ll get the picture). What the public really needs, they believe, are unbiased “intermediaries” to redirect charitable giving to the “best performing” nonprofits.
Funders are focused on measuring and publicizing nonprofit outcomes
A 2008 study released by the William and Flora Hewlett Foundation, called “The Nonprofit Marketplace: Bridging the Information Gap in Philanthropy,” outlines the desired objective:
“…a more efficient and effective nonprofit market would direct more funds to solving the world’s social problems faster and at a lower cost, thereby helping more people sooner. Reallocating just 10 percent of the current $300 billion annual fund flow to the best performers would have a similar effect as raising billions in new funds — with nowhere near the same cost in fundraising time and energy.”
Now, as much as I want to debate those assumptions, the train has already left the station.
For example, The William and Flora Hewlett Foundation has already provided seed funding to an organization called GiveWell which they are promoting on their website. They describe GiveWell as
“the sometimes controversial … independent, nonprofit evaluator of nonprofit organizations. A self appointed watchdog, it performs in-depth research to help people accomplish as much good as possible with their donations.”
Who are GiveWell? As listed on their web profiles, their staff are former hedge fund employees and recent college graduates (who appear to have little-to-no nonprofit experience). They boast on their website that they have already evaluated 500 nonprofits and only found four worthy of their top ranking!
While you may not have heard of GiveWell, you’ve probably heard of Charity Navigator. Ken Berger, its thoughtful President and CEO, has heard the criticisms of its 4 star ratings which assess only financial indicators and not nonprofit program performance.
Mr. Berger is aware of the criticisms of Charity Navigator’s limited perspective and determined
“to transform our evaluation system of charities to include two additional dimensions (beyond financial health) – accountability (including transparency) and outcomes.”(Emphasis added). Read more here
Charity Navigator has appointed an advisory group to help it design its system.
Is your organization attempting to measure outcomes at all?
We all know that measuring outcomes is one of the hardest tasks that most nonprofits and social benefit organizations face. And one of the most controversial.
Just look at the maelstrom stirred up by the US government’s No Child Left Behind Act which tests students to assess public school performance. Critics of the testing process point out many shortcomings including school cheating, lack of similar standards across states, the failure to test Read More >>
1 Comment »
Posted by Gayle Gifford on June 30, 2009 in 100 Things We've Learned, Better Boards
Vision matters. It inspires. It enables. It overcomes. It achieves.
Your founders most likely shared powerful dreams…
They saw people who were hungry and set out to feed them.
They saw people stricken by disease and were compelled to heal them.
They were outraged by the burning river and resolved to make it clean.
They saw a community without spirit and promised it art and music.
They saw their heritage at risk and vowed to preserve it.
Imagine those founding days of your organization.
Can you picture the founders, conspiring around a kitchen table? Can you hear them talking? Passionate, outraged, inspirational? Can you see them working tirelessly, day and night, in service to their cause, despite overwhelming obstacles, hungry to make a difference?
If you polled your board members today and asked why they serve, would they echo the passion of your founding vision?
Or would they describe their purpose in more mundane terms — attending meetings, monitoring finances, raising money, creating policies, supervising the CEO?
While these routine tasks are important components of the Board’s duties, they only have value as they enable the means to achieving the greater vision.
It’s not enough to outfit and command a tight little ship. That ship has to deliver its passengers to their desired destination or you’ve failed your mission.
Ultimately, your performance as a board isn’t judged by the health of your balance sheet, or the sparkle of your facility, no matter how important these may be.
The real measure is the difference you make in the lives you save, the natural resources you protect, the beauty you create, or the spiritual comfort you provide.
Whether you describe it as a vision, a mission, or just your promise to your community, achieving that vision is what truly matters.
*****************************************************************************************
Adapted from the opening chapter of Gayle’s book How Are We Doing? A 1 Hour Guide to Evaluating Your Performance as a Nonprofit Board
No Comments »
Posted by Gayle Gifford on June 18, 2009 in 100 Things We've Learned, Better Boards
What do the cowardly lion and nonprofits board members have in common?
The need for courage.
Don’t you just love the classic film the Wizard of Oz . It’s such a delightful and scary movie, a favorite of mine since I was a kid. Good old fashioned film making laden with lessons for the ages and for all ages. Lessons like:
- No matter how far you travel, there’s no place like home.
- Good friends are a treasure to cherish.
- Nothing beats common sense.
- Question authority.
And one in particular for nonprofit board members:
- If you really care, you’ll find the courage to do the impossible.
The issue of courage has been surfacing a lot for me over the last few days. It’s come up in discussions with board members who shied away from raising a contentious issue. It’s surfaced as I follow the Iranian demonstrators on Twitter and wonder just how close to personal danger I would stand to defend my ideals or my family.
I’ll bet that when you were asked to join a board, (or when you ask people to join yours), one area that never gets discussed is the need for board members to be courageous.
Most of you will never need the kind of courage for board service that puts you personally in harms way (though some of you may, and some of you already have).
So why talk about courage? Is that too big a word?
Leadership is never easy. Board members often face unpleasant tasks. You may need to terminate a failing CEO. Or stop re-electing routinely nonperforming board members or officers. Or cut a major program division that simply isn’t producing the desired results.
While these may be infrequent events, even the routine activities of serving on a nonprofit board require some courage. Or even a lot.
Like…
… asking the question that no one else is asking. And persisting until you get an answer you understand.
… suggesting it’s time to do thing differently from the way it’s always been done. Or dissenting — especially when you are the only one.
… reaching out to your friends, family, colleagues or even strangers to ask for their help, or to ask for their gifts in support of a cause you believe in.
… and critically and honestly reflecting on your own commitment and how that affects your performance.
You don’t have to be extraordinarily brave to be courageous. You just have to create the right conditions and culture that enable you to routinely be courageous.
The cowardly lion realized that his courage was the result of serving a powerful cause, standing shoulder to shoulder with a great team, recognizing that he did matter, and knowing that the repercussions were great if he failed to act.
Does this sound like the conditions you’ve created in your Board?
Like Dorothy and her crew, you don’t need a room full of magical creatures to accomplish great things,
… Just heart
… hard work
… the nerve.
*********************************************************************************************************
A version of this article appears as the last chapter in Gayle’s book How are We Doing? A 1-Hour Guide to evaluating Your Performance as Nonprofit Board available through Contributions Magazine.
No Comments »
Posted by Gayle Gifford on May 26, 2009 in 100 Things We've Learned, Better Boards
What enables change in a nonprofit board of directors?
- A critical mass of directors, including key leadership, perceive a need for change.
- The rest of the board is willing to go along.
- Directors find an inspiring new vision to rally around.
- Directors are actively involved in and agree with the “diagnosis.”
- Directors believe that the change is possible and will make life significantly better.
- Directors are open to trying new ways of acting.
- Directors believe that the benefits of change outweigh the costs.
- Directors are willing to, and learn, the new skills needed to perform the new behaviors.
- Directors believe that they personally can do it differently.
- The Board itself supports and reinforces the change over time.
- Directors are willing to commit the time to working on the change and to changing over time.
- Directors trust each other (and the change agent).
- Directors are willing to commit resources to support new ways of behaving.
What else have you found necessary to enable major improvements in your nonprofit board of directors?
And if you are thinking about launching board development, you might want to start by assessing just how many conditions for successful change are already in place.
For more about behavioral change and organization development, check out this helpful summary of Change Theory courtesy of University of Twente, Netherlands.
No Comments »
Posted by Gayle Gifford on May 22, 2009 in 100 Things We've Learned, Better Boards
Does Rumplestiltskin describe the life of a typical nonprofit CEO?
You remember the fairy tale. A poor miller’s daughter is locked into a room by the king and told to spin straw into gold upon penalty of death. She is saved by the appearance of a odd little person called Rumplestiltskin who offers to spin straw into gold for her but only on the condition that she give up her first born child.
Has your board imprisoned your Executive Director?
In surveys conducted across the U.S., most nonprofit executive directors report that they love their work. Yet they also lament how they’re subject to constant stress, never ending days (and evenings and weekends), and financial and personnel worries.
If there is anywhere in an organization that the buck truly stops, it’s in the office of the executive director. Yea, the moral authority of the organization is on the shoulders of the Board. But the reality… it’s the CEO responsible for success or failure.
According to a survey done by The Urban Institute ” more than a quarter of CEOs [of mid-sized organizations] rate their boards as fair or poor when it comes to evaluating the CEO, planning, monitoring programs and services, dealing with the community, and educating the public about the organization.”
Time after time, I hear from the executive directors of very successful nonprofits how alone and unsupported they feel. “I appreciate the vote of confidence of my board, but I don’t feel completely comfortable steering this ship without some direction from the Board.”
Certainly boards hire their chief executives for their leadership and with high hopes for great outcomes. But like the poor miller’s daughter, few mortals have gold-spinning powers. Most need some support to achieve great results.
CEOs need a strong partnership with their Board. They want to find a collegial, dedicated and self-managed team that employs the right amount of monitoring while at the same time offering support and wise counsel.
Too often they get micromanagers instead, or equally bad, uninterested and unreliable directors the care and feeding of which just squanders precious time.
How do you know what your CEO needs from your board (beyond meaningful work, reasonable compensation, a healthy workplace, and opportunities for professional growth)?
There are two ways to find out:
1. Put yourself in your exec’s shoes. What would you want from the board if you were in that job?
2. Ask. You can learn a lot through direct conversation.
Don’t make your CEO strike a Faustian bargain with some funny little man. Supported by an effective board, many CEOs actually can spin straw into gold.
**********************************
An earlier version of this appeared in Chapter 12 of Gayle’s book How are We Doing? A 1-Hour Guide to Evaluating Your Performance as a Nonprofit Board
2 Comments »
Posted by Gayle Gifford on May 18, 2009 in 100 Things We've Learned, Better Boards, Good reads
Can your charitable nonprofit pass the Mom test?
Let’s say your mother came to you for advice:
“Dale, you’re well off, your sisters don’t need my help. I’ve decided to leave what money I have to charity. What do you think of my giving it to the group you’re involved with?”
When deciding what to say to your Mom, you would probably ask yourself two questions.
1. Is my organization worthy of such a big gift?
You can spot a worthy organization pretty easily:
- It has passionate and competent leadership who turn dreams into reality
- The cause really matters and the programs change lives.
- It invests its money well — where it generates the greatest impact.
While worthiness is critical, it isn’t enough to meet the Mom test. You can probably think of a few worthy causes but you’d never give to the organization because you don’t trust how well they are managed.
That brings me to the second question:
2. Is this an organization that my mom could trust to use her gift well?
Trustworthy organizations take their stewardship commitments seriously. They want their donors, their clients, the public and the media to know that their trust is well founded. Trustworthiness means that you:
- Place stewardship and ethics above all else.
- Deliver on your promises.
- Avoid conflicts of interest and always make decisions in the best intereste of the community and people you serve.
- Consider every dollar and every asset a precious resource that must be used wisely.
When your board or staff are evaluating how well your organization is doing, it helps to think about your mother. Because if you don’t believe that your organization is a wise investment for your mother, it really isn’t for anyone else’s mom (or dad or sister or brother) either.
Chapter 9, How are We Doing? A 1-Hour Guide to Evaluating Your Performance as a Nonprofit Board.
You can order the book at Contributions Magazine. Just click here.
No Comments »
Posted by Gayle Gifford on May 13, 2009 in Better Boards, Communicating, Tidbits, Upcoming Events, Speaking and Training
Purpose. Vision. Wisdom. Humor. Joy. Passion. Shared Values. Dedication. Generosity. Insight. Productive. Patience. Flexibility. Common Ground. Perseverance. Investment. Struggle. Eye-opening. Community-building. Caring. Deep Caring. Collaboration. Diversity. Gratitude. Leadership. Creative. Integrity. Teamwork. Unity. Heaven. Rewarding. Brainstorming. Listening. Support. Respect. Commitment. Interactive. Different. Communication.
These words emerged from a workshop I facilitated this morning called “boards that lead.” To get us started I asked everyone to think of a great board experience they have had and then to share one word that characterized that experience.
In just a few minutes, the 40+ board members, executive directors and staff who attended shared the words above. Together, they described the perfect board experience. What a gift. Thank you.
No Comments »
Posted by Gayle Gifford on April 14, 2009 in Better Boards, Helpful sites, Tidbits
I just stumbled onto the IRS’s “Compliance Guide for 501(c)3 Public Charities” at http://tinyurl.com/22uwe9. This handy guide has all of the various reporting and disclosure requirements all in one place as well as a long list of IRS resources and other issues that all nonprofit boards and leadership should know.
Have I mentioned yet how helpful the Internal Revenue Service website can be? I routinely go to the web site to double check substantiation and disclosure requirements for charitable gifts (IRS Pub 1771) or to check what might be considered unrelated business income (IRS Pub 598 ) or to get a sample conflict of interest policy for the board. They even have a special tab for Charities and Nonprofits, right on the home page.
What could be better than free information, straight from the horse’s mouth, so to speak.
It’s not often that we get to say thank you to the IRS, so thank you.
No Comments »
