Archive for the ‘Better Boards’ Category
Posted by Gayle Gifford on July 8, 2010 in Better Boards
I just heard another sad tale today of a nonprofit that ended up in a financial pickle that almost ended its vital community programs.
Apparently the executive director took on a grant obligation which required a big match and the board took the exec’s word that the money was there to back up the obligation.
While it is the rare day that I find myself quoting Ronald Reagan, here goes: “Trust but Verify.”
The relationship between a Board and its CEO would be pretty broken if there weren’t high degrees of trust both ways. Yet for a Board to be truly exercising its fiduciary role, it can’t always rely on the word of its staff. It’s a sorry thing to have to say that, but even the most trustworthy person may find his or herself (or a family member) in a situation that they believe merits directly bending the truth or using silence to avoid disclosing a problem.
There was absolutely no personal gain in this case and nothing illegal. But how many times have you read a newspaper story about the loyal employee, the one that everyone trusts implicitly, who turned out to have been embezzling money all those years. (Often to support gambling addictions – we’ve had too many of those in our state). And think “that can’t happen to us.”
Instead, think about how that might happen to you and take some preventive action.
In their PolicyGovernance (R) model, John & Miriam Carver suggest three ways that Boards can monitor the situation at their organization:
1. Ask for a report from staff
2. Engage someone from outside the organization to conduct a review (e.g. your auditor), or
3. Inspect it yourself.
Every Board needs to make sure that they are judiciously using ways 2 & 3 in addition to relying on staff reports. It’s a heck of a lot wiser to trust, when you’ve got the independent verification that everything is hunky dory.
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Posted by Gayle Gifford on May 17, 2010 in Better Boards
If your organization is all-volunteer or has one or two staff, then board members, in addition to governing, also fill staff roles. These boards are usually described as “working” boards.
Working boards are often quite successful organizing direct service program activities and finding volunteers to staff them – after all, it is enthusiasm for the cause that stokes the passion of their volunteers. It’s not terribly hard to recruit volunteers to cut trail, recruit speakers or serve meals.
But raise money? Get out the newsletter? Serve as the IT department? Process the mail? Who wants to volunteer for those jobs?
A tough challenge for all-volunteer nonprofits is to find people to do the work that isn’t seen as fun. That’s why in most large organizations, these are the jobs staff are paid to do (and even paid staff moan about the difficulty of getting volunteers to participate in fundraising).
Here are five tips to help all volunteer boards accomplish important administrative and fundraising tasks.
1. Assign each board member and each committee a concrete goal to achieve.
You’ve got real work to accomplish — money to raise, memberships to renew, programs to deliver.
So don’t hand over fuzzy assignments to people or committees. If you need the fundraising committee to raise $25,000, make that their assignment. If you’ve got five open slots on the board, make sure that the nominations committee is given the task of finding five excellent new board members.
In working boards, never recruit board members “at-large.” Instead, recruit every board member for a purpose and give them an assignment… and by that I mean a significant outcome they are responsible for delivering.
2. Stop dumping everything on the board president… and conversely, board presidents please ask for help.
Too frequently, all of the critical jobs in an all volunteer organization default to the board president. Because we ask our presidents to be super humans, they don’t have the time to define volunteer jobs, find recruits or structure committee assignments. So they find it easier to “do it myself.’ How often have you heard that said! (I’ve even said it)
So, I find that a board governance committee is a great asset even in an all volunteer organization. Think of that committee as the board’s human resource department. Share with them the responsibility of building a great board… and great committee volunteers.
3. Make volunteer jobs manageable.
The “other-duties-as-assigned” catch-all is okay if you paying staff. But it’s virtually impossible to recruit unpaid volunteers to such open ended assignments.
Here’s an example. If you are chairing a conference committee, recruit an able team and split up the work. Make one person responsible for recruiting the speakers, someone else responsible for booking the facilities, another person for day-of logistics. I’ll bet that after two or three organizing meetings, your committee won’t even need to meet face-to-face. You can hold phone or email meetings to check in that everyone is on track.
4. Recruit volunteers who have technical expertise, high standards of personal responsibility and can manage themselves.
All-volunteer boards can’t afford too many volunteers who need a lot of handholding. That’s not to say that you don’t need to train new people to get them off to a good start (which is where committees come in) but make sure that the most important outcomes go to people you know will get the job done. It is okay to set high expectations and not to settle for any warm body.
5. Don’t assume that administrative, finance and fundraising tasks are never fun.
One of our problems in finding recruits is that we start out with the idea that these are loathsome tasks. And we recruit with that idea in mind.
But lots of people make a living — one they even enjoy — doing these jobs. Some are unique to nonprofits but others may be comparable to the for-profit sector. You’ll just need to train your volunteers in the special cultural and legal requirements of nonprofits.
6. Oh yes, have fun. And please thank your volunteers.
No one wants to keep coming back to an organization that doesn’t appreciate their help. Or where every task feels like a terrible burden. Make sure to take the time to socialize, celebrate and acknowledge the great work that you are doing.
There are volunteers are out there for you.
You just have to find them and give them something important to do.
P.S. You don’t have to put every volunteer on your board. Some people are very willing to do complex and time consuming tasks only if you don’t ask them to be on the board.
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Posted by Gayle Gifford on April 15, 2010 in Better Boards
For the last week, every time I leave my house I step out to a front yard radiant with spring bulbs and flowers. A few years ago we ripped out the sad looking front lawn and replaced it with raised beds filled with summer perennials, spring bulbs and ground covers. 
While I love all of my flowers, I think I love the spring bulbs most of all.
Last fall, as the flowers were fading and the temperatures falling, I dug the holes, dropped in the bulbs, a little organic bone meal, a little water, and waited for spring.
I plant the bulbs knowing that it will take months before I’ll reap the rewards. Yet I do it anyway, craving their beauty and anticipating their arrival throughout the coldest and snowiest months of winter.
And voila! here they are. First the crocuses, then the tulips and daffodils to take their place. I’m rarely disappointed (having learned to select varieties that the squirrels won’t eat).
Monday I was facilitating a planning meeting with some board members and staff of a nonprofit that I worked with on board development the previous year. Before our work together, the board was tired and ineffectively turning in circles.
We began our work together in in the fall, right around bulb planting time. In June, we elected five new community members who have been an incredible addition to the board, bringing hope, energy, new friends and growing commitment.
As I arrived at the meeting Monday, I stopped to say hello to one of the staff. He looked to the room where we were meeting and smiled, reminding me of the renewal of the board.
Like the bulbs of spring.
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Posted by Gayle Gifford on April 9, 2010 in Better Boards, Big ideas, Strategic Thinking
With the extremely poor financial condition that states are experiencing and the coming wave of dramatic cutbacks in state and local funding of services delivered through nonprofits (one colleague noted close to 15 nonprofits on the financial brink in her Florida community), one would think that boards would crave new thinking around program delivery, organizational structure, partnership or cost reduction.
But a conversation yesterday brought back to me a dynamic that I’ve been observing for many years: the role of boards as conservators.
A little background.
Yesterday I made my bi-annual trek to life portfolio company New Directions to discuss life in the nonprofit sector with their clients. New Directions clients are accomplished people in business or the professions who are designing the next stage of their life journeys.
My portion of the conversation was “The rewarding and confounding world of the nonprofit sector,” which is partly nonprofit 101 and partly DEEP THOUGHTS.
A fellow “interpreter of the sector” was the Executive Director of a capacity building (smallish, $500K budget) nonprofit. He mentioned that for the last two years he had been a co-executive director, a leadership team that resulted from a merger. He mentioned that the other ED was winding up his term and he would soon be the sole ED. When I asked how the co-directorship worked for him, he shared he really liked the arrangement, but his Board just wasn’t comfortable with the shared leadership model.
Boards as Conservators
At first a bit surprised by this tale, it reminded me that many boards are naturally suited to their role as conservators.
Here I’m using conservator in its definition as someone who conserves or keeps safe. Like a custodian, guardian, or protector.
The words we use to describe board duties — like prudent, loyalty, care, fiduciary — imply moderation and caution. Another word I might use would be “conservative.”
In my experience, most Boards of Directors are loathe, and rightfully so, to take big risks. In their conservator role, boards put the breaks on reckless spending. Because boards usually reflect the mindset of the communities they serve, they often restrain choices, decisions or actions Read More >>
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Posted by Gayle Gifford on April 2, 2010 in Better Boards
- Only choose board service if you are willing to carry the moral obligation of societal betterment on your shoulders.
- Serve organizations whose vision and values you are passionate about (or will quickly grow to be).
- Limit your board service – two boards at one time is usually enough.
- Know what you are getting into. Vet the organization as it vets you.
- There are many organizations of many sizes that need your help. Choose the one where your talents and passion align with its needs and vision.
- Generously leverage your wisdom, strategic sensibility, connections and expertise on behalf of the organization you serve.
- Value service, collaborative and consultation.
- Keep your eye on community outcomes, insist on high standards of performance and legal and ethical behavior regardless of organization size.
- Hold fast to a philanthropic moral compass.
- Study the nonprofit sector and the issues you serve.
- Observe and respect the boundaries between board roles and staff roles.
- Donate at your leadership level (make this organization the top 1 or 2 in your giving).
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Posted by Gayle Gifford on March 30, 2010 in Better Boards
My colleague Cheryl DelPico of New Roots Providence floated a brilliant idea by me a few weeks ago that I’d to share with you. She was commenting on a “Meet the Funders” forum she had attended.
One of the corporate community relations managers said “The only thing nonprofits ask from us is money. We can help them in other ways as well.” The community relations manager was thinking about volunteers, or some inkind contributions or even board members.
Which got Cheryl to thinking. Yes, many corporations are eager to place their employees, especially current or up-and-coming leadership, on nonprofit boards. And that’s great.
Her concern was that often those individuals come to nonprofits with little-to-no board experience. Training them is left to the already time and resource stretched nonprofit. And with the majority of nonprofits in the US well under $1 million in annual budgets, most don’t want to invest a lot of money training volunteers who may not stick around.
What if, as is happening in some programs across the US, businesses made it their responsibility to ensure that their potential board volunteers were fully trained in the highest practices of nonprofit governance, before they were placed on a board of directors.
What would be included in that training?
Well, certainly the program would include basic fundamentals of boards, such as legal obligations of board members, the special responsibilities and privileges of tax-exempt public charities, the responsibilities of governance, etc.
But I’d also include a number of other topics in my training program, such as:
- the unique financial structure of nonprofit organizations and how it affects what board members look at
- an indepth look at conflict of interest
- creating dashboards or key performance indicators to monitor nonprofit health and plan for the future
- making community connections
- establishing annual board objectives and workplans
- evaluating societal outcomes, or how do you know if you are really doing any good
- self-management and discipline
- managing change and facilitative leadership
- policy development
- the ideal board meeting
I’m not talking about a two hour training program. Maybe two days.
My training would include working a few cases, attending a few board meetings and analyzing them against best practices, simulating a board meeting that includes a contentious organizational issue… practical experience.
Why would a company want to invest in a training this rigorous? Because your employees will be much more useful to the organizations they serve and because they’ll be more fulfilled in their service. Because they’ll learn some valuable skills that can spill over to their jobs and their own leadership. And because you’ll be making a very valuable contribution to the organizations your employees have chosen to support.
P.S. I’d love to hear about businesses that are already running these programs and how they work. Or other non-monetary ways that businesses can help nonprofits. For example, if your company is running a organization development or human resource based training program that isn’t specific to technical expertise in your line of business (e.g. team development, project management, implications of new labor laws), why not hold a few slots for some of the nonprofits you support and invite them to your training.
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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 >>
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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 >>
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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 >>
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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.
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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
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