Thank you to A… for graciously sharing his home for what promises to be a delectable board meeting.
The meeting postprandial will be a lively humanities conversation with our special guest, Christopher Lydon, former host of WBUR’s The Connection and Radio Open Source, now live from the Watson Institute at Brown U. Chris is very eager to learn more about our Council and connect with board members. Personally, I can’t wait to pump him for his vast experience in “curating [humanities] conversations” over the airwaves and now in cyberspace.
Of course, before we can get to Chris and refreshments, we’ve got a board meeting to devour.
Our main course is a discussion, feedback and approval of the goals and programming direction for FY 2008 which RKA, our Executive Director, will be presenting followed by approval of a working budget for FY 2008 that reflects those priorities and outcomes. (Alas, it remains a working budget until Congress finalizes the budget).
Side dishes include a proposed bylaws change on the residency requirement for Board members and feedback from the Governance Committee on Board self-assessments.
Of course, no meeting would be complete without THE CONSENT AGENDA which includes the thoughtful recommendation of grant awards from the Grants Committee, receipt of staff and board committee reports, and final approval of the FY 2008 Board & Board Committee Objectives.
Please arrive so that we can start on time (no excuses, we are back in Providence!) and preserve ample time to savor the planned conversations.
But the reason I wanted to share this with you is that I think it is good practice for the board chair to frame the upcoming meeting for the board. This memo was sent out in advance along with the packet of materials for that upcoming meeting.
My memo also illustrates some of the practices that make for a better board meeting:
Use of the consent agenda to quickly dispose of noncontroversial items, items where the authority for action has been delegated to a committee, or items discussed at a previous meeting that just need a final vote. Of course, any member can ask that an item be taken off the consent agenda for a more complete discussion.
Most of the meeting spent on a few substantive issues.
A conversation with someone really interesting from outside the organization but very relevant to the mission.
And what you can’t see in the memo, good food and social time.
And a few practices that make for a better board and organization:
Clarity on goals and objectives for the coming year
A budget that reflects those priorities
Intentional board practice, including deployment of a governance committee, board self-evaluation, and learning from that feedback.
Are you wasting the talents of your Vice President?
In many nonprofits, the vice president of the board of directors is the heir apparent, slated to move into the top leadership position when the current president’s term ends.
So why doesn’t this upcoming leader have anything to do?
The laws of most states don’t require nonprofits to even name a vice president as one of their statutorily-mandated officers.
Tradition holds that nonprofits create a vice president position so they’ll have someone ready to step in should the president be unable to complete his or her term – in the same way we have a vice president of the United States. But your bylaws could just as easily mandate another officer to fill this role.
So rather than taking a perfectly capable board member and only ask them to hold their breath waiting for the president to expire, wouldn’t it be a better use of the VP’s talents to have something worthwhile to do? Especially if part of the process of choosing a VP is to groom that person for leading the board?
Here are three ways to use your VP:
1. Chair of the strategic planning committee
When I asked my networks about experiences of using the VP for something worthwhile, I received only one response. My Chicago-based colleague, Bonnie Koenig of Going International, said she’s seen vice presidents who are charged with carrying forward strategic planning and thinking in their organizations.
What a great idea. Why not make the vice president the chair of strategic planning. Strategic planning should be an ongoing process, not just a Read More >>
In an earlier blog post Abolish the nonprofit Board? What do you think? I told the story of a social entrepreneur who, in starting a new public charity, decided to forgo standard wisdom and ditched his board.
He couldn’t really eliminate the board entirely — most states require board members in order to have a nonprofit corporation. To meet the requirement, he invited two friends to make up a three person board, including himself.
Why did he do this? Because he found as CEO of a previous nonprofit that the board was an incredible time sink for his attention. And that the board seemed satisfied with the status quo (quality programs delivered to a small cohort of needy kids) rather than demanding bolder action to meet what was such a bigger need.
Many of you commented, sympathizing with his plight yet worrying both about the long-term sustainability of the organization as well as the oversight to donors.
I promised I’d weigh in after giving you an opportunity to comment.
I agree with him on two accounts:
Boards can be a real drag on Executive Director time.
Boards are often timid and unclear on what value they create.
And where I disagree:
Boards protect the public’s interests
Nonprofit ownership belongs in the community, not one person.
Last Thursday I was part of one of the most provocative discussions I’ve been in for awhile.
The CEO of a year old start up public charity — I’d say he fit the description of a “social entrepreneur” — was describing his leadership and management framework to a group of top level corporate types. He was confident, brash, passionate about his mission, and business oriented. He referenced Jim Collins and Good to Great in his approach.
The business people loved him. Me too… until…
He explained how in starting this new organization he had learned many lessons from the previous organization he had founded (which had enjoyed both great program outcomes and growth).
Like the need for a clear business model
The importance of having great people in their jobs
A commitment to the mission, including not settling for too small an impact on a big problem
All good, and then..
Getting rid of unproductive time sinks, including the Board of Directors.
Whoa! Like throwing a firebomb into the room.
Hearing the collective gasp, he went on to explain. At the first organization he had founded, he spent 30% or more of his time managing the Board of Directors. A board that was complacent with the number of kids they were serving, which was barely a drop in the bucket of need.
So, this time around, he wasn’t going to waste precious time when there was important work to be done. Though he really couldn’t really abolish the Board (state law does require a board of directors for a nonprofit, usually with more than one trustee), he could make it small and manageable. Which he did by composing the board with two good friends and himself.
I noted that this is all perfectly legal. And frequently done. Think of the typical founder board, usually a family and friend affair.
Needless to say, lots of questions followed:
Don’t you need the Board to assist in fundraising? No, the business model is built on federal funds.
Who decides Executive Compensation? How do you ensure that you don’t get in trouble with the IRS over excess compensation? We do an regular market survey of salaries, I get paid under the top, and I recuse myself from the discussion and vote.
How do you build community ownership? Get contrary advice? We have an advisory board of community leaders and others.
Why didn’t you just create a for profit organization? Because this is the corporate structure I’m most familiar with and to leave open the possibility for philanthropy, even though the business model doesn’t currently depend on it.
What happens if something happens to you? That is a question, but my guess is that the board will find someone to replace me. Plus, as we grow, there will be staff under me who could step into my shoes.
I had lot of thoughts about this. But before I share them, I’d love to hear from you.
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 >>
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 >>
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.
Making do with less is a familiar mantra. Pick up a business publication, and the virtuous charities are the ones with the lowest overhead.