Posts Tagged ‘nonprofit boards’
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 September 16, 2009 in Upcoming Events, Speaking and Training
Check out the nonprofit workshops we’re giving around New England this Fall. We hope you’ll join us.
- Wednesday, Sept 30th: Gayle will be co-presenting on Annual Giving Campaigns at the Boston Fundraising Summit at Simmons College. Our session runs from 9:30-10:45 am.
- Thursday, Oct 8th: Jon and Gayle will be presenting “How to make the most of your year end appeal” for the RI Land & Water Partnership from 5:30-8:30 pm. The session will take place at Audubon Society of RI headquarters in Smithfield, RI. While the session is open to all, first dibs go to watershed associations and land trusts.
- Tuesday, Nov 3rd: Gayle will be leading a lively discussion “Building Board Leadership: The role of board officers” at TDC’s downtown headquarters in Boston, Mass.
- Monday, Nov 9th: Gayle will be presenting “Funding your work in these times” at the YES WE WILL Conference at the Crowne Plaza, Warwick RI. Her workshop is from 2:45-4:15.
- Friday Nov 13th: Dig deep into board self-assessment at Gayle’s workshop “How are we Doing? Using Self- Assessment to Jumpstart Your Board Improvement Plan” at the Massachusetts Nonprofit Network/Associated Grantmaker’s Conference at the Sheraton Framingham in Framingham, Massachusetts. Session runs from 1:45-3:00 pm.
- Thursday, Dec 3: “Strategic Planning and Succession Planning” will run for the last time in 2009 at the Rhode Island Foundation/ Fidelity Investments Board Development Program. This one is an early morning session from 8:30-11:00 at Fidelity’s Smithfield, RI campus.
See you there.
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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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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.
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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.
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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
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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.
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Posted by Gayle Gifford on May 12, 2009 in 100 Things We've Learned
Does your board know what questions to ask before it approves the annual budget? While most boards have a vague sense of their need to exercise their fiduciary glands, I’ll bet if you queried your board members, most wouldn’t have a clue what they should be looking at.
Here’s a list to get you started. If you have other questions, we’d love to share them.
1. Does spending align with your program and operational priorities?
If you think of your budget as an investment, are you investing in the right things? What is the return in community results based on your expenditures? Does the budget match your strategic plan? It should.
2. Does the budget honor your commitments to your funders?
First, your donors give to you because you have promised to make the world a better place. Does the budget enable that?
Second, as the Nonprofit Finance Fund tell us, all cash is not fungible in a nonprofit. Board members should know whether dollars that have been restricted by funders are being spent on schedule and for the designated purposes. I’ve seen boards who thought they were okay cash wise blindsided when an audit revealed they were covering general operating out of dollars restricted for other purposes.
3. Does the allocation of the Executive Director’s time reflect Board-approved priorities?
In a full cost accounting system, a proportion of your Executive Director’s time will be apportioned to program, management and fundraising based on the amount of time your Executive Director spends there. So if the budget says that 80% of your Executive Director’s time is in management, is that what you expected?
4. Is the percentage spent on program acceptable, that is, does it meet voluntary standards and funder guidelines? (Follow up question: how many of your board members even know what that percentage is?)
There are no federal standards in the USA (unlike other parts of the world) on how much of your funding should be spent on your programs (though the IRS has been kicking up it’s heels on this issue). But know that charity watchdog organizations like Charity Navigator are tracking this number.
While I happen to think that rankings based on how little you spend on management and fundraising are too simplistic, I also think that it is important that the board pays at least some attention to where the bulk of spending is going.
The standards of the Wise Giving Alliance of the Better Business Bureau are that no less than 65% of your spending should go to programs. If you wish to participate in workplace campaigns such as the Combined Federal Campaign or a state or federation campaign, the standard is 75%. Other funding sources may have different standards.
5. Are you taking in as much or more than you plan to spend?
The equation is pretty simple. Spend more than you bring in and you’ll end up with a deficit. Remember that unspent restricted funds from the prior year still need to be spent on what they were designated for (see above). Not only do you most likely want a balanced budget, you might also want to run a surplus to help build your operating reserve. It’s nice to have adequate cash throughout the year and perhaps even earn a little interest.
6. Are you building cash reserves at a sufficient rate to match your growth?
This follows from the question above. As your budget grows, so should the amount you have in reserve. Accountants tell us that it is prudent to have a minimum of three to six months of operating expenses in reserve.
7. Does spending on salaries and compensation achieve your staffing objectives?
What is your compensation strategy? Does it match your organizational values? Are you trying to attract and keep the most talented staff? Are you providing a living wage to employees at the lowest pay scale? Can you afford to replace employees who leave?
8. Are compensation packages within IRS standards for reasonableness to avoid excess benefit sanctions?
If you have no idea what I’m talking about, run to the IRS web site discussion on excess benefit transactions and intermediate sanctions or ask your auditor for a tutorial. This is a really important issue as individual board members could find themselves personally slapped with steep penalties from the IRS.
9. Are you confident in the probability of projected revenues — enough to approve the requested level of expenditures?
No playing games here. If you don’t have a plan to bring in revenues that allows you to sleep fairly well at night, then don’t pretend that you can fund all those expenses. A good conversation for your board to have is to ask what level of risk you are willing to bet on revenues … and what goes when your best laid plans fail to meet expectations.
10. Are lobbying expenditures within IRS restrictions?
If do any lobbying at all, you should know the IRS limitations on lobbying. Check out the Center for Lobbying in the Public Interest for the full scoop.
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Posted by Gayle Gifford on January 12, 2009 in 100 Things We've Learned, Better Boards
We have such high expectations for our board members. (see my previous post “Can mere mortals be successful board members?” ) Of course, they have a unique legal responsibility for your organization, so their responsibility and accountabiity is significantly higher than other volunteers. (Though I can think of volunteers whose actions immediately affect the life or death of clients.)
But as a board member myself, I find that life’s other demands — family, work — usually come first. While I’m pretty self-motivated as a board member, I still need nudging from time to time.
Here are just a few of the things I’ve found very helpful to keep me engaged: Read More >>
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Posted by Gayle Gifford on November 5, 2008 in Upcoming Events, Speaking and Training
I frequently consult with and have occasionally served on the board of a lot of very small nonprofit organizations. By very small, I mean organizations that have no staff or just a tiny handful of staff, often part-time.
These tiny organizations often need to rely on their board members to serve staff functions. That’s clearly obvious for organizations that have no staff at all… but may not be so clear once you’ve hired an executive director or one or two more staff positions.
It takes a lot of human-power to make our organizations run. One or two people, while they can do a lot, can’t do everything that needs to be done to be a thriving nonprofit. It’s pretty near 
impossible for one person to run quality programs, raise all the revenues, reach out to the larger community, and manage the operations and finances.
Board members in small nonprofits usually need to wear two hats… the hat they wear to govern the organization and? the hat they wear to serve a staff function… that is, to take on one of the many jobs that fall under the “staff” side of the organization and get them done.? Other non-board members can also be recruited to get the work accomplished.
How do you do this? You can start by making a comprehensive list of all that you hope to achieve this year. Then break those objectives down into the tasks that are needed to get them accomplished. Think about what skills and knowledge are essential to get this work done.
Knowing what needs to happen, recruit board members (or other volunteers) with the expectation that they will produce one of those desired outcomes.
Here’s an example. My local chapter of the Association of Fundraising Professionals runs a series of educational workshops, an annual conference on fundraising, and a huge celebration for National Philanthropy Day, among others. With just one part time administrator, the chapter relies on its board members and volunteer to get things done. When board members are recruited, they are asked at the time of recruitment to chair a committee that is charged with the responsibility of achieving one of these very large tasks. ? I myself have served as chair of the Annual Conference, the scholarship committee, and the mentoring committee (not at the same time!)
So, to make a working? board work, every board member should have a job and outcome that he or she is responsible for achieving.
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