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.
Last week I found myself in a very interesting conversation about the “profession” of fundraising.
A colleague was sharing ideas from a workshop she attended. The presenter had described a common situation that many directors of development experience.
You know the one. The development director has just laid out a carefully crafted strategy based on best practices and research. Immediately a board member or other leadership volunteer challenges the elements of the plan.
I’ve found that this scenario is very common when planning events or personal solicitation campaigns.
Usually, the challenge reflects the anxiety of the volunteer at being asked to step outside of his or her comfort zone. The volunteer/board member, fearful of the task ahead, comes up with dozens of reasons why the carefully developed strategy won’t work. Why, another organization he volunteered at just sent out a glossy letter instead of asking him to make phone calls.
So my colleague noted that the workshop presenter made the case that fundraising is a profession. One of the ways to tell a true profession is whether or not it has a body of knowledge that is “unique and specific to its practice and function.” (AFP). She made the case that fundraising does in fact have an established and growing body of knowledge.
The presenter then described a few scenarios of other professions with established bodies of knowledge where it would be unimaginable to find the amateur telling the professional how to do that job. Here are two that came to mind:
Could you imagine a board member telling the chief of surgery at a nonprofit hospital a better way to perform an upcoming operation?
Or a committee chair telling the head coach at an independent school a better way to train his basketball players? (Well, maybe you could imagine that, but you get the picture.)
So why do board members feel they can tell fundraising “professionals” how to do their job?
But here was my counterpoint.
Before we get a little self-righteous about all that profession stuff, maybe we need to look into the mirror.
Perhaps our board members don’t treat us as the professionals we are because we act like amateurs can do our jobs.
Case in point:
Why do development directors and executive directors act like their board members rose from the primordial ooze as trained fundraisers?
I find way too much agony and even anger in this profession at board members about fundraising. I’ve written about this time and again (see Banishing your expectation of board fundraising). How, if we believe that fund development is a profession, can we expect good-hearted people with no fund development background to spontaneously do our jobs for us?
We can’t both complain that we aren’t respected for the professionals we are and then simultaneously gripe and moan when the amateurs on our boards don’t act like professional fundraisers.
Find the willing, equip them with compelling cases for support, train them, and hold their hands all the way through the process. In essence, put those professional skills to work.
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.
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 >>
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 >>
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.
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.
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.
Making do with less is a familiar mantra. Pick up a business publication, and the virtuous charities are the ones with the lowest overhead.