From Better Boards

Making working boards work

It takes a lot of people-power to accomplish the work of our nonprofits. Staff, volunteers, and, for the tiniest of organizations, their “working boards.”

You’ve probably heard that expression. I hear it frequently: “we’re a working board.”

Guess what? All boards have work.

In virtually all of our charitable nonprofits, our board members are likely to wear two hats:

  1. the hat covering their fiduciary and governing responsibilities.
  2. the hat covering their volunteer, or staff-like tasks.

What is the work of the board?

Governing responsibilities are about setting direction and overseeing the well-being of the organization and its mission. These can’t be delegated away.  For example,

  • approving the big vision
  • ensuring guiding strategy
  • setting and monitoring the policies that guide organizational work
  • defining the values everyone lives by
  • defining the metrics that measure success
  • asking the critical questions about impact, community changes, what’s coming down the pike
  • making tough decisions about priorities and resource allocations
  • organizing the board, from creating the standard of board excellence to determining the processes that bring people on board, train them, set meeting and decision standards and more.
  • Choosing and providing feedback to the CEO or leadership staff team, acting as their strategic partner and letting go of them when they are no longer serving the organization’s needs
  • overseeing required public reporting and accountability.

What are some staff or staff-like tasks? These are the things that if your organization had the money, you would likely pay a professional person to do. Tasks like:

  • raising revenues and caring for donors
  • running all aspects of events
  • caring for facilities
  • running programs
  • keeping the books, paying the bills
  • marketing, communications and promotion
  • media relations
  • managing the staff
  • recruiting volunteers

So what do people mean when they say they have a working board?

Organizations say they have a working board when they have no or few staff and board members are usually the folks filling most of the staff functions. Or they may have staff but the board keeps some particular function for itself.

Board meetings get all muddled up by combining the work of governing and the work of managing (or staff work).

Staff work also gets neglected or done ineptly when no one person (or team) is in charge but everyone — the board — is in charge.

Here are a few suggestions to enable better work from your working boards.

These are some suggestions to get you started.

1.Divide up your board meetings. Be clear about what items on the agenda are governing work and what items on the agenda are really a staff meeting. You might even want to set them up as two meetings. One that’s the board following all of its bylaws procedures. When that adjourns, then open the staff meeting. You might not even need all the board members present for that if there is no work that involved them.

2. Be clearer than ever as to the goals that have to be accomplished, who is responsible for accomplishing them, and what authority the board has delegated to those people. This can save countless hours  having the full board arguing over the cost of an event ticket or venue.

3. Recruit volunteers for staff work beyond the board. I say this often, most volunteers would rather not be on the board.  I happen to find the work of governing very fulfilling. But those folks who like running a community meal site, or teaching a workshop, or working with their hands don’t often want to be on the board.

4. Recruit board members as managers of critical functions in the organization. Give them something they are accountable to the board for achieving. That might be raising the budget dollars, ensuring a years worth of membership programs are carried out, or serving as stewardship manager for your properties. They don’t do this alone.. they can recruit volunteers to be on their committees. But every board member should have a job and outcome that he or she is responsible for achieving.

What else have you found to work well in your working boards? Love to hear from you.

Our new study: COVID’s impact on boards

Wondering about COVID’s impact on nonprofit boards? Then take a look at our new report, How COVID affected nonprofit board practices.  It is based on a survey of 119 nonprofit board and staff leaders at dozens of organizations in Connecticut, Rhode Island and Massachusetts.

We collaborated with our colleague Mike Burns at BWB Solutions to survey each of our clients and followers on how nonprofit boards have responded to disruptions cause by COVID since the shut down in March.

Changes in meeting format

The most striking COVID impact on board practices reported was the rapid transition to online meetings. Board meetings via video conferencing were rare before COVID, but are nearly universal now. About a fifth of respondents expect to continue all virtual meetings after COVID restrictions end. Up to half expect to use some hybrid of video conferencing and in-person meetings in the future.

Changes in practice

While the majority reported little or no change in the board’s overall effectiveness, a sizeable minority said that board work had improved since the onset of the crisis. A number of respondents reported that their boards had put fundraising and planning projects on hold during the shutdown.

Future expectations

We thought we would see some panic about COVID’s impact on boards and the nonprofits they serve. While almost equal numbers reported the likelihood of reducing or expanding programs or operations, board members tended slightly more to reductions while CEOs leaned slightly toward expansion. Very few expected to go out of business or merge with another nonprofit.

Recommendations

Mike Burns of BWB Solutions co-authored the report with Gayle L. Gifford and Jon Howard of Cause & Effect, Inc. We recommend that boards and executives reflect on what they can learn and adapt from changes in board practice since COVIC. We further call on boards to challenge all core assumptions to better prepare for future disruption.

Download the full report as a PDF here.

Please take our board coronavirus survey.

Smiling faces on video conference

This Photo by Unknown Author is licensed under CC BY-SA-NC

How is your board doing? And other boards in New England. Would you like to know? Then please take this board coronavirus survey. Click here for survey.

Board service is challenging in the best of times – and these are not the best of times.

Cause & Effect Inc. and BWB Solutions have partnered to survey non-profit board leaders and chief executives in New England. With your response, we can better understand and record how the pandemic has affected the process and practices of your board. By sharing your insights and experiences, we’ll all do better in the challenging times ahead.

Read more

Before the scandal – 5 questions for your board

Taking a good look at someone else’s unfortunate sign of man diggingsituation before a scandal happens could head off a problem for your organization tomorrow.

Asking tough questions today can save deep trouble down the road.

Our local news has brought us more nonprofit scandals in the last few months – financial mismanagement, executive directors run
amok, programs ruined.

If this has happened in your area, consider this is an important learning moment for your board of directors. At your next board meeting, schedule some time to talk about the scandal and how vulnerable your organization might be to a situation like this.

Here are five questions to get your discussion started.

  1. What temptations led to this situation?
  2. Could this happen in our organization? How?
  3. What would our board have done in this situation?
  4. How can we prevent this from ever occurring here?
  5. How can we support and enable courageous questioning by our board members?

If you take our advice, we’d love to know how this conversation went for your board.

What other questions would you add to our list? Drop us an email.

For more on this topic, read

Employee theft – it can happen to you.

WHERE WAS THE BOARD? Too often, complicit

 

Employee theft – it can happen to you.

Oh no! We've been robbed!

The July 2019 news brought another case of employee theft. The Executive Director, Controller and a business partner of the Boston Center for Adult Education have been charged with stealing $1.7 million over the last seven years. Time to share this advice. once again.

**********************************************************************

April 2014

Another news release about significant employee theft at a nonprofit rolled across my desk. A quick internet search on embezzlement at nonprofits turned up a myriad of cases. Time to talk to an expert in the field.

So I turned to Michael Santocki, Esq, First Vice President at Alliant Insurance Services (formerly  Crystal & Company) a “ leading strategic risk and insurance advisor.”

An attorney by trade, Michael has been in the insurance business for 20 years. We had a long discussion about many aspects of risk management at nonprofits, specifically in the area of employee theft.

GG: What can you tell me about employee theft at nonprofits?

MS: Employee theft is one of the most common areas of risk for nonprofits. Unfortunately, nonprofits don’t always have the level of controls that many private companies have.

According to a 2014 report by the Association of Certified Fraud Examiners*, Nonprofits across the US lose approximately 5% of annual revenues to fraud.

GG: Could you tell me some of the ways this happens.

MS: Unfortunately, there are lots of ways this can happen.  Bookkeepers often create dummy invoices, ghost vendors or kickback schemes.

Take kickback schemes. In this case, an employee at the nonprofit works out a deal with the vendor. Let’s say the employee orders supplies, say 100 of some item. The vendor only ships 80 of that item and then kickbacks part of its profit to the employee on the 20 items that were not shipped. While the amount might be small, this type of theft adds up over time if it’s never caught.

Other types of employee theft are very innovative. For example, the office is being renovated so the employee slips in their own bills for renovation supplies for their own property.  An employee can prepare dummy invoices, where the check is written to themselves and then fudged later. This happened at Roman Catholic Diocese in NYC where a long-time, trusted employee in the accounting department, who was obsessed with purchasing expensive Madame Alexander dolls, was arrested in 2012 for embezzling more than $1 million over seven years.

GG: So what can an organization do to protect itself?

M.S. While criminal background checks are important, unfortunately, about 87%* of fraudsters have never been charged with a prior offense and that holds for both for profit and nonprofit organizations.

Nonprofit organizations need to be vigilant and take preventative measures to minimize the risk of theft or catch it early.

It is pretty hard to spot an executive director engaged in this type of activity. Never let one person be in charge of everything.

For example, make sure that you segregate duties for the folks paying bills and those handling money, have surprise audits, make sure that you have counter signatures on checks, and conduct fraud training for your employees.

Often the way many organizations catch the thief is to make the employee take vacation and then someone takes look at their work.

Know your employees. Keep an eye out when something seems out of line… be astute about suspected changes. Have a confidential hotline for employees to report suspicious activity within your organization.

GG: What if a theft happens anyway?

M.S. The good news is that an organization can transfer the risk by buying an insurance policy. For example, a crime insurance policy covers theft such as forgeries, alteration, counterfeit, burglary or robbery. Most mid-sized nonprofits could generally buy a policy for around $5000 for comprehensive coverage. A tiny organization could buy one for a few hundred dollars.

GG: Thank you Michael for opening my eyes to this uncomfortable world of employee theft. But both boards and executive directors need to be aware that not only can this happen, that it does with some regularity, even in our nonprofit sector. Be prepared.

*2014  Association of Certified Fraud Examiners: http://www.acfe.com/rttn/docs/2014-report-to-nations.pdf

 

Let’s talk about moral capital and recruiting your board

As I was getting ready to write this post about the need for more moral capital on the board, the higher education scandal broke in the US. Sadly, thirty-eight people were taken into custody as of noon on March 12th in this bribery scheme.

What was the scandal? Wealthy and prominent parents from  business and the media bribed administrators, coaches, test proctors and others to grease their kids into elite private colleges and universities. What, their large direct donations weren’t already enough?

Shamefully, this was done through Key Worldwide Foundation (KWF). KWF was a 501c3 public charity led by William “Rick” Singer who is pleading guilty to the charges against him.

According to its 2016 Form 990, KWF has just three directors. Singer served as President and CEO along with a secretary and one other director. (Their treasurer is not a director.)

Not only were the donors to KWF offering bribes for college placements, they were likely getting tax deductions for making those bribes through the nonprofit.

We can’t say it enough: you need a moral compass.

Every organization has to have a philanthropic or moral compass, most assuredly within the board. Yes, you have well-crafted bylaws, job descriptions, and director expectations. Yes, you reference ethics, the rule of law and conflict of interest. Really, all is crap if your directors or staff lack a moral core to do what is right.

People as capital

Yes, talking about people as capital seems contrary to discussing a moral guiding light.

Remember, I’ve previously pitched Professor Elizabeth Castillo and her typology of capitals. Using her list, you can begin valuing people for more than their financial capital when you consider what you need in the way of the human capital you recruit to your board.

For example, wealthy donors and connectors to other money aren’t the only desireables for your board. Open your doors to other people with assets that strengthen the board – e.g. intellectual, social, political, and cultural capital. And yes, moral capital.

Moral capital isn’t someone who can thread the needle of what is or isn’t ethical or legal. I want steadfast voices defending doing what is right. I want directors with justice in their hearts. DIrectors who are courageous enough to call out when something is bad, smells bad or just doesn’t feel right.

Our sector needs to stands strong for honesty, truth and transparency. We can’t afford to risk the public’s trust. Unfortunately, trust has been on a downward slide for many years.

How much moral capital sits on your board?

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A case study of collaboration, network weaving, social capital and the power of a partnership culture

A new look at recruiting your board

A new look at recruiting your board

Are you struggling with recruiting your board of directors?  Take a look at the newest addition to our Toolbox: Recruiting your board of directors.

First, what do you want of your board members?

  1. First and foremost, to be great governors (I hope that is first). When you consider the right composition of your board to exercise its role in governance, you’ll need a mix of members demonstrating attributes such as strategists, systems thinkers, nonprofit, issue and community knowledge, diverse worldviews, wise stewards, moral and ethical folks, collegial, disciplined, and courageous, among others.
  2. Second, we have come to expect that our board members should be leadership volunteers.  As volunteers who help the organization move forward staff functions as appropriately called upon, look to recruit to the board individuals who will use their skills and connections in service to particular functions of the organization, such as government relations, or fund development, or expertise in marketing, communications or evaluation. The need for these volunteer skills is highly dependent on the number and types of professional staff in your organization and your business model.

Consider your board members as vital components of the human capital your nonprofit needs to function

So, in developing a great board, you need to consider what you have set forth in your strategic plan and what it will take to get from here to there. What is the ideal profile of the board to achieve your desired future?

Second, where can you find these folks?

I’ve written before about the benefits of keeping a running list of board members. IMHO you can’t have too many candidates to choose from. To get there, look everywhere. Start with your donors and volunteers. Consider asking for help. Read the newspaper and local (or national) magazines or other sources to find the folks that suit your profile. Leave no stone un-turned.

Share your best recruitment stories with all of us. We’d love to hear from you.

Wake up that sleepy board

Has boring put your board to sleep? Is it the arcane machinery of Roberts Rules? Pointless reports? Endless discussions? Trivial debates?

 

Dull can be dangerous when it com
es to boards.  Listless boards may be asleep at the switch when a resignation or crisis calls on them to step up and actively direct the organization. Members may snooze through information that ought to set off alarm bells.

Here are five tools you can use to help transform sleepy board meetings from ennui to engagement.

  • Move that table out of the room. Suddenly, you’re sitting in a circle with no head of the table to establish hierarchy and nothing to hide behind. If you can’t move the table, move the board members.
  • Serve food. Sharing a meal creates human connections, starts conversations and sets the mood for a great meeting.
  • Break into small groups. Especially on larger boards, many participants never say a word. You might be missing a brilliant insight.  Small group discussion helps advance board thinking as members help each other refine and develop good ideas.
  • Take notes on flip charts. Recording key points where members can see them as the meeting moves along assures board members they’ve been heard. Flip chart notes provide structure and a sense of progress through the agenda.
  • Move people around. Too many board members never get to know their board colleagues. Move table tents at each meeting. A new perspective on the meeting space may also open the door to a fresh look at the board’s business.
    You can find more great meeting techniques in our Board Toolbox. 
Or call Cause & Effect for expert design of your breakthrough board meetings. (401) 331-2272

 

How truly committed to inclusion is your nonprofit?

What to do. What to do.

Revulsion, anger, sadness, resolve. All of these emotions have been filling my head since Charlottesville. Well, really for much longer but seeing Neo-Nazis and Klansmen in the streets made them very raw again.

I found myself weeping reading some of the first hand accounts coming through my Facebook feed. Fear. Bravery. Disbelief.

I’m continuing to accept the challenge of confronting the protections of my own white privilege as I hear the anguish from my friends and colleagues.

I’m still shaking my head as to why we are still here, still at this point in 2017.

I believe the US desperately needs a Truth, Reconciliation and Reparations Process to take a hard look at its storied past on race. Our school history books have merely skated over the brutal aspects of US history that includes genocide, slavery, racism, and war crimes. We must come to a common understanding of what we have perpetrated as both a government and a people before we can begin to put an end to this hate.

It’s also time for a hard hitting inclusion reality check for your own organization.

If you want to respond to Charlottesville, it’s long past time to put an end to the half-hearted attempts at inclusion in your organization. Yes, your non-discrimination policy was a nice start.

But where are the individuals of color on your board? On your staff? Among your client base? At your events? Among your partnerships?  Who else are you leaving out?

What is staff’s response when a big donor makes a racist or bigoted remark? How will a fellow board member respond? It happens all the time. Shocking stories.

Get comfortable with discomfort, as a recent article in Nonprofit Quarterly advised.

I promise to remind you, to challenge you, to hold you accountable for fulfilling your espoused values.

There is much work to do. Let’s get to it.