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Archive for the ‘Board of Directors’ Category

board1Anyone who has read my blog for any period of time or has been a nonprofit grad student of mine knows how I feel about nonprofit boards. Most are just deplorable – wasting precious staff energies and bringing nothing to the board table.

We need a “Jack Kevorkian” for nonprofit boards – cutting the oxygen and giving a merciful death since beheading is so “old world”.

While Sarbanes-Oxley (SOX) has minimal requirements for nonprofits, the fact is that most organizations have no agreed upon metric for evaluating board performance.

I do like the Junior League’s motto, “give, get, or get off.” Whitman-Walker Clinic, Metropolitan Washington DC’s AIDS-service organization, requires an annual $10,000 donation from each of its board members whether through a personal gift, an arranged contribution of money or services, or a combination of both.

But a board’s responsibility doesn’t even start – let alone stop – with financial support. In principle, nonprofit boards are the “eyes and ears” of the community. They’re there to make certain that the organization is true to its stated mission.

In a recent email from the Nonprofit Times, there is a blurb about a few board groundrules stated as questions:

  • Does the adoption of good governance practices lead to the desired outcome? What is that outcome? How is performance measured?
  • If you assume a practice is a “best practice,” how do you deal with offenders? How do you establish those practices across a diverse nonprofit sector that includes grantmakers, such as private foundations, social service organizations, educational organizations, hospitals and others? How can you establish the predictive ability of “best practices?”
  • Does a nonprofit with high marks provide any assurance that the nonprofit is, in fact, a good organization?
  • Will good governance practices, over time, assure superior performance based on operating measures or other characteristics?

The email states that the Internal Revenue Service (IRS) tells us “a well-governed charity is more likely to obey tax laws, safeguard charitable assets, and serve charitable interests.” This reminds me of the opening line made by an IRS auditor to a minority business owner: “I’m from the IRS and I’m here to help you.”

What do you think?

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capacityThe Nonprofit Good Practice Guide, a free online resource, captures and organizes good practices for nonprofits and foundations.

There are thousands of effectiveness-building tips and resources on topics including:

  • Accountability and Evaluation;
  • Advocacy;
  • Communications and Marketing;
  • Foundations and Grantmaking;
  • Fundraising and Financial Sustainability;
  • Governance;
  • Management and Leadership;
  • Staff Development and Organizational Capacity;
  • Technology; and
  • Volunteer Management.

Source: National Council of Nonprofits

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training1According to an article in the Jan. 14th issue of The Chronicle of Philanthropy, nonprofit experts often complain that they can’t get members of their boards to effectively raise money.

But the problem is usually more about the nonprofit organization’s leadership than it is about the motivations of its volunteer board members, writes the anonymous author of The Nonprofiteer. “You’re not really authorized to critique the fund-raising incompetence of your doctor and lawyer board members until you can remove an appendix or argue a Supreme Court case without their assistance,” the author writes. “It’s their volunteer gig, but it’s your job, so the responsibility rests with you.

”To get board members to raise more money, the author says development officials and executives need to show them how it’s done — and set reasonable goals. The author urges nonprofit leaders to ask board members to: Look at a list of current donors and identify those they know. After they do that, ask them to come along when you solicit in person.

Come to the next board meeting with the names of at least two people to be added to the list of the potential donors. Help plan a benefit event. What has your organization done to get its board members more involved in its fund-raising efforts? Do most board volunteers have what it takes to solicit donors?

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puzzle1For those who regularly read my Blog, you already know that I have a near insane obsession that third-sector organizations either produce value or go out of business! And it’s a constant drumbeat in the classes that I teach as well.

Why? Because nonprofits are “on a mission,” and their boards have fiduciary responsibilities to society, customers, contributors, employees, and the communities in which they operate – to deliver on their mission promise.

The most egregiously overlooked problem with nonprofit organizations is that their boards don’t seem to realize that their organizations, to paraphrase the late Peter Drucker, exist for a reason that lies outside of the board meeting room. Here are some topline concerns:

Ignorance of Governance
The board is too often a tool of the senior staff executive, rather than a skilled governing structure representing the interests of the organization’s stakeholders. Nonprofit boards must do three basic things:

  • Establish the mission of the organization.
  • Identify measures that will determine success in achieving the mission.
  • Evaluate progress toward those measures.

Poor Choices for Board Membership
The most common criterion I’ve heard for prospective nonprofit board members is: Can they raise money? Obviously raising money is a vital activity for any nonprofit. But fundraising and governance are two separate requirements, and one individual rarely possesses both sets of skills at equal levels.

Collectively, an effective board should have expertise in nonprofit management, public relations, finances, law, human resources, and volunteerism.

Inappropriate Size
Virtually every nonprofit errs on the side of too many board members. This is because members are chosen not primarily for governance, but for name recognition, reward, potential donations, contacts, cache, and personal friendships.

Poor Self-Regulation and Discipline
Nonprofits need board terms even more than for-profits, because there is less external pressure and internal upheaval likely to cause turnover in the board. All organizations need new blood. Far too many nonprofit board members “retire on the job.” Evaluate individual performance and rotate out ineffective members.

Lack of Interim Actions and Poor Committee Work
No one can provide worthwile governance by working only once a month, much less once a quarter. Committees and subcommittees need to be active in the interim working with senior staff on resource development, strategic planning, and outcome measures.

Insufficient Distance from Staff Leadership
Too often the senior staff executive is a close friend of the board chair and/or key board members. Sometimes this coziness grows to the extent that the board chair and CEO often change places, or one is seen as a stepping-stone to the other.

Ignorance of the Bylaws
Boards need a parliamentarian to keep them on the straight and narrow. Bylaws should be required reading for all new members, and need to be reviewed, updated and revised as conditions warrant. The best boards assign a member as a watchdog to make sure these requirements are met. The worst boards can’t even find their copies.

Micromanagement
Nonprofit boards act, far too often, as if they are the senior management team. This is crazy-making for staff and ultimately the poison pill for their growth and effectiveness. The board’s job is not to implement, not to execute, and not to oversee daily operations.

Their focus must be on setting long-term goals and evaluating progress toward those goals. Period!

The Great “Campaign” Debacle
The most legitimate gripe I’ve encountered from nonprofit staffs is the annual change in “theme.” Strategy should never be solely a twelve-month affair, and constant theme changes can easily disrupt long-term strategy, making a mockery of any attempt to achieve longitudinal objectives. While bylaws often require a change of elected officers each year, they certainly don’t require a change in direction that is not dictated by strategic need or environmental events.

Is your board holding your organization back from producing mission-based value? If so, what can you do to make a shift in your board?

Source: Good Enough . . . Isn’t Enough, by Alan Weiss. Amacom, 1999.

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Nonprofits have organizational missions, and their boards have fiduciary responsibilities to contributors, employees, customers, members, and the environment in which they operate. The most egregiously overlooked problem with nonprofit organizations is that their boards don’t seem to realize that the organization exists for a reason that lies outside of the board meeting room.

Get in the game and fix what’s not working; nonprofit doesn’t mean nonperformance!

Ignorance of Governance
The board is too often a tool for the CEO or executive director, rather than a governor and overseer. Nonprofit boards should do three basic things:

  • Establish the mission of the organization.
  • Determine what measures will determine success in that mission.
  • Select, evaluate, and develop officers and senior managers.

Poor Choices for Board Membership
The most common criterion I’ve heard for prospective nonprofit board members is: Can they raise money? Fund-raising and governance are two separate requirements, and one individual rarely possesses both sets of skills at equal levels.

Board members should, amongst them, represent experience and expertise across the following gamut: business management, public relations, finances, law, human resources, volunteerism, and nonprofit experience.

Inappropriate Size
Virtually every nonprofit in the land errs on the side of too many board members. This is because board members are chosen not only for governance (which is, in fact, the least of it), but also for name recognition, reward, potential donations, contacts, cachet, and personal friendship.

Poor Self-Regulation and Discipline
Nonprofits need board terms even more than for-profits, because there is less external incentive and internal upheaval likely to cause turnover in the former.

Lack of Interim Actions and Poor Committee Work
No one can provide governance by working only once a month, much less once a quarter. Committees and subcommittees need to be active in the interim.

Insufficient Distance From the Organization Leadership
Too often the executive director or president is a close friend of the board chair and/or key board members. Sometimes this coziness grows to the extent that the board chair and CEO often change places, or one is seen as a stepping-stone to the other.

Ignorance of the Bylaws
Boards need a parliamentarian to keep them on the straight and narrow.

Bylaws should be required reading for all new members, need to be taken up in review form at least annually by the full board, and should be updated and revised as current conditions warrant. The best boards assign a person as the watchdog to make sure these requirements are met. The worst can’t even find their copies.

Micromanagement
Nonprofit boards act, most of the time, as if they were the senior management team. Their job is not to implement, not to execute, not to oversee daily operations. Their job is to set long-term goals and evaluate progress toward those goals.

The Great “Campaign” Debacle
The most legitimate gripe I’ve encountered from nonprofit staffs is the annual change in “theme.”

Strategy should never be solely a twelve-month affair, and constant theme changes can easily disrupt long-term strategy, making a mockery of any attempts to achieve longitudinal objectives. While bylaws often require a change of elected officers each year, they certainly don’t require a change in direction that is not dictated by strategic need or environmental events.

Misunderstanding the Value of Volunteers
The most waste to be found in any nonprofit is in the squandering of volunteer resources. Boards tend to look at volunteers as so much cannon fodder, not comprehending the tremendous asset they represent, the fact that the resource is not nonrenewable, and the financial fact that there is a return on investment equation that applies to volunteers.

Source: Good Enough . . . Isn’t Enough, by Alan Weiss. Amacom, 1999.

The Independent Sector is an excellent resource for help with board development and training.

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