Pretty much every nonprofit organizational consultant, including me, has something to say about nonprofit boards. Actually, a large part of my practice is focused on helping boards be effective and efficient. So, it is with great interest I pick-up and review what other consultants and researchers have to say. I am particularly interested in the fact-based data otherwise known as evidence that has demonstrated this or that element about how boards can and do function and the correlated "so-what". Of course, most of what is written is not based on research or evidence. Most of what is written, not unlike this blog, is based on experience - often sound and reasonable - but not necessarily proven or demonstrated through research. But what the heck: there is so little that has actually been researched about nonprofit governance, a kernel of thought may indeed provide an insight that could lead to higher levels of performance and outcomes.
I today found an article by one consultant who labels herself (or someone labels her) the Nonprofit Prophet. Out of curiosity I checked and learned that outside of a religious reference, most of the on-line dictionaries offer that prophets are "persons gifted with profound moral insight and exceptional powers of expression" or are the "chief spokesperson of a movement or cause". So, I'm thinking I should be paying real attention to what this consultant has to say. In her article in the Berkshire Eagle, the Nonprofit Prophet proposed that unlike in the traditional birth parent-child relationship where children do not come with "how to" manuals, nonprofit boards, whose "children" are the nonprofit, actually do have manuals.
I would concur that at minimum, the IRS is very clear about their/the public's expectations of what is expected of nonprofit boards. The IRS has not written a manual per-se but the guidelines are clear as are those often proffered by some state Attorney General. Beyond this, there is of course the generally unresearched instructive literature offered by the likes of a BoardSource - often held-up as best practice and just waiting to be proven incorrect. And, waiting for evidence is pretty much where I believe the Sector to be.
With all that said, please note that I believe that what is being described by the Nonprofit Prophet as a nonprofit board manual is certainly consistent with what many governance advisers recommend. Fulfilling fiduciary (legal/compliance) duties is effectively (we think but have not necessarily proven) accomplished by "setting direction, ensuring resources and providing oversight" or in other words: policy, planning and evaluation. We are learning though that advocacy, which in my mind includes "ensuring resources", is an equally important role and responsibility.
A manual? Maybe not so much as basic guidelines. But I believe there to be so much more to be learned and known about what affects how a board should pursue its fiduciary responsibilities. We do know additionally, that we must do more to learn about how structure, history and culture affect carrying-out these responsibilities in addition to examining stages of development and most importantly, personalities and leadership.
So, bottom line - the manual has yet to be developed. We are at the beginning. But in the meantime, here's what many have to say as reflected in the Nonprofit Prophet's offering.
Natasha Dresner | The Nonprofit Prophet: Some kids do come with a manual
PITTSFIELD >> "What exactly are our roles and responsibilities?" That's probably one of the most frequently asked questions I get from the boards that I work with.
If you have ever worked with and/or served on a board, I bet you too have asked that question before. Why is it so popular? Perhaps it's because of the complexity of the board's job, the ever-changing best practices in governance, confusion between paid staff and board roles, as well as the legal requirements that vary from state-to-state and change constantly. Whatever the reason for the question it is one that must be answered as clearly and emphatically as possible. The job of the board is too important not to.
Boards' job descriptions can differ somewhat due to the unique structures, histories, or cultures of their organizations. So. I'd like to offer the following list of roles and responsibilities that could apply to all.
I often compare organizations to children and their boards to parents. The organizations we serve are often as precious to us as our children. We often refer to them as "our babies". So, boards must take care of their organizations much like parents take care of their children by showing them the way, providing for them, and stepping aside — while still watching closely — to help them grow into responsible adults. The good news is that boards, unlike parents, do get a manual for their "children." Here it is.
According to the best practices recommended by many leading nonprofit governance organizations, there are 10 basic board responsibilities, which are organized around the three following board roles:
1. To Set Organizational Direction
2. To Ensure the Necessary Resources
3. To Provide Oversight
What do boards need to do perform each of these roles well?
• The board must determine the mission and vision of the organization — articulate an inspiring vision for the future, why the organization exists, what societal need(s) it is addressing, and how, as well as who, its primary constituents are. The board must also review its mission statement periodically, and rewrite it to keep it relevant.
• To ensure effective planning use the vision to guide the organization in a planning process to set goals and then support their implementation.
Failing to plan is planning to fail, so it's the board's job to make short-and long-term planning part of the organizational culture, and review progress regularly.
• Build a competent board: Having the right people on the bus is a great way to ensure that the organization is clear about its direction and can stay the course. The job is to create and maintain a competent board by recruiting strategically using job descriptions for board members, conducting regular board orientations and trainings, and, most importantly, performing periodic and thorough evaluations of the board's performance.
• Select the chief executive/executive director. Every board that is looking to hire its top professional must carefully define (or redefine) the role, and develop a detailed job description to launch a search and hire the most qualified and suitable person for the job.
• Ensure adequate financial resources: If the famous phrase that "the buck stops with the board" is true, then the buck must also start with the board. It doesn't mean the board is solely responsible for bringing in those financial resources, or providing them personally.
Understanding the many ways the board can ensure adequate financial resources for its organization is a huge part of being able to do it — e.g. establishing healthy financial models, systems, and policies; stewarding donors; participating in fundraising planning, events, and activities; supporting the organization with a personal meaningful gift; advocating for the organization and its mission in the community; articulating your story about why you are involved with the organization and why you choose to provide philanthropic support; etc.
• Enhance the organization's public standing by articulately and consistently sharing with the public your organizational stories, facts, progress and aspirations along with those personal stories I mentioned in the previous section. Those are a sure way to exhibit commitment to transparency and accountability, build trust and credibility, and secure the support of your community.
• Support and evaluate the chief executive: After investing so much time and energy into hiring the most suitable and qualified top professional for the organization, it is only logical that the board would also need to support him or her. Support comes in many shapes and forms, including but not limited to, setting clear goals and expectations, providing moral support, giving regular informal feedback and formal evaluations, as well as making coaching and professional development opportunities available.
• Monitor and strengthen programs and services: Determine which programs are consistent with the organization's mission, and monitor their effectiveness.
• Protect assets and provide financial oversight: Assisting in the development of the annual budget; putting proper financial systems and controls in place; recruiting a capable treasurer, and building a strong finance committee. The board is the one ultimately responsible for the organization's financial compliance.
• Ensure legal and ethical integrity: This is similar to protecting assets and providing financial oversight. The board must also ensure legal and ethical compliance by putting the necessary policies in place, reviewing and following organizational by-laws, recruiting board members with high ethical standards and the necessary legal expertise, and creating a culture of transparency and accountability.
These are the board roles and responsibilities that are applicable to most boards, even non-fiduciary ones if they are sufficiently empowered by their parent organizations. Discussing these roles, asking the right questions about them, challenging "but-we've-always-done-it-this-way" excuses, and enlisting help when necessary are the only ways for your board and you, as one of its members, to be the best you can be in supporting the people who benefit from your organization's services.
Going back to my original metaphor: It's not easy being a good parent, but it sure is worth it. So, to all of the lay leaders out there, thank you for your commitment, and let's do our best to become proud parents of our "babies".
Natasha Dresner is an Organizational Development Consultant and Mentor with the Harold Grinspoon Foundation in Agawam. She can be reached at Natasha@hgf.org