Nonprofit Board Crisis

Nonprofit Board Diversity

Nonprofit board diversity and cultural competency is important for the sustainability of a nonprofit.  Not all nonprofits practice the fundamental commitments to these disciplines and on occasion, a news item might bring this to light.  One recent Wall Street Journal item raised for me the question of an organization's commitment to board diversity.

The article noted how the National Dance Institute just found a new home in Harlem for $6 million (that was eye-raising in itself).  The article includes a picture of three white board members.  Curious I went to the Institute's web site to view its board.  My finding, after a little bit of internet research: the majority of the board is white and wealthy.

Noted on the Institute's web site are however some diversity facts:

The majority of NDI dancers come from low-income communities.

NDI dancers represent a diverse population: approximately 38% identify as Hispanic or Latino; 24% as Asian; 16% as African American; and 22% as Caucasian.

What do you think: a culturally competent and diverse board?  And how does it make a difference?

Nonprofit Collaboration and Social Enterprise Fails in Good Governance

In San Jose, California organizations from the nonprofit and for-profit sectors have created a nonprofit corporation call Team San Jose.  The nonprofit's job is to represent the best interests of both sectors and offer coordinated services to those who would book events and activities in San Jose essentially acting as a one-stop-shop for the community.

The idea that all these folks who share a common interest but different missions could come together is pretty appealing and just what many foundations and municipalities have been calling for to reduce competing interests and duplication of efforts.  And, to top it off, the resulting nonprofit can even generate its own revenue.

Well, maybe.  According to the San Francisco Gate, the organization overspent by $750,000 and, from the City Council's point of view, paid exorbitant salaries to its execs.  Of course this is one of those times when exec salaries do matter and serve as one measure of how well a nonprofit is doing.  My opinion is that this is a governance problem and, to reinforce my opinion, the nonprofit released a statement saying that the "organization has changed its governing procedures and met performance measures in its city contract." 

Nonprofit Boards Be Warned: Others Determine Your Accountability

US nonprofits are pretty much market-driven entities.  If institutional or individual donors are moved by a nonprofit's mission and generally convinced that money won't be misspent, a gift will be forthcoming.  It is from this reality that Charity Navigator was born to help inform prospective donors.

And, at least according to Charity Navigator in the New York Times, donors have been better informed. But, as the article points out, consumers are better informed by one particular lens only -- how much of a nonprofit's money is being spent on program versus admin.  Although I beleive that this information has provided an improved basis for a go/no go gift, it is still only one piece of the puzzle when determining if your gift will be effective.  While spending priorities count, the impact of the dollar spent is more meaningful than the precise use of dollars.  Embracing this understanding, Charity Navigator is planning to adjust what it reports to include some idea about impact.

But I wonder if Charity Navigator is in a position to tell the impact story of the nation's nonprofits.  Doesn't this mean that the organization would need some kind of huge annual survey to make this work?  And, is such a survey possible?  After-all, the IRS sort-of has this kind of survey and while it still may be early, there's not a lot of evidence that we all know better what impact nonprofits are having.

This of course leads to a more important reality.  Generally, nonprofit boards do not fully understand what it means to be results-focused.  As much as we are trying to help by starting with results-focused strategic plans, I'm not quite sure we as an industry have even agreed on how to talk about results.

So to Charity Navigator I say: at minimum, you can't do this alone.  I think you need panels and panels of nonprofits and other experts to help think about what it will mean to report results in a way that makes for better informed donors across the industry. 

But first we need nonprofit boards to embrace a results-focused approach.

Nonprofit Succession Planning

What does good succession planning look like?  The Dalai Lama is taking one step to illustrate what succession planning can look like.

The Dalai Lama holds spiritual and political titles and authority over Tibetan Buddhists and the Tibetan government-in-exile respectively.  This week the Dalai Lama informed the government-in-exile of his plan to remove himself from the largely ceremonial political role he plays.  And, as noted in the Chicago Times article, he is taking "another step in the aging leader's efforts to prepare his people for life after he dies."

Ok, so it's not a perfect model given the differences between the Dalai Lama and other nonprofit leaders, but to me, the lessons are clear.  A nonprofit leader is not a permanent fixture.

Nonprofit Executive Firing: more thoughts

On Monday on NPR there was a sports news item about the firing of two head coaches of two respective professional teams.  The article mentioned that each coach had basically been fired because of their team's performance, the numbers; -- each had lost significantly more games than they had won in the season to date.  The commentator also noted that it wasn't clear why the firing at this point in the season given that there was little a new head coach could do to change the inevitable tally for the season.

The lesson: performance does matter -- whatever the dashboard consists of -- this must be the rationale the board uses to justify a firing.  The other lesson: timing matters if the board really wants to have a positive impact on its institution.

 

Nonprofits are not all perfect

This story helps illustrate that not all nonprofits are perfect, at least all the time.

My opinion: the board needs to check its values and ensure that its employees have a standard for their behavior and are held to that behavior.  I of course don't know what really happened but the facts lead me to believe that something is certainly not going on well.

Nonprofit Boards and Giving

I often get in the discussion with nonprofit boards and execs over the topic of board members' requirement to give and get money.  I have maintained that there is no "requirement" to give unless the board collectively decrees such a requirement.  In this case of course, the decree should be in writing (a product of a board meeting minute) and there should be periodic discussions in the board meeting about how that is going. 

For the most part I believe board members should give "something" and that there are fundraising consequences (particularly on moving others outside the organization to give) for not having full participation.  But, unless members come to a collective agreement, there is no inherent requirement.

That said, here's an interesting Social Edge article on the matter.

Nonprofit Board Fires Exec: Replaces with Board Member

I heard recently about a nonprofit board that had "issues" with its exec.  The issues were feeling-based, not performance based.  Justified or not (who's to say?), the board has fired the exec.

In the exec's place, a board member's spouse, a former founder and board member, has been appointed to replace the fired exec.

I'm open to hearing what if anything is wrong with this picture.

Nonprofit vs. Nonprofit

Aloha to Property Tax Exemptions heads an article in The Nonprofit Quarterly daily news update.  The article notes that the Hawaiian legislature is considering increasing the personal property tax exemptions that currently are fixed at around $300 for all nonprofits.  As the article points out, some nonprofits are large and some are small.  And all of them make some contribution to the community's well being.

What struck me as more important is that this proposal really pits the small against the large given a disproportionate taxation already in place.  So what to do?  I say nonprofits must organize and be ever-vigilant against such attacks while also being prepared to make their own proposals to address state and municipal fiscal challenges.  I do not hear this organizing in the article but the challenge is not singular to Hawaiian nonprofits.  Nonprofits Unite!

Nonprofit Marketing Strategy: Price

One of the 5 P's in a marketing strategy, "price" can be viewed as a tool that affects how prospective consumers perceive the value of an offering. 

For instance, there is no direct cost to using a public park but there are costs like maybe having to manage less privacy or congestion or cleaning-up after yourself.  As a result, public parks may not be perceived such a good deal even though "free". 

Nonprofit health centers offer a sliding fee scale to accomodate varrying income levels and needs.  The down-side is that a wider number of consumers may be missing the boat in what is generally high-quality care because they perceive that providers offering a sliding fee scale must be providing a lesser quality of care.

That said there is a good article in Governing Magazine on the role pricing plays in the world of parking, particularly street parking, and an experiment in variable pricing which San Francisco is going to test.  The basic premise: price higher where there is bigger demand.  Price lower where there is less demand.