Nonprofit Board Crisis

Nonprofit Mission, Sustainability and Serving Those Without

Is it really possible to be in the historical preservation business, attract high-end buyers and serve those without resources?  This is certainly the question for the Presidio as described in the Wall Street Journal article on this very subject.

I think the answer is "maybe" but really, you can't have your cake and eat it too.  And, I'm not sure this should be surprising while the real question is one of priorities.  If the priority is preservation, maybe the exchange, particularly toward reaching sustainability, has to be that one goes where the money is.

Good debate to have.

Nonprofit Mission versus Nonprofit Revenue

I'm not so sure that the dilemma facing the Girl Scouts fits in the "only thing wrong with tainted money is there taint enough of it" category.

The dilemna is highlighted in a Philadelphia Inquirer article about the conflict for Michelle Obama faced with preaching nutrition and serving as the honorary national chairperson of the Girl Scouts.  The basic issue: Girl Scout cookies are a major source of revenue for the Girl Scouts generating $714 million annually.  But, the cookies are not the perfect nutrition item according at least to nutritionists.

So as much as there may be a competing demand dilemma for Mrs. Obama, for me it is the Girl Scouts that have the real competing demand.  The question: is income from cookies, when an organization has a goal of healthy girls, tainted?  And, could an organization really say no to $714 million?

Of course I am sure lots of boards would want this dilemma but I also wonder whether a board wouldn't also ask that there be more programming around maintaining balance in the consumption of their products (which might negatively affect the bottom line) or, perhaps consider also creating some new products that were really healthy options like a healthy energy bar for example?  It strikes me that maintaining what is basically tainted but used for good doesn't have to be the only option for a big institution like the Girl Scouts.

 

Nonprofits Benefit From Changes in Governing Rules

The former two presidents of the Chicago Public School Board proved to be very generous fellows.  While I think it's just not something I'm particularly aware of and maybe it's just in Chicago, a school board may have budgeted fund accounts from which it can spend on institutions or activities that may or may not directly benefit the public schools.

The article in the Chicago Tribune highights spending by two board presidents which were in the "may not" category of school benefit.  Spending on non-school benefit items, when identified, raises much dissatisfaction by the public taxpayer and that is the focus of this article.  But more interesting to me are references within the article that discuss changes the school boards made that resulted in more liberated spending habits by the Board president.  For example:

...in the midst of his second term as board president, (the Board President) helped change board rules to give himself almost complete autonomy over gifts and donations, records show. With the president no longer needing approval from the board, records show, the giving accelerated.... 

But, after lots of public backlash, here's what happened:

....the board sought to clamp down on gifts and donations. It lowered the threshold of gifts requiring board approval from $25,000 to $1,000 and stripped powers (the President) had implemented giving the president sole discretion over charitable donations..

In the process, the board has adopted a new, more conservative philosophy on giving that better suits its financial reality.

In the end, I would offer that the board, yes, thanks to outside pressure, began to understood that transferring its responsibilities and authority to its President was a failure of its duty of care.  Such a transfer failed one of the simple tests of what constitutes sound decisionmaking -- prudence.

Let this example serve as a heads-up for all boards to better understand that their duty of care can not be given away lightly.

Nonprofit Not All It Hoped To Be

In an article titled "Google Finds It Hard To Reinvent Philanthropy", New York Times' reporters  Stephanie Strom and Miguel Helft provide a really great read on the development and current status of DotOrg, Google's philanthropic effort to "ambitiously apply innovation and significant resources to the largest of the world’s problems.." and achieve this through a structure within Google that "It can start companies, build industries, pay consultants, lobby, give money to individuals and make a profit.”

Well, as Ms. Strom and Mr. Helft point out in their article, what has evolved doesn't quite look like what was planned.  Much appears to be because of not so stellar management but maybe that's just my interpretation.  And perhaps this is to be expected from one of today's innovation pioneers with lots of success in producing pretty big outcomes.

So, we know there are three sectors (at least in the US) and we know each has a unique role.   We also know that there's frequently a lot of chatter about how one sector can or could benefit from the lessons of one of the other sectors.  Interestingly, it's usually the business sector that most often says it has the experience that should be adopted by the public and nonprofit sectors.

Although I'm thinking it's still too early to tell, maybe the real lesson to be learned from Google's experience is that business does well as business but maybe not so well as nonprofit.  Maybe, but again, I think it's too early too tell and in the meantime, I'd like to see how far Google can go with this effort. 

And really, any commitment that any business wants to make is welcome.