Nonprofit Board Crisis

Nonprofit Boards Get Little Credit

Today I was perusing the Christian Science Monitor which I do regularly to look for blog-worthy articles.  There were several articles about european or north american"white knights" who had or were continuing to found nonprofits which, according to the stories are now grassroots organization serving whatever community where they were founded. 

My take-away: why do the boards of these organizations deserve any attention?  Is nonprofit governance just a boring administrative-type function that isn't newsworthy?  Why is it that there are generally only three lens from which nonprofit "story" about nonprofits are viewed: program activities and outcomes; founders/managers; how much money they make or have lost)?

Of course, these are appropriate lens, but I believe that a fourth lens offers equal learning and possible interest -- that about the boards and board members behind ensuring that the nonprofit knows where it is going, fulfills its promises and operates as efficiently and effectively as possible.  There's a story here that needs telling.

Nonprofit Acts Based on Values

I believe that one of the most imporant part of a nonprofit board's work in strategic planning is to revisit its values.  Values are important because they inform an organization's decision-making, particularly around its policies.  When done well, a strong set-of clearly articulated values reduces all kinds of stress later.

I bring this topic up having just noted in the September 2011 AARP Bulletin that Catholic University has decided, after two decades of the practice, to re-institute single-sex dorms. When asked why the change, the college president said "We thought it was a more wholesome environment." 

I was a bit disapointed with this response expecting a statement more along the lines that single-sex dorms more consistently represent the core values of the College and the Church which informs our actions.  Given the Roman Catholic Church's stance on the purpose of sexual relations (albeit, coed dorms does not inherently condone sexul relations) it would have stood to reason that single-sex dorms are right for this institution.  Of course, acknowledging this would raise the questions as to why the policy change was implemented 20 years ago.

Anyway, this example clearly demonstrates what is to be gained from strong values statements.

Nonprofit Board Defends Record

You may remember this summer the big hoopla over the misdeads, really questionable truths about nonprofit rock star Greg Mortenson and his nonprofit CAI. CAI is the Central Asia Institute and according to 60 Minutes among others, there wasn't much going on while many donor dollars were being spent lured by the fantastical stories about success spun by founder Greg Mortenson.

Well, according to the Nonprofit Quarterly, the board of CAI has kind-of taken charge and is back out spinning its own stories to counter the not-so-good narratives.  But, as the Quarterly points out, Mr. Mortenson remains at the helm. 

So, is this the best the board can do, put a new spin on a bad situation?  Is this what it means by duty of care?  I'm not thinking so but if, on the other hand, donors are willing to come back to the table, well, that's on them.

Thanks Claire for the heads-up.

Nonprofit Board Cuts 1/2 Employees; Blames State

A Philadelphia nonprofit with an $89 million budget has announced its plan to cut half of its staff.  The reason: it is slated to lose $13 million as a result of state budget cuts. 

In the Philadelphia Inquirer article, the organization's CEO says that the (new state) rates made it "unsustainable" to add clients.

It's the question of sustainability that caught my eye.  While I might agree that the state's move to impose a budget cut is clearly challenging and calls for advocacy action, I wonder too about this organization's sustainability strategy which has it laying off half of its staff when one funding source goes away.

Is this responsibile sustainability planning on the part of the board and staff?  I'm thinking the evidence says otherwise.

Nonprofit Boards and Advocacy

There's a provision in President Obama's proposed jobs bill that "would limit itemized deductions, including charitable contributions, for individuals with an annual income of $200,000 or more." (WSJ)

I'm not totally convinced this is a terrible proposal but I'm not rich enough or in the position to give mega-sized gifts to have a clue about true potential impact.  There are those in the nonprofit sector who are lining up to take a stand and communicate their displeasure.  Excellent I say:  not to having displeasure but to organizing and communicating on this matter!

Advocacy for public policy, particularly as it affects the nonprofit sector, is an important function for nonprofit boards.  Earlier this week, Professor Fram wrote that boards might want to consider assigning a board member with a title and responsibility for addressing policy issues.  I'm liking this idea because I believe that board members respond best to their peers and if one member is tasked with this assignment (supported by staff), an action is more possible.

Bottom line, whatever your position around a particular public policy, don't just sit around, act!  Boards that don't........

Nonprofit Board: ignorant or stupid or just not equipped to govern?

Stories like this have me scratching my head and asking if this board is ignorant, stupid, not equipped to govern or all of the above?   Stories like this also remind me, for better or worse, that nonprofits are way more likely to get caught being stupid or being bad when a whistle is blown despite the new IRS data collection methods which may take awhile to have their full impact.

Oh well -- we all have to keep on top of this stuff to ensure the sector as a whole is reputable and acts with integrity.  How else will donors have trust and missions be accomplished.

Read more on this particular story here, and thanks Dr. Fram for the heads-up.

Nonprofit Board Standing Committees

Mike:

I strongly agree with your viewpoint that another standing committee for policy is not needed. Your comments on using task forces fit well with the board design presented in the third edition of my book,"Policy vs Paper Clips" (Amazon. com)

However, I think that one director in some medium and larger organizations should be given advocacy responsibility for policy development and assessing outcomes. In addition, this director could assist the board chair in a number of other ways, if the chair becomes over committed. ("Lead Director" is title I have projected for this director position. See June 2nd issue of Chronicle of Philanthropy.)

Gene

Eugene Fram
[email protected]

Nonprofit Boards Too Rogue

Not his words but this is essentially the message in a recent Fast Company article about Howard Buffett, grandson to investor guru Warren.  The younger Mr. Buffet is declaring war on the individualistic nature of nonprofits and especaially on duplicative services.

The problem Mr. Buffett has decided to focus on is international food security and I agree that in a number of markets there are many players doing like things with evidence indicating that barely a dent has been made as the problem of food insecurity persists.  Mr. Buffett suggests that the problem will be better solved when high performing nonprofits work to address each aspect of the problem from public policy to third world farming techniques. 

I do wonder, as one more business person is telling the nonprofit sector that it does not know how to be successful.  I would offer however that these players have been very business minded playing a game that market forces have established -- a kind-of divide and conquer based on a number of variables that include connections and relationships.  I would also offer that maybe these big sphere problems are no more resolved by one solution, like collaboration, than the multiple solution approach.  My bottom line would be that nonprofits have been doing what is doable given a range of environmental factors.  Mr. Buffett will likely learn this as he progresses in his work...

Nonprofit Board Standing Committees

The Alliance for Nonprofit Management has today successfully completed its redesigned and dynamic effort to link practitioners, researchers and funders to inform the way each does their business to support nonprofits' success.  More of what was said and done here will eke out in a variety of ways.

One thought though that I heard shared was about developing a new standing board committee focused on policy.  Please understand, I do absolutely believe that pretty much every board is in need of addressing policy gaps.  But set-up another standing committee?  No way! 

You may have gathered from me by now that in my experience, standing committees have proven a failure, tying down and even distracting some board members, often focused on micro managing and more often, not doing much at all.  The exceptions: a Governance Committee and a Fundraising/Finance Committee directed by clear mandates from the board.

Yup, get rid of those standing committees and introduce task forces or whatever is given a specific, time-limited assignment.  This structure accommodates busy people, gives great satisfaction to having completed something, and, most importantly, can get needed homework done for the board. 

Say no to standing committees!  Say yes to task forces!

Nonprofit Governance: A non-legalistic definition

The word governance "derives from the Greek verb κυβερνάω [kubernάo] which means to steer and was used for the first time in a metaphorical sense by Plato" (You can find this in Wikipedia which got it from the European Commission).

So, based on this definition, thinking about governance in terms of the legalistic and most frequently referred to term of fiduciary (duties of care, loyalty and obedience) limits the real added value of good governance.  Using this definition, good governance then is about either "keeping the nonprofit from running amok" (kind-of the risk-reduction context) or ensuring that the end goal is clear and that the nonprofit stays on the intended course.