Nonprofit Board Crisis

Nonprofits Reflect Poor Governance?

Many years back I heard this paradigm:  a group of citizens/volunteers organize and create a nonprofit as a solution to a problem.  Over time the nonprofit gets so good at what it does, the government wants to contract for the services.  Over more time the nonprofit becomes de facto, an extension of the government.  And over time, another group comes along saying that the problem originally targeted by the nonprofit at the beginning of the story has now become part of the problem. 

The questions for the day: was the evolution of the nonprofit toward being identified as a part of the problem a failure in governance?  Did growth and the need for resources to fuel the growth become the driver over mission by the nonprofit board?

Why the questions?  Take a look at what's going on with Education Colleges (noting that many of these actually are state organizations but the argument still has validity, in my opinion).  A nonprofit advocacy group is challenging these colleges to up their quality.  Is this not just a failure in governance, fulfilling the duties of care and obedience, on the part of the Education Colleges? 

For more background, see the story in the Wall Street Journal.

Nonprofits and Faith Based Initiatives

This week in the Christian Science Monitor there's a series about government funded faith-based initiatives and how they appear to be prospering despite what had been some pretty big resistance on the part of faith communities to pursue and accept government money.  

I think it's perfectly clear that lot's of good social change and service has come out of faith communities.  If I'm not mistaken, many of the earliest social movements in the US were faith based.  But the question as to whether the government should may be more a question of governance, rather than capacity.

The essential question: for whom is the faith-based group working and why is it being supported by the government?  And of course, the faith-based group must ask whether they can abide by the government rules given their own "higher" allegiences.  Taken from this angle, government grant support of faith-based work -- is this really the public supporting the public or the public supporting a higher power?

 

Nonprofit Whistleblowing and Fraud

It appears that the incidence of fraud within nonprofits is rising.  Possibly not, but there certainly have been a lot of media reports suggesting this. 

Nonprofit fraud is fairly disturbing to the public because individuals who have given their hard-earned money dislike the idea that their gifts were used for personal gain.

To the rescue is a hotline service that will accept reports from anyone wanting to report issues they think should be introduced to the rest of us.  

What do you think?  Is there market for this?  

Nonprofit Board-Exec Shared Leadership

I noted yesterday that shared leadership is the model being promoted as the ideal relationship for a nonprofit board and exec.  The shared leadership model suggests that each party knows and fills their role.

Farm Aid, the organization, may be one of the examples where the shared leaderhsip model is working.  Willie Nelson, the artist, chairs the Board and lots of other artists also serve as members of the board.  Each year, the artists put on a concert often preceeded by some press events where each converses about family farming and family farmed food.  The chair, Willie, as described by the Farm Aid exec, plays a role in setting the organization's direction and being available for whatever when needed.  The exec manages and supports the board's ability to do what it does best.

Shared leadership at its best?

Nonprofit Execs and Boards: Do They Really Share Leadership?

Shared leadership is the current language for how a nonprofit board and exec are supposed to function.  Each is to have a clear role and set of responsibilities and the combined whole is supposed to drive the nonprofit to successful outcomes. 

I have to say however that the number of times I hear how this framework is so not working with many execs asking "do I really need a board" or "how can I minimalize the board's presence" or any number of similar questions. 

It should not be surprising that founder execs frequently raise this cry wondering aloud why a board at all. 

The answer for the need for a board is simple: it's a legal requirement for a corporation and of course, a nonprofit is just that, a corporation.  A more complicated answer is that a board serves as the surrogate "owner" for the public and an exec does not - thus the rule of check-and-balances.  Beyond this: a board can bring added value in the area of connections and raising money and insights into the community.

But what if a board doesn't bring so-called added value?  Who's suppose to do something about this?  I would offer that indeed, the exec has the most to gain for developing a board that does bring added value.  And, while many execs may see this board building as a distraction away from getting down to the business of achieving outcomes, I pose that the short-term distraction is worth it in the long-run.

Now, getting to the state of shared-leadership: that is the next level board development work that follows the building of a board that adds value.  So, for you execs struggling with a board that just doesn't do it for you: hunker down, realign your schedule and know that even if you are not in the long-run the individual who will experience the shared leadership board, I believe that your efforts will produce a higher achieving organization.

Nonprofit Titles for Paid and Volunteer Leadership

A few months ago I asked the 2000 folks on my email list to tell me about the titles of their paid and volunteer leadership, seeking to answer the basic questions: do titles matter and if so, how?  This question arises in recognition that nonprofits appear to be using a number of titles for these position and it's not clear to me how much the naming is related to power and authority.  I believe that power and authority are the basis for how these two positions "get along", so it is not a flight of fancy that moves me to want to think about titles as providing one window to a better understanding about relationship and roles.

I received 191 response to the survey.  I will share some of these insights gleaned from this survey as I review the responses.

Today's topic: what is the reason for the title of the paid leader?

President conveys the status and responsibility of the position; we have a structure with multiple directors so the head makes sense as Executive Director; to emulate the for-profit sector; not adopted CEO or President - maybe influenced by female dominated leadership; wanted to give staff more stature than title Executive Director does; President was chosen as title to ensure a say in the governance of the organization; several years ago we changed the title from Executive to CEO because this sounded more important; ED is the traditional title when the person doesn't have a vote on the board.

Nonprofit Exec Won't Go: Where's the Board

When we last chatted about what happened over at Komen for the Cure (after it defunded and then refunded Planned Parenthood chapters) one question was unclear was: where was the Board in all this?  As best as anyone knew the big decision-maker on this matter had been the CEO who is also a "founder" with deep ties to the Komen for the Cure commuity. 

Nonprofit boards I believe, are responsible for the strategic (long range, fully informed, results-focused) decisions.  I believe this is one of the essential activities ensconced within the fiduciary duty of care.   According to the Huffington Post, the Komen story is not over as key senior managers are jumping ship and chapters and even the national are struggling withg fundraising.  So where was the board in all this?  And where is the board now?  Are they meeting while I write?  Are they being excruitiatingly conscious aobut their role in determining what's next for Komen?

Let's hope so.

Nonprofit Partnerships Can Work

Nonprofit partnerships are often code these days for mergers and acquisitions.  But this group in Maryland serves well to remind all that there remain partnership opportunities that just help to save money for a win:win proposition.  The coalition of 119 nonprofits are out to reduce their energy costs and do so by creating effectively a buyers coop.  This is about being intentional with a simple goal in mind.  Kudos to you and many groups around the country with a commitment to putting intention into action.

For more info, here's the story from the Washington Post.

Nonprofit Founder Centered

While looking for nonprofit news stories today I ran accross the Neighbor Brigade in the Christian Science Monitor.  The Monitor regularly publishes a section called "change agent" where it highlights an individual who is doing good stuff and Pam Washek, founder of Neighbor Brigade, was the pick of the week.

Neighbor Brigade, in my opinion, is a kind-of block watch which organizes individuals in a given neighborhood but instead of looking out for signs of crime, looks out for neighbors in immediate and temporary need or crises and responds e.g. someone gets cancer and needs the lawn cut or meals made until they can get back on their feet.

What fascinated me most about this story was the work Ms. Washek has and continues to do to continue to grow her movement, particularly around seeking leaders.  This made me wonder about Neighbor Brigade's governance. And while thinking about this I mosied over to Neighbor Brigade's website and then to Guidestar.  Guidestar had very little information because there's not much been filed.  And, the website speaks nothing about the board -- or nothing I could find.

"So what" you ask -- seems like good work is going on and that's all that matters.  Perhaps, but is this true?  Is all that matters about a nonprofit that good work is going on?  Are there not plenty of lessons about nonprofits that are founder driven and pretty much all we know (and all we need to know) is that the person at the helm is doing good?

My thoughts for the day.

Nonprofit Board and CEO Make Huge Mistakes

Nonprofits have volunteer leaders (the board), and for the most part, paid leaders.  As many know, one of the largest challenges in nonprofit leadership is this paradigm.  I know from my own consulting practices that there are three basic governance/ceo scenarios most commonly practiced: nonprofit boards make every big decision possibly consulting with their ceo, possibly not; nonprofit ceos make every bid decision possibly consulting with their boad, possibly not; and nonprofit boards and ceos have clearly defined which desicions belong to whom and consult each other on the rest. 

Of course the biggest challenge is deteriming which approach to take, ensuring that each party is fulfilling their responsibilites.  We like to think that the "everyone has defined and practices their respective decisions-making role" the practice but I know from my practice this is not the case.

I speak of all this because in the New York Times there is an article reviewing the current plight of Community Preservation Corporation -- a big nonprofit developer in New York and New Jersey.  The writer does a great job of reviewing affordable housing deicsions and the "so whats" of those decsions.  In addition though, and of particular interest to me, the writer also reviews the roles of the board and CEO (now resigned) and how the nonprofit was able to procede toward a cliff, financially. 

This is worth reading to consider the question: just when and how far should a board go in sharing its decision-making?  And, why is it that only the CEO has to experience the consequences of shared decision-making?