Nonprofit Board Crisis

Nonprofit Governance with a Twist

One fact that is very unusual about this Washington Post article is that it is about nonprofit governance, although the article is actually about how the manner in which board members are selected might effect an organization's nonprofit status at the Federal level.  I think this worth considering not because I would like to question the nonprofit's legitimacy but because the process offers an interesting fundraising opportunity.

According to the article, the Cato Institute (the free-market folks housed in a really nice building not far from the Capitol):

The Cato Institute, one of the largest think tanks in Washington, is governed by four people, each with a 25 percent stake in the organization. That stake can be bought and sold for cash under an arrangement, only legal in a handful of states, that is frowned upon by the Internal Revenue Service. ... Although they (the Koch brothers, two of the four "owners") don't receive dividends like shareholders of a for-profit company, the structure gives the Koch brothers power to appoint half of Cato’s board. In most nonprofits, new directors are elected by the organization’s membership or the current board members.

Think of the possibilities though.  A couple of folks really want a particular mission to go forward and then make a major financial investment (I know, that's not exactly what's going on with Cato) and when these investorss tire, new investors come in. 

This could be one answer for nonprofit sustainability...  governance up for sale!

Nonprofit Media: Sustainability Strategy is Lesson

I remain dubious about the sustainability prospects for nonprofit media.  I am still confused about how nonprofit media can succeed where for-profit media is failing.  I care because I believe the lessons not only apply to media but to a number of other disciplines and sectors.

In an article in the Spring 2002 Stanford Social Innovation Review, and following a deep and wide narrative defending the need for nonprofit media, the authors describe a sustainability strategy that includes advertising, micro-payments, donations, grants, product sales and more.  But all of this effort is expended to address the one essential reality experienced by the for-profit media:
"commercial media's profit margins are so thin--or, are getting so much thinner--that they are more and more focused on making money than on meaningful jounalism".

With a strategy that requires a sophisticated menu of sources, I fail to understand why nonprofit media believes it can triumph where for-profit media is failing.  And, why will its profit margins be any better? 

Nonprofit media boards -- this is your challenge to address.  Where will you be if (or when) the bucks stop flowing?

 

Nonprofits Boards and Corporate Social Responsibility

People, planet and profits - that's the mantra for the corporate social responsibility field which asks for-profits to inclue more than profit among its goals, according to a recent Christian Science Monitor article. 

But while in the process of thinking about corporate social responsibility for for-profits, I began to think about if and what nonprofit boards think about their own corpoate social responsibility.  The mantra needs an adjustment of course.  Something like people, planet and outcomes (mission) would do it. 

I know from consuting practice though that the "outcomes" conversation might well be the first stumbling block for nonprofit boards.  Often mired in the tediums of ensuring no financial harm to the organization, many boards do not ask the outcomes question at every meeting (my standard).  The People question only comes up at budget time, and the Planet question, um, not sure when that gets raised.

So just how responsible are nonprofits in the corporate social responsibility arena?  Hm......