Nonprofit Board Crisis

Nonprofit Activities That Result in Harm?

The problems in the Middle East stimulated by the film produced by a nonprofit in the US raise for me a number of questions, most which are focused on governance.

Should nonprofits that do harm get to keep their tax exempt status?  Does "harm" inlcude attacking the core principles of other groups, especially religious organizations? 

Of course the government would have to prove intent: that the Board of the nonprofit in question did indeed authorize actions which would be so incendiary that only harm could result.  And would a nonprofit Board really have this kind of conversation -- for the record?  And, as a proponent of keeping meeting minutes that pretty much focus on the results or actions, would the dissenting vote count, albeit not a majority, to demonstrate that the whole board was not behind such an action.  And, did the members who did not approve resign after the action to demonstrate how opposed to doing harm they really were?

The story that stimulated my thinking about the role or accountability of a nonprofit board on these matters can be found in the LA Times.

Nonprofit Board Committees

Nonprofit board committees: how many and what remains a common question for pretty much every board.  Here's my thinking.

It is currently popular to have standing (i.e. permanent) Governance and Finance Committees remembering at all times all extended bodies of a board only have as much authority as the board designates AND onless otherwise specified, have no money and no direct authority over staff.

Standing Exec Committees are notorious for alienating the rest of the Board -- effectively usurping the Board's authority.  At the same time, the idea that the officers have a forum for checking-in with each other and serving in an advisory capacity to the Ed, planning board meetings and helpfing frame the board jobs of planning, policy and evaluation is pretty ok to me. Having such a group can be beneficial as long as they are clear about their parameters. 

Subsequently, pretty much all other functions of the board can be accomplished through Task Forces, bodies established for a single purpose with a clear timeline (beginning and ending). 

 

Nonprofit Succession Planning

What does an Exec's planned departure look like -- to a nonprofit Board, the staff, the public?  I raise this question following the announcement by the Executive of New York City's Lincoln Center that he will be leaving in a little over a year. 

This is plenty of time for preparation by the Board and staff -- or is it too much? 

 

 

Nonprofit Boards and Strategic Planning

I've been mulling over an article in the Nonprofit World Barriers to Strategic Planning and How to Transcend Them for a few weeks now.  A number of points have me scratching my head.

For one, the article is described as learnings from research but the study is from work with one organization.  I suppose the cumulative experience of the authors is reflected as well and there is a disclaimer about this being exploratory and qualitative, but, as far as evidence-based -- I would offer this is way too soon to be generalizing.

That said, the basic finding: when boards don't understand why strategic planning and in particular their involvement in the process matters, the result is not very good.

But let's look at a few of my puzzlements.  First, I concur that "strategic planning is a governance activity" and yes, a strategic plan does contain a set of goals and strategies designed to "help" an organization fulfill its mission and ultimately achieve its vision". 

But wait, there's more and turning specifically to the section titled "New Planning Model for Nonprofit Boards" we are advised that the "study clarified four keys to making sure that your board completes a successful strategic planning process:

1. Be sure every board member is committted to the organization's success;

2. Tell board members that strategic planning is part of their job;

3. Make certain that board members collectively possess the knowledge necessary for strategic planning; and,

4. Put processess in plasce to assure that board members fully implement the plan which included:

*create a list of action items and assign each board member a specific task and deadline for completion

*have board members sign letters of agreement to make certain they understand exactly what their tasks are

*choose a board member to remind people of their assignments and encourage them to follow through

*hold every baord member accountable for implementing the plan's goals

Hm...for my money, these MIGHT be good recommendations for a board in its infancy and maybe juvenile stage of development but for a mature board -- I need a lot more research and probably research around my own assertion about who can actually benefit from these recommendations.  In other words, I'm putting out a really big Yellow Caution Flag for any nonprofit thinking this article will effectively get them through strategic planning.

 

Nonprofit Boards Matter?

The following is a clever albeit amusing approach to defending why nonprofit boards matter.  The author is Ruth McCambridge of the Nonprofit Quarterly (are you a subscriber?).

My theory of governance as it relates to refrigerator bins.

The theory goes like this: I asked people to raise their hands if they had a refrigerator
and then if they governed their refrigerator. They, naturally, were pretty confused but I continued, saying that I buy vegetables and put them in the proper bin where they settle down for the long haul and when I say settle down, I mean settle down. I use all the stuff I can see on the refrigerator
shelves, but by the time I go into the bin to figure out what the heck is making it impossible to open the refrigerator door without wanting to abandon the property, the organic matter inside has mutated – in the worst case scenario it has grown fur and is walking around kind of buzzing.

In other words, left to my own devices, I am incapable of governing my refrigerator. My daughter is
outraged by my lack of vigilance in this regard but – c’mon! I forgot it was there! That is why I need others around me, especially when I have some responsibility for something that is meant to serve the needs and interests of others.

I realize that all this may be TMI, but my point is that when we are helping to lead something complex, many of us get very focused on one realm, while another realm shape shifts inside the bin where we don’t normally look. This is why we need a group to provide the level and diversity of challenges that a nonprofit needs to keep itself true to its constituents.

Nonprofit Board Secretaries Matter

How true for your nonprofit is the following:

The secretary is the custodian and keeper of all nonprofit records. The  secretary is also responsible for being aware of all laws, bylaws and organizational records, and provides any information the board requests. Keeping  up with organizational deadlines and deadlines for paperwork filing may also be required of a nonprofit's secretary.

Is the above statement true for the person that holds the position of Secretary in your nonprofit?  And how well do they fill these roles?  Do they record the minutes?  Do they review the minutes staff may have taken? Should they?

I'd like to hear about how this position is working in your nonprofit.

Nonprofit Board Fires President/Founder

I'm not sure I fully understood what the board was doing before now but this week the board fired its president and founder.  The school recently got into a dispute with the town over its nonprofit status with the town wanting to tax the properties.  But this dispute apparently led to other findings that challenged the standing and honesty of the President.

So, the board has acted and must now look for a new president and more importantly, consider its strategic direction.  Hopefully we will hear more as details unfold.

See the story here.

Nonprofit Board Not Great Supervisor

In today's governance work the term "Shared Leadership" is now used to describe the relationship and responsibilities between the board and the paid leader.  But let's not forget that one of the roles of a board includes that of "supervisor" of that paid leader.  After all, one critical set of board functions is to hire, guide and evaluate.

But the Waterbury, CT Boys & Girls Club seems to have forgotten its duty as supervisor.  According to press reports, the recently fired CEO became an alcoholic following the apparent accidental drowning of a Club patron four years ago, and, during this same period, began stealing funds.

So, while I might want to ask why the board did not recognize the thievery at an earlier date, I would rather talk about why the board, as supervisor, was not more actively posturing to provide relief to its mentally ill staff person?  We actually do not know what the board did or did not do except that the CEO was still in his job, with access to funds. 

Monitoring, supervising -- where was this board and what was it doing?  And, this leads me to ponder the question: to what extent does a board's duty of loyalty include loyalty to the CEO?  My answer: not at all.  The board's first and last duty is to the well-being and success of the organization.

Nonprofit Board Report Card

Self-evaluation tools for assessing a nonprofit board member's performance are all over the web.  Over the years, these tools have proven helpful in moving board members to think about their contributions.  The cumulative scores also help the Board Chair and CEO think about board development.

But the more I think about the "so what" of board self-evaluation tools, the more I want to suggest that this approach is way too subtle to improve board member performance.  Instead I want to urge boards to consider asking their Governance Committees to develop a report card -- a tool with maybe 6-8 indicator areas considered essential to high board performance and helpful in moving board members toward better understanding of expectations and to provide an incentive to make a change or keep doing what they've been doing. 

Clearly attendance (on-time) and committee/task force participation would be two areas on the report card.  What might be other areas to make this a really effective tool?

Nonprofit High Drama

I review nonprofit disasters because they are learning points.  When a treasurer or founder absconds with a nonprofit's money we know that something is not working with the reporting systems and the board which didn't miss the money at the time.  When a board and exec just don't get along we know there's problems with accountability and responsibility at the very least.

Today I noted a little blurb in the Wall Street Journal that referred to the National Arts Club re-opening and all the troubles it's seen.  High drama just begins to describe the situation.  To get a flavor, check-out this insider blog. 

My takeaway: this is a place where no insider should be in charge -- a place where acquisition by another nonprofit makes more sense than any other action.  Really, where are the regulators when you need them?