Nonprofit Board Crisis

Nonprofit Board: Feeling Pressure

The title of Tuesday's Chronicle of Philanthropy daily news e-bulletin opinion piece caught my attention:  How Board Members Can Handle Growing Pressures in 2014.

I will speak to the content of the opinion piece in a moment but my first response to the title: nonprofit board members fell pressure?  Remember, my primary work as a consultant focuses on helping boards and their execs address the many internal and external challenges they respectively face on a daily basis.  Boards do indeed face a variety of challenges but it is most likely the officers and the chair in particular that  my experience says are the members who experience "pressure" from their challenges.  Really and unlike the typical owner of a business (which is often the standard referred to when thinking of fiduciary "care") I don't think the average board member is ever pressured unless you include the hassles of attending meetings or meetings that are too long or committee work when asked.  Yes, I exagerate a bit...but maybe you can say how much my "bit really is.  

Anyway, back to the piece.  Michaeol Peregrine does a fine job in this piece projecting some 2014 challenges as well as offering suggestions for the board.  He begins by citing that  "nonprofit board members will be asked to "work harder, faster, and longer in 2014—and keep a far sharper eye on operations, performance, and mission."  Given that the average board member puts in roughly 24-40 hours of time a year, asking for more time and requesting preparation may indeed create a perceived undue pressure

Anyway, the thinking is that there will be, for nonprofits, more "economic and competitive pressures, donor concerns, closer regulatory scrutiny, and a broader perception that nonprofit boards should no longer be given the benefit of the doubt when it comes to allocating accountability for breakdowns, missteps, and failures."  Mr. Peregrine offers these include:

a. more scandals and controversies requiring boards to do more "to protect the reputation of their organizations and to show they are vigorously enforcing ethical and legal standards".   

b. providing oversight will be more demanding because of regulations  and peregrine suggest that committees will be needed to specifically address these regulations and the board may need more to increase their use of technology to help.

c. Strategic planning will play a big role in particular around long-term sustainability and board members will need to increase their monitoring of results

d. The nominating committee (although governing committees with the task of nominating is pretty much becoming the preferred norm) will have to be on a higher lookout for candidates who can bring different skills to the board as well as ensure the board is indeed doing its job of oversight.

e. The board should increase its attention to regulatory compliance perhaps even considering a staff member with this as the primary focus of their job and ensuring board members understand and oversee compliance.

f. The board will want to be clear about its dashboard and ensure it has the data it needs to understand whether goals are indeed being met while being fully supportive of staff.

g. Boards will want to share risks with the execs with boards fully understanding where their responsibility bgins and ends. 

h. Because of the kinds of new arrangements (e.g. partnerships and ventures) that are growing as a part of the way nonprofits do business, board members must be conscious of when conflicts of interest arise and put clear policies and procedures for guidance. 

i. Ethical demands will increase.

I suggest that Mr. Peregrine may well be correct with his environmental assessment.  At the same time, I wonder if he isn't expecting far to much from the nonprofit boards who must hear and respond to his message.

 

Nonprofit Board Chair Facilitation: It doesn't have to be your job

Of the perhaps many tasks facing a nonprofit board chair, none is more frequently repeated during their term than that of facilitating the board meeting. Facilitating a board meeting can be quite daunting for an individual who has never before been in this situation.  The term "herding cats" is often referred to the job  for some chairs who are frequently the volunteer leader of a group of personalities who in most other circumstances might never have come together under the same roof save but their common interest in the one focus of their nonprofit.  

So, member lack of familiarity (or in some cases, too much familiarity) can make the meeting management job (yes, that's one frame for facilitating) uber challenging, especially the untrained.  Good facilitation at the very least requires adequate listening (not hearing) skills; time management; topic management (knowing when the subject has been exhausted); and decision management -- just to categorize.  But facilitation is both a science and an art as all tasks involving human beings tend to be.

So, advice?  Inexperienced nonprofit board chairs would do well to do some reading about facilitation (the literature is limitless in internet, books, magazines).  Chairs should observe other facilitators taking notes on what they have seen be effective.  The outgoing chair, assuming they were good, should be sure to offer pointers to the incoming chair.

Great meetings often make the difference between a good board experience and a bad board experience.  If you are a chair or incoming chair and you haven't much experience, go do some learning.  But, you the chair are under no obligation to be the meeting mangager.  Unless your bylaws say otherwise, perhaps one of your biggest contributions to the meeting will be to identify the strongest facilitator in the group and assign them the task of facilitating meetings.

Nonprofit Board Fails Its Fiduciary Duty

In Philadelphia last week the CEO of a charter school was convicted of embezzling and then, wait for it, the CEO went back to work and embezzled some more.

Uh, what's wrong with this picture?  I'll tell you what I think.  We have a school with no internal controls and, worse, a board that knows it has a problem manager and is still not acting and even if the board wants to be supportive, hasn't put into place the needed controls to ensure the CEO can't continue his wayward behaviors. I would think, putting the manager on paid or unpaid leave and taking away the credit cards would be the very least steps the board should have taken until further resolving what next.  But not for this board.....  For shame, for shame, for shame.

Here's the story.

Nonprofit Board: Strategic

It is popularly instructed that one of the responsibilities of a nonprofit board is to act (think and make decisions) that are strategic (versus operational or managerially focused).  It is also popularly accepted that nonprofit boards should be engaged as key leader in strategic planning.

I believe that one of the characteristics of strategic is "fully informed".  This is to say that strategic thinking (discussions and decisions), to be effective, should be data driven whether the focus be internal or external.  PS, my additional two characteristics of strategic: multi-year and results-focused both toward achievng mission.  The results focus can be organized according to four buckets: program; management and operations; sustainability; and, governance.

With all that said, I have recently been pondering how a board "gets" to the stage where it is effectively strategic.  From a strategic planning perspective, this journey is relatively simple.  Because a huge part of strategic planning involved data collection and analyses (identifying and understanding strategic issues (internal and external; opportunities and those which limit prospects), there is for sure one moment every 3-4 years when a board is relatively "fully informed".

But what about outside of the the strategic planning period?  I propose that while it may fall on the CEO to facilitate this, there is every reason for focused board members to ensure they are keeping current on the literature, newsletters and even web materials about their respective "industry".  Keeping abreast will help provide the fodder that is critical to strategic thinking and if every board member was responsbible for reading just a bit on a regular bases and conveying their learning to the board on an equally regular basis, the prospects for being strategic --- endless.

 

Nonprofit Competing Interests

I have to admit that I'm not quite clear why there are folks who long to be accepted by an institution that has so strongly been unfriendly toward them (recalling the Groucho Marx line: he wouldn't want to be a member of any club that would accept him as a member).  But on principle I understand the issue...

The Boy Scouts USA thought it had solved the "gay problem" with it's so called judicious position of letting local troups decide on the acceptance of gay scouts while not accepting gay (I presume, identified) leaders.  

It appears (according to the Chronicle of Philanthropy) that nope, the "problem" has not been solved in particular for donors.  For those who passionately care that Scouts not be "ist", commitments to not give any money into the future are occuring.  And for donors who don't agree with the Scout's solutions, commitments to not give any money into the future are occuring.  As an example, the Assemblies of God, a sponsor of many scout troups, says it will do so no longer.

Would the Scouts have been better off hanging onto it "ist" position recognizing that it would at least hold-on to some foundational donors?  But more importantly, if an institution is founded on a set of beliefs that are biased toward one or more populations, is that "ok"?  Especially if that group is publicly chartered and has tax exempt status?  One could legitimately challenge that any "ist" group should not be honored with tax exemption status simply on the grounds that it violates human or civil or constitutional rights (the right to be treated fairly and equally?).  Imagine the consequences of such a decision (a correct decision I would offer).

Meanwhile, back to the Scouts.  You have partially tried to right your historic wrongs.  Don't let donors with values that don't recognize all humans as having inalienable rights change your own path towards enlightenment.  Keep striving to get this right recognizing that for every donor who has yet to evolve, there's at least one more that has evolved and will support you, especially when you go all the way to respect every individual.

 

Nonprofit Board Politics

In the "this would make an interesting study" readers might enjoy taking a look at Eugene Fram's observations about nonprofit board politics and the possibility that leaders (paid and volunteer) with different political leanings could in fact lead their boards astray when these differences get in the way of effective decision-making.  

I acknowledge that in my own practice I see plenty of board conflict (it is my core practice after all) and these conflicts are more often grounded in feelings over facts (e.g. love for the exec vs. lack of love regardless of the level of bad behavior).  Ideologies, not so much.  So, while Dr. Fram makes an interesting observation that political ideologies may steer a board apart and afar from rationale and informed decision-making, I for one don't have enough data to affirm.  As a matter of course, I have generally found that folks of differing political ideologies don't sit together on the same board but perhaps, for the arts in particular, this is not so true.  

To see Dr. Fram's thoughts, go here.  And, to Dr. Fram, as always, thanks.

Nonprofit Choices

The ASPCA has made a decision to close down its New York City enforcement unit.  The unit had the authority to investigate and arrest those who abuse and neglect animals.  The ASPCA has determined that this action will enable it to better focus on its strength: advocacy.

Trimming back something a nonprofit may do well but something that also diverts from what a nonprofit does best usually produces even better results toward achieving mission.  The decision is never easy but the rewards can be great.  I can only imagine the nature of the ASPCA board debates over this subject -- one that likely was not just one meeting worth of conversation and one filled with lots of data because being fully informed is a critical element to effective decision-making.

Kudos to the ASPCA.

Nonprofit Board Passion and Connections

I am not generally excited about BIG efforts to raise BIG amounts of cash to save BIG historic treasures.  When I consider the many other 'competing' demands for BIG amounts of cash, BIG historic treasures don't really come to mind.  

However the story about the SS United States is one of those chapters in philanthropy which serve to remind me of the "different strokes for different folks" dimension of philanthropy.  Good researchers can actually make links to historical monuments such as this and if the "fit" is right, keep the ship afloat recognizing that it may not just be philanthropy but economic development that can hold onto such a venture.

True, I am not going to be one of the SS United States donors.  I think there are more important issues.  But some folks will be driven to give and the folks at the top of the organization, the board, appear to have just the right passion and apparent connections to make this humongous fundraising effort work.   The lesson for the rest of those in philanthropy -- passion and connections do matter.

For more on the story, go here.

 

 

Nonprofit Founders, CEOs and Boards

Nonprofit founders often prove a conundrum for a board and the nonprofit's exec.  I don't believe there's a lot of statistical documentation to this point but my experience and the stories I hear from boards I work with all affirm, founders can be a blessing and, well, you can guess.  I believe this experience by boards with their founders is magnified when the founders take on the role of CEO.  Sooooo many complications.

Well, while anecdotal, the Wall Street Journal story about what's going on over at Microsoft highlights the complications founders can make in addition to the struggles boards can have with the task of replacing a CEO (there is some published matter on this subject).  Do take a look at the article, here, to gain some insights about the nature of the challenges and hints at solutions.

Nonprofit Board Annual Planning

Nonprofit boards admitedly have differing fiscal years resulting in annual planning coinciding with the calendar year (today) or typically including alternative months like July and September which coincide with public funding years.  But, because today, January 2 is the start of the fiscal year for many nonprofits it's a good time to ask nonprofit board chairs what business they have in mind for the board over the coming year.  I suppose the proper question: do you, nonprofit board chair, have you a plan for the activities and results you expect for 2014? 

This question is posed as a reminder that if the only business of a nonprofit board are those matters which "pop-up", I question whether the board is truly fulfilling its duty of care.  I propose that beyond the usual monitoring and checking-in about finances and what the CEO has been up to, there are the policy, planning and evaluation matters that are likely anything ordinary given the times in which we live and the needs a nonprofit faces and, most importantly, the status of a nonprofit's success in achieving its mission.  With all this on the plate, there is much to be discussed and many decisions to be made  that require thoughtful preparation and planning, easily filling-up the annual calendar.

Nonprofit board chairs, January 2, 2014 is a good time to ask yourself, what's on your board calendar for the coming year?