Nonprofit Board Crisis

Nonprofit Board Composition #NonprofitBoards

Nonprofit board diversity is the news theme of the week.  So we hear from the NYC Department of Cultural Affairs that the boards and staff of NYC's cultural organizations do not look like the population.  Only 35% are nonwhite while the city population is 67% nonwhite.  

Why, you might ask, should this not be a surprising finding?  History, good and bad, is one explanation.  Distribution of wealth, particularly for larger, older institutions is another (although very tied into history).  Networks, again relating to history and distribution of wealth.  And what is the "so what"?  Clearly one big impact is that the haves will have more and those who are not the haves, won't have or will have less.  The consequence of this: what few resources are already allocated to the arts (proportionate to say, religion and education) are allocated predominantly to the few.

What to do?  In private sector marketing terms I would suggest that the argument to the haves is that they are missing both tangible and intangible benefits by not even modestly redistributing their wealth.  Such a redistribution actually can lift all "boats" benefiting the haves and have-less.  The exchange benefit must be made evident for this transaction to occur.

In the public sector, policy aka demand, matters.  And in this world, numbers matter and the voices of the many more should and can drown out the voices of the fewer.

And in the nonprofit sector, the focus of this study, I believe the challenge to effect change to be the greatest.  As resources drive action, the haves again dominate.  Like the light bulb, leaders must want to make change - must want to value change - must see what they are missing.   Public policy, where the voices are largest in numbers - could have an impact. Imagine first that public money does not flow where diversity is absent.  Imagine too that tax exemption is restricted where diversity is absent.  But first we must imagine a community (and boards) that equally values its citizens and their contributions regardless of race or class.  And imagine that the institutions that influence this reinforcement of values has this set of core values.  

PS, as noted in another NY Times article today, the newly appointed music director of the New York Philharmonic, with one task to raise $360 million for its hall renovation: Dutch.

 

Published today in WNYC News

New York City is Diverse. Its Culture Sector is Not: Report

Among larger sectors of the cultural world, the theater is the least diverse, with 70 percent white staffs.
(Jeremy Daniel )

i

 

Jan 27, 2016 · by Arun Venugopal

A new study has for the first time provided a racial breakdown of the New York City's cultural sector, and found that its diversity falls short of the city itself.

According to the report, commissioned by the city's Department of Cultural Affairs, 35 percent of the people in the cultural sector — which includes museums, theaters and other organizations — are nonwhite. That compares to a city population that is 67 percent nonwhite.

The report tabulated data from nearly a thousand cultural groups, including WNYC, which had to answer a survey if they wanted public funding next year.

"There are really great bright spots in the cultural field but there are also places where the field is struggling," said Edwin Torres, Acting Commissioner of Cultural Affairs. "I think that, one, we have to be able to call it out and two, we have to do so supportively."

The museum sector, according to the report, is 59 percent white, making it more diverse than the theater sector, which is 70 percent white.

The problem is more stark at the upper reaches of cultural organizations: 74 percent of senior staff are white. 

Andrea Louie, the executive editor of the Asian American Arts Alliance and an adviser to the authors of the report, said upper management is especially lacking in diversity because many people of color working in the arts come from grassroots backgrounds and have less access to wealthy networks that can help with fundraising.

"Because we're not able to access deeper pockets, we become less attractive as potential candidates to perhaps those higher-level roles at larger institutions," said Louie, who is a member of WNYC's Multicultural Advisory Council. 

Some arts groups say they're taking active measures to address diversity. Clive Gillinson, the executive director of Carnegie Hall, noted that his organization had hired a consultant three years ago in order to address diversity on the board of trustees. Gillinson said that of the 70 trustees, nine were either black or Hispanic.

The report noted that gender equity has largely been achieved in the cultural sector, with 53 percent female employment. Among senior management, the figure is 54 percent. However, among the city's largest cultural groups — organizations with budgets exceeding $10 million — the figure drops to 49 percent.

Nonprofit Board Composition #NonprofitBoards

For the most part, outside of a nonprofit, it's usually funders and donors who have an interest in who makes up a board. I would pose that even who was on the board of the Academy of Arts and Sciences wasn't as much of if any interest as the fact that Academy members were expressing their concern over the lack of diversity in who was being nominated for awards.  That the Academy's choice to focus on changing its board was of possible interest to outsiders but sadly, I would pose again, not much.

But there are occasions when a lot of folks do have a more heightened interest in who's on a nonprofit's board.  Take for instance the dietary nonprofit that was involved in the Coca-Cola scandal. Or more recently, let's look at the Center for Medical Progress.  If you don't recognize the name, these are the folks who made the "undercover" video about themselves trying to buy fetus parts from Planned Parenthood.  As we now know, the video has proven to be "made-up" and Planned Parenthood has, for the time being, escaped another big political bullet.  Meanwhile, they are musing about who is this Center for Medical Progress and as the Philadelphia Inquirer cited:

 Despite the center's lofty name, public filings suggest only a small number of people are affiliated with the nonprofit, none of whom are scientists or physicians engaged in advancing medical treatments. The people named as its top officers are longtime anti-abortion activists with a history of generating headlines.

So, bottom line, while it might not seem important all the time, who sits on a nonprofit board can matter a whole lot in terms of organizational credibility not to mention of course, contributing to the effectiveness of a nonprofit.

 

Nonprofit Board Diversity Matters #NonprofitBoards

In a country where movie stars are royalty and their actions on and off the screen matter and can actually influence the behaviors and values of the remaining society, is it possible that the recent actions of the board of directors of the Academy of Motion Picture Arts and Sciences can influence what other nonprofit boards, for-profit corporations and individuals do regarding race and class?  Well, even if it doesn't affect all the rest of how organizations are governed, the board of the Academy believes that its action can at least affect its own organization and members.  As noted in the press release by the Academy, diversity does matter, at least at this time.  Included among the steps to reflect this newly found value, seats on the board for "diverse" members will be added; committees will include non-board members; and membership rules will change in theory meaning that all the old white members will no longer be able to vote (for the board and the awards).  None of this will help the awards this year but it will be interesting to see what results are achieved next year.  Hooray for the Academy board?

 

 

Posted: 

Friday, January 22, 2016 - 08:00

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Lifetime voting rights reframed; new governor seats added and committees restructured

Goal to double number of diverse members by 2020

In a unanimous vote Thursday night (1/21), the Board of Governors of the Academy of Motion Picture Arts and Sciences approved a sweeping series of substantive changes designed to make the Academy’s membership, its governing bodies, and its voting members significantly more diverse.  The Board’s goal is to commit to doubling the number of women and diverse members of the Academy by 2020.

“The Academy is going to lead and not wait for the industry to catch up,” said Academy President Cheryl Boone Isaacs. “These new measures regarding governance and voting will have an immediate impact and begin the process of significantly changing our membership composition.”

Beginning later this year, each new member’s voting status will last 10 years, and will be renewed if that new member has been active in motion pictures during that decade.  In addition, members will receive lifetime voting rights after three ten-year terms; or if they have won or been nominated for an Academy Award.  We will apply these same standards retroactively to current members.  In other words, if a current member has not been active in the last 10 years they can still qualify by meeting the other criteria.  Those who do not qualify for active status will be moved to emeritus status.  Emeritus members do not pay dues but enjoy all the privileges of membership, except voting.  This will not affect voting for this year’s Oscars.

At the same time, the Academy will supplement the traditional process in which current members sponsor new members by launching an ambitious, global campaign to identify and recruit qualified new members who represent greater diversity.  

In order to immediately increase diversity on the Board of Governors, the Academy will establish three new governor seats that will be nominated by the President for three-year terms and confirmed by the Board.

The Academy will also take immediate action to increase diversity by adding new members who are not Governors to its executive and board committees where key decisions about membership and governance are made. This will allow new members an opportunity to become more active in Academy decision-making and help the organization identify and nurture future leaders.

Along with Boone Isaacs, the Board’s Membership and Administration Committee, chaired by Academy Governor Phil Robinson, led the efforts to enact these initiatives.

Media Contact

[email protected]

Nonprofit Governance vs. Public Engagement #NonprofitBoards

Nonprofit does not inherently mean "always correct".  While it is, I believe, generally the nature of nonprofits to do no harm, what is sometimes required to achieve mission may not always sit well with all the public, even those who are the intended customers.  This is why one of the reasons so many grantmakers and consultants alike encourage board diversity.  This ensures that before they act, nonprofits listen.  Of course, board members are not the only source of communal "intelligence".  Effective nonprofits take extra steps to ensure that they have talked to those who might be affected by the nonprofit's decisions.

Take for instance the Appalachian Mountain Club (AMC).  According to a Washington Post article, the AMC is making plans to build a trail hut" in the Mount Washington area.  It turns out that what may be ideal for hikers and especially hikers who are less be able to traverse the less approachable parts of the Trail but still want the Appalachian Trail experience, is not ideal for others.  According to the article, there are "hikers and lovers of the outdoors who contend the region (where the hut is being planned) is already overcrowded, ruining the experience, causing harm to a treasured environment and commercializing this part of the world".  Sadly, the AMC did not on its own take the initiative to ask what the many parties affected by an additional hut might say. Again, according to the article, "Chris Magness, a guide with the International Mountain Climbing School in North Conway, was upset when he heard about the plan and felt it was being considered without the public knowing much about it. So he circulated a petition to draw attention to it, nearly 1,000 people have signed so far."  But one public official, Mark Dindorf, the chairman of the board of selectman for Hart’s Location, the community within Crawford Notch, "considers the hut a chance to expose more people to the outdoors he grew to love since he scaled his first peak in the Whites when he was 5.  Though he’s concerned the proposed location would encroach on a boreal forest area, overall he believes a new hut would be beneficial."

So now the AMC is exploring other options to achieve its goal of reaching audiences who might not benefit from the trails and nature.  

Is anyone particularly right?  That remains to be seen but the real lesson: nonprofit board's should not presume they have all the answers even if their intent is to do good.  And, board diversity matters but is not the singular path to ensuring that all voices are represented in strategic decisions.  It should not be surprising that when voices are not included and heard, they will find a way to be more vocal.

Nonprofit Board Meetings #NonprofitBoards

Finding advice about nonprofit boards is not difficult to locate (including this very blog).  Finding advice that is evidence based, maybe not so easy.

Take for instance the following missive from an accounting firm trying to be helpful.  The focus of the missive: how to run a nonprofit board that is far from boring.  The advice: have a strong mission; get folks who are passionate; and, get folks who have the skills needed.  And, then, the last sentence states that these three elements will ensure that board meetings are far from boring.

Hm..and this is a formula to keep the board and board meetings far from boring?  Well, in my opinion, boring does relate to mission and meeting content.  Clearly, having folks around a table that aren't interested in mission and what's happening to achieve mission, are not the correct fit.  But seriously, nonprofit governance is not about preventing boredom.  Nonprofit governance is about wearing the hat of an owner.  Owners may have occasional boring days but they are not bored because their "baby" is developing and excelling and, well, achieving mission.  And more importantly, yes, board meetings can indeed be boring but it's not about who's around the table as much as what is the fodder of the meeting.  Great meetings have fodder that is worthy of advancing mission: fiduciary (risk reduction); strategic (moving the ship forward); and generative (addressing that which diverts the ship from going forward).  Great meetings are about policy, planning and evaluation and have involved preparation.  Great meetings are relational and transactional.  Yes, there may be parts of great meetings that are not as exciting or interesting but that should not diminish the value or experience.  

Bottom line: some advice may be helpful.  Some advice: not so much.

 

How to Run a Nonprofit Board that is Far from Boring

How do some nonprofit organizations develop and prosper, while others appear passive and static? Thriving and effective nonprofit boards share some important characteristics, which do not include “boring” board meetings. Enterprising and lively boards produce board meetings that guide an organization to its next goal on the long journey of mission.

In most instances, the strength of a nonprofit’s board of directors and governance structure is the key to its overall success. Compelling board members and boards tend to have a strong board mission and board members who are passionate about the mission and contribute relevant skill sets.

The following three steps can help transform a “boring” board into an interesting and productive governing body.

Establish a Strong Mission

Having a clear, straightforward mission that you can communicate to your board member is very important. If this is a new organization, the founders should define a succinct mission that impacts a measurable segment of the community. If the organization has been established for a while, the existing board and management might need to evaluate the current mission statement and compare it to the operational direction that is currently in place. If mission and operations are not quite synchronized, action needs to be taken to make the two run parallel in order to provide a clear organizational objective.

Recruit Passionate Board Members

The better an organization defines its mission, the easier it is to convey that mission to potential board member recruits who can determine if they are passionate about the nonprofit’s purpose. A passionate board member will be eager to provide energy and resources to the nonprofit’s objective at board meetings and events, because for these members, whatever the issue is, it’s personal. Whether establishing policies, creating a new program, solving an IT issue or responding to a personnel problem, a board member who is engaged brings energy and the ability to accomplish goals, objectives and benchmarks.

Look for Compatible Skills, Not Just a “Type”

Some organizations make the mistake of creating a governance structure that pigeonholes the “type” of individuals who can be board members. For example, the by-laws of a private school or college may define that over half the board be educators, or a community development corporation may require virtually all members to live in the community. Organizations need to determine the skills that can effectively be utilized to accomplish their mission. After prioritizing those skills, an organization should recruit individuals who meet the criteria and are passionate about the organization’s mission. For example, a public foundation that primarily makes grants to other nonprofits would probably need a successful investment advisor to serve on its board of directors and finance committee, whereas a social service organization that receives most of its funding from government sources would most likely need an individual with significant insurance experience.

When an organization is equipped with board members who have buy-in to the nonprofit mission and purpose, are passionate about a part of the community they truly believe they can impact, and have the skills to do just that, board meetings will likely be anything but boring.

 

From the accounting firm of Brown Smith Wallace.

Nonprofit Board Crisis #NonprofitBoards

There are those moments, hopefully rare, in a nonprofit board's life that the only way to resolve all the issues is to get a brand new board.  That's the sum of the following Berkshire Eagle story which I ask you to read and weep.

 

Berkshire Co-Act conflicts being negotiated by alternate boards

By Jim Therrien

[email protected] @BE_therrien on Twitter

POSTED:   01/21/2016 08:19:35 PM EST0 COMMENTS| UPDATED:   107 MIN. AGO

 

 

 

PITTSFIELD — Supporters of former Berkshire Co-Act executive director Paul Deslauriers have formed an alternative board of directors and are asking the nonprofit service organization's current board and its president to step down.

The current board president, the Rev. Ralph Howe, said Thursday that, after an exchange of written proposals for resolving some of the nonprofit corporation's debts, he has hope the conflict that began last summer can be resolved.

"I think there is a constructive conversation going on," Howe said after the current board met Thursday afternoon. He said he's hopeful that within a week to 10 days the parties will know whether debts he is reluctant to leave outstanding can be addressed.

Meeting on Tuesday, Deslauriers and about 20 people with ties to Berkshire Co-Act as donors or volunteers approved an alternate slate of board members. They hope to take over the nonprofit corporation and replace Howe and the existing board, which dismissed Deslauriers in November over alleged mismanagement of Co-Act programs.

Deslauriers said Tuesday he planned to formally propose negotiations to end to the strife of the past year. At his urging, the new board approved a letter to Howe with that proposal, and it was delivered via email on Wednesday.

Howe said later that he had received a proposal to resolve more than $15,000 in debts and address other financial concerns by 2017, but he said he is pressing for an earlier resolution of the debts. A possible solution is being explored, Howe said.

Those present at the meeting with Deslauriers on Tuesday were among those who had signed forms to officially become members of the nonprofit corporation and eligible to vote, according to Deslauriers. He and Howe have differed over whether the original membership-controlled board had been changed to create a self-perpetuating board that adds its own new members, and that point is expected to be part of any negotiations.

Howe, the pastor of the First United Methodist Church on Fenn Street, has stated that he is willing to step aside if the new directors agree to meet some of the financial obligations. Those include more than $8,000 owed to Bruce Beston, a current board member, for work to resolve reporting and other issues that resulted in the revocation by the IRS of Berkshire Co-Act's 501 (c)3 nonprofit tax status.

Howe said all of the requested annual reports and other requested information have been sent to the federal agency, and he expects the tax status will be restored in the near future. The lapse of the tax status was one of several problems Howe said he discovered after becoming board president, which he said led the board to dismiss Deslauriers — the only Co-Act executive director since its founding in 2008.

The new directors, after voting as community members Tuesday to unanimously approve each new board member, also approved a letter to be sent to the current board, seeking to formally engage in negotiations toward a transition.

Deslauriers contended that Howe had begun a takeover of the organization and had shifted some of the programming and assets to Fenn Street Community Development Corp., a nonprofit service group Howe has formed. Howe denies that, saying he was merely concerned the nonprofit was being mismanaged.

"I don't have a personal agenda in this," Howe said, adding, "If we can get the debt paid down, and if they want Paul to run it," he believes the current board will relinquish control.

Deslauriers told supporters Tuesday he hopes the negotiations succeed in an orderly transition, but he acknowledged that if the talks break down the new group might want to resort to legal means.

Directors elected to the new board include Deslauriers, James Conroy, Kathleen Cardella, Zack Duigo, Bruce McDonald, Patricia Neri, William Schaepe, Ben Schawinsky and John Boot.

Named to an advisory group to the board were Joseph Jackson, Belle O'Brien, Ron Shaw, Barbara Wampler and Karil Ravensong.

Deslauriers said they represent a wide range of impressive skills and life experiences and most have been involved in Co-Act programming for years, if not from its founding. The directors, in turn, once again expressed dedication to Deslauriers in representing the spirit of volunteering and collaboration upon which the nonprofit was founded.

A longtime volunteer and supporter of the organization stressed during the meeting that the new board must become more directly involved in financial and organizational decisions, and that specific members have to be responsible for duties like treasurer, accountant or board secretary.

In the past, he said, most duties fell to Deslauriers, who he said naturally tends toward optimism that something can be accomplished, no matter the fiscal or other obstacles.

Some directors also said they were upset by what they called vicious and untruthful criticism of Deslauriers, particularly through anonymous posts on Facebook.

Board member Kathleen Cardella said most of what has been posted — such as on the Facebook page "committee rehash - berkshire qu-ack" — has been inaccurate, slanted or a lie. She said her posts on the site trying to defend Deslauriers or Co-Act members were derided, mocked or taken down.

Lately, she said, fraudulent posts purported to be by her, Deslauriers or other supporters have appeared, along with unapproved photos. She said the board should consider taking legal action over the online attacks.

"It is really horrendous what they are saying on social media," Cardella said. "It is so twisted and so far from the truth."

Conway and Deslauriers said their hope is that the criticism will fade if the issues facing the nonprofit are resolved under a reconstituted board.

Deslauriers also told the new board that he hopes to concentrate first on restoring a Co-Act shared-living affordable housing program, along with the FoodNet community garden and food program and a day labor program.

He said he hopes to also bring back a day center for the homeless and low-income residents, replacing the former Pearl Street Center, which was closed in the fall.

Nonprofit Board Composition #NonprofitBoards

There are a lot of member nonprofits.  In many of these organizations, the term members is simply code for donors with "members" having no rights and only one obligation: give money.  But for a good number of nonprofits where members means individuals who have rights and responsibilities beyond giving money, one of the biggest obligations is to elect the board.  Sadly in my opinion, for many members, their obligation is merely perfunctory and anything but authentic or serious. 

In part of the following CityPulse article, the author, referring to credit unions, takes on the challenge of empowering members of nonprofit organizations to have a more authentic role in governing. There may be some wisdom here that non-member nonprofits may also glean.

The credit unions’ boards are elected representatives. Every credit union has a one member-voting process. When was the last time we remember voting for board members? And how knowledgeable were we about them when we voted? Did we have any control over who might become a candidate? My investigation of credit unions’ board election processes discovered the norm is driven by a board subcommittee. They come up with members for election. The candidates are handpicked with CEO influence on the process. I’ve seen this become a who-knows-whom exercise in my interaction with nonprofit boards. A real danger is the board becoming a private club, where the CEO makes board nominations.

One approach to checking board control is reserving seats for certain constituents. Another approach is letting members nominate other members for candidacy. Nominees require 1,500-member signatures within six weeks to qualify, the same number required to run as an independent for the U.S. House of Representatives. Vancouver Credit Union Vancity has a large membership base, and only requires five letters of nomination. They show board election information on their website, something rarely done.

My research shows local credit unions reflect the national trend, acting like private businesses instead of co-ops. A Filene Research Institute report titled “Credit Unions and Cooperatives: How Charter Choice Drives Social Enterprise” showed credit unions operating within cooperative ethics in pursuit of a greater strategy.

“Member owned institutions operated in accordance with cooperative principles were one of the earliest forms of business organization that integrated the pursuit of broader social goals within a for-profit vehicle,” the report said.

A 2004 Filene report showed an opportunity being missed with these principles.

“A new generation of members awaits, one of which is more civic-minded, socially conscious and motivated by causes such as ‘green growth,’ ‘local food,’ and ‘gender opportunity,” the report indicated. “The obligation remains with credit unions to put the greatest emphasis on nurturing values, as well as generating value for their members.”

One thing studying sustainability taught me is how systems require feedback. If we want our financial institutions to grow and make money regardless of cost, silence is the key to making that a reality. However, we can let them know what we want, to make them triple-bottom-line performers. All credit unions have annual membership meetings. How well they advertise and how pro forma it is varies. Members should be able to ask questions or make suggestions at forums. Otherwise, communicating with the board mandates investigating websites for contact information.

Getting 500 or 1,500 signatures is a challenge to reforming the board’s direction through elections. One can begin by calling for a lower nomination threshold. You don’t need to wait for the board to eventually address issues of sustainability. Each member has a voice. It can be simplified by getting others to join you. It’s your credit union.

Nonprofit Governance Matters #NonprofitBoards

Sharing "ownership" is not a simple task and one which may never occur with a founder.  Generally, shared ownership is accomplished through a board of diverse (skills and perspectives) AND passionate people.  But often enough, founders tend to value a board only for what they can do to support their agenda, not share ownership.  The consequences of this tendency is best illustrated in the following Washington Post article.  Interestingly and also not unique to this organization, unless a lot of effort has been conducted to counter the situation, the public doesn't see the board.  The consequence: without the founder the perception is that there is no director.  

Castleton Festival announces hiatus in 2016

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By Anne Midgette Classical music critic/The Classical Beat January 20 at 8:22 AM

The Castleton Festival, which the conductor Lorin Maazel founded on his private estate in Virginia in 2009 and nurtured until his death in 2014, announced today that it will cancel its summer season in 2016 and take a year-long hiatus.

Apart from a few selected events — including a possible benefit concert with the singers already contracted for the summer season — the leadership team “will use this interim time to build a solid financial foundation for the festival for continued growth in future years,” the festival announced in a statement.

“I have no finances anymore,” said Dietlinde Maazel, the actress and widow of the conductor, who took over the festival after her husband’s death and guided it through a 2015 season that she called “huge.”

[From 2015: The Widow: Dietlinde Turban Maazel takes over Castleton.]

But the success of the season — the first under the music director Rafael Payare, the first to include a residency by the Academy of Jazz at Lincoln Center and the first to reach more than 1 million viewers from around the world via live streaming of events — exhausted the resources of the board and a staff that was too small to keep the necessary fund-raising activities going when the festival was over.

“In October, it looked okay,” Maazel said, speaking by phone from New Jersey, where she teaches theater at Rutgers. But by Christmas, the financial model for the year ahead suddenly seemed much less viable. And the cushion that had previously supported the festival through lean times, the income from Maazel’s conducting, is no longer available.

Castleton has struggled with conflicting ambitions ever since Maazel made the decision to found a festival on a sprawling property in Rappahannock County that he and his wife purchased precisely because it was not easily accessible and was a place to get away from it all. Getting resources and audiences out to the 600-acre estate has always been a challenge. So has getting funders to support a nonprofit organization that for most of its history was perceived as a kind of vanity project of a wealthy conductor who was able to spend what he needed to get the forces he wanted to build a new theater or put on Puccini’s major works.

[2012: Castleton struggles for an identity and future beyond Lorin Maazel.]

Maazel had always wanted the festival to achieve autonomy as a nonprofit organization independent of his own resources but died before he could oversee that transition himself.

Dietlinde Maazel hopes the year off will allow her to reestablish the festival’s financial footing and continue its activities as an educational and performing institution in 2017 — on a smaller scale.

Nonprofit Board Values #NonprofitBoards

As the adage goes: the only thing wrong with tainted money is there 'taint enough of it".  And yet, as is suggested in the following item from Telesur, perhaps there is enough of it and "it's" only accomplishment is to taint, to diminish the value of what is accomplished.  If nonprofit boards are about changing the status quo or at minimum, filling the void that is unattractive to for-profits and not demanded by the public, then money from both of these sector (for profit and public) cannot be pure.  Nonprofit boards must determine how much the source of their money matters and establish rules about what is too tainted?  Not doing so makes all that they do equal to the value of their money.

  This content was originally published by teleSUR at the following address:

 "http://www.telesurtv.net/english/opinion/Nonprofits-Beware-the-Hand-that-Feeds-20160119-0001.html". If you intend to use it, please cite the source and provide a link to the original article. www.teleSURtv.net/english

Nonprofit Governance Accountability #NonprofitBoards

 

You may recall that last week the owner of The Philadelphia Inquirer and its sister publications donated, along with $20 million the papers to a new nonprofit institute.  This gift was identified as a sustainability strategy for an entity that was facing serious challenges to staying alive, just like most of the media institutions.  I noted last week that this was possibly a well and good solution for the struggling entities while questioning how the new entities would be governed to maintain the independence that good media relies on.

In a follow-up article in yesterday's Inquirer, Philadelphia Media (the current corporation) executives said that "although the nonprofit institute and for-profit PMN were inherently connected, the institute has no governance power over the newspapers and website. PMN and the institute are run by separate boards, each with independent responsibilities. PMN can make requests for funding to pursue certain projects, but the institute is not required to approve them. The news company can turn down money if it has qualms about a donor."

So this is it?  Two "independent" boards with no guarantee that the one will instantly respond to the other's requests if "it has qualms about a donor"?  For me, more questions are raised.  What criteria will be used to constitute "independence especially for the "have's" board?  What efforts will be made to ensure an "arm's length" distance between the two boards and is this what would be required to ensure "independence".  And who will watch the "have's board" to ensure it doesn't have an agenda the "seeking" board will never fully meet?  

Sadly I've seen occasions where the board with the money goes off on its own direction creating a huge crevice between the two organizations and effectively, out-of control.  While independence is important, particularly to benefit the public, there are inherent risks in this new structure.  I might have even proposed that a third "mediator" type board should have been developed to put all in a proper perspective - a board who's interest lays singularly in the public's welfare and has no ties to either of the two organizations.  Yup - more structure and process and perhaps what is necessary in a world where individual and institutional interests often overlap.