Nonprofit Board Governance #NonprofitBoards

Aaron Hurst of the Taproot Foundation is a really smart guy who has accomplished some really amazing stuff.  But, In my opinion, Mr. Hurst has seriously short-changed the distinction between a nonprofit board and "for-profit" board.  

First, I do agree that recruiting wider and really reaching into the community is an important step for building a strong nonprofit board.  I do not agree however that one must be more selective in recruiting who should be serving on the nonprofit board versus at a business board.  As the nonprofit board are the surrogate "owners" for the public, I believe it is very important that individuals be selected for very strategic reasons while recognizing that each member must also make decisions that are both fiduciary and strategic.  And, let's remember that there are also a wide number of other opportunities for fully engaging the community in non-fiduciary governance matters that help inform, lead and sell the nonprofit.

I could debate other elements of Mr. Hurst's interview but I will leave well enough alone asking that we all recognize that nonprofit governance is as challenging if not more so than for-profit governance; requires equally smart and passionate people; and, in the end, both can make a significantly large impact on the way we live.

Here's the Inc.com interview with Mr. Hurst.

The Key Differences Between Running a Startup and a Nonprofit

Aaron Hurst of Imperative and Taproot Foundation highlights the similarities and differences between running a startup and a nonprofit.

 

BY PAUL GROSSINGER

 

If you are considering whether to create a non-profit or a for-profit, what should matter?

What are the key differences between running a for-profit and a non-profit, in terms of style, enjoyment, and execution?

I caught up with my friend Aaron Hurst who founded the non-profit Taproot Foundation, the world's largest pro-bono marketplace, 14 years ago, then turned around and created the for-profit Imperative, which aims to nurture purpose-driven workers, on the key similarities and differences between the two, and what founders should think about when making their choice.

1)      What are the big differences between running non-profit and for profit?

"I think one of the things that is very important in non-profits is community building. Early on, you want to get everyone you know of value involved early on. Whereas with a business, you are looking for strategic people but you are much more selective about who you approach. It's not grassroots."

2)      What is the key to building a strong non-profit versus a for-profit?

"The key to building a strong non-profit is creating a powerful board of directors; they are really your salespeople out in the world. With a startup, it is a much smaller role, primarily strategic and focused on governance. To illustrate, a typical non-profit board has 15 people, and a typical startup board is 5."

3)      Do you attract different types of talent to a for-profit versus a non-profit?

"The talent you are able to attract is very different. For a non-profit, you are able to do more with less money, because of mission orientation. But with startups, you can give upside so you sometimes attract a higher caliber of talent in the leadership."

4) Which do you enjoy more and why?

"I like different things. With the business side, it's easier to think of how to scale it, and I enjoy the shared sense of ownership. I also enjoy that startups have exits, so there is a defined endpoint, whereas non-profits are endless. But with non-profits, I love the board and working with people who are volunteering their time and energy into its success."

"I really enjoy the lack of red tape in a startup versus a non-profit, it's just incredibly refreshing."

5) How do you incorporate the best aspects of a non-profit into a for-profit startup?

"The most successful startups I see begin with a core change they want to make in the world, and profits come second. This is a key part of non-profits. The second is to build key stakeholders in your success.

"Ultimately, with a startup just like a non-profit, people need to feel like they are making an impact. The primary payment is in purpose, not money."