Nonprofit Board Crisis

Tainted Money: When Is It So? #NonprofitBoards #NonprofitTaintedMoney

When is gifted money tainted and when is it not?  This is the question Dartmouth and the Museum of Modern Art are asking about Leon Black who continued to pay Jeffrey Epstein for services after the man was convicted on soliciting prostitution from a teen among his wide and varied playboy-esque behaviors.  

Every nonprofit needs to create policy about what is tainted in terms of sources of gifts.  At minimum failure to adopt policy can result at minimum with very angry consumers and donors and potentially bad press.  Now, will folks not go to the Museum of Modern Art because Mr. Black gave a huge gift?  There remains part of the question to be answered.  

There appears to be no simple rule about when $ are tainted.  Like porn it appears to be a "know it when you see it" idea.  But is it really?  I believe that mission and values must inform when tainted is tainted - singularly.  Any other standard is just justification.

Oh, and for press questions like this, I believe answers should come from the Board, not staff.  

The following is copy from the Chronicle of Philanthropy Newsletter.

The Metropolitan Museum of Art and Dartmouth College should distance themselves from Leon Black, a major benefactor with ties to the late Jeffrey Epstein, some artists and students say. Black, a private-equity billionaire, paid $158 million to Epstein for financial and tax advisory services after Epstein's 2008 conviction for soliciting prostitution from a teenage girl. In 2018, he gave $40 million to the Museum of Modern Art, whose board he chairs, and in 2013 he donated $48 million to Dartmouth for its media and visual-arts center, which bears his name. Among the artists who want the museum to part ways with Black is Chinese dissident Ai Weiwei, who said he wanted the museum to remove his art from its collection if it does not do so. A Dartmouth spokesman said there is no evidence that Black "engaged in any of Epstein's shameful behavior." (New York Times)

Nonprofit Board Chairs #NonprofitBoardChairs #NonprofitBoards

As you may have gathered by now, one of my deepest interests around nonprofit governance/boards is the role of the board chair.  Back a few years ago, I was a member of a team of practitioners who are members of the Alliance for Nonprofit Management Governance Affinity group (aka learning community) that conducted a national study on board chairs and I have been hooked on the subject ever sense.  I believe we the board chair to be at the center of board leadership and an individual that can actually make or unmake and effective nonprofit board.  You can view the findings from our team's learning here.

Meanwhile I was reminded of a 2010 study by Chris Cornforth, Yvonne Harrison and Vic Murray and I am sharing their learning here.  I believe we can't know enough and need to keep on discovering how to do best.

What makes Chairs of Governing Bodies Effective?

 

 A report prepared for the National Council for Voluntary Organisations and theCharity Trustee Network bynChris Cornforth, Open University Business School, UK.Yvonne Harrison, Seattle University, USA.Vic Murray, University of Victoria, Canada.

Email: [email protected]  January, 2010.

 

Executive Summary 

Relatively little research has been carried out on the important leadership role of chairs of governing bodies. What research has been done across different sectors suggests that the impact of chairs is highly variable. It is important therefore to understand in more detail what distinguishes effective from less effective chairs. This report helps to fill that gap. It presents the results of an online survey of board chairs and the people they work with, including chief executives, board members and staff. The survey collected data on perceptions of the chair leadership role, including the quality of the chair’s relationships (with management, the board, and stakeholders), chair impact, and the influences on chair leadership.

 

Key Findings

Chairs that were seen as:

• fair, open to ideas, focused on building high quality relationships with others and encouraging team work and having a considerable impact on the effectiveness of the board, Chief Executive (CE), and organisation.
• The least effective Chairs were those that were not seen as team players and were unable to manage inadequate performance by the key actors with whom they interact. Various dimensions of a Chair’s emotional and spiritual intelligence were associated with his or her level of impact. In particular chairs with high impact were perceived as being socially aware, able to manage relationships and helping and service motivated.
• The Chairs’ contribution was seen primarily in terms of process(e.g. managing board meetings) and
• content (e.g. providing information) rather than as a source of inspiration to boost board morale and board member engagement.
• Chairs tended to rate their own performance and impact higher than other people they work with did. There is a potential danger that if this gap becomes too wide these relationships could become dysfunctional.

Practical implications

The research has a number of implications for the recruitment and development of chairs:1. The research suggests it is the softer inter-personal and

leadership skills that distinguish effective from ineffective chairs. Effective chairs were perceived as being socially aware, helping and service motivated 

and good at managing relationships. It is important therefore when recruiting chairs that these softer leadership and inter-personal skills are given as much or possibly more weight than cognitive and analytical skills such as problem solving or strategic thinking. 

Those chairs whose performance was seen as more satisfactory were seen as fair and impartial, open to new ideas, did not distract from the organisation’s goals, provided autonomy and independence for the board and CE, and engaged in board team building behaviours through valuing team members,

encouraging and acknowledging different contributions and creating a safe climate were issues can be discussed 

Chairs tended to rate their impact more highly than CEs, board members and other key actors. It is important therefore that chairs receive

 feedback on their performance.  This can be done formally through an annual 360 degree appraisal, and informally by chairs seeking more regular feedback, particularly from other board members and theCE.4. The further someone is away from the Chair the lower they are likely to perceive his or her impact. The same is also likely to hold true of boards more generally. Boards should consider developing a communication strategy that keeps key stakeholders informed of the work of the board and the key issues it is addressing.5. Chairs and those people who wish to become chairs need opportunities for

training and development, both to keep up with important developments in their field and to enhance their chairing and leadership skills. In addition to formal training events, seminars and conferences this might include peer learning circles or mentoring by an experienced chair.

Nonprofit Boards Fails #NonprofitBoards

Joan Gary has constructed the following framework (or one of them) to think about nonprofit boards.  Built upon a traditional roman catholic framework, she offers: The 4 Deadly Sins of Dysfunctional Boards..... - fear; penny-pinching; cluelessness and abuse of power.  While I would certainly quibble with her labels, I generally think there is indeed some merit to the list.  But to quibble I would argue that cluelessness is the most deadly of sins recognizing that many boards lose track or understanding what indeed is mission and how mission is pursued and more often than not, do not understand internal operations enough to make even common sense decisions.

Either way, you be the judge and please share your thinking.

 

Here's the complete Chronicle of Philanthropy article:

 

By Joan Garry

FEBRUARY 8, 2021

Too often board members don’t know they have a very important job because we don’t tell them upfront. As nonprofit leaders, we don’t define success, and we don’t give trustees the tools they need to be successful. I have seen four key drivers of board dysfunction.

The Sin of Fear

Anxiety as a key driver of decision making by boards will never propel an organization forward in the pursuit of its mission. Fear will eat innovation for lunch.

A risk-averse board operates from a place of scarcity, not abundance. Because the board member joined not being 100 percent clear on the responsibilities ― and was even less clear on the wonderful opportunities board service presents to them personally and professionally ― fear can be an easy default.

The Sin of Penny-Pinching

A corollary to fear is frugality. Boards are notoriously frugal. Given the choice between raising money to try something new and cutting expenses to make room for a new activity, boards will vote for the latter far too often.

Skeptics will say this is true because board members know they are responsible for raising money and they don’t want to embrace that role, so reducing expenses is much preferred.

The Sin of Cluelessness

There are two root causes here. First, most board members just don’t know what they don’t know. Second, they often lack a sense of the “whole.” When the board does not act as a team with a shared sense of purpose, then the treasurer will only take care of the numbers, the nominations chair will just be responsible for identifying prospects, and so on.

The Worst Sin of All — Abuse of Power

When either the CEO or a board member loses complete sight of the reason for the work, and their primary motivation is self-interest, all hell can break loose. You would think that a sector rooted in altruism would not have this at play. It turns out that no organization, public or private, is exempt from this toxicity.

How to Foster Functional Boards

We must be clear about why boards matter — to prospects and to the folks around our conference table (real or virtual). Can you imagine if we made a board member feel like a million bucks, gave that person a real sense of privilege about board service? If you want a high-performing board, make sure the members know the following:

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• A nonprofit board bears little resemblance to a corporate board; it is the legal and governing entity of the organization.
• A board is the ultimate steward of the public funds that drive the work. Nonprofit boards should be passionate about and intimately familiar with the organization’s mission and knowledgeable about the sector and its challenges and opportunities.
• A nonprofit board interviews, selects, hires, and evaluates the executive director. It develops a strategic plan in partnership with staff. Board members stand as the organization’s most visible and credible ambassadors, inviting people to know more, do more, and give more to a nonproft they care deeply about.
• A nonprofit board partners with staff to set a vision and to ensure that every donor can be very proud of the contribution she has made to support the work. A nonprofit board does not follow; it leads.
• A board member’s compensation comes in the gift of service, which is a contribution of time, treasure, and expertise. Compensation also comes in the form of professional and leadership development and relationships with kindred spirits who share a passion for the organization’s mission, relationships that can and do last for decades.

This article was adapted from the new book “Joan Garry‘s Guide to Nonprofit Leadership.”

Expect Change at United Way Worldwide? Don't! #NonprofitBoards #NonprofitBoardChair

If you thought that lessons had been learned by the United Way Worldwide board after its B. Gallagher experience and internal cultural dysfunction, don't!   According to the Nonprofit Times and other sources, "United Way Worldwide (UWW) installed the chair of its U.S.A. board, Neeraj Mehta, as interim president and CEO of the organization effective March 1. That’s the day current leader Brian Gallagher announced he will step down."  I know from experience that change does not come from an organization when the board has failed and then chooses it's own leadership to serve as interim when the source of failure has resigned (but without admitting fault (sound familiar)?  So, as while Mr. Mehta comes to the paid leadership following serving as Board Chair of the United Way, this same individual continues to sing praises for the previous leader who despite his protests, evidence suggests that he did indeed fail, at least around creating a culture that was safe, inclusive and supportive of all its employees.  That the board threw its support behind the now departed exec only indicates how they too have failed.  Bottom line, the values of the failed exec are shared by the board that failed to look beyond the legal well-being of United Way.  Sad!

Here's copy from the Nonprofit Times on this subject.

......Mehta has served on multiple for-profit and nonprofit boards and has been an advocate for diversity, including support of GE’s internal and external Asian Pacific American groups.

“I am pleased that such an experienced leader as Neeraj has agreed to step into this role during this critical time,” said United Way Worldwide Board Chair Juliette Tuakli, M.D. 

“I have been so impressed with the work that the United Way Worldwide team does to support our United Way Network and communities across the globe,” Mehta said. “The hurdles we are facing are daunting, but not insurmountable, but challenging times also present great opportunities.  So, as we turn our attention to finding our next leader, I am confident that we will come through this stronger and ready to continue providing the support and care our communities need.”

In a letter to United Way affiliates and staff on the day his departure was announced, Gallagher said there was no merit found to allegations of misconduct after the organization thoroughly investigated them. “There is no evidence of a toxic or hostile culture. Is there room for improvement? Absolutely, just like almost any other workplace,” he wrote. “I am proud of my life-long commitment to diversity, equity and inclusion. I am equally proud of the work done in those areas by our team at United Way Worldwide. Our commitment is real and our work is effective. This entire episode will not diminish United Way Worldwide’s commitment to the right of every woman, or any person, to come forward with any concern they might have, and to be heard and protected in that process.”

 Tuakli and Mehta said in a joint statement released after the investigation: “The investigation was completed in a thorough, thoughtful, and dutiful manner, while also recognizing the urgency of the situation at hand.”

In addition to the EEOC complaints, as many as 200 affiliates apparently have been considering withholding dues to the national office this year, according to reports published by The Huffington Post.

Nonprofit Board Diversity: Achieving This #NonprofitBoardDiversity #NonprofitBoards

A panel for the Wall Street Journal (2/20/2021) offered some tips in achieving board diversity.  Admittedly, the focus was on corporate for-profits but I think the points can still work for non-profits.  I've picked-out what I believe to be some "gems" starting with a WSJ point: diversity begins with a commitment - policy.

WSJ: In 2019, New York City’s comptroller asked 56 S&P 500 companies to adopt a policy—based on the National Football League’s so-called Rooney Rule—requiring that people of color and women be considered for every board and CEO vacancy. 

MR. JONES: Boards also can partner with Black affinity groups like the Executive Leadership Council. That can become a pipeline of talent.

There are Black people in corporate America in various roles in technology, global supply chain, digital marketing. Boards can look outside a corporate arena to find other strong Black candidates. There are leaders running global not-for-profit organizations—major hospital systems and institutions in higher education.

WSJ: What big mistakes do boards make when they try to increase the ranks of Black members?

MR. JONES: Many are looking only for a sitting CEO or a sitting CFO of a major corporation. There are very few Black sitting CEOs and CFOs of major Fortune 500 corporations. I serve on the board of Northwestern Mutual Life Insurance. I started before becoming a CEO.

MR. GARLAND: Another mistake is there is a tendency to go to the same directors. John and Dale may get a lot of requests to sit on boards. 

WSJ: Should boards require at least one Black candidate during every director search?

MR. JONES: There ought to be a diverse slate. That would certainly include a Black candidate, which is what we do in our business.

MR. ROGERS: At Ariel Investments, we challenge companies we invest in if they don’t have an African-American director. Over 38 years, we’ve had 45 times where we’ve had what we call a Jackie Robinson moment—by getting them to have their first African-American director.

It’s really important to add more discipline to this process. We [Ariel] will be changing our proxy voting to support the idea that every company that we invest in should have an African-American director.

MR. ROGERS: Whether it’s an institutional investor, an executive recruiter or some of us [Black executives] who have been on boards, we can help get the right fit.

Let people know you’re looking for a diverse director and communicate if you want someone only in technology or someone only in finance.

WSJ: What drawbacks arise from having a single Black director? And how can boards make those members feel included and valued?

MR. ROGERS: We want minority directors who are willing to fight for civil rights, economic justice and social justice. If they are the only Black person on the board and they don’t speak out, you give cover for the status quo.

That CEO can say, “I’ve got my Black director. They’re not saying anything is wrong. We don’t need to change anything.”

Nonprofit Leadership vs Nonprofit Leadership #NonprofitLeadership #NonprofitBoards

This piece constructed through the eyes of Forbes Nonprofit Council members is at best light weight in its advice but there may be a gem for some readers just the same.  Three notes:

1. The title, 9 Ways a Nonprofit Can Improve Collaboration with the Board offers a construct that it is the staff and exec in particular who is the nonprofit.  I would offer this to be an error, gross error, in thinking.  The board, the proxy "owner" for the public is who is the nonprofit not the other way around.

2. Forbes Council member, at least in this case, are execs so this is one lens for viewing the "collaboration" between board and exec.

3. There is not one nonprofit leader: there is the paid leadership and volunteer leadership.

4. I pose that the best approach to collaboration is for the paid leader to ask what is desired by the board and the board to say what is its desire.

From Forbes:

Feb 16, 2021,08:10am EST|139 views

Nine Ways A Nonprofit Can Improve Collaboration With The Board

Expert Panel®Forbes Councils Member

Forbes Nonprofit Council

COUNCIL POST| Membership (fee-based)

Leadership

 

Nonprofit leaders can sometimes have a difficult time working alongside their board. Part of this may come from a disconnect that the board has with the enterprise's daily running. Many board members aren't aware of what goes into running a nonprofit. However, it may also be due to a breakdown of communication between the board and the leader.

Dealing with either of these will require interfacing with the board and having them see your point of view as the organization's leader. To help, nine members of Forbes Nonprofit Council offer sage advice on how nonprofit leaders can better work alongside their board for mutual benefit.

Forbes Nonprofit Council members provide tips improving collaboration between leaders and board members.

1. Understand Their Motivations

Board members are a gift to your organization. Spend quality time with each board member to understand their motivations and how they like to be engaged. Don't make assumptions that they want to be on the finance committee because they are a finance professional. Make sure that they get the most of their experience and you will have a supporter for life. - Cortney Nicolato, United Way of Rhode Island

2. Tap Into Their Passion And Expertise

Find the one thing each of them has expertise or passion in and ask for their insight or opinion on something. They each have something to offer beyond fundraising and if you can get them engaged in a meaningful way, their commitment doubles. When you do a new ad, run it by the marketing folks on your board, ask them to help plan a new program or provide insight on new technology. Use them! - Kim Jefferies, Brighton Center

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3. Consider Their Feedback

Always take into consideration all of the feedback you receive from your board members. Aside from that, make meetings more enjoyable–perhaps by providing things like coffee, tea and snacks. My last piece of advice would be to always keep the meetings short and concise. Our time is valuable, so presenting the necessary details in a shorter amount of time is what people really appreciate. - Gloria Horsley, Open to Hope

4. Keep Them Engaged

Make sure you keep them engaged! Have concise meetings. My monthly board-only newsletters, where I list projects they can volunteer for, are effective. I also share what is going on in another member's life or career (i.e., birthday greetings, awards, promotions, etc.). Members also have access to a shared Google Drive with handy information, including board/committee schedules, minutes, etc. It works! - Simone Joye, Howard University Medical Alumni Association (HUMAA)

5. Enable Regular CEO Communication

Having served on 12 nonprofit boards and chaired a few of them, I find it most helpful when I'm let in on the sense-making processes of the CEO. I feel empowered when the CEO shares industry reports, easy-to-understand data summaries on finances and programs and their conclusions and plans. Regular communications with the CEO allow for an exchange of clarifying questions and responses. - Christopher Washington, Franklin University

6. Inspire Them To Tell Your Story

Feed them first with highlights that inspire them to tell your story. They are your primary ambassadors whether your organization is volunteer-driven or has staff. Inspiration supports a board member's natural storytelling so others can understand how you change the world for the better.  - KellyAnn Romanych, Veterans Legal Institute

7. Be Completely Transparent

Transparency is extremely important when it comes to working with your board. There needs to be a clear picture of where your nonprofit is right now and where you would like it to be. You and your board members need to share the same vision for your organization. Communicate the needs and requirements of your nonprofit. - Patrick Coleman, GiveCentral

8. Don't Burden Them With Operational Issues

Recognize that board members are there to set and monitor governance issues. Don't bog them down with operational issues as that's where the staff comes in. Maintain open communication and transparency to build and maintain trust, but keep meetings at high-level discussions to allow them to contribute from their areas of professional expertise. - Kimberly Lewis, Goodwill Industries of East Texas, Inc.

9. Be Respectful Of Their Time

Do unto others as you would have done unto you–practice the golden rule. Most nonprofit board members serve in a volunteer capacity. This does not mean they are free of any responsibility or accountability, but it also means they are not paid staff. Be respectful of their time, communicate objectives clearly and appreciate their philanthropy. - Aaron Alejandro, Texas FFA Foundation

Check out my website. 

Expert Panel®

 

Successful nonprofit executives from Forbes Nonprofit Council offer firsthand insights on nonprofit leadership & trends.

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Nonprofit Board Fiduciary Duty Fail #NonprofitBoards #NonpofitBoard Fiduciary Duties

The following Oswego County Business op ed serves as a fine warning shot over the bow of nonprofit board members that "shit" can happen on their watch and they must always stay alert and act when necessary.  The author also advises boards to ensure they take out D&O insurance, of course, AND something with which I am unfamiliar: employee fidelity insurance.  I will follow-up to learn more about this other insurance.  Meanwhile, this missive is well stated with a case study to boot.

 

High-profile Case Shines a Spotlight on Obligation of Nonprofit Directors

By Richard L. Weber, Esq.

‘Nonprofit boards should consider obtaining ‘directors and officers’ insurance coverage (aka “D&O” coverage) and employee “fidelity insurance” in order to protect board members that diligently perform their duties.’

Nonprofit organizations are an essential fixture in our communities. Often, the engine that drives a nonprofit is its board of directors.

Service on a nonprofit board is to be commended. However, a recent court case underscores how important it is that individual directors understand the fiduciary obligations that come with nonprofit board service.

In September 2019, The College of New Rochelle filed for bankruptcy after 115 years of operation. This particular bankruptcy was commenced in The United States Bankruptcy Court for the Southern District of New York as a “Chapter 11” filing — a variation of bankruptcy that seeks “reorganization” of the insolvent organization to satisfy debts and (if possible) move forward with continued operation in some form in the future.

Over the following months, a number of creditors filed claims in the bankruptcy, seeking to recover payment on debts owed by the college, and the campus itself was put up for auction.

On Jan. 14, 2021 the committee established to protect the interests of unsecured creditors commenced a lawsuit directly against former members of the college’s board of trustees. The complaint in the lawsuit asserts (among other things) that the former trustees improperly “delegated near complete control” over financial decisions to certain college administrators, failed to install proper corporate governance systems and safeguards, enabled misuse and depletion of college endowment funds, and failed to ensure proper payment of payroll taxes and other liabilities.

In particular, the complaint alleges that the trustees failed to adequately supervise the college’s former treasurer – vice president of finance, which enabled that individual to engage in unlawful misconduct and mismanagement of assets (actions for which he was ultimately prosecuted by the Department of Justice and sentenced to a three-year prison term).

The complaint seeks significant financial recovery directly from each individual trustee, and asserts that each trustee bears responsibility for the tens of millions of dollars of liabilities incurred by the college prior to the bankruptcy.

The College of New Rochelle case is strong reminder that individuals serving on nonprofit boards cannot merely “show up” at monthly meetings and “rubber stamp” the actions of the organization’s executives and staff; individual directors who abdicate their duties could incur significant individual liability. Each and every director must be mindful of the fiduciary duties and obligations that come with board service, including:

• the duty of care, which demands acting in good faith with the appropriate degree of diligence, care and skill required for the position, and includes (among other things) attending and actively participating at board meetings, reviewing reports and minutes of the board and the organization, and engaging in periodic review or audit of the organization’s employees and operational practices;

• the duty of obedience, which requires compliance with applicable law and regulations and the organization’s internal governing documents and mission statement; this duty includes monitoring the operations of the organization to make sure it remains properly focused on its core mission; and

• the duty of loyalty to the organization, which demands that a board member put the best interests of the organization above his or her individual interests.

Fortunately, the majority of nonproft organizations have diligent and engaged board members, and good internal governance practices. Yet it is essential that an individual serving on a nonprofit board of directors take the time to personally review the organization’s formation and governance documents (including its mission statement and bylaws), and become familiar with the organization’s assets (including real property and accounts), finances (including tax filings and audited financial statements) and operations.

Nonprofit boards should consider obtaining “directors and officers” insurance coverage (aka “D&O” coverage) and employee “fidelity insurance” in order to protect board members that diligently perform their duties.

Finally, organizations should consider retaining outside accountants and attorneys to review operations on a periodic basis with an eye toward ensuring compliance with all applicable laws and obligations.

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Richard L. Weber is an attorney with Bond, Schoeneck & King, PLLC in Syracuse. He specializes in business litigation, trust and estate litigation, and property disputes. To contact him, send an email to [email protected].

United Way Worldwide versus United Ways #NonprofitBoards #NonprofitBoardValues

I have recently blogged twice about the United Way Worldwide.  I first blogged about how badly I believe the United Way Worldwide board conducted research re the challenges by its staff about alleged abuses (it used a lawyer lens).  I next blogged about the defense of its exec who subsequently resigned. Today I saw a reporter's discussion about the difference, if any, between local United Ways and the United Way Worldwide.  Pay particular attention though to the final paragraph where the local United Way, after touting how different was their culture from Worldwide, the local seeks to "protect the United Way’s high standards."  Uh, one can easily suggest that United Way Worldwide, at least to date, has some seriously questionable standards that I would hope the locals do not emulate. 

That said, here's what the Business Record had to report:

"As a reporter who follows our local nonprofit community, I recently saw a story that the Associated Press did on the resignation of the CEO of the United Way Worldwide, Brian Gallagher. The announcement came after the organization was accused of mishandling sexual harassment and discrimination allegations.

Sounds like a big deal for the United Way. It is. But what does it mean for local chapters, such as the United Way of Central Iowa?

Staff members at the Business Record communicate with the staff at our local United Way chapter fairly often, whether it be phone calls, emails or participating on Zoom calls. We wondered aloud during a recent staff meeting what, if anything, the news from United Way Worldwide means for local chapters. We were curious about the relationship between local chapters and national and international offices.

How do the pieces all fit together? How do the cogs make the wheel turn?

One rule of being a reporter is that if you have a question, it’s likely others do, too. So we asked.

I sent an email to the folks at the United Way of Central Iowa and they promptly replied with answers to my questions.

Local United Way chapters are separate entities from United Way Worldwide, and operate as independent nonprofit organizations that are governed by local boards of directors and led by local management teams.

Although independent, because they are members of the United Way network, local chapters pay membership dues to United Way Worldwide for licensing rights to the United Way brand. Local chapters also are required to meet certain standards in various business areas to maintain their membership status.

We also learned that United Way Worldwide invests funds raised in various national and global initiatives, like 211 and early grade reading. It also activates fundraising to provide additional funds to help local United Ways during increased times of need. That was the case at the beginning of the coronavirus pandemic.

The change in leadership at United Way Worldwide will not affect the mission of United Way of Central Iowa.

“The workplace challenges United Way Worldwide is experiencing are not reflected in any way in our local organization,” the email from our local chapter read.

Local United Way leaders said that the local chapter’s financial position is strong and that its “carefully cultivated” workplace culture is thriving because the organization’s values include compassion and integrity. They noted that the local chapter’s emphasis on diversity, equity and inclusion has been key in decisions made around staffing, workplace policies and the work it does in the community.

Local leaders assured that they will continue to do everything they can to “foster an equitable, empowered, engaged, thriving community” and protect the United Way’s high standards."

Nonprofit Boards "Shoulds" Re Fund Development #NonprofitBoards

While I very much respect Dr. Fram for his experience and wisdom, his latest blog for me is just plain too presumptive and assumptive to embrace.  In his latest blog, Dr. Fram has extended wisdom on the subject of boards and what is expected of them in terms of raising funds and I will admit that there are some points I like and others I don't like and well, altogether a sense for me of assumptions and presumptions that while consistent with most fund development experts, rubs me wrong because they are assumptive and presumptive.  Allow me to qualify thought that I do believe there to be not-so positive outcomes when board members don't ask for money or themselves give.  There are too many individuals and institutions that respond positively to board engagement regarding fund development for me to believe otherwise.  At the same time I want to offer that these "recommendations" are just that albeit good but for the reason that their are indeed positive outcomes when there is board fund development engagement.

At the same time, giving and getting is up to the board collectively to decide - not me or others in my field of nonprofit organization development.  I firmly believe that it is my job to offer the concept; explain what happens with the concept is not followed; and, facilitate the board discussion to weigh and find merit in an affirmative decision to enlist every board member as a donor and solicitor.  That said, it is not a given that all boards and every member must raised funds.  Boards need conversation.  New board members need to agree should the board have decided favorably. There are no documented valid assumptions and presumptions about boards and fund development, only strong and affirming dialog and tools to understand what to do.

 

Once Again: Who Should Be Involved in Fund Development and How?

By Eugene Fram                  

This is a perennial issue. Following are suggestions that can clarify questions related  to it.

The Board of Directors
• Board members should provide an annual donation, be able to generate contributions from other sources or donate time. (“give or get” policy).
• Even if cash donations are modest, 100% of board members should make a financial and/or support contribution each year. Funders look at this percentage as a surrogate measure of board interest and involvement in the organization.
• Two type of of board members should be directly involved in development. One is the talented person who is highly comfortable with the development process. The other is the person who may lead other board members to unknown sources. For example: relatives, neighbors, college friends, etc. who can contribute. At least three or four board members need to be in  the former category.  All board members are obligated to alert the CEO to other leads they may encounter and assist with introductions, if appropriate.

The CEO and the Board
•  There needs to be a robust partnership between the board and CEO if there is to be effective and efficient fund-raising. The CEO should act as a  lookout  for fund development potentials and then alert board chair  to support his/her activities, after the board has approved the project and is prepared to make a proposal.
• If the CEO is going to assume the lead role in approaching prospects, it may important that the person have the president/CEO title.

A Foundation
• With the aid of legal counsel, establish a development foundation. It needs to have its own small board and a volunteer as its leader.  The board needs to have full understanding that the parent board is responsible for fund expenditures.  Otherwise conflicts can arise between the two boards on fund deployments.  A foundation can also be helpful current traumatic conditions because its total focus is on fund development.

Nonprofit Board Leadership Research #NonprofitBoards #NonprofitLeadership #NonprofitResearch

The following was prepared by Gayle Gifford and can be found on her blog.  This specific blog material is the product of Alliance for Nonprofit Management Governance Affinity Group research on nonprofit board leaders, particularly officers and committee chairs conducted in 2018.  While the material was shared in a couple of national workshops and webinars, it has not been released in writing.  Gayle and I believe there are findings worthy of discussion and thus the following.  Please feel free to contact me and/or Gayle with any comments and/or questions.   

 

Do your board leaders have too much responsibility?

In the P.C. (pre-Covid) year of 2018 P.C.,  a team* of consultants, members of  the Alliance for Nonprofit Management  Governance Community of Practice set out to learn more about the formal leaders of nonprofit boards. We assigned the phrase board leaders to refer to officers and committee chairs.

This Photo by Unknown Author is licensed under CC BY-NC-ND

Who responded?

Through the magic of survey monkey and a process called snowball sampling, we heard from 398 leaders of boards of local, regional and national organizations. They came from 35 US states and about two dozen from across Canada.

Of these respondents:

• 216 chairs were board chairs, 36 of whom were co-chairs.
• 78 were vice chairs and 31 described themselves as chair-elects.
• 69 were board secretaries (also known as a clerk in some states)
• 35 were treasurers.
• 51% indicated they held positions as committee chairs, some of which overlapped with their officer positions.

How hard is it to recruit board leaders?

While we asked many questions, I wanted to zero in here on what we heard about job size.

For those of you serving on nonprofit boards, this may sound very familiar. Three-quarters of the leaders answering the survey said that it was at least somewhat challenging to recruit the formal leaders of their boards with 28% reporting that it was very or extremely challenging to recruit these leaders.

So what are the barriers to choosing to step up to board leadership?

• Overwhelming: time.  75% of respondents chose this answer.
• Next on the list, selected by half of the respondents,  too much responsibility.

Farther down were lack of knowledge, lack of experience and just not wanting to step up.

The Goldilocks question: Too big, too little or just right?

So, in thinking about the perceived barriers of time and responsibility, I expected that we’d find out that the officer and committee chair jobs themselves were just drawn too large for these board volunteers.

So we asked the questions Goldilocks asked about each position:

• Is the job too big? (i.e. too much responsibility for any one person?)
• Is the job too small?
• Is the job just right?

If I were a betting girl, I would have picked out the board chair job as named as too big or having too much responsibility for any one human.

But instead, 63% said the board chair had the right amount of responsibility, including 67% of the chairs themselves!

Too be fair, among all the positions listed, respondents were most likely to pick the board chair as the position with too much responsibility, with 30% answering that way.

Based on my own practice, I just assumed the numbers for too much responsibility would be much higher.

The jobs selected as the most right-sized were committee chairs (77%) and the treasurer (71%), followed by the secretary at 66%, though secretaries themselves were more included to say their jobs were just right (72%).

What about Vice Chairs?

Among our team, Mike Burns and I were most interested in the role of the Vice Chair. Personally, I feel that the position of vice chair, like most state lieutenant governors, is a seriously underused leadership position. (see alternative suggestions farther down)

Overall, most board leaders agreed with me. Of the four officers and committee chair positions, less than half (45%) of respondents said the Vice Chair had the right amount of responsibility vs 25% who felt the job had too little (and a whopping 20% just didn’t know what to say).

But when we looked at what vice chairs said about their own jobs, the majority (61%) indicated that their role had the right amount of responsibility (hah!) with only 22% saying they felt they had too little.

But board chairs weren’t buying this. From the perspective of the board chair, 30% felt that their vice chairs had too little responsibility with only 41% feeling the had the right amount of work.

So what does this mean?

So, like you may have experienced, my decades of experience have shown me that it is definitely somewhat challenging to convince board members to step into leadership.  And that’s especially true if there is not a well-develop leadership grooming system.

As I said, I expected a much larger majority of respondents in our survey to report that their board chairs had too much responsibility for one person.  So why didn’t they?

While I am only speculating, I think that the job of the board chair is expected to be highly time consuming. So, if you’ve witnessed chair after chair working their butts off (no pun intended), you may have come to believe that this just what is expected of the board chair position.

Either that, board chairs have been pretending they have too much work to scare off rivals! NOT!

Reimagining Officers

Sadly, I don’t think most boards consider that they could restructure jobs and divide up tasks. We learned in our last survey, Voices of Board Chairs, that a top way of learning the chair’s job was to observe the chair already in office. It’s hard to break tradition.

But I’m giving you permission.

I’m of the mind that board leadership doesn’t have to be a full time job, especially that of the board chair. I do believe, if freed from traditional officer job descriptions and norms, our boards can develop practices that enable all board members to step up to take on leadership functions.

Here’s an example. As I’m in the camp that most vice chairs have too little to do (I don’t think of waiting for the board chair to be absent as a real job), you could send more responsibility the vice chairs way. Like what, you ask?

• Vice chairs could be responsible for ensuring well-functioning committees.
• They could be responsible for strategic planning.
• How about overseeing board accountability, including developing annual goals for the board and its committees.
• Or, you could go all the way to sharing leadership. The Chair and Vice chair could be co-chairs. And/or they would split their job tasks. One ideas if one chair to focus on board functioning (internal) and the other to focus on community engagement (external) such as engaging with donors, being a lead policy advocate, or just being out in the community in a more visible way.

I also suggest that your secretary, another position that seems under used in many organizations, might wear the additional hat of chairing the Governance committee.

Some organizations I’ve encountered have assistant every position, with jobs divided up. Those assistants are actively groomed to step into the leadership when the primary dog’s term is up.

To sum it up

Based on what our board leaders said, they themselves don’t feel they have too much to do. But they do think it’s at least somewhat challenging to fill those leadership roles because others perceive their jobs as taking too much time or having too much responsibility.

So consider evaluating all of your board leadership positions and distributing tasks more evenly among all of your officers and committee chairs.

Wouldn’t you like to have a board filled with leaders? I do. I want fellow board members serving with me who don’t wait to be asked to advance the work of their nonprofit boards. They step up.

If you’ve redesigned your board leadership, I’d love to hear your stories.

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* Alliance for Nonprofit Management Board Leadership Research Team 2018: Mike Burns; Ann Cohen; Diane Fletcher, Judy Freiwirth, Gayle L. Gifford, Mary Hiland

Voices of Board Chairs Report