Nonprofit Board Crisis

Environmental Concerns: Who Says "So What"? #NonprofitBoards

Apparently nonprofit boards say "so what" when it comes to thinking, talking and acting about environmental matters.  Do I care that not all nonprofit missions involve environmental matters?  Not at all!  This very siloing of matters will bring us all down.  But it doesn't have to.  Start with your board, add a 2 minute note to every board meeting about what the nonprofit can do to address environmental matters.  It doesn't matter how big or challenging: start and start by educating the board.  And for help on this matter, distribute this Chronicle of Philanthropy article to use during a time set-aside just for this topic:

Foundations Say Climate Change Is Urgent but Still Fail to Fund Solutions

By Jim Rendon

JULY 12, 2022

Nearly 90 percent of foundation leaders say that climate change is an urgent problem, yet they are doing little to help stop it, according to a report released Tuesday from the Center for Effective Philanthropy.

No matter the possible approaches, foundations are sitting on the sidelines, the report found. Only about 2 percent of all foundation giving goes to help curb climate change. And even now with so many dire warnings about the urgent need for action, foundations are not making climate change’s implications part of grant-making programs focused on, say, housing or immigration, nor are they funding community organization and advocacy groups seeking local solutions to climate change. What’s more, very few are divesting their fossil-fuel holdings.

Foundation leaders are well aware of climate change’s sweeping impact — about 82 percent said it will negatively affect the causes they support, and 72 percent said it will affect grant makers’ ability to achieve their goals. Ninety percent said that in the coming decade, climate change will negatively affect the people they serve. Nonprofits are also concerned about the issue, but a bit less than the grant makers — 60 percent said it would negatively affect the missions they seek to advance.

Despite these high levels of concern, only 10 percent of both grant makers and nonprofits said it was the most important issue to address right now. The study was based on responses from 188 foundations that give out more than $3 million a year and 120 nonprofits.

Most foundation leaders in the study said they did not address climate because it was not part of their missions, noted Phil Buchanan, president of the Center for Effective Philanthropy. But they also cited a lack of interest from board members and a general sense that the problem is just too big.

Nonprofits and foundation also looked to each other to take the lead on the issue. Foundations were more likely to say that nonprofits can play a significant role in addressing climate change, and nonprofits were more likely to say foundations were.

Among foundations that make no grants to climate or environmental causes, discussion of the problem is rare: Less than 15 percent of leaders of those philanthropies had talks with their board of directors about the impact of climate change on the foundation’s ability to achieve its goals, and less than 10 percent communicated with grant recipients about how climate change could affect the grantee’s work. Few leaders of nonprofits that do not work on climate discuss the issue with their board or even consider its impact on their work.

The fossil-fuel industry is largely responsible for perpetuating the idea that climate change is overwhelming and too complex to address, says Lee Wasserman, director of the Rockefeller Family Fund, which finances research into the fossil-fuel industry’s disinformation efforts on climate change and supports small groups that oppose new drilling, coal mining, and pipeline projects. Too many grant makers see it as a scientific and policy issue best left to the experts. But, he says, that is far from the truth. “We have more than enough policies to deal with the problem,” he says. “It’s an issue about power. Only an energized civil society can change the conversation.”

 

Some foundation leaders who participated in the survey said they have been too busy with the crush of urgent problems that have emerged in the past few years to turn to climate. “They said, ‘We see the urgency of climate change, and unfortunately we just have more pressing issues at hand, like Covid and the fight against systemic racism,’” says Katarina Malmgren, a senior analyst at the Center for Effective Philanthropy and an author of the report.

Small but Growing

The William and Flora Hewlett Foundation funded the report, which aimed to understand attitudes among grant makers.

(The Hewlett Foundation is a financial supporter of the Chronicle of Philanthropy.)

While giving on climate is tiny, it has grown in recent years — doubling from 2015 to 2020 — and is likely to continue to do so. The Bezos Earth Fund alone has given about $1.5 billion since 2020 to advance conservation. This survey shows that about 40 percent of foundation leaders that already give to environmental causes plan to increase their climate-related giving. And 45 percent of grant makers are still open to funding climate-related causes.

That is a very encouraging finding, says Shawn Reifsteck, vice president of strategy, collaborations, and brand at ClimateWorks. He says it shows that grant makers outside of those who fund climate are interested in understanding how climate affects their missions. They may just be struggling to determine how to get started.

“No sector, no organization, no individual is untouched by climate,” he says. “We should take that as an opportunity because there are many ways in which philanthropy and nonprofit leaders can meet their missions while also supporting work that helps to address climate change.”

Fossil-Fuel Investments

Recently some grant makers have begun to move their investments away from fossil-fuel stocks as part of a broader effort to match their investments to their grant-making goals.

 

But the Center on Effective Philanthropy survey shows how small that effort is. Only 20 percent of the foundations and 10 percent of the nonprofits in the survey had divested from fossil-fuel companies. Some of those who have not divested thought that doing so would not make a difference. Others were concerned that they would lose out on investment income if they changed strategies.

But that has not been the case for the 39 foundations surveyed that had divested. Not one of them said that their investments performed worse than those that that included fossil fuels. And about half said their assets had achieved better results than investment benchmarks that included fossil fuels.

The Rockefeller Family Fund divested from fossil fuels in 2016, and its investments have fared better those with fossil-fuel holdings until this year when share prices of fossil-fuel companies increased due to the high price of gas, says Wasserman.

More foundations should avoid investing in these companies, he says.

“As organizations committed to the public interest, foundations should be taking a principled stand that they’re not going to associate themselves with an industry that is committed to a business model that is creating enormous harm to citizens around the world and will continue to do so in an accelerating fashion,” he says. “There just are some businesses that I would hope people decide they don’t want to be a part of.”

‘Uniquely Vexing’

Climate has been a tough issue to make progress on. Despite U.N. agreements and big advances in renewable-energy technologies, carbon emissions continue to climb. Even those foundations that fund climate-related causes do not feel that they are doing a good job.

Only 11 percent of grant makers that fund climate causes said their strategies were effective. Among nonprofits, it was even worse — only 4 percent said they were effective.

“Climate is a uniquely vexing problem because there are so many contributors to the problem. There are so many actors that need to act to address the issues,” says Buchanan.

 

Many of the needed changes require actions by governments and businesses, and grant makers may not feel confident they can influence those spheres. “It’s a multidimensional issue, and it’s not as simple as pull this lever and get this resolved,” he says.

But that is the wrong way for grant makers to think about the problem, says Wasserman. Policy-based approaches that received the vast majority of funding for decades have failed.

“We would have been so much further ahead if we had spent resources to help constituencies anxious to engage and build and strengthen the power of civil-society organizations and authentic community organizations to organize and mobilize and go directly after those responsible,” he says.

Such advocacy work is an area of climate funding that has been neglected. In 2019 only $60 million went to grassroots community groups led by people of color that seek to take a local approach to developing solutions to climate problems, according to Candid.

Giving to Small Groups

Despite the tiny amount of funding those community organizations get, many foundations said supporting these local groups — often referred to as climate-justice organizations — is important. Many grant makers are trying to bring equity and diversity into all the efforts they support. Of those that fund climate work, 65 percent said they fund climate-justice groups. Grant makers led by people of color were more likely to say that they supported climate-justice groups.

So much of climate funding suffers from the mentality that white people are going to ride in with their perfect solutions and save communities of color from this impending catastrophe says Elizabeth Yeampierre, executive director of Uprose, a multiracial, community group in Sunset Park, Brooklyn. Instead, grant makers would be more successful if they looked to the people most affected by change and supported their often very successful local efforts to solve their own problems.

“The solutions are led by the very people that they don’t see,” says Yeampierre, who is also on the board of the Climate Justice Alliance, a coalition of more than 70 such groups.

Many foundations fail to see how climate issues affect a broad range of their grant making. She says that grant makers can learn a lot from talking to other organizations that have had great success integrating climate into a broad range of their grant programs.

 

She points to the Kresge Foundation, which sees climate as a key factor in determining health-care needs, particularly for low-income communities, and includes the support of community groups in its grant making and the Solutions Project, which is giving 95 percent of its grants to groups led by people of color and 80 percent to nonprofits led by women, as well as the Hive Fund for Climate and Gender Justice, the Libra Foundation, and others.

“The planet is on fire,” she says. “It’s going to force people out of their comfort zone, whether they want to or not. It’s better if they can come willingly and lovingly to start really learning about what we need to do collectively to address this threat.”

Buchanan hopes foundations are now starting to see more ways that climate can become part of their grant making.

“Climate cuts across everything. There is that potential to ask yourself, even if you don’t consider yourself a climate funder, what is the relationship between what we’re doing in housing or in our poverty work and climate?” Buchanan says. “I hope that the data in the report prompts people to think about those questions, even if they’ve never imagined themselves as a climate funder.”

We welcome your thoughts and questions about this article. Please email the editors or submit a letter for publication.

FOUNDATION GIVING

Jim Rendon

Jim Rendon is a senior writer who covers nonprofit leadership, diversity, and philanthropic outcomes for the Chronicle. Email Jim or follow him on Twitter @RendonJim.

Name Only Nonprofit Board Members? #NonprofitBoards

Interesting column on what should a nonprofit board do or even have "name only" board members?  Of course the simple answer is: it depends.  What is the purpose of having folks who effectively lend their name (for fundraising or credibility purposes) but little else to the board?  Do such individuals enable a board to fulfill its fiduciary duty?  Do such individuals in lending their name really stimulate others to give thus basically filling a purpose that enriches the organization?  Or, what is the impact on the "other" board members when one or more members don't have the same obligations and responsibilities?

Do check-out M. Stansbury's thoughts on this subject.  One thing for sure: this is not an arbitrary action and all board members should be very intentional about accepting members for their name value only.  Equally important, only policy provides certainty in the future.  Whatever the decision, happenstance or intentional, now becomes the decision for the future.

 

What's the best advice on name only board members? | Notes on Nonprofits

Alyce Lee Stansbury

Guest columnist

Should your nonprofit allow name only board members?

A reader asked me to address the issue of name only board members. These are people elected to a board who do not actively participate but remain a director for various reasons.  

Name only board members are sometimes influential community members, CEOs of a leading companies, major stakeholders, elected officials, or people with access to others whose support is seen as critical to the nonprofit’s success. These people are sometimes recruited to the board with full agreement they will not actively participate in meetings or the regular work of the board.

More often, there is no specific agreement they won’t fully participate but they don’t. This means they rarely, if ever, attend board meetings, participate in planning, committees, or board-led initiatives such as fundraising.

I know of one organization where the name-only board member did not know they were still on the board!

Influence and resentment

Boards do this because they believe their endorsement of the organization could help regardless of their involvement. They also believe the board member will make a significant financial contribution, influence others to do the same, and/or open doors to funding or power that has previously been unattainable for the organization.

The biggest pitfall when a nonprofit allows name only board members is that other directors who are meeting agreed-upon board expectations will resent the inactive member. This can result in a loss of productivity and collegiality within the board and cause high-performing directors to resign.

In a blog about avoiding what he calls “letterhead board members”, author and speaker Doug Eadie said, “non-participating board members have a demoralizing impact on even the best of boards.”

I have been told by countless philanthropists that they recognize the technique of being extended a board invitation in exchange for a significant gift or grant. 

Commitment to cause

Philanthropists want to be valued for who they are as people. When they agree to serve, it is because they support the mission and trust the leadership of the organization to value them for more than their checkbook.

If they are also high performing board members, they will look for and expect much more than a big name on the roster to determine if they want to accept an invitation to serve on a board. 

Political leaders or people looking to build their professional resume should be expected to work hard and contribute as much as everyone else. Otherwise, they are using your nonprofit for their own personal gain without an equal commitment of work and productivity.

Directors who are actively engaged in and committed to the board’s work, exhibit the following behaviors: 

• Attend all or most of scheduled board meetings.
• Read the board packet in advance and arrive ready to participate.
• Notify the Chair in advance when they are unable to attend and follow-up after the meeting to determine what they missed and where to act.
• Respond to calls or emails and are accessible when needed.
• Available and willing to meet with the Board Chair or ED to discuss key issues.
• Actively participate in a standing committee.
• Participate in strategic planning and board education activities. 
• Make a meaningful gift on an annual basis.
• Know and understand the organization’s services and support the CEO.
• Participate in and actively support fundraising activities.
• Serve as an advocate of the organization.

Alternative strategies

Consider these alternatives to name only board members:

Invite the influencer to serve on an ad hoc committee or task force where their involvement can produce positive results in a short time frame without the requirements of board service.  

Create an advisory council that convenes at least once a year to help board members address current challenges or provide an external view of threats, opportunities, and trends that may impact the organization. Please refer to my previous columns on the use and role of advisory councils and emeritus boards.

 

 

Hate Your Neighbor: Start a Church #NonprofitBoards

What does a nonprofit have that a church does not have?

(As a church, it is) ....no longer required to file a public tax return, known as a Form 990, revealing key staffer salaries, the names of board members and related organizations, large payments to independent contractors and grants the organization has made. Unlike with other charities, IRS investigators can’t initiate an audit on a church unless a high-level Treasury Department official has approved the investigation.

Yup - a church effectively has no accountability to the public - the very public that through the IRS supports the designation of a tax exemption.

ProPublica released a report today on the "trend" of certain nonprofits changing their tax status to that of a church where effectively none of the rules of transparency and accountability apply.  Who might we then hold accountable: the IRS of course!  But in the meantime folks like what was formerly knowns as Focus on the Family and now the Family Research Council (yes, the folks that brought you a "faith" hate thy neighbor (the LGBTQ community among others) are now a church with their exec their lead ministry.  

At very minimum the fault does not singularly rest with the IRS as it does with the Congress who sets the parameters and clearly limits enforcement or at least tolerates incongruity.

So, if you would like to cover-up what is going on at your nonprofit or at least cover-up who are your donors, then go ahead and convert (get it?) your organization to a church.  Or maybe you would like to start you very own hate-focused tax-exempt church - feel free - no one is going to stop you.  It's a free county.

You can check out the ProPublica story here.

 

Where Was/Is the Board? #NonprofitBoards

When I read a story like the following about a college president who resigns following a bad report card (depleted $24 million in reserves over a 9 year period) I must go to the more important question: where was the board?  

Generally, board policies and review inform what happens to an institution's reserves.  Few CEO's/Presidents have the authority to just keep dipping.  Those policies most often cite the circumstances for the dipping.  Whether the President made-up the stories about the need for the money or not, it was on the board to ensure that they used their own common sense to ok the transactions.  

This story should not be about the college president but instead, the volunteers who were responsible for safeguarding the overall well-being of the institution.  They failed their job.  They should also be resigning.

 

From Connecticut Public Radio / WNPR Morning Edition:

 

 

Western Conn. State University president John Clark resigns, after report on 'depleted' reserves

Connecticut Public Radio | By Catherine Shen

Published June 30, 2022 at 5:28 PM EDT

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Western Connecticut State University’s reserves are “depleted” after officials tapped into it for more than a decade to finance operations, according to a report commissioned by the Connecticut State Colleges and Universities system.

Leigh Appleby, spokesperson for CSCU, said the system commissioned the National Center for Higher Education Management Systems, a Colorado-based education consulting agency, to conduct the review.

“NCHEMS has produced a first report with immediate recommendations, and CSCU is currently working closely with the WCSU leadership team to ensure they are implemented,” Appleby said in a statement to reporters.

Findings show that WCSU’s structural deficit essentially eliminated “all reserves at the university,” from $24 million in fiscal year 2012 to “depleted” in 2021.

WCSU’s financial woes led to the resignation of the school's president, John Clark, who will officially step down in July.

“As I look back at my seven years as president, the one thing I will remember is that during these difficult and challenging times — from the COVID-19 pandemic to the tragic deaths of students and staff — members of our university community have risen to the occasion each and every time at great cost to themselves, personally and professionally, to move the university forward and never give up,” said Clark.

Clark’s resignation comes after the report's findings prompted a no-confidence vote against him by the faculty union.

The report also stated that WCSU was the only university whose finances had dwindled to this extent, compared with the other three state universities in the CSCU system. By contrast, two state universities have grown their reserves since the end of the Great Recession in 2009.  

The reserves at Central Connecticut State University, however, dropped by a third over the same period, with much of the decline occurring prior to the pandemic.

The report found that WCSU’s expenditures were compounded by a decline in student enrollments, as well as employee costs and the impact of the pandemic. But some faculty members believe the root cause is deeper.

Economics professor Rotua Lumbantobing, who is president of the WCSU chapter of the American Association of University Professors, said the university president’s large cabinet and the lack of coordination between the president’s office and the financial office are two major problems Those problems “resulted in this outspending, pretty much, without any coordination and without knowing, ‘Hey, how much do we have actually, or is this really necessary right now.’”

Appleby of CSCU said actions have since been taken to stabilize WCSU’s budget, including creating a program for students in New York and New Jersey to attend WCSU at an in-state rate to increase enrollment.

But Lumbantobing said more needs to be done to close the budget gap.

“We can’t balance our budget that way,” said Lumbantobing.

She pointed out that stagnated state funding over the years is another roadblock. “We don’t get a lot of funding,” she said. “But we wasted a lot of money.”

The report emphasized that WCSU has an expenditure control problem, not a revenue problem, which “can be addressed by cutting costs, increasing enrollments without increasing expenditures, or some combination of these two strategies.”

“Given the immediacy of the financial issues facing the University, short-term solutions will likely have to focus on cutting costs; benefiting from enrollment increases is a longer-term remedy,” the reported stated.

For Oluwole Owoye, an economics professor at WCSU, transparency and clear communication from the university are key elements.

“If we can begin to share where we are in our finances, then everyone would be on the same page,” said Owoye. “Right now, the boat is already sunk. We want to know when the boat is floating, when the boat is sailing, and thereby we know how to strengthen the boat.”

Owoye also said that “it would be a disgrace for one of the four campuses to lose accreditation because of this. We are all here for a single purpose, and that’s for our students.”

Board Bullying #NonprofitBoards

I suppose that labeling bad action by board members as bullying is a fair enough label.  I don't know how prevalent is this practice but based on the stories shared in this article, prevalent enough to warrant some consideration.  So, for some light summer reason, do consider.  

Recognize board bullies before they divide organization | Notes on Nonprofits

Kelly Otte and Alyce Lee Stansbury

Notes on Nonprofits

 

This column on board bullying first ran in 2015 and was written by Kelly Otte.  Since then, Kelly and I pledged to run it whenever we receive a question or call for help on this issue or witness a board bully in action.

Unfortunately, bullying is prevalent in the nonprofit sector and can occur between board members and between a board member and the Executive Director. In both cases, it is a divisive issue that results in a fractured board which often leads to resignations of board members, ED, or both. Here are Kelly’s words of advice on how to recognize bullying and what steps to take to stop it. 

Misuse of perceived power

A board bully is someone who uses whatever means necessary to get what they want.  I have theories about why board members become bullies.

The first is a misuse of perceived power. Many years ago, I had a board member who worked for the owner of a large company. A member of my staff was soon to be the ex-wife of the same business owner. It was a random set of circumstances that tied them both to the organization and there was no reason they would ever cross paths.

One day the board member called our office and spoke to my assistant while I was out. She demanded to know how much my staff member, the soon to be ex-wife, was being paid.

When my assistant refused to disclose this information, the board member puffed up and reminded my colleague she was addressing a board member.  How can anyone possibly think this was acceptable behavior?

Misunderstanding power

Another reason for bullying behavior is when board members misunderstand what power they have. The only time board members have legitimate power is when they are convened at the board table and conducting the business of the board or when a board has delegated them to have specific power, such as a realtor board member negotiating the sale or purchase of property.

In one example, a board member was not happy they were seated at the back of the room for an event. They complained to the ED who explained sponsor tables were closest to the front with individual seats after that.  The board member didn’t like the answer and told the ED to move them to a closer table.  When the ED refused the board member found the Chair and asked them to order the ED to move them.  

The Chair refused.  At the next board meeting the offended board member asked the board to publicly discipline the ED for not obeying them. Ironically, the board member had not even bought or sold a single ticket to the event.  It’s called board service for a reason.  The day it starts being called service for board members is the day people can start behaving as if the organization is there to serve them.

Micromanaging

I have heard countless stories about board chairs that try to provide daily supervision of the ED which is another bullying behavior. Expecting to sign off on timesheets, being involved in staff personnel issues, and asking for weekly reports of the EDs activities are examples. Another is expecting the ED to drop everything when they call or drop by.

 EDs and boards have a servant leader relationship. Sometimes the board leads and sometimes the ED leads. Boards should give broad discretion to the ED to do their work and then evaluate the ability of the ED to meet clearly defined outcomes.  If the board chair feels the ED needs close supervision something is wrong. Either the chair is out of control or the ED isn’t doing a good job; both require board action.   

Manipulation and intimidation

Bullying can also occur when the board chair rules instead of governs or uses manipulation or intimidation to force the board into doing what they want.  Talking endlessly instead of facilitating conversation and dictating decisions instead of allowing for discussion are examples of this.

I’ve worked with organizations where the board chair has aligned themselves so strongly with the ED they refuse to allow any discussion about the ED’s performance and badger or berate board members who ask questions.  I know of an organization that almost went out of business because the board chair was so dead set against anyone criticizing the actions of the ED that saving the ED became more important than saving the organization. 

In another example, a board chair, at the request of the ED, told the staff anything perceived as speaking up against the ED would be seen as insubordinate behavior and they would be terminated.    

How to respond to bullies

So, what happens when there is a board bully?  Unfortunately, these situations are not easy to rectify, and they often force valuable board members and EDs to leave. Bullies have power for a reason and most board members are unwilling to take on that kind of conflict.

 If you are a board member and have a bully on your board, I advise you to stand up for what is right.  You have as much legal authority and liability as the bully so don’t let them make your decisions for you.

I also believe the ED has to figure out how to address the situation, albeit sometimes very carefully and strategically.  One ED asked me to come in as a consultant and I was able to facilitate change through education.  

Another time I joined a board at the request of several board members to help move on a bully board chair in his fifth year as chair who was destroying the organization.  It was not easy and many times the board room was very testy as we worked to redistribute power and clean up processes but ultimately the board members rallied around doing the good work and the board chair eventually moved on.

Remember, board service is not for the faint of heart and leaving the board because you don’t want to deal with a bully doesn’t make things better for the organization, it only makes it worse.   

Wearing My Hat Technique #NonprofitBoards

The following article comes from Psychology Today and its origin is precisely what caught my attention.  I thought what on earth does an author in Psychology Today have to day about joining a nonprofit board (the focus of the article?  Turns out - not a whole lot but the one offering that is kind-of a twist to thinking about being on a board is something the author calls the "wearing my hat" technique.  Essentially, the twist is about how to think about the possible choices, presumably for the nonprofit, that arise while sitting on a board and may actually have a member needing to be clear about what "hat" they are wearing when they give an opinion or a vote.  

I guess all true-ish but just the framing of this article is worth a moment of thought.  Oh, and of course I believe executive committees to be unwise vehicles in a board structure and if the board is that big, shrink it!  

Crazy....

Planning to Join the Board of a Nonprofit?

How to use the "wearing my hat" technique

Posted July 2, 2022 |  Reviewed by Hara Estroff Marano

KEY POINTS

• Being invited to join the board of a nonprofit can be flattering, expensive, and time-consuming.
• In addition to mission, you want to understand the direction of retained earnings relative to similar-size companies with a similar mission.
• The “wearing my hat” technique allows you to respond to issues from multiple and even conflicting perspectives.

Congratulations! You have been invited to join the board of directors of a nonprofit. You love the mission. You understand the time commitment. Nevertheless, there are a number of other issues to consider before saying signing on.

No Margin No Mission.

Nonprofits distinguish themselves from for-profit companies by focusing on mission. Mission is important, but be equally sensitive to the direction of net assets. Net assets are the value of the nonfinancial and financial assets owned, minus the value of outstanding financial liabilities.

 

“No Margin No Mission” is a nonprofit cliché that correctly summarizes why net assets can’t be separated from mission. Institutional survival is dubious if expenses outrun income, even in organizations that call themselves “nonprofit.”

Where Can I Get a Good Perspective about Net Assets?

Ask the chief financial officer of the nonprofit for the latest version of Form 990. This form is a federal legal requirement. It provides an in-depth understanding of corporate financial structure, legal claims, and compensation paid to officers.

 

Give the CFO a week to respond. If the CFO is not forthcoming, you can access it for free. Go to www.guidestar.org. Another option is Tax-Exempt Organization Search (TEOS) at https://apps.irs.gov/app/eos.

Consider the CFO’s lack of timely response to your request a useful piece of information about the financial status of the organization.

 

Do not be satisfied by looking at the most recent Form 990. Go over the past forms for the last three to four years. Look for trends. Can you compare the trends in the organization's net assets over the past few years to those of other nonprofits of comparable size and mission in your geographical area?

 

Who Am I Speaking For?

Cynthia Jarboe is a former partner with PWC, where she led a regional nonprofit audit practice. She has worked with over one hundred nonprofit corporations. In her book, A Guide to Nonprofit Board Success (2020), she says, "You may be asked to serve because you represent a particular demographic. All of that is good governance as long as you are willing to assume responsibility for that representation."

 

In other words, if one of the reasons the board offers you a role is because you are a member of a certain demographic group core to the mission, you must wear two hats. Your professional perspective is necessary but insufficient. You were elected to represent a critical constituency. When you speak, others think that you are speaking as a representative of that constituency.

 

“Wearing My Hat”

You can supply multiple or even conflicting opinions as long as you are clear who you are representing. For example, you could say, “Wearing my hat as a senior executive in human resources, I would say X. Wearing my hat as a representative of black women in our community, I would say Y.”

 

This perspective also implies that you need to remain in touch with the cohort you stand for. Do not assume you know what is best for them.

Meet the Executive Committee Members.

Prior to accepting a board role, it is advisable to arrange a series of one-on-one meetings with the members of the executive committee of the board of directors. Nonprofit boards can be so large that the executive committee becomes the critical decision-making body.

 

If you meet the members and conclude that they have nothing to teach you, you are entering a new relationship from a stance of arrogance. If you meet members of the executive committee and conclude that there are people on the committee who could expand your business horizons and enlarge your professional network, then you want to be part of this board.

 

One final thought: Some nonprofit boards require annual financial contributions from board members. Make sure such matters are discussed prior to making a commitment.

 

References

C. Jarboe. A Guide to Nonprofit Board Success: answering the call of leadership. Santa Barbara: Praeger, 2020.

Paid to Serve #NonprofitBoards

What used to stand as a "no way" practice for boards may be changing in the near future.  Check out this Pioneer Press (Minnesota) article that discusses a move to pay folks for sharing their knowledge and experience to inform decisions.  I actually like the idea of regularly convening focus groups of a nonprofit's constituents.  Besides asking folks what they thought of the services and maybe throwing in a few more questions about wants and needs, focus groups and surveys and interviews are important sources to inform strategy and direction. 

But it has been a given that those who serve on nonprofit boards are not compensated.  This is their civic duty and their passion for mission explains their participation.  At the same time, boards do not generally have a good track record for inform strategy and direction.  Assuming they were recruited for their "love of mission" AND because of their own knowledge, expertise and experience, it is reasonable to expect some insights.  Reality is that this just doesn't happen OR equally true, it's not the best people sitting on boards for this purpose.  Paying attention to fiduciary matters just doesn't appear to leave room for generative matters or serving in a program advisory position.  So just maybe, regularly convening consumers and not relying on the boards makes sense.  Or does it?

Here's the Pioneer Press article.

Paid to serve? A growing number of civic boards are compensating everyday volunteers

 

 

Frederick Melo, Pioneer Press

Fri, July 1, 2022, 11:28 AM·6 min read

 

 

The metro’s regional planning agency is looking for residents to weigh in on the merits of a sweeping transportation plan, but not necessarily with the well-trained eyes of a transportation engineer. Instead, the Metropolitan Council wants up to 16 everyday people concerned about racial and economic equity, or equal access across race and class, to advise their professional consultants.

“You do not have to be an expert in transportation,” reads a recruitment ad posted by the Center for Economic Inclusion. “Just bring your personal and professional experiences using transportation in the region to inform the policy group.”

As an incentive, the Met Council is reimbursing future members of the “Transportation Equity Policy Group” $175 per monthly meeting.

Paid volunteerism on a local government advisory board? It’s a growing trend, and one that some civic advocates say is as essential as ever to capture the perspectives of diverse groups that government too often overlooks during critical planning. Sometimes, it’s the only way to get new faces in the door.

 

COSTS OF PARTICIPATION

Increasingly, nonprofits, city and county governments and regional planning agencies are treating citizen advisory boards like paid focus groups and compensating volunteers for their time, or at least offering to offset growing costs of participation in light of rising gas prices and burdensome childcare costs.

The individual sums usually aren’t huge — $10 to fill out a survey, $25 to $50 to attend a meeting. But they can add up over time, and participation in more involved projects, such as a county hiring panel, can net greater amounts.

The reasoning is that many everyday citizens — especially low-income residents and people of color — won’t join civic boards because they simply can’t afford to. Some are unlikely to take time off their second job if they can’t somehow recoup those lost dollars.

As a result, advisory boards end up top-heavy with older white homeowners and retirees — people with the time and means to volunteer but who may lack recent, on-the-ground perspective as to what it means to be a young single mother riding a public bus at night or visiting a public park that lacks a diaper changing station.

“We are seeing a trend locally that communities start to be compensated, which I think is great,” said Ramsey County Policy and Planning Director Elizabeth Tolzmann. Tolzmann has worked with volunteers who feel they should be paid more, and others who don’t feel they should be paid at all. “Community feels valued when they’re offered a compensation, though some community members opt out.”

FROM $0 TO $200

Five years ago, Ramsey County rarely offered payment to the members of its 30 or more citizen advisory boards. With an eye toward racial equity, county officials started taking a harder look at the issue around 2018, and set aside funds in the 2020-2021 budget. Then came the need to create more continuity and consistency for department directors, Tolzmann said.

She looked for local precedents across the metro but didn’t find much to work with. After searching nationally for examples at the county level, she presented the county board in October with a suggested compensation matrix intended to guide but not dictate payments to citizen advisers.

Under the matrix, a volunteer serving on a typical advisory group — such as the county’s library board, the Parks and Recreation Commission, the Rush Line or Riverview Corridor committee — would be eligible for up to $25 per meeting.

A citizen adviser on a hiring panel, or a resident evaluating a request for proposals, could earn up to $25 per hour of service. Members of a handful of groups responsible for delivering reports or projects with a more countywide focus, such as the Equity Action Circle and Transforming Systems Together, would be eligible for $50 per hour of service. A keynote speaker or panelist at a county event could earn up to $200.

Participation in a Ramsey County focus group might net $25, and survey participants could pocket up to $10.

Among the stated expectations, members of community engagement teams would not be reimbursed for their participation if they’re already being paid to be there by another organization.

In that vein, Elisa Rasmussen, a senior manager with Xcel Energy’s community relations team, said she has never sought added compensation from Ramsey County for serving on its Workforce Investment Board, even during her year as chair of the board’s equity committee.

“Any committee that I serve on, I’m a volunteer,” she said.

‘A SLIGHT UPSWELL’

Jan Lucke, a deputy county administrator with Washington County, said members of citizen advisory boards can request a per diem that varies somewhat depending upon the board or commission. It’s usually about $50 per meeting, on top of mileage reimbursement set at the same rate as that of county employees.

In Dakota County, most boards — from the county Planning Commission to the Public Art Citizen Advisory Committee — are offered a per diem of $35 per meeting. The major exception would be the Special Board of Appeal and Equalization, which oversees appeals filed by property owners challenging their valuations for tax purposes. Members can earn up to $175 per day or $87.50 per half day, as well as mileage reimbursement.

In St. Paul, the city’s municipal code indicates that all per diems and expense reimbursements related to service on public committees must be set by the city council, but it doesn’t spell out specific rates. Members who do not receive per diems can get their parking reimbursed at the city’s downtown convention center ramp.

John Wurm, a membership and communications director with the Minnesota Council of Nonprofits, said his organization does not formally compensate members of its board of directors beyond conference registrations and other expense reimbursements.

“While the vast majority of nonprofit boards do not currently directly compensate board members, I do believe there is a slight upswell in the concept,” said Wurm, in an email. “That may be an interesting question to be asking them moving forward.”

Questions over compensation have sometimes dogged boards that otherwise might fly under the radar, such as the now-defunct board of the Ramsey County Conservation District. The county’s equivalent of an elected soil and water board disbanded in 2018 after intense infighting, including disagreements over unfulfilled requests from a board member who waged a nine-year campaign to be compensated $75 per meeting, to no avail.

In the case of the Met Council’s Transportation Equity Policy group, the work group will advise a team of professional consultants over the course of two years, so the $175 in reimbursement for every two-hour monthly meeting adds up to about $44 per hour after accounting for prep time.

“This is not volunteer work; the work requires a level of expertise that demands being compensated,” reads an unsigned written statement from Met Council staff. “We value the expertise, knowledge and lived experience of the participants on this group and value their time and their contribution to understanding a challenging and complex system — transportation.”

 

 

Roberts Rules of Order and Transparency: Not! #NonprofitBoards

The following article ascribes Roberts Rules of Order as the be all and end all for ensuring transparency.  I understand the author's point about the importance of transparency when it comes to supporting the public trust.  I also understand Roberts Rules of Order and do not subscribe to the idea that they ensure transparency.  Quite contrarily I pose that strict following of Roberts Rules of Order permit those in charge to creating general obfuscation that results in anything but transparency and certainly not trust.

Of all the rules of order, this set is authoritarian and dominating finding all kinds of code to limit full participation by leadership.  Rules that ensure transparency may certainly borrow from Roberts but consider Roberta's Rule or Consensus as reasonable, in my opinion, alternatives that contribute best to transparency and trust.  Really though, any set of meeting management rules that are adopted by the whole will contribute more fully to transparency and possibly trust (which I pose to be more about the who than the how).

Anyway, here's one take on the benefit of Roberts Rules.  

EDITORIAL: Ashland County land bank must follow strict rules to maintain public trust

• Ashland Source Staff
 
• Jul 2, 2022

“Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty.”

Maj. Henry Martyn Robert wrote this in his 1876 book, "Robert’s Rules of Order.” The rules inside this book have been adopted by parliamentary boards and committees all over the United States and world.

Rules are in place for a reason. When followed during an official board meeting, the result is transparency that fosters trust between those charged with making decisions and those affected by the decisions.

When rules are not followed, there is no transparency and a diminishing effect on trust.

The recently-formed Ashland County Land Reutilization Corporation, commonly referred to as the land bank, includes a nine-person board of public officials and some private individuals, is tasked with following specific rules as a deliberative assembly.

Land banks are public authorities or nonprofit organizations created to acquire, hold, manage and sometimes redevelop property in order to return those properties to productive use, according to Local Housing Solutions, an organization that tracks housing policies.

In Ashland County, this is a worthwhile organization established in 2018. It's a new entity, and we understand that.

However, recent reporting by Ashland Source on the board, found the land bank did not follow procedural rules on at least one occasion. The result happened to be the purchase of a house owned by an Ashland County Commissioner and land bank board member, Denny Bittle.

The purchase did not lead to a profit for Bittle, and by the looks of it will allow for the creation of an improved county parking lot and public park.

But that’s not the takeaway here.

The land bank did not vote on the purchase of Bittle’s property in a public meeting. Instead, there was an email thread in which four members voiced approval of the purchase. Weeks later, the purchase showed up in Ashland County Real Estate Conveyance Forms.

“This was potentially an ethical violation,” said Ashland County Prosecutor Chris Tunnell.

By not following the rules, public trust erodes — despite the very likely possibility the board operated with the best of intentions.

The land bank, in general terms, is a good thing. When fulfilling its mission of eliminating dilapidated structures in order to bolster property values and stimulate the local economy, accolades should follow.

Ashland County land bank — follow the rules. Vote on purchases. Record minutes. File financial documents by deadlines set by the Ohio State Auditor. Hire a public information officer. Consult with an attorney. Establish a records retention policy. Post your public records policy visibly in the office in which you meet.

Strict procedural adherence leads to transparency and the trust of the people your decisions effect.

Nonprofit Board Conflict of Interest #NonprofitBoards

 

My first instinct after reading the following Washington Free Beacon article: what's the point of being a Foundation President if you can't support what you love?  The short story, while president of the Ben & Jerry's Foundation, Jeff Furman was able to make grants to a nonprofit he founded.  How good or bad is the nonprofit is not an issue in this story.  Neither is conflict of interest which is what the author suggests.  A conflict of interest would indicate that the redirection of funds would somehow benefit this fairly wealthy person.  I don't think so.  And, there are many people on this board who signed-off on the grants.  So, to the Washington Free Beacon we should be grateful for helping us understand what is not a violation of the conflict of interest activities.

Ben & Jerry’s Foundation President Steered Funds to His Own Charity

Alana Goodman • July 1, 2022 4:58 am

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The Ben & Jerry’s Foundation steered more than $100,000 to a charity run by its own president, in the second case of a sitting board member’s nonprofit group benefiting from the foundation’s grants.

Social Ventures Inc., a charity run by Ben & Jerry’s board member Jeff Furman, raked in around $118,000 from the Ben & Jerry’s Foundation between 2016 and 2020, according to financial disclosure records.

During this time, Furman served as president of the Ben & Jerry’s Foundation from 2018 to 2020 and as treasurer in 2016 and 2017. He was also a member of Ben & Jerry’s corporate board and in-house counsel for more than 30 years, according to the foundation’s website.

The funding raises questions about the Ben & Jerry’s Foundation’s financial activities days after the ice cream maker’s high-profile effort to boycott Israel fell apart. The grants are also prompting concerns from ethics watchdogs who say they pose a conflict of interest and could violate laws against self-dealing.

The National Legal and Policy Center, an ethics watchdog group that has been tracking the Ben & Jerry’s Foundation’s spending, told the Washington Free Beacon the funding poses a conflict of interest.

"Unilever should understand they’re dealing with a radical progressive board with apparently huge conflicts of interest with corporate funds that are magically being steered to personal pet projects and nonprofits of board members," said Tom Anderson, the director of the National Legal and Policy Center’s Government Integrity Project.

Federal law prohibits self-dealing, which the IRS defines as the "transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a private foundation." A disqualified person includes "any person who was in a position to exercise substantial influence over the affairs of the applicable tax-exempt organization" during the five years prior to the transaction, according to the IRS.

Social Ventures Inc. says it works to provide "social justice for disadvantaged people," according to its tax discourse records. The Ben & Jerry’s grants made up a substantial portion of Social Ventures’ funding, accounting for one quarter of its revenue in 2020.

Last year, the National Legal and Policy Center filed a complaint with the IRS over the Ben & Jerry’s Foundation’s grants to a different nonprofit group run by another director at the foundation, Anuradha Mittal.

Mittal has been a trustee on the Ben & Jerry’s Foundation board since 2012 and also serves on the independent company board. During this time, the Ben & Jerry’s Foundation gave $195,000 to the Oakland Institute, an anti-Israel nonprofit group run by Mittal that has published columns in support of Hezbollah and Hamas.

Mittal and Furman appear to have a close working relationship. Furman serves on the board of Mittal’s Oakland Institute, and he recruited her to the board of Ben & Jerry’s, according to the New York Post.

Mittal is a leading force behind Ben & Jerry’s decision to halt sales in Israel last July, which anti-Israel activists sought to use as a springboard to pressure other companies to cut economic ties with the Jewish state.

She has posted on Twitter in support of the Boycott, Divestment, and Sanctions movement, praised singer Shakira for canceling a performance in Israel, and defended Rep. Ilhan Omar's (D., Minn.) claim that pro-Israel members of Congress have an "allegiance" to a foreign government.

"Criticism of AIPAC is not anti-Semitic & calling for Congress not to have allegiances to foreign countries (Israel) is not anti-Semitic," Mittal wrote in March 2019, "but targeting the first black Muslim member of Congress with false accusations of antiSemitism IS Islamophobic!"

Unilever, the parent company of Ben & Jerry’s, rejected the ice cream brand’s boycott attempt on Wednesday and said it would resume sales in Israel through a third-party vendor.

"Unilever rejects completely and repudiates unequivocally any form of discrimination or intolerance. Anti-Semitism has no place in any society," Unilever said. "We have never expressed any support for the Boycott Divestment Sanctions (BDS) movement and have no intention of changing that position."

Ben & Jerry’s did not respond to a request for comment.