Nonprofit Board Crisis

Nonprofit Plea

The CEO for Dance New Amsterdam says in the Wall Street Journal,  "it will close its doors for good if it doesn’t raise $50,000 by Friday".  According to the article, the organization has filed for Chapter 11 and is facing a big cash crunch.

Hm...I don't know enough about the organization to know how far $50K can really carry but I don't ever get a good feeling about this type of "cry for help" news.  My first question: what is the board doing about this?  Sending the exec to the press to beg? 

As fundraisers know, this kind of fundraising often has long-term repercussions.  Great fundraising is about long term relationship development -- this is certainly not that. 

And what do we know about what led up to this situation?  What do we know about what has been done besides Chapter 11 filing to prevent or fix the situation?  And finally, what do we know about who loses if this studio closes or who might win if it for instance merged with another group?  Alas, the article does not provide any of this data.

My bottom line: I have little hope for this group's future and I would suggest that responsible governance would be looking for a good merger.

Nonprofit Exec Unhappy with Board

It's not the first time I've heard it from a nonprofit exec: "My board really doesn't do anything!" 

This is a dilemna I think about a lot becuase I believe it matters a lot to the current and future health of a nonprofit.  Afterall, active or not, the board is the surrogate owner (for the public) of a nonprofit.  The board's policies, strategic plan, periodic assessment of progress and outcomes, engagement as volunteers in fundraising, and other selected activities defines how successful a nonprofit will be.

But what if none of what I believe about a nonprofit's board is actually true?  What if the exec is so competent or authoritative (either and/or both) that for the duration of the exec's time in the position, the board doesn't matter?  Well, one way it then matters is that the exec will be living a self-fulfilling prophecy -- the board is actually of little use.  This, I believe, is also very common and the board then is basically of little use.

What to do?  First, the board has to come to the recognition that it is the owner and it is not acting like one.  A simple step toward acting on this recognition is for the board to start asking questions about what is actually going on in the organization.  Asking about everything, particularly financials, is a good step.  Undertaking a strategic planning process which includes understanding the exec's departure-succession plan (or determining one) is another step that helps the board think about "what-next" for the organization. 

If members have been in the organization a long time (i.e. no terms and term limits) then that practice also needs some review as old behaviors will change more often with "new blood".

Bottom line though, an exec who complains may be as much a part of the problem as the problem the exec is focused on.  Change will require the will of the board and cooperation by the exec.  If the exec is truly committed to the organization, they know they will not live forever and that the future of the organization relies on creating a board that is engaged.