Tag Archives: Nonprofit Boards

WittyBizGal Nonprofit Management; 3 Common But Fatal Governance Mistakes

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The Boards of Directors of nonprofit organizations are a vital component of each and every entity which is a part of the nonprofit sector. A high functioning board is one where leaders clearly understand board roles and responsibilities, as well as areas of major accountability which are:

  • Setting broad strategic vision and goals 
  • Overseeing and ensuring nonprofit’s overall financial viability, both short and long term
  • Fundraising
  • Positive promotion of the organization in the community 
  • Effectively managing and delegating operational responsibility to the Executive Director

Almost everyone who joins a nonprofit Board of Directors does so with good intentions, and a desire to support a worthy cause. There is rarely ever a financial gain motivation, as nonprofit board members are not paid. In fact, in many organizations, board members are expected to make substantial contributions in the form of monetary donations, in addition to donation of time and service

So, you’d think that nonprofit boards would not only survive but thrive in this perpetual atmosphere of goodness, light, good will and sunshine, right? Well…not exactly. In fact a lot of things can go wrong in this sort of environment, resulting in minor to severe organizational dysfunction, ineffectiveness in governance, stagnation, and even the eventual demise of the nonprofit. That last one is always a shame, as most charitable organizations are founded with worthy and important goals, and at least the potential to address pressing social service need, and fill critical gaps in communities. 

Here are my top 3 picks for the common, but highly fixable errors made by a lot of nonprofit boards:

1) Failure To Strategically Assemble And Maintain A Diverse Group

The key to success with a Board of Directors often lies not in its ability to get along well, socialize outside the boardroom, and never experience conflict, but in understanding the value of a team which respects and even embraces differences in one another. The key here is diversity–not in the traditional sense of racial, cultural, and ethnic diversity, although that can play a role as well–but in diversity of background experiences, professional skill sets, personality, and ways of approaching problems. 

Homogeneous groups tend to be less effective than diverse groups because they are prone to groupthink and lack of innovation. This is a common occurrence on nonprofit boards primarily due to the way in which these groups tend to source their members–through their own social connections. People are more comfortable being around others who think like they do and have the same response to problem solving, etc. Let’s remember that comfort is not the goal here–affecting positive change for the client group is

2) Thinking Governance and Management Are One In The Same

Quite simply, they’re two different concepts. Lines are often blurred due to a fundamental lack of understanding of the governance role, as well as arguably subtle differences between the two. Hey, let’s face it, sometimes you can be governing right along there with the best of them, lose focus, and all of a sudden wake up managing. How the heck did you get there? Well, because it’s easy to do. Here are a few tips to keep boards on the governing side and steering clear of sliding over into management:

  • Hire and effectively manage the overall performance of the Executive Director, don’t push them aside and do their job for them. 
  • Keep simultaneous focus on the short and long term. This is actually Leadership 101, and not as hard as it sounds. Set short and long term goals with long term vision in mind. Determine the purpose of your organization, realistically look at where you are now, develop a vision of where you’d like to be, and give broad marching orders on how to get there utilizing the resources you have in the here and now. 
  • Resist the urge to micromanage! If your staff and/or fellow board members are afraid to make the decisions and take the actions which fall within the range of those bullet points on their job description without running it by you first–every time–then you too might be a micromanager. Consult Control Freaks Anonymous for 12 Step Help. 🙂 
  • Remember that oversight is your primary responsibility. Delegation is not abdication. The buck stops with you. In addition to looking great on one of those cheesy motivational business posters, those last two sentences should be your guiding light for governance. Be present and accountable for what your nonprofit does and how it is viewed by external stakeholders. 

3) Nursing A Fundamental Lack of Understanding That Change Is Inevitable, But Growth Is Optional

My friend, motivational speaker and author Mary Foley Tweeted that the other day, and it stirred my governance juices so that I felt compelled to Tweet back, “Amen Sister!” The nonprofit sector has the reputation of being slow to embrace change, clunky and inefficient, and idealistic-unrealistic. Mind you, I say this as a great lover and supporter of all things 501c3, but the nonprofit sector has come by that stereotype honestly….

Many nonprofit boards, while well meaning, do cling to the notion of doing things the way they’ve always been done. While it is important to know and understand the history of the organization (that’s the “where we’ve been and where we are now” part), it is also important to fully grasp the concept that while change is scary, it will be visited upon your nonprofit whether you like it or not. Organizations, as much as they’d like to, do not exist in a vacuum. There is an internal and external environment in which they must exist that is continually changing. Client groups change, client needs change, legal and regulatory climates change, best management practice changes…all aspects of the world in which your nonprofit operates change. And, as Mary so aptly stated in 140 characters or less, the positive growth of your nonprofit is optional…It is optional, and fully within your locus of control and responsibility as a nonprofit board member and leader. 

Should boards then respond by tearing up the old ways and jumping on the bandwagon of whatever is new and trendy? Of course not. But, boards make a grave error when they tie their own hands, those hands responsible for shaping the present and future of the organization, because they are afraid to try new things, think outside the box, and take a calculated, educated risk now and then. If the fear that shaking things up a bit will cause your most important members to jump ship, then you really have to ask yourself if you have fallen into that common trap of pleasing one another rather than a spirit of servant leadership to your mission.  

Please feel free to comment below on my top three governance errors, and add some of your own! 

WittyBizGal Nonprofit Management; How Much Should Your Nonprofit Rely On Required Board Member Monetary Donations?

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WHAT ARE OTHER NONPROFITS’ POLICIES ON REQUIRED BOARD MEMBER DONATIONS? (Based on a 2007 Board Source survey)

Image & Data Sourced From: Should Board Members Be Required To Give? by Jan Masaoka 

I’ve been thinking about this issue for awhile now, gathering information, organizing my own thoughts on the subject, and would now like to address this arguably sticky wicket. Why is it sticky? I have come to the conclusion that it is one of the most uncomfortable management and governance problems the board will face, all because we’re human. Yep, we are impressive, professional, governing bodies comprised of flawed human beings–and discussion of personal financial matters makes most of us so uncomfortable that we don’t…discuss them, that is. This often leads to confusion, embarrassment, and less than effective governance and management, as poor organizational communication always does. 

It may not be common knowledge, but most nonprofit professionals are aware that it is traditional in the nonprofit sector for members of the organization’s Board of Directors to donate substantively to the nonprofit. This is because donations on the part of board members represent a gesture of good faith to the organization, as well as personal belief in, and commitment to, the entity’s vision and mission, as well as a tangible partial fulfillment of board members’ responsibility to fundraise. Financial donations in particular, according to some sources, render board members better able to approach donors to ask for major gifts and other types of charitable donations, although I disagree with this stance. Why do I disagree? Because I believe that substantive, meaningful donations on the part of individual board members do not necessarily need to be financial. There are a variety of ways in which board members can donate to the nonprofit in order to fulfill that generally accepted requirement to donate substantively as an individual–the traditional fiscal contribution of course, but also donations of the in kind variety, meaning special professional expertise, actual volunteer man hours, goods and services donations, etc. 

And here is where I will buck the system and attempt to radically overthrow the nonprofit sector as we know it and state without hesitation that I do not believe the traditionally accepted custom of requiring annual financial contributions of board members is a good one. Not only do I think this is an outdated notion which has been carried forth in the sector simply because it is tradition, but I also think it can be unhealthy and harmful to the organization in certain circumstances. While I completely agree that board members need to display commitment to and belief in the organization via donation, as I’ve stated, those donations can and should come in a variety of forms in addition to financial. In fact, nonprofits adhering to the tradition of large, required monetary donations to the nonprofit run the serious risk of maintaining a homogenous board, with only members of one particular socioeconomic background, which can lead to harmful groupthink, or even unnecessary discrimination against worthy potential members of lesser personal means. 

Board members of nonprofit organizations can and should be so much more than large gift donors. Great, effective board members….

  • Display exceptional leadership skills
  • Demonstrate ability to keep simultaneous focus on both long term and short term organizational goals
  • Bring diverse professional skill sets to the table
  • Have the inclination and ability to volunteer hours of their time to make a difference
  • Offer varied perspectives in order to foster effective teamwork and problem solving
  • Skillfully and strategically plan organizational activities from year to year which effectively support the organization’s mission, vision, and purpose in the community

Nonprofit organizations, quite frankly, are lucky if they can find these qualities in board members willing to donate their time and expertise to the organization…and these qualities don’t always co-exist with a fat personal bank account. Board members from all walks of life, cultural backgrounds, and socioeconomic status should be sourced by organizational leaders in order to assemble the best team–a team with diversity of perspective, and a desire to do something wonderful and meaningful with their lives. Overreliance upon the Board of Directors for fundraising from their own wallets, and overemphasis upon members’ ability to donate financially, can cheat nonprofit entities, and more importantly the clients we serve, out of an optimally functioning board. Not to mention the fact that honing an ability to gather such donations from the community, corporations, and other sources is equally, if not more important than simply reaching for one’s own checkbook to finance organizational activities, programs, and services. 

For additional reading on the topic of board member contributions of all varieties, I recommend BoardSource  for trustworthy, up to date governance articles and resources. 

What is your take on mandatory, or strongly expected and heavily emphasized board member monetary donations? Do you hold with the traditional school of thought that this is a large part of what makes a board member worthy and desirable as part of the team, or do you agree with me that we need to start a bit of a revolution in our sector? Weigh in below!