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Posts Tagged ‘not-for-profit’

Over the past 20 years, I have sat on several not-for-profit (NFP) boards, three of which I had the distinct honor of serving as president.  (It was certainly my distinct honor; how the boards and members-at-large may have actually felt may well have been another story.)  Anyway, these three boards could not have been more different.  My first board, that of the Nassau Shores Civic Association of Massapequa, Long Island was absolutely chaotic, probably because I presided over it incorrectly.  I felt that (1) every member of the board should always be heard; (2) whatever they had to say was worth hearing and considering and; (3) informality was better than formality.  (Ok, I know, I know, but give me break, I was young and idealistic!)  This was a small board of maybe 8 or 10 members which met on a monthly basis in various members’ living rooms.   While I believe our organization was ultimately effective in representing the community regarding civic improvements, engaging residents in volunteer activities, and providing social activities, especially for young families, the board itself left a lot to be desired.  The good news was that our budget was miniscule, so there was little we could really screw up.   The bad news was that the board did not govern or lead as it should, and my vice president and I ended up spending 15 or 20 hours a week for the three years of my term running all over Massapequa and the Town of Oyster Bay trying to do what a better managed board could have done.

Lesson # 1 – Boards need to be managed and kept on track.  Don’t be afraid to shut members down who are not adding value, and maintain order using Robert’s Rules.  Everyone wants to feel that something is getting accomplish – and they want to get home at a decent hour, too!  

businessman wearing  paper bagMy second experience as president of an NFP organization came about 11 years later when I served as the last president of Temple Judea in Massapequa and as a founding co-president of Temple B’nai Torah (TBT) in Wantagh.  TBT was formed when TJ and The Suburban Temple merged, with the new organization settling into the home of legacy Suburban.  In so many ways, this merger was one of my finest moments; we combined two great but struggling religious communities into a strong and sustainable, “reinvented” synagogue.  My experiences with both the board of legacy Judea and the board of the new TBT were remarkably similar, to wit – they were both populated with smart and passionate people who tended (myself included at times) to check their brains at the door and let their emotions take hold.  The religious boards, at 20+ members, were much larger than the board of the civic.  They, too, were difficult to control, but the larger size made the task more daunting.  The term “herding cats” comes to mind.  Everyone had an opinion on every topic, sometimes two or three, and every topic had to be debated, even on those rare occasions when everyone agreed!  (It’s always interesting to see people argue with one another using the same arguments.)  These were the most challenging boards I ever served on.  From my observations and experiences, I tend to think that religious boards may just be like that.  People serve because the passion that motivates them comes from deep within and, unfortunately, it does not always get distilled by the brain before being processed to the public.  As emotional and difficult to manage as these boards were, they were ultimately effective, successfully completing a much needed merger.  We were able to control them just enough so that work actually got done.  Five years later, life is good!

Lesson # 2 – Passion for the cause motivates board members to get involved.  Unchecked, however, it morphs into emotion and gums up the works.  Insist on respectful interchanges between board members and, echoing Lesson # 1, don’t be afraid to shut down those who are moving off track.  ImprovementsBearcat

My current gig is as the president of the Binghamton University Alumni Association.   In so many ways, this board is the most professional of the boards on which I have served.  Admittedly, unlike the other two organizations, we have the luxury of a professional director and staff to support our mission.  This enables us to truly focus on the business of the board.  For example, we recently spent a couple of years re-inventing ourselves.  Our previous president felt that we were adrift, so with the help of an outside consultant, we took a good, hard look at ourselves.  We defined and stated our mission and vision (not an easy task), and began working on implementation.  In other words, we reengaged the true business of the board from which we had strayed in recent years.  Through appropriate delegation of duties to board members, recruitment and engagement of nonboard committee members, and decentralization of service delivery into national and international chapters we do the work of a truly functioning board, overseeing operations, setting policy, and working in partnership with and giving direction to the professional staff to implement that policy.  We guide and oversee but don’t get bogged down in minutia and administrivia.  It works.

Lesson # 3 – Board members often roll up their sleeves and “get their hands dirty” helping to do the actual work of the organization.  That is okay for individual members, but it is not the purpose of the board itself.  The board exists to determine mission and vision and to guide the stakeholders in realizing that mission and vision.    

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Engaged donors are often asked to sit on advisory councils or boards of directors for the charities they support.  Such an appointment or election is considered a great honor but, of course, comes with great responsibility.  It is incumbent on potential board members to understand their roles and responsibilities before accepting such an assignment.

First, make sure you understand if you are being asked to sit on an advisory board, which is more akin to a committee and has no legal standing on its own or if you are being asked to sit on the legal board itself, the overall governing body of the organization.  While advisory board or council membership requires that you participate in a legal, ethical and responsible way, it does not confer on you the same level of responsibility that board membership does.   Today’s discussion focuses on the actual board that runs the organization.

I have found from personal observation and experience that the level of sophistication embodied in not-for-profit boards ranges from professional and seasoned to shockingly unsophisticated and naïve.  In some cases, board members come in with all their personal and professional qualifications at the fore to help advance the cause of the organization, coupled with a willingness to learn that which they do not know.  In other cases, these otherwise intelligent, rational, successful and well-meaning individuals check their brains at the door and let their emotions run amok.  (Ancillary example:  United States Congress, www.house.gov).  Unfortunately, presidents and executive directors have to work with both types of individuals and, if they are successful, will develop the latter into the former.  Actually, they had better; the board serves a vital and legal role in guiding and overseeing the organization it serves and ignorant or incompetent board members will weigh it down.  It is, by no means, an overstatement to say that the board can truly make or break the organization.

Let’s get down and dirty and crass – some boards are what we call “money” boards – the only way one gets appointed to such a board is by being a significant and consistent donor to the cause, on the theory that such donor will be able to attract other such donors.  To varying degrees, many large, national, wealthy, entrenched charities fall into this category.  Other boards are what we call “working” boards – members are appointed based on the expectation that their skills and talents will be put directly to work serving the organization.  Dollars may be secondary on such boards, but the expectation of financial contribution is and should always be there.  Even if you support its cause wholeheartedly, if you are asked to serve on an organization’s board, it is imperative that you determine which type of board it has so that you can be reasonably sure that your experience as a board member will be a positive one.  Diff’rent strokes for diff’rent folks – some people want to roll up their sleeves and get their hands dirty with the work while others prefer to don their finest attire and attend gala fundraisers – only you know for sure which camp you fall into.

Generally speaking, most boards fall somewhere in the middle but, in any event, ALL boards have legal and fiduciary responsibilities for the organizations they serve and such responsibility flows directly downhill to each and every board member.   (Hint: does the organization that is asking you to serve as a board member have a reasonable level of directors and officers liability insurance (“D&O”)?  It should, and you should also consider augmenting such insurance with personal coverage as well.   See the recent WS+B blog post “Not-for-Profit Board Member Liability.”)

BoardSource, a not-for-profit organization itself, works with nonprofit boards providing training and publications to enhance the effectiveness of the boards and the organizations they serve.  They published a terrific little book written by Richard T. Ingram entitled Ten Basic Responsibilities of Nonprofit Boards.  It is a great starting point for individuals considering board service and for boards providing training for their members or reassessing their own approach to their responsibilities.  It is not just about giving money or attending meetings.  Woody Allen once said that “80% of success is showing up;” while that may be the case, the remaining 20% is far more important.  According to Ingram, the ten basic responsibilities of nonprofit boards encompass best practices and constitute a rudimentary job description.  If you are or will be a board member, learn these basic rules, take them seriously and live them.  You will be acting in the most responsible manner possible:

  1. Determine mission and purpose
  2. Select the chief executive
  3. Support and evaluate the chief executive
  4. Ensure effective planning
  5. Monitor and strengthen programs and services
  6. Ensure adequate financial resources
  7. Protect assets and provide financial oversight
  8. Build a competent board
  9. Ensure legal and ethical integrity
  10. Enhance the organization’s public standing

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A reader recently gave a suggestion for a future post:  “Write about the importance of unrestricted giving to an organization you support, especially umbrella organizations such as __________ or a local United Way.” 

As one who is currently serving in leadership roles in two national organizations (including the _________ referred to above), the suggestion rings true.  Unrestricted gifts hold a special place in the hearts of executive directors everywhere for the obvious reason – they give the leadership the most flexibility to determine how the funds will be spent in the furtherance of their organization’s mission.  Donations with strings attached, restricting how or when funds can be expended, are also welcome and encouraged, and frankly are often the focus of major fundraising campaigns.  And certainly no development officer worth his or her salt would necessarily balk at a major gift just because the donor wants to limit the organization’s ability to “squander” the gift.  But human nature being what it is, the leaders of charitable institutions want to preserve their ability to guide the organization by using its assets free of encumbrances from the outside world, i.e. donors.  For organizations that operate efficiently and effectively, nothing could be better.

However….

For major donors, we are not talking about a mere two-way street here; we are talking about a major four lane highway.  These donors are increasingly demanding a say in how their funds are deployed to further the mission of the organizations they support – as they rightly should.  Unlike the fee for service or commodity mentality that pervades the for-profit world (if you can’t do the job I will take my business elsewhere), charities aspire to be something bigger than themselves, and donors look to satisfy their need to give back by aligning with those institutions that best mirror their personal world view. 

This may be hard to fathom if you are on the lower end of the giving spectrum.  I laughed out loud when I read a recent article by Gail Collins in the New York Times when she spoke of how unpopular Congress is right now and compared them to “…people who get students to call you up during dinner and ask you to give money to your old university.”  That about sums up the average casual donor’s feelings about the transactional approach to charitable giving.  The charities solicit, I say “no” (or “yes” if my guard is down) and the transaction is complete.  Fast, sterile, faintly cynical and not particularly satisfying.  Could you imagine soliciting, much less obtaining major gifts in this manner?

No, major gifts require far more finesse.  The very word “major” implies that the donor is not just giving money; s/he is investing in a cause.  And if s/he invests in a cause, s/he has the right (responsibility?) to monitor the use of those funds.  Charitable groups that get this right do far more than just solicit funds.  They go out of their way to properly steward the assets and report back to their donors about their progress.  They respect the wishes of their donors and develop relationships with them that often transcend the business at hand.  For the uninitiated, the attention lavished on a potential major donor may be cynically viewed as a slick sales job.  The fact is, if this is the potential donor’s visceral reaction to a particular organization’s development process, then perhaps that organization is not for them.

Charities do a lot of good in the world.  They need resources to do it.  Donors want to help but they also want to feel genuinely respected and yes, loved for what they bring to the table.  So here is the “major four lane highway” prescription –

(1)  For not-for-profit managers and boards of directors:  Never stop defining, evaluating, and communicating your vision/mission.  Be fully aware that you are the steward of your organization’s assets and it is your duty to ensure that adequate controls are in place to properly safeguard and expend those assets.  Realize that donors may place restrictions on their charitable dollars because they are not entirely comfortable that the leadership will always do the right thing.  You have to constantly work to earn and retain that trust.

 (2)  For donors:  Be vigilant in your oversight of the causes you support.  After all, you voluntarily fund them and they need to live up to your expectations.  On the other hand, when your organization performs at or above expectations, don’t be afraid to show a little appreciation – and don’t forget about unrestricted gifts.  Unrestricted gifts speak volumes to the leadership about the confidence that you place in them.

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