Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

June 13, 2011

Nonprofit boards need to step up


By Todd Cohen

In theory, nonprofit boards are supposed to be responsible for their organizations.

In practice, many boards simply are coasting.

Boards are charged, among other things, with hiring the CEO and monitoring his or her performance, setting the vision and direction for the organization, overseeing its finances and investments, and making sure it is running smoothly and serving clients effectively.

Boards also need to create an organizational culture in which the nonprofit can thrive and fulfill its mission, and make sure it has the resources it needs.

And when times get tough, boards must be prepared to be open and candid with donors, volunteers, customers and partners about the problems their organizations face, and about their plans for fixing those problems.

Today, with the economy in turmoil, with technology and competition transforming the marketplace, and with demand for their services rising and resources becoming more difficult to secure, nonprofits face unprecedented challenges, with many organizations struggling to survive.

Boards should be leading the effort to retool their nonprofits and equip them to cope with the complex organizational and financial problems that confront them.

Yet many boards are failing to fulfill their duties.

Boards often consist of or include people who do not understand their board role, who treat board meetings as an opportunity for networking and socializing, and who believe they have done their job at board meetings if they ask a few questions about, and then rubber stamp, reports from the staff.

Many board members do not want or know how to raise money, and seem to have little if any curiosity about how their organizations actually work, or the practical challenges their staffs face on a daily basis, particularly the personnel issues, sometimes serious, that can damage the workplace environment.

So when a crisis arises, boards often are surprised, unprepared and unsure how to proceed.

That would not be the case if boards were doing their job.

Serving on a board is not simply an opportunity to pad a resume or schmooze with colleagues. And it should not be merely a reward for a big donation or other type of support.

Board service demands true commitment and rigorous attention to the organization.

It requires curiosity, scrutiny and constructive skepticism about how the organization is operating.

It requires an active role in setting the organization’s vision and direction, in making sure it secures the resources it needs, and in creating a philanthropic culture connected to the needs of the community the organization serves.

Boards also have an obligation to ensure the organization is acting in a legal and ethical manner.

When nonprofits get in trouble, the CEO often takes the fall, a good call if the CEO in fact messed up.

But the board ultimately is responsible for keeping track of what is happening inside the organization and making sure mistakes do not happen, and that includes careful oversight of the CEO’s performance.

In today’s economic crisis and fierce marketplace, nonprofit executive directors are getting burned out and overwhelmed.

And while it is the job of executive directors to run day-to-day operations, it is the board’s responsibility to provide the tools and support executive directors need to navigate what is the most difficult time nonprofits have faced in decades.

Yet many nonprofit boards are leaving their executive directors to twist in the wind

By law, nonprofit boards have fiduciary and other responsibilities for their organizations, yet many board members do not seem to understand those obligations.

Instead, board members see their board service as a perk, acknowledgement of a gift, or recognition of their role in the community.

And when problems at their nonprofits arise, board members often do not want any part of it, and ask the executive director to deal with it.

Nonprofits no longer can afford boards that abdicate their responsibilities.

What nonprofits need are boards that lead by being smart, engaged, aware and responsible.

Until boards get their act together and take their role seriously, they are putting their nonprofits at risk.

4 Comments:

  • At 6:52 AM, Anonymous Amy Eisenstein said…

    Excellent post. The complicated part is asking board members to do all of the above, while balancing their personal and professional lives as well. One recommendation I always make to baords I work with is to have at least annual training in the form of a board retreat, so they are able to fulfill many of the responsibilities you mention.

     
  • At 11:13 AM, Anonymous Nell Edgington said…

    Todd,

    I agree that boards need to step up to their responsibilities, and in many cases ineffective boards of directors are holding the nonprofit sector back. However, I don't think it is enough to take boards to task. Much of their dysfunction comes from the fact that they are a group of volunteers with many more, higher priority responsibilities, and they are rarely trained in their board responsibilities. I think we need to work to give boards the tools and knowledge to set them, and their nonprofits, up for success. I also think that often it is a question of a single board member stepping up to provide leadership to a group that can be directionless. I talk about how we can encourage a transformation of boards through a single board leader here: http://www.socialvelocity.net/2011/02/the-road-to-financial-strength-starts-with-one-board-member/

     
  • At 1:10 PM, Blogger Greater Giving said…

    While I agree board members need to fulfill their responsibilities - I work with NPO's everyday who haven't outlined their expectations. A Nonprofit needs to define who they need on the board for talent, etc. They need to interview prospective board members and outline expectations and once selected - there should be an agreement signed. If a boardmember then then does not fulfill expectations, you meet with them and see what you can do - and if they've lost interest don't be afraid to let them go.

     
  • At 1:02 PM, Anonymous Anonymous said…

    The article says that the board is ultimately responsible for keeping track of what is happening inside the organization and making sure mistakes do not happen, and that includes oversight of the CEO's performance. How do you get the board more involved with this piece.

     

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