B-Minus! Nonprofit Boards Can Do Better

leading-blog-imageBy Bruce Lesley, BoardSource senior governance consultant

In my community, the public schools dismissed their students for the summer last week, which means that some parents are spending this week contemplating what to do about Junior’s report card. He’s a smart kid and full of promise, so why is he getting B-minuses? And what can be done to help him improve his grades?

Nonprofit board members should be asking themselves the same questions. According to Leading with Intent: A National Index of Nonprofit Board Practices 2015, nonprofit boards across the country also are earning B-minuses for their performance. Why is this when board members are smart people, just like Junior? Shouldn’t we too expect more of ourselves? I have some thoughts about this, but for now, some tips to help underachieving boards improve their grade.

Light a fire under your governance committee. Maybe it’s inactive and needs a more enthusiastic chair. Maybe you need to repurpose your nominating committee to focus year-round on the board’s engagement. Having this standing committee become more active will force the right conversations about roles and responsibilities, composition, orientation, effectiveness, and the right leadership. One colleague of mine even recommends making your corporate secretary the chief governance officer of the organization and asking him or her to chair this committee.

Repurpose your board meeting agendas so that there is less passive listening to oral reports and more meaningful dialogue on the most important issues. Call it generative work or strategic thinking, when board members are in the same room, the best use of their time is interactive discussion. This is more than just asking questions for clarification; it is when the dialogue generates better understanding among board members and new ideas that will advance mission and strategy. To free up more space for this interactive communication, consider delegating more oversight functions to committees, using consent agenda more aggressively, requiring written reports from your CEO and committees be sent out in advance, preparing visual dashboards for mission impact measures, or even holding a conference call in advance of a board meeting to review fiduciary matters — all so the in-person time can be spent better in interchange.

Close the feedback loop. Board member performance needs to be assessed at all levels, and then the aggregate data reported back to directors. How can a team improve if it doesn’t know how it’s doing? Assessment can be as simple as a 3X5-inch card used at the end of a board meeting for directors to share with the chair what they most liked or disliked about the meeting. Or a board can complete (as BoardSource recommends) a full self-assessment every two to three years and benchmark against its own performance over time. Even peer-to-peer assessments are starting to be used by some exceptional boards. And BoardSource has assessment tools to help with all of the above!

Be positive. Do you truly believe in the potential value-added to mission of an exceptional board? Do you truly believe in the benefits of a constructive partnership between your board and CEO? Maybe all of a board’s successes start with the right attitude, the right values of trust, respect, and interdependence between a board and its CEO. In Forces for Good, the authors state that “most of the (CEOs) we interviewed maintained that their relationship with the board was critical.” Recently some colleagues and I were deliberating about what characteristic most determines how good a board really is. The first answer was a board-centric CEO, one that truly appreciated all the value-added and benefits that a great board can bring to a mission. The second answer was board leaders who realize the importance of doing its job well in support of the mission, its constituents, and its CEO.

All of these considerations emphasize being more intentional about what it means to be an exceptional board and about implementing practices that will improve your board’s performance. There’s a lesson to be learned from those parents intent on helping their children succeed in school. They understand that our children are tomorrow’s leaders. But let’s not forget today. Nonprofit board members are today’s leaders. I encourage us to set equally high expectations of ourselves. Let’s live up to our own promise.

 

 

Calling All AmeriCorps Alums

excepboards-teamby Andy Davis, BoardSource director of training, AmeriCorps alum

A year ago, AmeriCorps Alums and BoardSource began to discuss a potential partnership. I immediately thought it would be a great idea because it would shine a light on new service opportunities for a group of individuals committed to giving back to their communities. However, as BoardSource’s director of training, an AmeriCorps alum, and the vice chair of the National Advisory Council of AmeriCorps Alums, I recognized that I was perhaps a bit too close to both organizations to be objective. Since then, as I reflected further on my own history, I have come to the conclusion that no matter my relationship with BoardSource and AmeriCorps Alums, this really is a great partnership. Board service is a wonderful opportunity for alums to continue to volunteer in a way that has lasting impact and meaning.

I learned the definition of a “board of directors” when I was about 11 years old. My father, the executive director of the homeless shelter in my hometown, was explaining to my grandmother why my family couldn’t attend a Sunday lunch — he had a board meeting. She asked what a board did, and he explained in a way that made sense to her, and me.

Because I grew up around a small nonprofit that relied on volunteers to help deliver its direct services, I grew to respect and admire those individuals who volunteered and, when old enough, started volunteering myself. And almost every single time I completed a volunteer assignment — for a school, a Boys and Girls Club, a food bank, or on the deck of the USS Missouri, for example — I would wonder, what else can I do? How can I become more involved? How can I impact the future of this organization? I wanted more!

So I joined AmeriCorps NCCC and helped get things done for America — both up front in operations and behind the scenes in back offices. And I wasn’t the only one. Not by a long shot. Today, there are nearly a million AmeriCorps alums. And that number is just a drop in the bucket for overall volunteering in the United States. According to the Bureau for Labor Statistics, more than 63 million individuals volunteered in 2014 — a number that should be admired and celebrated. But, let’s break that number down a bit. In the same link, we learn that 35- to 44-year-olds are most likely to volunteer (29.8 percent) and 20- to 24-year-olds are least likely to volunteer (18.7 percent).

So you may be wondering where nonprofit board service fits in. Well, according to BoardSource’s Leading with Intent: A National Index of Nonprofit Board Practices 2015, less than 17 percent of all board members are under the age of 40. When you look at individuals under age 30, the percentage shrinks dramatically to 3 percent. Why is this? Anecdotally, we hear that many younger people don’t know how to join a board or what it means to serve. Nonprofits tell us they don’t know where to find potential younger board members and aren’t sure what skills and interests they can bring to the table. What this says to me is that we aren’t doing enough to find each other, and that we are not communicating the vast array of skills and experience that Gen X and Yers bring to the table. The new partnership between BoardSource and AmeriCorps Alums aims to fix this issue.

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CEO Transition: Are You Ready for the Inevitable?

excepboards-leavingBy Katha Kissman, BoardSource senior governance consultant; interim leader and organizational development consultant

BoardSource has long noted that one of the 10 basic responsibilities of all boards is to support and evaluate the chief executive. Another is the hiring of the chief executive. The first is a given — or should be. The second, thankfully, is not a regular board responsibility — at least, I hope not! But after working more than 30 years in the nonprofit sector, I would offer that these two are the most important responsibilities that a board must address, and address well.

Keeping an effective CEO engaged and happy shouldn’t be hard. The Ethic of Reciprocity (often referred to as The Golden Rule) essentially states “Treat others as you would like to be treated.” In a professional setting, management best practices help us understand that when we treat others well, we get the most productivity and reduce turnover.

That said, no matter how well we treat a CEO, he or she is not going to stay forever. It’s inevitable: One day, the CEO will walk out the door and on another day, a new CEO will walk in. What we can do, however, is keep our effective CEOs as long as possible and then manage CEO transition well.

According to BoardSource’s Leading with Intent: A National Index of Nonprofit Board Practices:

  • Half of all CEOs intend to leave their posts within the next five years, yet only one-third of nonprofit boards have an executive succession plan.
  • One out of five nonprofit boards have not conducted a formal performance evaluation of its CEO.
  • One out of four nonprofit boards have not done their due diligence on setting executive compensation in terms of gathering comparable data and documenting their process and decisions.

Boards cannot afford to wait to address these issues until they receive a CEO resignation letter, have to let a CEO go, or, in the worst-case scenario, learn of an unfortunate turn of events that would preclude a CEO from returning to work. Boards need to act proactively for the good of the organizations they serve.

Here are simple yet concrete steps that a board can take now to prepare for the inevitable.

Make sure your governance house is in order

While Leading with Intent had lots of good news to share, the bottom line is that nonprofit leaders give nonprofit boards a “B minus” grade in overall performance. A correlation may be made between this and a CEO’s desire to stay with a particular organization. Because effective CEOs are in high demand, those who are good will likely lean toward employment with organizations that demonstrate a track record of strong board performance.

Ensure an effective and annual CEO performance review process

Typically a CEO receives the best feedback when all board members are asked to complete a performance assessment tool, which should be based on the CEO’s job description and stated performance goals. Results should be compiled so that the data reported is not attributable to a specific board member, ensuring candid reflection, and presented in a written format as well as a verbal discussion. In addition to praising and/or providing constructive feedback to the CEO, the results of a performance evaluation also should be used to set performance goals for the coming year and be shared with the full board.

With CEOs reporting as follows, boards have an opportunity to improve in this area:

  • 26 percent of CEOs indicate that they are not satisfied with the process used to evaluate their performance.
  • 23% percent of CEOs indicate that their evaluations are not based on performance goals mutually agreed upon by the board and CEO.

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Executive Committees: To Be or Not to Be?

photo (6)By Robin Hindsman Stacia, BoardSource senior governance consultant; principal, Sage Consulting Network, Inc.

Not to be? Many of you may think that questioning the relevancy of the executive committee (EC) crosses a sacred line. If you do, it’s because somewhere along the way, we’ve allowed our executive committees to become sacred groups with the ability to make limitless decisions and act in lieu of the board’s full participation. And when I say “we,” I mean board members. Our executive committees didn’t take this level of power by force or coercion; rather, we have been giving away this power so we can do less! There, I’ve said it: Board members allow the executive committee to cover for their lack of engagement.

Just hold your horses, you say: Executive committees have the authority to act on behalf of the board, and they are a common standing committee. According to Leading with Intent: A National Index of Nonprofit Board Practices, 78 percent of boards have executive committees, making them the most prevalent of all committees reported. Surely, 78% of nonprofit boards can’t be in the wrong!

Okay, maybe there are a few effective executive committees out there, but, in many more cases than we hate to admit, our executive committees are what were intended to be a good practice gone wrong. And I’m not alone in my desire to see them ‘not be.’ In the May 26, 2011 issue of The Nonprofit Quarterly, Simone P. Jayaux defiantly declared, “I’m on a worldwide mission to destroy all executive committees.” Why? Because board disengagement — something many, many boards struggle with — can be worsened by the presence of even a halfway functional executive committee. And, as the board’s engagement deteriorates, the executive committee grows in strength, becoming the de facto board and undermining the legal and statutory responsibilities of the full board.

If you’re among the 78 percent of boards that have an executive committee, the full board must retain its position as the primary authority for the organization and take steps to ensure that your EC doesn’t exceed its boundaries. There must be full transparency between the deliberations and decisions made by the EC and the full board. The take-away here is that board members can’t delegate their responsibilities, fall asleep on the job, and fail to maintain full engagement and accountability.

The following are some practical actions that will help your board improve its executive committee processes:

  • Consider if your executive committee is necessary for your board. Not all boards require an executive committee, and each needs to consider the added value and if the EC’s responsibilities could be handled by other committees or perhaps the board’s officers.
  • Make sure the bylaws detail the specific scope of responsibilities for your EC, clearly state the membership, and indicate when the EC’s decisions must be confirmed by the full board. The more structure the better — limit flexibility. Clearly identify what the EC should not do.
  • Use the EC to vet ideas and options for full board discussion, not decision making.
  • Ensure that there is a process in place for full board review of EC minutes and actions.
  • Consider the appropriate meeting frequency for the EC. Consider having this committee meet only when necessary and not routinely, which will minimize the possibility of diluting board responsibilities. Executive committees that meet more frequently are prone to doing more work — work that might be better delegated to other committees, your board officers, or even management.

Executive committees: To be or not to be? Emerging governance trends suggest that we change or eliminate our executive committees. That means we need to rethink business as usual and engage in an honest evaluation of the impact of our executive committees on our boards. Are we, as board members, enabling board disengagement by allowing our executive committees to make decisions for us? If so, it’s time to reengage and take back our power.

Is Your Spending Rate Sustainable?

boards_blog_imageBy Heather Myers, managing director, non-profits, Russell Investments

As a board member, you have a difficult job. You need to ensure that your organization has the money, talent, experience, and resources to fund your mission. And you need to do this in an ever-changing environment. Additionally, if your organization relies heavily on your investment program to meet your spending needs, it has become essential that your board fully understands how to effectively manage that program.

Forecasters expect the inflation-adjusted growth of a passive portfolio of stocks and bonds to fall to 3.3% over the coming 10 years — a level that would make supporting even a 5% spending rate unsustainable. What this means is that nonprofit fiduciaries are going to have to think differently about how they go about meeting their return objective. The good news is that while the outlook for market returns has declined, there are still ways to improve portfolio returns.

Here are five strategies my Russell Investments colleagues and I suggest nonprofit fiduciaries embrace going forward:

  1. Be nimble. Gone are the days when you can set and forget your strategic asset allocation (your long-term policy allocation to all asset classes and sub-asset classes). Markets are fast moving and increasingly complex; you need to be fleet of foot to capture evolving market opportunities.
  2. Be mindful of your spending policy and evaluate it annually. Know how much your organization draws from your investment portfolio to meet your spending requirements and, unless you have a legal requirement to spend 5% annually, ensure that you don’t overspend and evaluate the planned spend at least annually.
  3. Manage your liquidity. Spending policy and liquidity go hand in hand. A sound liquidity program means aligning the liquidity profile of your investment portfolio with your time horizon and cash-flow demands. If you do that, it can help you meet your spending obligations as they come due, while reducing the risk of mission-threatening investment losses.
  4. Manage risks holistically and assess your risk tolerance. Focus not just on investment risk, but also on governance issues and other aspects of risks. Ultimately, you need an investment approach that can deliver the returns you need at a level of risk you can survive.
  5. Take an organization-wide perspective. Be aware of the impact your investment program has on your organization’s ability to achieve its broader goals.

It’s important to realize that these strategies don’t operate separately; prioritizing one will have an impact on the others. At some point, you will need to decide which of these is most important to your organization, and then manage the rest accordingly. For example, if your spending target is high, and you do not have a high tolerance for risk, you may need to rethink your spending target. Having a firm understanding of these strategies and how your board wants to prioritize them is essential to effectively managing your investment program.

Does all of this sound complicated? While it wouldn’t be fair to say that it is not, Russell Investments has a new resource that we think will help, and that is available free of charge to the BoardSource community. The Non-profit Fiduciaries’ Handbook is a step-by-step guide to investment strategy for nonprofit investors. It discusses each of the above strategies and includes worksheets you can complete with your investment team or questions you can ask to prompt discussion. To request a copy of The Non-profit Fiduciaries’ Handbook, click here or visit www.russell.com/nphandbook

The opinions expressed in this material are not necessarily those held by Russell Investments, its affiliates or subsidiaries. While all material is deemed to be reliable, accuracy and completeness cannot be guaranteed. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.

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Adaptive Strategic Planning for Today’s New Normal

blog-imageBy Ann F. Cohen, chief strategist and change agent, Ann Cohen & Associates; BoardSource senior governance consultant

Do you remember that childhood game called “Freeze”? If only we could play it now with the world in which our nonprofits operate. “Freeze,” I’d yell, when it comes time to create a strategic plan — “Stop moving, we have to plan.” After all, setting direction for the organization is one of the board’s primary responsibilities. But no, there’s no freezing the world today. The “new normal” is change — fast paced, constant, and, at times, unpredictable. In fact, organizations that do attempt to stop the world while creating a strategic plan usually end up with credenza ware — a document that sits on the credenza collecting dust until the time comes to create another plan.

It’s not surprising to me that BoardSource’s new study, Leading with Intent: A National Index of Nonprofit Board Practices, found that boards are doing only a mediocre job at monitoring programs and setting direction. It’s hard to do when the external environment in which our organizations operate won’t stand still for a moment.

In today’s new normal, the key to successful strategic planning is to do a little changing ourselves — to approach strategic planning not as an event or a means to an end but rather as a dynamic, ongoing learning process or cycle.

The process begins with board and staff co-creating an aspirational vision that answers what has become the iconic and ubiquitous Gandhi question: What is the change we want to see in the world? From there, it moves forward with intentionality.

Learning occurs in many ways:

Questioning our board and staff members, clients, and important thinkers, funders, and partners (via interviews, surveys, and today social media as well) and truly listening to what they say, being mindful of our own biases. I recommend the following two lines of inquiry:

  • Strategic impact questions that go directly to what the organization has been doing: What is our core work? How well is our organization performing — programmatically, financially, and administratively? Are we making a difference? How do we know? Who else does our work, and are we competing for the same funds?
  • Generative questions that look at the work of the organization from a different angle: If we do X, what will we look like? What is the biggest gap between what we claim we are and what our actual performances or actions say we are?

Assessing: Did we reach our goal? What stood in the way? What propelled us forward? What measures support this assessment?

Researching: What do relevant studies — whether trend analysis, demographics, or research — tell us about the changing landscape (economic, social, and environmental) in which the organization operates?

Transforming knowledge into action: By asking strategic and generative questions, listening, assessing, and researching, we surface the needs, possibilities, strengths, weaknesses, opportunities, and signs of caution that should be addressed as we design our plan — one that we believe (based on our learning) and hope (based on our passion) will propel the organization toward its vision. As we identify and choose between different design elements or strategies, we know that nothing can be set in stone; our strategies must be adaptive to the changing reality, lend themselves to effective monitoring, and remain relevant and imperative. And if we later discover through monitoring that we aren’t meeting our strategic goals, then we ask more questions, we learn more, and we apply that learning to our design. Amending a design, a course of action, a plan, should become part of the board’s culture and ongoing oversight responsibilities.

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Make Informed Fundraising Decisions

if-blog (4)By Ron Wormser, lead author, Informed Fundraising: An Introduction & Guide               

“Why does the world need yet another book on fundraising?”

I was asked this question by a friend who is a long-serving senior staff member of a community foundation. Throwing caution to the wind, I answered her question with another: “Do all the nonprofits in your community raise the money they need?” After a slight pause, she answered, “No, they don’t.”

The sad reality is that too many nonprofits are unable to raise the funds they need to maintain current programs and services let alone serve all the others in need. Yes, some nonprofits have staggering fundraising success. But most often they are large, well-established organizations with years of accumulated fundraising experience and abundant fundraising expertise and resources — organizations like large private universities and hospitals.

But most nonprofits are not large (according to Urban Institute’s Nonprofit Almanac 2012, almost half of all public charities have annual expenses under $100,000) and have limited, sometimes very limited, fundraising experience and even more limited current fundraising expertise and resources. Yet it is the smaller nonprofits that are typically the most dependent on contributed funds, as are those they serve, and that have the hardest time raising needed funds.

There can be many reasons why smaller nonprofits have limited fundraising success. Based on my experience working with community-based nonprofits, one major reason has become painfully apparent to me: Large, established nonprofits can 1.) easily attract community members to board service who have experience with fundraising as well as personal resources and access to others with discretionary resources, and 2.) afford chief executives with years of fundraising experience. In contrast, smaller nonprofits have access to different pools of prospective board members and chief executives. Their board leaders are likely to be less experienced in fundraising and less informed about what it takes to do it well.

Many who are new to nonprofit board service think that fundraising is about writing a big check and asking their friends to do the same. That perception, that misunderstanding, could well be the single most significant reason why smaller nonprofits struggle to raise the funds they need.

Consider an alternative, where fundraising efforts are based on the following:

  1. A clear understanding of what is required to be effective in raising money so that whatever fundraising efforts are authorized are well-conceived.
  2. Carefully prepared fundraising plans, strategies, and goals supported by necessary capabilities that reflect the unique needs and circumstances of the nonprofit, resulting in a well-planned program.
  3. Competent and consistent implementation of the plan by those qualified for the tasks, resulting in a well-executed program.

Fundraising based on those three components is almost always highly effective in achieving the desired results, and is what I refer to as “informed fundraising.”

Informed Fundraising: An Introduction & Guide is not another “how to” book. Rather, it is designed to provide nonprofit decision-makers associated with small nonprofits with the information they need to make informed decisions when presented with proposed fundraising plans and programs. It provides them with the understanding needed to ensure that those plans and programs have been carefully prepared and will be well executed.

Learn more about Informed Fundraising: An Introduction & Guide.

 

 

 

Boards: A View from the Corner Office

leading-blog-imageBy Marla J. Bobowick, MBA/CNM, senior governance consultant, BoardSource; author, Leading with Intent report

While we live in volatile, uncertain, complex, and ambiguous (VUCA) times, nonprofit boards have changed only modestly. The findings in Leading with Intent: A National Index of Nonprofit Board Practices show some progress over the past 20 years. We have gotten smarter about boards, but only incrementally.

Reading between the numbers, boards could be so much better and add so much more to their organizations. I can’t help but believe that board members need to take greater ownership of their governance structure, practices, and behaviors. But, I also believe that CEOs bear responsibility for some gaps in board performance.

On average, a CEO spends 17.8 hours per month on board work. While I’m not sure if this is good or bad news, I do know that a CEO’s time is a precious commodity. What follows is some little data that highlight big ideas for CEOs to gain greater value from their boards.

Do you have the dream team board?

If you’re one of the 73 percent of CEOs who believe you have the right people on your board, congratulations! My experience, however, suggests that we should take this number with a grain of salt. Many CEOs and boards are still in search of the dream team board. One of the obstacles may be a lack of agreement between CEOs and boards on the desired team players. Passion for the mission tops the list for both, but board chairs rank professional skills second while CEOs rank community connections second.

What might explain the difference? CEOs often have a large Rolodex of contacts with knowledge and expertise in a wide range of relevant areas. But, they can’t be everywhere and know everyone. CEOs want and need board members to serve as ambassadors, to extend the organization’s reach, to speak out and up as dedicated volunteers in places and ways that the CEO — who, while a subject matters expert, is also a paid professional with a vested interest in the outcome — cannot. There is no substitute for well-connected, influential board members with different networks and platforms.

Consider This: When the full board and CEO of a social service agency brainstormed the dream team board together, they realized that they had connections to some ideal candidates who might have otherwise been presumed to be out of reach for the organization.

How do your board members know what the work of your board is?

Eighty-one percent of nonprofits have a written job description for board members, 66 percent of CEOs report that their orientation process is effective, and 65 percent of CEOs believe their board members are well informed of their governance responsibilities. While written statements of board roles and board members expectations, board manuals and formal orientation sessions are important starting points, they are only the first steps toward meaningful board engagement.

As Dick Chait [co-author of Governance as Leadership] has observed, “Governance is a rare and unnatural act.” Board education requires a genuine commitment to continuous learning (about the organization and about governance), strategic information sharing, and mutual feedback. Best practices for board development range from a simple, on-the-spot board meeting evaluation to a more comprehensive board assessment. Fifty-one percent of boards have undertaken a formal, written board assessment within the past three years, and their performance was rated higher by CEOs than boards that had not.

Consider This: The board of a professional association invites the incoming board members to the last meeting of the outgoing board members. As part of the onboarding ritual, together they review the results of the annual board assessment and identify board priorities for the coming year.

Do you engage the board in what matters most?

I hear, repeatedly, from CEOs that they want the board to see the big picture, own the mission, and act with a “we mentality” about the organization. Yet, many board meetings do little to encourage this. Seventy-five percent of CEOs report that half of their board meetings are spent on staff and committee reports. Only 35 percent of CEOs report that meetings focus on strategy and policy, rather than operational issues.

This Leading with Intent data — along with observations over the years — suggests that board members may not have enough input and interaction with the organization’s strategic direction, priorities, and issues — all of which the CEO and professional staff deal with on a daily basis. But, for many CEOs, sharing strategic leadership with the board is daunting. Only 42 percent of CEOs strongly agree that they involve the board in leading the organization. A college president — who felt he had a great board composed of smart, dedicated, generous people — confessed, “I struggle with the knowledge that I don’t bring the really difficult strategic challenges to board meetings.”

Consider This: At the end of the meeting, a board member described a disappointed exchange he had with the health care organization’s staff. The CEO acknowledged the problem and promised to bring the issue back to the board. At the next meeting, the board examined the results of a customer satisfaction survey, and the CEO was able to glean valuable lessons learned from board members who had worked through this issue in corporate, government, and direct service backgrounds.

Do you have the board you deserve?

As a CEO, if you have a great board, it is not by accident. I suspect you’ve spent a lot of time building relationships with your board members, asking them not for their support and approval, but listening and learning about their interests and concerns. If your board doesn’t get good grades, you may be — unintentionally or otherwise — contributing to the problem. Perhaps you flood them with 120-page board meeting PDFs in the interest of transparency. Maybe you keep your distance out of respect for their very busy professional and personal lives. Take a few of those 17.8 hours per month and dedicate them to learning what your board members think about what’s working well and what could be better. See what happens when you take this one small, intentional step toward a better board.

How to Get Beyond B-Minus: The State of Nonprofit Boards Today

leading-blog-imageBy Anne Wallestad, BoardSource president & CEO

Today, BoardSource launched Leading with Intent: A National Index of Nonprofit Board Practices, which is a comprehensive scan of current nonprofit board practices, policies, and performance. While there is lots of good news to share, the bottom line is that nonprofit leaders give nonprofit boards a “B minus” grade in overall performance. Leading with Intent explores why that is, and — more importantly — what we can do about it.

Here are a few of Leading with Intent’s key findings, and some advice about how we can get beyond B-minus:

Getting the people right is fundamental: Leading with Intent finds that if a board isn’t thoughtfully composed as it relates to skill sets, leadership styles, and diversity of thought and background, it is less likely to excel in other areas of board performance. But unfortunately:

  • Only 1 in 5 chief executives strongly agree that they have the right board members.
  • 58% of chief executives say it is difficult to find people to serve on the board — up from 44% in 2012.
  • Board diversity has improved slightly, but a full 25% of boards remain exclusively White.

       What boards can do:

  • Make strategic board recruitment a priority. Make sure that your recruiting efforts are connected to your overall strategic vision and plan, and that you’re thinking through the skills, backgrounds, and networks you need to have as a part of your board’s composition. For step-by-step guidance on strategic board recruitment, check out BoardSource’s Board Recruitment Center.
  • Structure yourself for success. If your board doesn’t already have a governance committee responsible for leading and managing board recruitment and performance, consider creating one.

Boards need to get outside of their comfort zones: Leading with Intent finds that boards do well at functions related to compliance and oversight, but face challenges with their strategic and external work. In an operating environment that is characterized by constant change, this is a wake-up call: Boards need to get outside of their comfort zones and provide stronger external leadership — especially in fundraising and advocacy — that enables their organizations to adapt and adjust to change.

       What boards can do:

  • Set strong expectations. When talking to current and potential board members, be clear about the important external role that board members need to play in supporting your mission. Make sure that each individual board member is comfortable reaching out to his or her networks and spheres of influence, whether it’s about policy decisions that impact your mission, charitable support that you need to fuel your work, or community partnerships that you could build to magnify your impact. For more on the important role that board members can play in advocating for their missions, visit standforyourmission.org.
  • Celebrate success. One of the secrets to engaging board members in activities that they may be nervous about is to thoughtfully celebrate successes whenever they take place. It reinforces how important those activities are, and creates pride of ownership and positive peer pressure within your board’s culture.

Investments in board development are worth the effort: Building and strengthening a board takes ongoing, intentional effort. Leading with Intent explores the pain points that many boards are experiencing, and highlights the important role that board self-assessment can play in improving board performance.

       What boards can do:

  • Get serious about board development. Challenge your governance committee to craft a holistic board development program for your board, with thoughtful goals around recruitment, orientation and education, regular assessment, and board succession planning. BoardSource’s year-round board development for organizational members provides a great foundation for this work, including an annual assessment tool.
  • Share your commitment to strong board performance. Organizations that take board leadership and governance seriously are stronger and more sustainable, and that’s something that donors and the public care about. Take a moment to share your board’s commitment to essential board leadership practices by updating the “People & Governance” section of your GuideStar Exchange Profile.

If we want nonprofit organizations positioned to deliver the kind of impact and results that our world needs, then B- boards aren’t going to cut it. We need to focus our energies and resources to support boards that are working diligently to strengthen their performance, and we need to challenge those that are not to set a higher bar for themselves and their missions.

We need our boards to strive to be A+ boards. That’s what our missions need, it’s what they deserve, and it’s what is within our reach if we commit to making it happen.

Passion is Not Enough!

photo (4)By Chris Grundner, president and CEO, Delaware Alliance for Nonprofit Advancement

Are you familiar with Maslow’s Hierarchy of Needs? Abraham Maslow, a psychologist, introduced the concept in a 1943 paper, stating that people are motivated to achieve certain needs. When one need is fulfilled, a person seeks to fulfill the next one, and so on. The needs are often depicted as levels within a pyramid, with the largest, most fundamental levels of need at the bottom — things like food, water, shelter, sleep. Meanwhile, at the top of the pyramid, is self-actualization — most often explained as understanding what your full potential is and then actually striving to realize it. To borrow a phrase from the U.S. Army, self-actualization is “being all you can be,” which should be our ultimate goal.

In a talk I gave recently at a TedxWilmington event, I shared what I consider to be the key ingredients to building an excellent board, and to emphasize my point, I contrasted these building blocks to the steps in Maslow’s Hierarchy of Needs. In building my parallel pyramid, I set forth that passion for an organization’s mission is the equivalent of the bottom rung on Maslow’s pyramid. Combine passion with regular attendance at board meetings and organizational events and making meaningful financial contributions to the organization on a regular basis, and you’ve got a base from which solid governance can be built. But they alone are clearly not enough to help the board be all it can be…or even to facilitate long-term organizational sustainability, for that matter.

So what comes next in my pyramid? I invite you to view the video of my talk to find out.

https://www.youtube.com/watch?v=MIF9yJVldwQ

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