The Nonprofit Board’s New Role In An Age of Exponential Change
By Eugene Fram Free Digital Image
Most nonprofit boards are being faced with huge pressures—reduced financial support, challenges in integrating new technologies, and difficulties in hiring qualified personnel at what are considered “nonprofit” wages. To survive long term, directors need to be alert to potential opportunities. These may be far from the comfort zones of current board members, CEOs and staff.
What needs to be done?
Look for scalable opportunities to reformat the nonprofit: This may include merging, partnering or acquiring other organizations, obviously in an attempt to make both organizations more effective and efficient. One nonprofit, operating a sheltered workshop for the blind and visually impaired, affiliated with a local Goodwill nonprofit. The change over many years allowed the original service organization to grow from a budget of $5 million with 160 employees to today’s budget of $37 million. Currently it has 800 employees, serving 150,000 clients annually.
To achieve results like these, the board had to move out of its comfort zone, learn about new types of operation that can help fulfill the mission and initiate bold moves. To explore and manage such changes, a “Lean Management”* approach using small-scale experimentation can be helpful.
Acknowledge the inherent limitations of nonprofit board tenure:
The median tenure for nonprofit board members is from four to six years. With only reputation and/or emotional investment in the organization, this creates a short-term time line horizon for many directors. The CEO, probably the only one with long-term organizational memory, has an obligation to motivate the board to consider long-term actions in this time-compressed tenure environment.
Led by the Chair & CEO what can be done?
First recognize that not all board members will be interested in developing a future scenario that goes beyond their tenure limits. The argument will be that a three-year strategic plan is sufficient. The answer is to have the board chair and CEO form a discussion group, not a committee. It should be composed of directors who appear to be visionary in the mission field, in their career areas, management and staff.
Pose questions like these:
- What do you see the mission of this organization will be a decade from now?
- What might shape it now to grow, decline gradually or stay stable over the decade?
- What can management do now to prepare for the next decade?
- Are there small-scale experiments that will assist in preparing for these changes?
- What succession plans are required to make available strong or stronger management abilities available in the next decade?
Once a scenario is developed from the discussions, ask management to develop one or two experimental programs. If successful, it will help guide the nonprofit for the next decade. Hopefully, future board members will see the value of this work, develop an appreciation for longer term planning and continue the process.
This process is all a matter of aligning board members to long-term thinking. It involves using conceptual considerations by board and management. It motivates the CEO to consider managerial abilities that will be required, and it also should be especially helpful for board members whose careers are outside the mission area of the nonprofit.
Excellent points. I’ve served on a number of nonprofit boards and consulted with just as many. The biggest problem is the lack of “future vision” by the Board members. As you said, one of the issues is the terms set for board members and lack of effective board member recruiting. Boards tend to use standard bylaw templates when creating their nonprofit instead of foreseeing the importance of short term limits and holding regular board elections to ensure new leadership.
I’ve also found the CEO/ED gets comfortable and complacent with the current board members instead of advocating for change.
Agree and then the board and CEO/ED tend to recruit board members like themselves. It can go on for generations, occasionally members of the same prominent families can populate the board for generations.