Dysfunctional Levels in Nonprofit Boards & Organizations.
By: Eugene Fram Free Digital Image
Articles and studies from a Google search on “Dysfunctions in Nonprofit Boards & Organizations,” yields 3,530,000 items in .53 of a second. These items show dysfunctions on charter school boards, church boards, healthcare boards, trade associations, human services boards etc.
Rick Moyers, a well-known nonprofit commentator and nonprofit researcher, concluded:
“A decade’s worth of research suggests that board performance is at best uneven and at worst highly dysfunctional. ….. The experiences of serving on a board — unless it is high functioning, superbly led, supported by a skilled staff and working in a true partnership with the executive – is quite the opposite of engaging.”
These data and comments can lead one to conclude that all nonprofit boards are dysfunctional. I suggest that nonprofit boards can generate a range of dysfunctional behavioral outcomes, but the staff can muddle through and continue to adequately serve clients.
Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: A Complex Problem?
By: Eugene Fram Free Digital Image
At coffee a friend serving on a nonprofit board reported plans to resign from the board shortly. His complaints centered on the board’s unwillingness to take critical actions necessary to help the organization grow.
In specific, the board failed to take any action to remove a board member who wasn’t attending meetings, but he refused to resign. His three-year term had another 18 months to go, and the board had a bylaws obligation to summarily remove him from the board. However, a majority of board members decided such action would hurt the board member’s feelings. They were unwittingly accepting the “nice-guy” approach in place of taking professional action. (more…)
How Prepared Are Board Members for the Challenges of the Nonprofit Culture?
By: Eugene Fram Free Digital Image
Given that the typical tenure of a new board member is six years. In addition, a new board member’s intention may be to make his/her unique contribution to the organization’s progress before he/s rotates off the board and is supplanted by another “new” director. With these factors in mind, I estimate that many volunteers enter the boardroom with little understanding of nonprofit culture. Even those who have served previously on business boards may initially spend valuable time in accommodating to the nuances of nonprofit practices and priorities before being poised to make contributions to the “greater good” that nonprofits create. Following are some areas that are endemic to nonprofits:
• Mission is Impact: Whereas the central mission of corporate boards is to make money for shareholders, nonprofit organizations, with their multitude of diverse missions, are commonly invested in impact. Most nonprofit directors, managers and staff are committed to helping the nonprofit organization fulfill its unique mission. I have seen staff and managers, often with highly marketable skills, remain with nonprofits despite financial pressure to move on. Dedication to the organization’s raison d’etre is a strong motivator that keeps good people working towards its accomplishment. Both types of organizations can report financial results quarterly, but nonprofits struggle to measure such long-term mission outcomes as ” … enhanced quality of life, elevated artistic sensitivity, community commitment and successful advocacy… .” The elusive nonprofit challenge becomes how to measure impact in order to assess mission fulfillment. (http://bit.ly/OvF4ri)
• A Slower Pace: The pace of the decision process is decidedly slower in nonprofits than in the corporate board. This can occur for a number of possible reasons. It could be that the NFP’s charter may purposely set up requirements that preclude hasty and possibly unwise decisions—by mandating a period of deliberation before an action is formally voted upon. It may possibly be that the organization recognizes that it has insufficient staff for fast implementation. And there have been a number of cases when a nonprofit board has had to defer action because a succession of meetings has not produced a voting quorum!
• Get or Give Obligations: Nonprofit board members are said to stand “10 feet tall” in response to their commitment and service to the organization. The value of their time, energy and expertise is immeasurable. Another important aspect of good board management is ensuring the availability of adequate funds. To this end, many nonprofits ask board members to help generate and/or make annual donations themselves within the parameters of their resources. Commonly, directors are urged to make a “stretch” gift– and there are times when they are even requested to make their largest donation to that organization or seek donations or services from others. Some directors resist this type of pressure. But even with a development staff taking proactive development responsibility, it is still the board’s responsibility to pursue funds by every appropriate means.
• Board Chair, CEO and Staff Relationships: This triumvirate of positions makes up the lifeline of any nonprofit organization. Both Board Chair and CEO have their own designated spheres of influence that sometimes succumb to a board culture that is resistant to change. The staff has its own set of issues related to the nonprofit’s “flat” structure. Here are some cultural breakdowns in internal relationships that can be disruptive to the organization.
The NFP Board Chair is probably more important than in an FP organization. The rank and file board members often defer to the current chair on proposed actions– generally to avoid conflict, which might impact donations or hobble potential networking efforts. This hesitancy to challenge the leadership cannot only impede progress but is apt to give the board a “rubber stamp” image..
The CEO will be the keystone to implementing a high-performance culture in a nonprofit organization. Boards are frequently resistant to consider replacing a CEO as long as he/s is producing at a “C” or “B” level. “If it’s not broken, why fix it?” is the view, albeit a short-term response. Understandably, the frequently shifting body of board members finds that maintaining the status quo is less disruptive. It is not, however, always in the best interest of the organization and its potential to grow and serve clients.
The Staff, unlike in the FP hierarchy, is structurally often only one or two levels below the board, thus well attuned to the frequent rotations of board personnel. A continual shifting body of directors makes staff members vulnerable to changing priorities, which can significantly impact their work. Nonprofits should offer many opportunities for staff and board to communicate appropriately—to interact in informal settings and on board-staff committees. But creeping board micromanagement needs to be avoided as a danger for nonprofits.
Summary: Once acclimated to the unique challenges of the nonprofit culture, serving on the board can provide an exceptionally rewarding experience. Board members will have a chance to work with others who are dedicated to the work of serving people with significant personal needs, improving the positive contributions of professional and trade associations and bringing value and enrichment to their communities.
It happens over time. A passionately conceived mission starts to drift from its original intentions. Stakeholders begin to view a nonprofit’s purposes from a different angle. There is a discrepancy between how the organization is committed to act and external perceptions of its current actions. Nonprofit boards need to be on the alert to such misalignments that can go unnoticed in the perceptual “fog” of daily challenges. It can limp along for years without acknowledging the impact of the client reality by which the nonprofit is being judged.
Is Your Nonprofit Recruiting & Retaining by Using a Mission-Driven Approach?
By: Eugene Fram Free Digital Image
Recruiting and retaining able people for nonprofit careers has always been a challenge. Salary levels have not been comparable to business organizations and some government posts. Many small and medium sized nonprofits have frontline personnel organizationally located only two levels below the Board of Directors. Consequently, career paths can appear stymied.
The employment situation has changed for two population cohorts. They are: some millennials (born between 1981 and 1996) and those in the Generation Z cohort (born between 1997 and 2012).
Lifestyle & Behavioral Information – Some New Ways To Seek High Performance Nonprofit Board Members?
By: Eugene Fram Free Digital Image
Over several years, I have conducted nonprofit board recruitment projects. Two boards with which I worked had rather similar challenges. • They had concerns recruiting sufficient numbers of board members to fill their needs. • Current board members, largely composed of younger people, in the 30-40-age range, had significant problems balancing work and family obligations and attending board and committee meetings. • Attendance was sporadic. Although the boards were small, board members really did not know each other, and, in another situation, a board member sent a work subordinate to attend board meetings. A well-regarded board member never attended meetings and only occasionally met with the ED to offer advice. In both instances EDs and board chairs had significant power. One of the EDs complained she was doing the work of operating the organization and operating the board, and this may lead to too much potential personal liability. • Although these organizations, with budgets in the $8-$10 million range were operating successfully, the EDs involved realized that they were in line for long-term problems if board recruiting didn’t change.
What to Do • Consider establishing two boards, a board for governance and a consulting board. For the governance board, make certain the typical directors in the 30-40 year age range have a good understanding of their work-family obligation to be able to devote time for the organization. • For the consulting board, ask volunteers to work on projects that have a defined time limit. They will not be asked to be involved in more than one or two projects per year, an ideal inducement for millennials who are used to short bursts of activities. It may be necessary to recruit several persons with the same skills to provide coverage for several projects. • Keep communications flowing to the consulting board like one would to the governing board. Have social and educational events that allow the groups to meet informally. If the organization has a volunteer manage the consulting board, this person should be charged to keep the communications flowing. Members of the consulting board will only have occasional contact with the organization. • Overlay the traditional nonprofit skills grid with several time dimensions to recruit: 1. Recently retired people, both those traditionally retired and those who retried early, who may have time to be candidates for both the governing and consulting boards. 2. Seek individual contributors who may have more control of their time, such as medical doctors, lawyers, professors and small business owners. 3. Seek successful entrepreneurs who can schedule their own time, can resonate with the organization’s mission, vision and values and who want to give back to the community. • Beyond the time requirement, seek persons with experience on for-profit or nonprofit boards so they can share their board knowledge and become models for those having their first board experience. Their questions and behaviors can teach as much or more than formal seminars.
Summary The traditional nonprofit board skills grid can still be helpful in the 21st century. However it needs to incorporated lifestyle and behavioral information for each board candidate. These are important candidate attributes that must be thoroughly vetted.
How Do Boards Develop Successful Business Practices In Nonprofit Organizations?
By: Eugene Fram Free Digital Image
Every nonprofit needs a business plan to implement marketing, financial, human resources, etc. activities. The goal of the nonprofit business plan is to maximize the achievement of the organization’s mission within existing resources.
Strong service and business practices should be the hallmarks of any nonprofit board that effectively focuses on four business factors:
Governance arguably suffers most … when boards spend too much time looking in the rear view mirror and not enough scanning the road ahead. *
It has been my experience that nonprofits rarely address the possibilities and perils of “…the road ahead.” An endless stream of current and pressing issues can cause both Board and CEO to take a myopic view of their nonprofit responsibilities — either totally ignoring strategic issues or procrastinating a discussion of the subject. The results can be damaging to the organization. Here are some “prompts” that might guide nonprofit board members and CEOs as they attempt to provide leadership in this important but neglected area:
Balanced Agendas — Include and highlight strategic issues on every board meeting agenda (not just when a committee report is presented) until they are resolved with action plans, policy development or thoroughly discussed and removed. This constant emphasis on planning can go a long way towards achieving concrete actions on topics of future concern. A discussion of immediate issues juxtaposed with ongoing strategic concerns will provide a balanced meeting format that may possibly discourage board member’s attempts to micromanage, a very common tendency in nonprofit boards!
Short Term Focus — In a BoardSource report, “…only 33 percent of nonprofits report that their board members are actively involved in advocating for their missions, and many organizations aren’t advocating at all.”** To inspire and challenge board leaders to actively serve as ambassadors. The explanation for weak performance in this area is often attributed to the fact that the directors’ terms of service on the board are usually three to six years during which time people’s interest in the long-term future of the organization may be compromised. Some boards may be disproportionately represented by “millennials” whose participation comes with heavy time constraints. Problems of this type can be mitigated by seeking board members who are partially or fully retired. They are likely to be better equipped to focus on the important governance functions and the fundamentals in which the nonprofit operates. Boards need to look to look further out than anyone else in the organization… There are times when CEOs (those operationally concerned with strategy) are the last ones to see (environmental) changes coming.
Board Recruiting — Nonprofit recruiting can be a hit-or-miss process, often producing candidates who are readily available and familiar to the current board. Rarely will the committee seek out people who have strong track records as strategists and/or competent visionaries. This is a real challenge, but a forward focused board should make every effort to identify potential directors who have these types of experience and skills. The topic of recruitment is a challenging one and the process should have continual annual evaluation.
Can Nonprofit Boards Work Smarter Not Harder? As noted earlier, nonprofit board people are often limited in the amount of time they can devote to board participation. Given these constraints, the board chair and CEO can choose from a range of options that will help orient directors to better understand the external landscape in which the organization operates. These initiatives can include visits to comparable facilities, opportunities to attend field related conferences or inviting experts in the same or similar organizations to interact with board members. The purpose is to infuse each member of the board with an informed view of the organization’s long-term future and prepare them to take the appropriate action. The CEO and board chair must address this question with a viable plan: What actually helps… (to develop) a board environment that encourages participation and allows board members to derive meaning, inspiration and satisfaction from their (board) work?
Talent: The Key to Nonprofit Success — A nonprofit board has one hiring decision to make: the engagement of the CEO. But it also has a significant responsibility to overview long-term talent development in the staff and management. The board of a family service agency needs to assure that its counselors are up to date on current modalities of counseling. A recreational organization must be operating in the context of accepted fitness practices. Annual talent reviews need to be scheduled with CEOs and the appropriate staff. In addition, individual board members, with the concurrence of the CEO, may want to have occasional professional contact with key people below the senior management.
Make strategy part of the board’s DNA — (Many nonprofit) … CEOs present their strategic vision once a year, the directors discuss and tweak it at a single board meeting (or a short retreat), and the plan is then adopted. The board’s input is minimal and there’s not enough in-depth information to underpin proper consideration of the alternatives.
An educated nonprofit board will have the depth of understanding to be alert to the future needs and problems of its organization. Typically there is usually an unanticipated “fork” in the road ahead. Status quo, “minding the store,” participation by rote are all too easy mindsets that will only hobble the progress of an organization. Board chairs and CEOs are key actors in turning an existing board environment into one that is focused on moving forward.
*Christian Casa and Christian Caspar (2014) “Building a forward-looking board,” McKinsey Quarterly, February. Note: Quotations from this article are presented in italics.
More Than Passion Needed in Prospective Nonprofit Directors
By: Eugene Fram Free Digital Image
What nonprofit selection committee would reject a candidate who demonstrates passion for the organization’s mission? I can attest to the fact that in many recruitment processes, an interviewee who shows strong empathy for the cause is a “shoe-in” for a board position regardless of any obvious weakness in skill areas. By contrast, one who appears less than passionate about the organization’s mission can be overlooked or even eliminated from the list.
Nonprofit Management 