Nonprofit board stucture

What’s Needed To Become a Nonprofit Board Change Agent?

What’s Needed To Become a Nonprofit Board Change Agent?

By Eugene Fram

Nonprofit board members with business backgrounds often become frustrated with the moderate pace for change that is characteristic of nonprofit boards. Most resign or remain on the board as passive directors, not wanting to create internal conflict in organizations that are dedicated to developing positive social programs. Here are some qualifications for unusual board members that want to become change agents and lead boards and/or organizations to making substantial positive changes. * (more…)

Do Directors View Their Nonprofit Boards Through Rose-Colored Glasses?

Do Directors View Their Nonprofit Boards Through Rose-Colored Glasses?

By: Eugene Fram

Being asked to join a nonprofit board is, in itself, an honor. To be working alongside other honorees for a cause that addresses world, community, professional or association needs commonly evokes in directors a mix of pride, loyalty and reverence. Call it the nonprofit “mystique” if you will. Having served as a volunteer director, board chair and consultant, I am often tempted to call it the nonprofit “mistake.” It is, in some instances, a perception that may blindside the director and stunt the growth potential of the organization.

Following are some commonly misplaced assertions that I have encountered through my years with nonprofits:

Our board of directors is like a family—this was the response of a director (who happened to be an attorney) to a proposal that called for a restructuring of the board. He warned that the change would negatively impact his emotional attachment to the board, i.e. his “family”

It was clear that the board was far from a family environment. It was a fairly large board of circa 20 people who met for two hours monthly from September through June. Directors’ tenures were limited to two three-years terms, with some directors opting out after one year before resigning because of work/personal pressures. In this eclectic setting, the only family connection appeared to be “dysfunctional!”

Our board is doing a great job—yes, the board is meeting goals and verifying all the compliance policies and impacts. But is this satisfaction with the status quo dissuading the board (and subsequently the organization) from setting stretch goals? Is it motivating management and staff to maximize client service? “Doing a great job” is often a mantra for an organization’s failure to reach its potential.

Our worries are over—we just hired a great new Executive Director—the board needs to monitor the new CEO who may not be “great” if the board is satisfied to set low standards allowing the him/her to simply “mind the store.” Too many boards seem to be content with this modest level of incremental growth– deferring the creative and entrepreneurial efforts until the next strategic planning cycle and then letting them slip between the cracks. A robust evaluation of the new hire should be held annually and never left to the whims of the board chairs or a simple board checklist survey.

When push comes to shove, our board can raise big $$–this may be true but 2015 national statistics show just the opposite. Sixty-five percent of nonprofit CEOs gave their boards academic grades of “C” or below for their fundraising efforts –in this age of rampant grade inflation! * Boards are hesitant to fully partner with the CEO in developing resources for the organization. They often abdicate the responsibility to the CEO or, on occasion, ignore him/h.

Our programs are superior to other similar nonprofits—systematically prove that statement! Actually make the point-by-point comparison. This “comparison-shop” is something an alert board should do every three years. It will provide a clearer picture of the organization’s strengths and weaknesses. In the case of the nonprofit’s relative under-performance, it will generate a relevant discussion on what to do about the gap in standards.

It’s entirely appropriate for a director to act as cheerleader for his nonprofit—that’s what directors are supposed to do. But first they must remove the tinted glasses and take a hard look at what’s happening on the inside— then enlist their esteemed cohort in an effort to right all possible wrongs or seize the potentials for improved client services. That accomplished, he/s will have a compelling reason to spread the word!

* BoardSource (2015) “Leading With Intent – A National Index of Nonprofit Board Practices,” January

Is there truth in the statement that ALL nonprofits are actually businesses, and they need to be run like businesses?

Is there truth in the statement that ALL nonprofits are actually businesses,and they need to be run like businesses?

By Eugene Fram

Updated viewer favorite

In my opinion, too many board and staff members in the nonprofit environment:

Do not realize that a nonprofit can focus even more effectively on “caring” missions, visions and values while operating under a business model. Many functions of a business and are the same for both types of organizations — financial operations, human resources, marketing, board governance, etc. (more…)

Once Again! Can A Mission-Driven Nonprofit Be Blindsided?

Once Again!! Can A Mission-Driven Nonprofit Be Blindsided?

By: Eugene Fram

Strange to say, a nonprofit organization and Board can become too dedicated to its mission! Such over-zealousness can cause them to overlook opportunities for strategic change. For example:

Nonprofit boards and their organizations offering mental heath counseling services are aware that new pharmaceutical therapies will certainly reduce the need for face-to-face counseling. They need to balance their current and long-term efforts to accommodate the progress that is being made in the pharmaceutical field. (more…)

Common Practices Nonprofit Boards Need To Avoid

Common Practices Nonprofit Boards Need To Avoid

By:Eugene Fram

Peter Rinn, Breakthrough Solutions Group,* published a list of weak nonprofit board practices. Following are some of the items listed and my estimation of what can be done about them, based on my experiences as a nonprofit board director, board chair and consultant.

• Dumbing down board recruitment – trumpeting the benefits and not stressing the responsibilities of board membership. (more…)

Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: A Complex Problem

Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: A Complex Problem

By: Eugene Fram

An updated and revised viewer favorite post

At coffee recently 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 director who wasn’t attending meetings, but he refused to resign. His term had another year to go, and the board had a bylaws obligation to summarily remove him from the board. However, a majority of directors decided such action would hurt the director’s feelings. They were unwittingly accepting the “nice-guy” approach in place of taking professional action. (more…)

How Can Nonprofit Boards Overcome the Inertia of Certain Directors?

How Can Nonprofit Boards Overcome the Inertia of Certain Directors?

By: Eugene Fram

Making major changes in mission, board structure, management or other significant matters is difficult. The typical nonprofit board will be divided into several groups on the issue: 1) directors who want change, 2) directors opposed to change, some strongly opposed and 3) what I call “process directors,” persons uncomfortable with major decisions who always want more data or information before voting.

The first and third groups (directors who want change and process directors) will be very willing to appoint a committee to review the alternatives, but it’s up to the board chair to satisfy process directors who create obstacles.

Process directors like to sit back and examine issues, often, in my opinion, sincerely feeling that their questions allow them to be on the cusp of showing some insights that others have failed to notice. They always ask, “Have we consulted everybody?” Or say, “Let’s make sure we have considered everything.” Often they are directors who call for postponement of the vote, even after a lengthy discussion.

Process directors are well-intentioned, sincere individuals. However, the board has to be careful that these directors don’t allow the board to continually examine one angle after another until they lose sight of the board’s main job. They can keep action in limbo indefinitely! It is up to the board chair to makes certain that this does not happen. But board chairs want to develop an inclusive board where all who want to voice their views can be heard.

A certain level of board process is necessary to operate efficiently. But when it gets out of hand, it can have a serious negative effect. Boards often lose some of their best volunteers, who get frustrated and quietly resign. Their usual reason for resigning is “the pressure of job obligations.” To me, that’s a covert message that the board is getting mired in minutiae, usually initiated by process directors.

One friend recently resigned from a board, using the “job obligations” excuse. The real reason was that the executive director, a process oriented person, used board-meeting time inappropriately, including asking the full board to review detailed public relations Power Point presentations.

In another situation, I watched a board make a strategic decision involving the combining of two programs. Even after a thorough discussion of the decision, the board insisted on discussing the tactical decisions needed, all of which were the responsibility of management. The board was unable or unwilling to shed an imbedded process culture that the status quo nonprofit had used for over 50 years.

Can Transformative Leaders Succeed on a Nonprofit Board?

Can Transformative Leaders Succeed on a Nonprofit Board?

By Eugene Fram

According to Malcolm Gladwell, noted writer and analyst, people who drive transformation share three traits: courage, the ability to reframe problems and a sense of urgency “It is not enough,” he continues, “to have ideas— but (you must have) the discipline to carry them out. One has to tune out the naysayers and the rest of the world.”

Gladwell’s reported verbiage on the subject fairly crackles with energy and initiative, just the ticket for nonprofit boards who want to recruit and maintain engaged directors. But–not so fast—change is tough in the slow-paced nonprofit environment. CEOs and boards alike should look at Gladwell’s power markers in the context of the typical nonprofit culture.
http://bit.ly/1DGJac3 (more…)

Falling in Love With the Mission & Other Sage Advice for a First Time Nonprofit Director

Falling in Love With the Mission & Other Sage Advice for a First Time Nonprofit Director

By: Eugene Fram

Sam Smith recently entered early retirement and wants to become a director on the board of a nonprofit organization. His motive is to give back to the community where he has prospered. As a first time board member, he can look to some advice from pros in the area, from a recently published article by Stanford’s Center Social Innovation (CSI).
http://stanford.io/1qefmx1

Following are my reactions to some of the article’s suggestions, hopefully adding important field information. The comments are based on having served on 12 nonprofit boards over several decades and my experiences as a consultant to at least a dozen additional nonprofit boards.

Fall in Love Wisely
This is good advice. It follows the nonprofit dictum that each director needs to be dedicated to the organization’s mission. In practice, however, some flexibility is required:
• the availability of choices at the time the search for the position takes place
• the board ‘s current composition – example, no board needs six attorneys
• the time and frequency of meetings
• requirements of “get or give” etc.
• the compatibility of he new director with the current CEO — a fast driving director may not be compatible with an ED, doing a status quo job but lacking in entrepreneurial instincts.

In my opinion, good nonprofit directors may only need to have a modicum of mission dedication, as long as long as he/s can be assured the organization is having positive impacts. For example, a director has joined a board for networking contacts does an outstanding fundraising job. Choosing a nonprofit board is akin to finding a spouse. Everybody looks for the perfect spouse, but in the meantime people get married!

Pick Your Preferred Developmental Stage
Like commercial organizations, the CSI article points out nonprofits range though three stages – early stage, growth stage and scaling stage. The early stage can be most frustrating for those who have worked in commercial organizations. Board members often are called upon to doing everything, from securing the facility at night to assuming operations responsibility. Management relies on the board for both direction and operational decisions.

More staff support for the board becomes available in the growth stage. Board oversight committees are organized to reflect operational aspects bush as — building, personnel, budget, program, etc. These can work well until they become redundant, as staff assumes more responsibility. Board meetings can become longer and filled with reports. Board turnover may increase rapidly. Unfortunately, during the growth stage a nonprofit culture can keep this system in place long after it is productive. When this occurs, the board needs to move to a corporate position.

Under a corporate position http://amzn.to/eu7nQl the board focuses on over-viewing management impacts, strategic planning and policy development. Tactical operational decisions become the responsibility of management and, hopefully, micromanagement is completely abandoned.

The CSI article calls for a third scaling stage: “Organizations that understand the difference between scaling solutions versus scaling the organization engage in collective impact strategies that require developing a strong network. The board relies on connections across sectors and disciplines.” Here the board, hopefully, takes leadership through generative “what if” questions to increase the scale of client-based solutions. Mergers and partnerships can take place that should provide better quality client services.

Design for Harmony & Efficiently

Like a business board, the new first time board member has to know that the nonprofit board only has one employment decision – engaging the chief operating officer. However, any sensitive nonprofit CEO should seek the formal or informal board reactions before changing or engaging the senior management team.

Board Engagement – Every nonprofit CEO and board chair wants their board members fully engaged. But few talk about the need to have them meaningfully engaged. Since nonprofit directors representing communities and foundations over such a wide spectrum of backgrounds, the CEO and Board Chair need to clearly assess what is meaningful to each director. To some being involved with the details of the annual dinner is meaningful. Hopefully to most others, strategic planning and overview management outcomes are paramount.

“Cultivating the right composition? (The answer) lies in in the venerable idea of the ‘the 3 Ws:’ work, wisdom & wealth… . [M]embers (should) bring one or two or even three of these assets to the organization. “

Engineer Financial Health

Like the business situation, what constitutes an organization’s overhead can be a debate among professional accountants. “Baring field variations, 15% of overhead is typical in the nonprofit world and reflects salary levels that are significantly lower than in the for-profits… . “

Most nonprofit directors serve limited terms amounting to anywhere from one to six years, with the vast majority in the four to six year ranges. Sometimes this brief tenure of board members precludes some boards from really focusing on the sustainability issue. While some operating expense, can be drawn from endowment (4-5% in recent years) there must be a prudent reserve to assure long-term increases and improvements in client services.

Fundraising should be a joint responsibility between the CEO and board members who are comfortable with the process. At the very least, each board member should feel responsible to provide leads and introductions to potential funding sources.

Board-Staff Relationships: For-Profits Take Cue From Nonprofit Model

Board-Staff Relationships: For-Profits Take Cue From Nonprofit Model

By Eugene Fram

The hierarchy-organized business is declining in importance. Senior business CEOs, as board members and senior managers, are now blogging or tweeting messages directly to staff. The two founders of Google have frequent company-wide forums that personally or electronically allow every employee to address direct questions to the founders.

While these changes are new in business environments, informal and formal relationships between nonprofit boards and staffs have been in place for decades. (more…)