The question continues to be debated, and the need for comment and opinion seems insatiable.
http://www.huffingtonpost.com/eugene-fram/once-again-should-a-nonpr_b_4408917.html
nonprofit boards. nonprofit directors. nonprofit director term limits
How A Nonprofit Board Director Can Initiate Positive Change
How A Nonprofit Board Director Can Initiate Positive Change
By: Eugene Fram
A nonprofit board member comes up with an idea that he thinks will do wonders for the organization. He is convinced that establishing a for-profit subsidiary will not only be compatible with the group’s mission but may even bring in new sources of revenue. It’s his ball–now what’s the best route to run with it? All too often in the nonprofit environment, initiating change can be as daunting as trying to get consensus in the US Congress! There are, however, certain interpersonal levers, which, if pushed, can accelerate the process–although one hopes that not all the levers will be needed in any specific situation. (more…)
Nonprofit Alert: Follow the Government’s Regs!
Nonprofit Alert: Follow the Government’s Regs!
By Eugene Fram
Stakeholders of every nonprofit want their board members and managers to be passionate about the organization’s mission. However, in the current century, directors and managers must navigate a regulatory environment that can lead to substantial personal liabilities and possibly impair their own reputations and that of the organization.
For example, I recently read about a director of a nonprofit who was fined $10,000 by the IRS for failure to vote “no” on a proposed $2 million building contract between the organization and his building firm. The logic behind the fine appears to be a violation of the Intermediate Sanctions Act, Section 4958 of the IRS Code. (more…)
Nonprofit Directors and the Future of Technology: A Modest Proposal
Nonprofit Directors and the Future of Technology: A Modest Proposal
By Eugene Fram
Both for-profit and nonprofit boards are trying to find ways to become better informed about technology issues when they encounter them in developing policies or strategic directions. Some organizations have tried to add technological experts to their boards. However, the type of people with this expertise who also can contribute to broader discussions on finance, marketing, human relations, etc. are in short supply. Another approach has been to consider younger directors who understand the world of technology better. But this leaves only one director, or at most two, on the board qualified to intelligently review the issues involved.
Nonprofit directors need to prepare themselves to become more technologically literate. (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
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. (more…)
How Can Nonprofit Boards More Clearly Define Operational Responsibilities? Revised & Updated
How Can Nonprofit Boards More Clearly Define Operational Responsibilities? Revised & Updated
By Eugene Fram
My experience shows that well functioning nonprofit boards establish and monitor the organization’s policies. The board operates through the president/CEO. In turn, the CEO executes policy and is responsible for the prudent and creative operations of the organization. In this role, the CEO exercises leadership resulting in the effective and efficient use of board and of other volunteer time.
Although defining what are policy issues and what are operation issues is not always clear, for both for-profit and nonprofit organizations, following is a useful set of guidelines (more…)
Nonprofit CEO: Board Peer – Not A Powerhouse
Nonprofit CEO: Board Peer – Not A Powerhouse
By: Eugene Fram
Some nonprofit CEOs make a fetish out of describing their boards and/or board chairs as their “bosses.” Others, for example, can see the description, as a parent-child relationship by funders. The parent, the board, may be strong, but can the child, the CEO, implement a grant or donation? Some CEOs openly like to perpetuate this type of relationship because when bad decisions come to roost, they can use the old refrain: the board made me do it.
My preference is that the board-CEO relationship be a partnership among peers focusing on achieving desired outcomes and impacts for the nonprofit. (I, with others, would make and have made CEOs, who deserve the position, voting members of their boards!)
There are many precedents for a nonprofit CEO to become a peer board member, some without voting rights, some with full voting rights. One nonprofit group is university presidents, where shared governance with faculty bodies can be the norm. For example, when General Eisenhower became president of Columbia, he referred to the faculty in an initial presentation as “Columbia employees.” Later a senior faculty member informed him “With all due respect, the faculty is the university.”
Another nonprofit group is hospitals where the CEO may also be or has been the chief medical officer. The level of medical expertise needed to lead requires that a peer relationship be developed. Also if the hospital CEO is a management person, he and the chief medical officer must have a peer relationship, which extends to the board.
Hallmarks of a Peer Relationship
• The CEO values the board trust assigned him/her, and carefully guards against the board receiving surprise announcements.
• The board avoids any attempts to micromanage, a natural tendency for many nonprofit boards.
• When a board member works on a specific operating project, it is clearly understood that he is accountable to the CEO for results.
• The CEO has board authority to borrow money for short term emergency needs
• The CEO understands need for executive sessions without his/her presence.
• The CEO understands the need for robust assessment processes to allow the board to meet its overview duties.
• Both board and CEO are alert to potential conflicts of interest which may occurs.
• Both value civil discussion when disagreements occur.
• The board realizes that nobody does his/her job perfectly, and it does not react to occasional CEO modest misjudgments.
Summary
Elevating a nonprofit CEO to a status of board peer does not automatically make the CEO a powerhouse. The board legally can terminate the CEO at will. However, in my opinion, the following benefits can accrue to the organization.
The peer relationship help will:
• Help the organization to build a desirable public brand,
• Allow a capable person to interface with the media.
• Define a role for the CEO to lead in fundraising.
• Allow the organization to hire better qualified personnel.
• Allow the organization to present a strong management environment to funders. After all, top people readily communicate with people in similar positions.
What Does Nonprofit Board Oversight Mean? Revised/Updated
Once Again! What Does Nonprofit Board Oversight Mean?
Every week, three or four nonprofit case stories surface in the meida related to inadequate oversight by nonprofit boards of directors. Many of the cases result six or seven figure dollar losses to the nonprofits. Following is my personal list of what reasonable board oversight means to attempt to help nonprofit boards of directors to avoid such losses.
- At least half the board should be able to analyze the monthly or quarterly financial statements. Have voluntary information sessions available for those who do not have the skills. (more…)
When Nonprofit Missions Get Muddled
When Nonprofit Missions Get Muddled
By: Eugene Fram
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. (more…)
Who in a nonprofit organization is responsible for fund-raising? Should the CEO follow or lead the board? Updated/Revised
Who in a nonprofit organization is responsible for fund-raising? Should the CEO follow or lead the board?
By Eugene Fram
The CEO is the advance guard when it comes to fund-raising. First and foremost, he/she has to be alert to all places where the CEO can raise funds on his/her own initiative. (more…)
Nonprofit Management 