A Blueprint for Board Governance: A Back to Basics Guide for the Frustrated Nonprofit

Blueprint

As nonprofits, we sometimes feel as if we are asking the same questions again and again. “Why is this so hard? Shouldn’t we have learned how to do this by now? I’m so frustrated,” we say.

Board governance is one of the issues we keep coming back to. Here are some of the basics (with help from management guru Peter Drucker) that will help us stay on track.

The Mantra of Good Governance: Roles, Results, Responsibility

In board governance, there are three points that we need to keep repeating to ourselves: roles, results, and accountability. Again. Roles, results, accountability. Now that we’ve got the hang of it, what does it mean?

Roles: the Executive, the Board, and Personnel

The baseline for a well run organization in any field, but especially in the nonprofit arena, is defining goals and responsibility. With no income-based profit motivation and arguably less intrinsic motivation for nonprofit employees, roles need to be clearly defined. What is the role of an executive? A board member? What does each do and how do they differ?

Very often organizations are created around a management structure similar to that of the US government. The executive is the ultimate decision maker, the the board (think of the courts) keeps the foundation oriented to their agenda and regulates its future direction. The organization’s staff (think of the legislature) propose and try to implement new ideas with the help of the executive and approval of the board.

While each organization differs in how these powers manifest, the most important thing is that everyone involved knows exactly what her role is and what is expected of her in the organization.

We like expectations because they help us understand what to do. We know who to bounce ideas off of, who to go to for help, and the proper channels to get things done. Clearly articulated expectations for all members of an organization make this happen.

Results: Optimizing Board Performance

I disagree with those who say nonprofits have no profit and therefore no financial motivation. This is a dangerous misconception. Donation dollars are the same show of support for a nonprofit that businesses make from enterprise.

There are two major differences:

  1. In a nonprofit, the results are collective and therefore do not pertain to personal profit (read: individual financial gain)
  2. A business sells a product while nonprofits sell ideas

One of the primary reasons nonprofits falter is because they ignore their own financial health. This could result in crisis.

Olympic athletes train all day, competitive athletes train many hours a day, and experts tell us we should all be exercising several hours a week to be healthy. The same is applicable for nonprofits’ financial wellbeing.

Like a business, a nonprofit’s budget should be kept tight and fully accounted for. Personnel whose job deals with money– be it donor relations, educational programming, media outreach, or human resources– should know exactly where they and the organization stand financially. In the same way that everyone must know their role, every employee dealing with finances must understand their resource allotment within the organization.

Because a nonprofit is dealing with ideas, donor dollars indicate the organization’s success in fulfilling its mandate and garnering support. An organization whose mandate is seen as pressing and prescient will earn more support than one whose purpose seems outdated, uninteresting, or irrelevant.

Donor dollars improve the organization’s functioning, but as important, they are a litmus test for the organization’s health and standing in the community. Strong community support indicates that an organization is doing its job well.

Getting Results from Your Board

Here’s where the board comes in. Board members are chosen for three main reasons:

  • Their standing in the community as an activist or supporter of a cause (this may be something narrow that directly aligns with the organization’s purview or broader pertaining to the whole community)
  • The perception that they will enhance the image of the organization and pull in personal connections
  • Their field experience that is of anticipated use to the organization

A healthy board proves these to be true. Using their community status and personal pull, they raise the image and the health of an organization by attracting donor support and field cachet.

But there must be results. A board that is not functioning at full capacity must be redirected by the organization’s executive. Does the board understand how their role and responsibilities are defined? Do they have a sense (collectively and individually) of how to accomplish these results?

A successful board uses theirs assets to foster support and promote the mission and mandate of the organization.

Accountability: Emphasizing Outcomes

Accountability seems to be one of nonprofit organizations’ greatest challenges. This includes the ability to hold themselves accountable.

Because the measurement system is not seemingly based on dollars and cents, it is sometimes believed that a nonprofit employee cannot be assessed in the same way as an account manager or bean counter.

But I come from the school of accountability and results. Even if your measurements seem intangible– in which case I challenge you to reassess what it is you are really measuring– you should have a clear understanding of how your mission and vision can be translated into measurable objectives.

Analyzing and evaluating how your organization is accomplishing its objectives is a vital and meaningful process. Executed conscientiously, regular assessments will help you be aware of your mission and vision at all times, driving home your organization’s purpose.

Are you fully maximizing your potential and resources as an organization? Is every worker and board member being held accountable for achieving her objectives and given the appropriate support to be able to do so? If not, it is of key importance that you figure out how as an organization to make this happen.

Conclusion: Keeping Your Board from Boredom
Foundations sometimes fear asking their board members to step up to the plate and provide for an organization as a contributing member. Because they are often powerful members of the community, and also volunteers, organizations hope that the name brand alone of board members will attract support.

In reality, an organization’s board is its masthead. Most often, board members are fully ready and willing to lead and support an organization, but need direction on how to do so. It is an organization’s duty to provide their board with this training in the culture of the foundation, its priorities, and expectations.

In the end, efficacy boils down to role, results, and accountability. First, a board must understand its role and responsibilities. Then, they must produce results. Finally, all board members and the board as a whole must be held accountable to these results for the health and wellbeing of the organization.

No one said it was easy, but taking these steps to create and support a strong and active board are critical to the health and future of your organization.

Links

If you liked this post, you may enjoy: “The Nonprofit Employee’s Top Five List of Must Haves in the Workplace.”

4 Responses to A Blueprint for Board Governance: A Back to Basics Guide for the Frustrated Nonprofit

  1. Great stuff here–one thing I’d add to the accountability issue is that Boards should be engaged in setting both outcome and process standards for the organization that is connected to the org’s mission. For example, I do a lot of work with organizations that help people prepare for and find jobs. We engage their boards in setting standards for what that process should look like for customers and what results customers should achieve as a result. These organizations often have government regs they must adhere to as well, but we’ve found that it’s far more effective to have the boards setting their own quality standards. It also helps boards see themselves as having more of an impact.

  2. thenewjew says:

    Thanks for your comment, Michele.

    I was thinking about that aspect of it after I posted, but as the entry was so long, I didn’t want to add anything else– but you are so right. For one of the next board posts, I will write more about best practices for procedure and may consult you for your expertise.

    I haven’t been able to participate in Building a Better Blog since I got my new computer last week (after a month without one) as I’ve been swamped with a backlog of work, but I can’t wait to return.

    Your admirer,

    Maya

  3. […] “A Blueprint for Board Governance: A Back to Basics Guide for the Frustrated Nonprofit” […]

  4. […] “A Blueprint for Board Governance: A Back to Basics Guide for the Frustrated Nonprofit” […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: