Thursday, July 5, 2018

What the World Cup Suggests about Nonprofits

On July 4 a friend, and loyal blogee remarked to me that he enjoyed my posts especially when they point out the error of some nonprofits’ ways. They are useful object lessons, he said. It's not as if I go out of my way to highlight scandals or wayward missions, but sometimes they are hard to ignore. And if discussing them can be helpful, then I see no reason not to continue to bring them to your attention from time to time.

It got me thinking - what is at the core of these disasters, such as the shutdown of major institutions, like the Corcoran Gallery of Art or the New York City Opera? What about the various embezzlement scandals that are revealed in the media it seems almost weekly. There is always plenty of blame to go around but if I were to sum up the reason in one phrase I would say" sloppy oversight." And whose responsibility is it to exercise oversight at a nonprofit? In my opinion it is unquestionably with the board of directors/trustees. That is where the buck stops.

The job of the nonprofit board is to govern the institution, oversee its operations, financial stability, strategy and mission. Ideally its work focuses on policy, leaving day to day operations to the staff, headed by the CEO/Executive Director, who it hires and whose performance it evaluates annually (or should). Much has been written about the individual duties of board members. Here I want to concentrate on how a board, as a corporate body, can be made most effective.

As someone who has served on as number of nonprofit boards and served many others in a staff capacity, I am a veteran of board meetings. Whether it meets four, six or, heaven forfend, twelve times a year, a typical board meeting scenario might look like this. The board assembles, sometimes in straggling formation. Most haven't seen each other since the last meeting. Following what is hoped to have been an agenda sent out in advance, the Chair guides the meeting. If the Chair and executive director have given it some thought, the meeting might have some meat, rather than a series of droned reports. By "meat" I mean discussion of a policy issue or strategic initiative. Votes are taken, including for some the most important, the one to adjourn. Members then disperse, until the next meeting.

Some work has been done, but is it effective? Does the board think of its self as a body rather than a collection of individuals, elected for a variety of reasons - skills, relationships, wealth?  My experience suggests no - with the subsequent impact on the board's success in governing..

Like many, and to my surprise, I was riveted watching the recent World Cup. I don’t think I have seen a better demonstration of team work in any endeavor. So if a nonprofit board is like a group of talented soccer players, how is to be formed into a true team? We don't have coaches, but we do have a mechanism that has come into favor in recent years. It is called a governance committee. It grew out of the nominating committee process. Some people began to ask - ok, we have good new board members, now what?  How can they and other board members work together to further the organization's mission?

The purpose of a governance committee is really board quality control - internally guided by board members themselves. Aside from retaining the nominating function, including care to have a succession plan in place for board officers, the committee should be engaged in education and evaluation. Education takes the form of being sure that board members know their roles and responsibilities and that new board members have thorough orientation before service begins. Periodic presentations should be made on new trends in nonprofit management (including fundraising) along with knowledge updates on how programs are supporting the organization's mission.

Evaluation is setting in place a process of reviewing how the organization is making best use of board member's skills and interests, including an analysis of participation, The board should also engage in self-evaluation annually -  asking itself: "How are we doing?"

Few dispute the need for such a committee. The challenge is to how to make it work, given the time demands on board and staff working on other committees directly associated with, for instance, raising money, marketing or planning. The reward will come in the development of a cohesive governing unit, which, in turn, can make the other function-related tasks more effective and personally fulfilling for individual board members..

Another important aspect is the social one. There should be at least one annual get-together of board members - no agenda but to have a glass of wine and get to know one another. Social relationships are helpful glue for team work. Some organizations attach such events to an annual retreat. Not everyone likes that kind of artificial sequester. One of the better board chairs I had told me he would agree to take that position as long we didn't have retreats: "no disappearing into the woods and brainstorming, please."

There  are various techniques that can be utilized to build a board team but the point is without a group to encourage and guide the process chances of success become haphazard. So if your organization doesn't have a governance committee (some now call it a board development committee) encourages its formation and support. Doing so increases the likelihood of hearing around the table frequent cries of "GOAL!!"