Best Practices of Outstanding Boards
How do the best of nonprofit boards weather storms and accomplish their missions? The answer? By governing well. That may sound simplistic but, as comments at the meeting pointed out, good governance on nonprofit boards is critical, difficult and seldom recognized.
At the March 18 Governance Matters Roundtable, board governance was the topic of discussion as the winners of VCG's Brooke W. Mahoney Outstanding Leadership Award talked about the methods they used to get through the financial crisis of 2009.
In the end, it all boiled down to having board members who:
- have been carefully selected,
- are well trained in all aspects of nonprofit governance,
- are deeply involved in their board duties,
- participate in the activities of the organization and know its clients,
- realize that their job is "to serve the organization, not to be served by staff,"
- accept evaluation of their performance as a board member,
- respect the opinions of staff and elicit ideas from staff,
- realize that serving on a board is a privilege they must earn and must continue to merit through hard work.
Responses to the 2009 crisis emphasized these critical board traits.
The best board members are selected with "intentionality," that is, a clear idea of what skills are needed on the board and a clear understanding of expectations by the board member.
Panelists agreed that new board members should be selected to fill specific needs on the board, such as knowledge of marketing or real estate. Boards should have an intense interview process during which it is emphasized that being on the board is a privilege and very hard work.
The ability to "play well with others" is also a factor because boards must solve problems collaboratively.
The recruitment process should include very clear statements of what is expected of the potential board members in terms of money, time, procurement of donations or services, and in-kind service.
"Time" means attending all board meetings as well as involvement on committees and attending those meetings. Money is, well, whatever the market will bear. In cases where board members are former clients of the organization, the amount of out-of-pocket money might be less but the expectation of rounding up donations or services is still there.
Giving time and expertise, and leveraging contacts and resources are as valuable as cash, the panelists agreed.
Board members must understand their fiduciary duties. Financial statements may not be a strength or an interest to board members but they are their responsibility. Good boards provide training in how to read financial documents.
Board members must also be open to learning new things, completely outside their realm of expertise. Serving on committees which all board members should do may well require in-depth exploration of new fields and new ideas.
Involvement aka passion
Board members must be aware of the importance of their decisions. They must understand that cutting programs affects the lives of hundreds of people and they must care about those people. Board members should understand what a day in the life of the client is like and have a real desire to make that life better.
Participation beyond board meetings
All panelists reported that their board members attend the activities of the organization fundraisers, social events, athletic events and bring others to those events. All board members should serve on committees, including committees outside their most obvious area of expertise.
Hard work whenever needed
The crisis "galvanized" the board, one panelist commented. In that case, the board put together a fundraiser that not only helped the bottom line but also brought in a whole new list of donors and potential donors. But board members took responsibility in a variety of other ways:
- Members met monthly instead of quarterly to stay on top of the crisis.
- Executive committee of another agency had monthly phone calls to manage the emergency plan and the calls were open to any board member.
- Board members tapped their own networks of friends and colleagues to get donations.
- Board members went directly to major funders to ask for continued support.
- Board members doubled their personal contributions to the organization.
Respect for staff
Several panelists mentioned that problem-solving begins at the staff level. In one case, a plan to reduce payroll costs was initiated by staff. In another, all employees and volunteers were required to come up with ideas for cutting costs. At the very least, these efforts helped morale because staff knew that they mattered and that their welfare was a concern to the board.
Board member evaluation
A stringent evaluation of board members every year makes them aware of their responsibilities and the organization aware of training that may be lacking. The evaluation form used by Harlem RBI can be uploaded below.
Board members need to be held accountable for their physical (not phone) attendance at board meetings and organization events; their participation on committees; and fulfillment their financial pledges, among other things.
The process of evaluation tends to bring about the resignations of those who aren't passionate about the mission or who don't have the time needed to be a good board member. It is a self-selection process as well as an incentive to do more and do better.
Download the board evaluation form used by Harlem RBI, which won the Brooke W. Mahoney Award for Outstanding Leadership.
Michael Seltzer is a well-known pioneer in the field of nonprofit management and philanthropy, Michael is the author of Securing Your Organization's Future. Michael has served as president of the New York Regional Association of Grantmakers (NYRAG) and program officer at The Ford Foundation.
Claudia Zeldin, Harlem RBI whose mission is to provide inner-city youth with opportunities to play, learn and grow. The organization uses the power of teams to help youth recognize their potential and realize their dreams.
Stephen Graham, The Brotherhood/Sister Sol, which is a Harlem-based organization that empowers Black & Latino young women and men, helps them develop into critical thinkers and community leaders.
Anne Washington, Community Voices Heard, an organization of low-income people, predominantly woman with experience on welfare, working to build power in NYC & state and improve the lives of families and communities.
Lois Reddick, Cultivating Our Sisterhood International Association, Inc. (COSIA), whose mission is to cultivate a sense of sisterhood among women and to enhance the lives of those of whom they support.
Betty Rauch, The Fortune Society, an organization that helps incarcerated or formerly incarcerated people become positive, contributing members of society.