05/16/2005: "Why Do Some Nonprofits Stall In Their Vital Tasks?"

Nonprofit Boards of Directors
By Steve Brandt

Nonprofits come in all sizes and shapes Mr. Brandt's SJ Islands Institute many do meaningful work that improves the quality of life in the community. Locally we have such organizations dedicated to a representative range of subjects ranging from mental health and low-cost housing to the performing arts, families, and preserving wildlife habitats.

Why do some nonprofits, including certain of our public taxing districts, stall in their vital tasks? One common reason is that they have ineffective boards of directors. Nonprofit boards are typically collections of friends and casual participants. Most directors mean well, I suspect, but in my experience they sometimes add little of value to completing the work at hand. When there is weakness at the top of an organization, one of two things happens. 1) The roost of the organization is ruled by the paid staff or a sub-group of directors that has a private agenda--and frequently a loud voice. Or 2) There is a power vacuum, the enterprise dithers, and its resources are squandered. Whichever outcome, instead of meeting a community need, the enterprise serves the interests of a select few, or no one at all.

Why do organizations have so-so boards? Two reasons, at least. One is because members and supporters (and tax-paying voters) seldom pay any attention to the director-election process. Unlike some corporate directors (since Enron) and many higher-profile elected officials, the qualifications and interests of nonprofit directors are typically un-scrutinized. Often they are simply appointed by friends already on the board. Or if there is a membership, it votes blindly for strangers duly nominated by the existing board. One organization in our county is spiraling into irrelevancy as this is written. The board is inert, very comfortable with itself, but inert. It regularly re-appoints itself, or clones of existing directors. And due to persuasive, often-evasive PR by the staff, the organization's supporters think (wrongly) that it is doing something appropriately productive with the thousands of dollars contributed in support each year.

A second reason for so-so boards is that members and supporters (and taxpayers) don't hold directors--past, present, or future--accountable for results. Almost by definition, nonprofits profess good intentions. Performance is another matter. So long as whatever goals are being pursued, if any, are kept fuzzy, accountability is very difficult. If a board doesn't say where it is heading, it can't be criticized for not getting there! And what's the risk to directors if "their" organizations don't produce? Virtually none. This is why many nonprofits are more like social clubs than purposeful organizations. The emphasis is on comfort, not discernable service. Our community is diminished when its nonprofits don't perform.

Neither of these two cultural reasons for so-so boards is likely to melt away. This means individual, rather than public, initiative is perhaps the only practical way to boost the impact of our local nonprofits. For an existing or potential director willing to take a stab at self-evaluation and/or improvement, here are three revealing questions she or he can ask. They bear directly on organizational effectiveness.

QUESTIONS:
1. Ambitions. Why am I willing to serve on the board? The, "I want to help," desire is necessary, of course, but insufficient. Everybody wants to help. But nonprofits exist in a competitive world just like for-profits. Nonprofits must hustle for funds, attention, staff, "customers," and so on. Can you (director or prospective director) make a specific contribution--raise money, attract staff, supply a needed skill--or are you willing to serve primarily to obtain an ego massage? One person I know was on the boards of three local organizations simultaneously, and her primary contribution was disruption in each case.

2. Balance of Power. Who is in charge? Most importantly: Does the paid (in most cases) executive manager work for the unpaid board, or vice versa? Some directors I know have been more than modestly surprised to find over the months that their input didn't count for much. Directors come and go; staff often stays. And if the staff picks most of the directors, you can be sure it stays, regardless of the performance of the organization, at least until the money runs out. Two organizations in our county are currently in financial difficulty because they have been woefully under-managed by their small staffs, which dominate their respective boards.

3. Integrity. Is the board honest? Every nonprofit has articles of incorporation and by-laws that spell out basic rules of conduct for the organization. These documents are required by law. When such rules are ignored, a major structural element is missing, regardless of how satisfied all the directors feel at the end of board meetings. Anarchy can prevail within an organization without any rioting or open conflict. There is one board in our county that has repeatedly refused to review/revise its by-laws even though most directors are aware that several by-laws are being flagrantly violated. And the membership hasn't a clue to what is going on.

Most nonprofits, including many junior taxing districts (e.g. libraries), depend on volunteers to some degree; such organizations are a special breed and they require enhanced managing skills. In the less effective nonprofits, ten percent of the people (including directors) do ninety percent of the work. There are some of these ten per-centers in our county. In more effective organizations around the U.S., e.g., the Girl Scouts, the Salvation Army, fifty percent or more of the primary participants make regular, useful contributions. Why are these nonprofits fifty per-centers? Because they are well managed. Such organizations have solid governance, missions that drive behavior, leadership that focuses on results, and performance that is monitored and discussed, for better or worse. These organizations attract and hold capable people at all levels, people who pitch in and make desired things happen. Such people take pride in tangible accomplishments, in making a difference. Warmth & fuzzies are not enough.
Copyright © by Steven C. Brandt