A Nonprofit Board or a Group of Dead Fish?

Britt Hosmer Peterson, Principal of Rock Environmental

I recently was assigned this Harvard Business Review online article (see below) during a graduate class at the University of Denver.  It made me think about the boards that I volunteer on and work with as clients.

Simms has 3 suggestions for creating truly engaged boards and engaging meetings:

1) Effective leadership.
2) High-performing board brings a great diversity of experiences.
3) Engaged board members do their homework before the board meetings.

Effective leadership is really a loaded concept because it holds multiple people accountable in different ways but for similar reasons.  The executive director and the chairman of the board need to show professional competence, initiative/leadership/generalship, proficiency, productivity, communication skills/openness, and responsiveness (Howe 2004, 5).

One of the major pitfalls that I have seen in most boards is a lack of diversity.  In order to elicit new ideas or create an environment that is engaging and stimulating you need a board of people who think differently. At the same time, I have seen a board of all the same sex, general age, income level, and competence all have completely different and varying ideas of how to achieve a certain result.  I agree with Simms, there needs to be a mixture of unique backgrounds and experiences, rather than just a demographic or visual diversity.

Lastly, Simms suggest that board members need to do their homework before the board meeting.  The point of this assertion is the use the meeting time to discuss the topics, not the educate the board members on the topics.  To have a productive meeting the board should be prepared to understand the background of the issues and come up with creative solutions — rather than “arrive to class unprepared.”

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I write this just after returning from an energizing meeting in San Francisco with Bridgespan’s board. We wrestled with important strategic issues about, among other things, how (and how fast) to expand our global work; how to modify our operating model to increase our impact a hundredfold over the next 10 years; how to increase diversity among our staff and board; and how to use online engagement and social media to its full potential. The discussions were robust, the collective wisdom sharp, the group engaged.

I know this isn’t always the typical experience in nonprofit boardrooms.

During a conference I attended last month at the Omidyar Network, one of the CEO participants described the nonprofit board at one of his prior organizations as “an aquarium of dead fish.” Many of the nonprofit executives in the room laughed out loud — I suspect partly out of nervousness. That description hit maybe a little too close to the mark.

What some board members tell me, when pushed, is that they tolerate things on a nonprofit board that they wouldn’t stand for in their day jobs. The boards don’t ensure that the organization has a sound strategy, they tolerate mediocrity in management, they don’t hold the organization accountable for results, and they don’t ensure that resources are adequate to accomplish goals. The president of a very large community foundation went so far as to tell me that “the overwhelming majority of boards in this region are broken.” He was characterizing the governance of more than 7,000 nonprofits.

Why is this? Nonprofit organizations are tackling critically important issues — improving our schools or the environment, for instance, enhancing our civic life, or working to fight disease. They have smart board members who care about these issues. People take time out of their busy lives — away from friends and family — to sit in on meetings. These volunteers obviously aren’t looking to fail in their roles as board members; even with the best of intentions, it just seems to happen.

I don’t have an answer. I don’t know why so many nonprofit boards aren’t succeeding in their governance roles. But I do know what makes for a truly engaged board and valuable, productive meetings.

First and foremost is leadership. The chairman sets the tone and works with the executive director to set the agenda for each meeting and the rhythm for the topics to be discussed over the course of the year. Note that the agenda doesn’t focus on “informing” the board; rather it engages them in discussions about central issues.

Second, a high-performing board brings a great diversity of experiences. They come from extremely successful careers in business, law, nonprofits, academia, and elsewhere. They are carefully vetted before being asked to serve, and they make their attendance at every meeting a priority — they want to be there.

Third, engaged board members do their homework before the board meetings. They review the organization’s financials, study reports on performance, do their committee work, and prepare questions. Which brings us back to the first point: balancing a modest amount of financial reporting and overview of program accomplishments with a more generous amount of collaboration and discussion. In Bridgespan’s recent meeting, the board members asked insightful and, frankly, very tough questions. They shared their experiences from their very different but highly relevant backgrounds. And they engaged in “generative thinking” where we needed it.

So what would you add to this list? What sort of dynamics do nonprofit boards need to cultivate to succeed — and avoid resembling an “aquarium of dead fish?”

David Simms is a partner at The Bridgespan Group

Original Posted on JUNE 29, 2010: https://hbr.org/2010/06/a-non-profit-board-or-a-group-of-dead-fish

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Director of Development – Do you need one?

Hiring a Director or Development for your nonprofit.

In the world of nonprofits, donor development and retention is vitally important. Finding the right people, with the right skills, will help to achieve these goals. From donor relations campaigns to a new grant application, expanding the opportunities means making an investment. So, when is the right time to bring someone on board and what will this person bring to your organization. Britt Hosmer Peterson of Rock Environmental offers expert insights into her experience with Directors of Development.

A Director of Development essentially functions as the COO of a nonprofit. Priorities include managing and allocating funds as well as creating strategies to raise new funds for the organization. This position functions mostly behind the scenes building the structure and framework of a financially healthy organization.

When is the best time to bring these experts in? This can vary based on many factors.

  • Financially assessing your organization to ensure the viability of a new hire can be a challenge. You must consider the delay in ROI as new programs are implemented as well investing in new office space, training and other new hire expenses.
  • Seasonal bumps or slumps in donations can also play a part in your decision. Maybe you only need someone for a short term project to maximize on donor’s goodwill during a holiday season?
  • Examine the potential for growth that may currently be getting overlooked without a person in this position.
  • Be honest about scalability prospects. You may have staff working on fundraising and donor retention already but do these people have the extra time and skills necessary to put together a strategic plan? Development is key to continued growth and bringing experts on board when necessary is essential.

Are fundraising and writing skills qualities you are seeking in a Director of Development? A qualified candidate will have both. It may take extra effort to find this person, but this combination is the key to a well planned and executed strategy.

These items should considered before any steps toward hiring are made. Board and staff members should get the opportunity to discuss the state of affairs, both currently and with the potential growth after bringing on a new team member. Once a decision has been made about hiring potential and viability, the decision of who to hire is next.

There are two main options when it comes to hiring a Director of Development, in-house or consultant.

1. In-House Employee:

An in-house team member will function as a regular employee of the nonprofit. This type of position allows for full immersion into the nonprofit as well as a deeper understanding of the mission and goals. This is also a larger up front investment into workspace, tech and benefits. Depending on the job market and the size of your nonprofit, expect to pay a well qualified candidate $40-65k, plus the standard benefits of a full time employee.

2. Rock Environmental’s Solution:

Consultants offer a more flexible approach as well as a smaller investment up front. These people can be seasonal, fill in a talent gap as you search for a full time employee, or for a project-to-project basis such as grant research, management, and writing or for a major upcoming fundraising event. They are typically paid a flat (per hour) or predetermined monthly retainer for services rendered.

The growth and long term viability of a nonprofit rests in it’s effective use of funds. A Director of Development can be a key player in this arena. Considering the need for this role in your organization should be a top priority. Whether you choose to hire a full time employee or Rock Environmental, take the time to plan ahead by factoring in the cost of fundraising and do not expect the person to raise their own salary!  Fundraising is based on cultivating of donors and the person must focus on your mission, not securing their pay check.

Rock Environmental offers consulting services including back of house operations (strategic planning, grant writing, volunteer management, press release writing, social media, etc.) and has experience with a wide range of international organizations and US-based donor pools.

Rock Environmental offers consulting services that will bring your nonprofit up to the next level of financial stability and mission effectiveness.