An effective nonprofit board of directors must commit to learning, build a strong strategy and define a solid relationship with the executive director, while striving to generate resources and implement action.
Peoria is blessed with many nonprofit organizations that enrich our lives and serve our friends and neighbors. Some provide services on limited budgets with few paid staff, while others are multimillion-dollar organizations delivering sophisticated programs. But whether large or small, every nonprofit has a board of directors— and that group of leaders makes or breaks the agency.
The great majority of nonprofit board members are volunteers, recruited to serve for their professional expertise or emotional attachment to the mission. But board volunteers are often unfamiliar with nonprofit governance strategies or their roles and responsibilities as a board member. This is very common for nonprofits in cities the size of Peoria. Certainly an agency can and often will survive with such a board of directors, but mere survival is not good enough. Every day through research and innovation, the nonprofit industry evolves into a more sophisticated and efficient sector, and nonprofits are jumping on this wave. Those organizations that choose to proactively develop the business of their nonprofit are reaping great rewards and expanding the reach of their mission. Those that do not, suffer.
In the past two decades, research on nonprofit organizations has flourished, and social scientists have identified that the board has a tremendous impact on the success or failure of an agency. Here are some of the fundamental characteristics of effective boards.
Effective boards are learning boards. They handle the business of the corporation and invest extra time and resources to train board members. This type of time investment can be difficult for any volunteer, but the agency is positively impacted when its leaders learn and apply new strategies in the organization. Effective boards also expect active learning to happen throughout the organization. All too often, board and staff training is a line item that is first to be cut from a budget. Effective boards, and indeed, effective organizations, are constantly learning and applying information in new and creative ways in order to thrive in a changing world.
Effective boards act strategically. Strategy is an action, not a noun. Strategic action begins with a well-developed plan based on rich information and creative thinking. But it’s not enough to just have a strategic plan. An effective board fosters and supports the implementation of that plan. A culture of strategic management is created throughout the agency and resources allocated to support the execution of strategic directives. Again, executing a plan requires the board to invest resources. I have facilitated extraordinary strategic plans that merely gather dust. An executed strategy ignites a mission.
Effective boards have a clearly defined relationship with the executive director. The board is the legal owner of the corporation, and therefore, has direct supervision over the executive director. The executive is the conduit that carries the vision and expectations of the board to the staff, who make the mission a reality. Therefore, the board must give clear direction and not micro-manage. This relationship can be equated to a team: The board owns the team and allocates resources. The executive director is the coach who assembles and manages the team, makes adjustments and strives for a winning record. Finally, staff and volunteers are the players who are recruited for their special talents and are tasked with playing the game.
Effective boards generate resources. Developing resources is both an art and a science. For example, science tells us to contact a donor once a request for funding has been made, but it is the art of fundraising that tells us how that contact should be made. Agencies that develop a clear strategy and understand both the science and art of fundraising are successful. Whether the nonprofit has professional fundraising staff or not, the board plays a role in securing resources.
The first step is easy: each and every board member must personally give to the organization. If the board itself does not financially support the mission, it’s absurd to ask the community for support. Next, the effective board utilizes a proven fundraising strategy that cultivates donors who believe in the mission and invest in the organization. There is a science to nonprofit fundraising. The process is not slick or deceitful. Rather, good fundraising is built on transparency and honesty with each and every donor. Every donation, from $25 to $2 million, is an important investment in the mission of the organization. As such, each gift is thoughtfully requested and appropriately thanked.
A good board can become an effective one through intentional action. The board must accept the challenge to learn about nonprofit board governance practices and take the time to execute these strategies. In so doing, the board has to be realistic that changing an organization is hard work and takes time.
Changing an organization is like turning an aircraft carrier around. It takes a great deal of planning, coordination of efforts, and resources. But when a board takes that first tentative step to learn and then act, that aircraft carrier begins to budge just a bit. As the capacities of Peoria’s nonprofits develop, we can more effectively provide and create the services that our community needs and deserves.
Peoria is certainly blessed to have hundreds of nonprofits serving our community through the relentless efforts of thousands of volunteers and staff members. I want to take the opportunity to thank all of you who work so diligently in our local nonprofits. Each and every one of you makes an impact on Peoria every day, and you cannot be thanked enough.iBi
Eileen A. Setti is a consultant with Ruby & Associates with 15 years of experience in the nonprofit field.
