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Ten Steps for Building an Effective Nonprofit Board: A Checklist for Action

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Recently I published a blog post about the core attributes of a strong nonprofit board of directors as part of an informal series of articles related to board development. This series can be found here. My writing on the subject comes from the “blended” perspectives of being both a nonprofit consultant as well as a from my personal service as a “serial” board member for several different organizations.

This blog is a follow-up to a couple of emails I received in response to my last post about how useful the information was.  One question I received was “Do you have a checklist that we could use to help us in our next board meeting?”   You asked. I deliver. In this post I present “Ten Steps for Building an Effective Nonprofit Board: A Checklist for Action” This free 12-page PDF document is  not designed to be an exhaustive guide to developing and staffing a board. Rather is a practice-based assessment tool that summarized ten nonprofit board essentials that boards can use as a conversation starter about its strength and effectiveness. It also offers a short list of actionable ideas to improve board functioning for each element.

In addition to overviewing the ten principles, I included a board composition worksheet, a short bibliography, and an action planing worksheet. It is my goal to empower boards to excel through self-exploration. Yet I am also aware that there are times when you need a fresh, imaginative, and objective perspective. For those times, facilitation and Process would love to partner with your agency to meet your strategy and performance goals.

Download a Free Copy of :  

Ten Steps for Building an Effective Nonprofit Board: A Checklist for Action

 

 

Reflections of a Nonprofit Board Chair

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Last week I facilitated my last board meeting as chair of Resolutions Northwest (RNW), Oregon’s largest nonprofit community mediation center.  With this meeting, I completed five years of service on the board as a member, treasurer and, for the last three years, board chair.  During my time on the board, the darkest days were those when the agency managed a turbulent staffing crisis and again, when it weathered the elimination of a longstanding contracted service program. The brighter days are those of late, where, in the last three years RNW has nearly doubled its revenues, expanded its facilitation and restorative justice programs, and has begun to engage volunteers and donors more deeply in the success of the agency.  With a newly developed strategic plan, solid community partners, and a deep commitment to keeping the strategic plan active and alive, I am leaving RNW as a vibrant organization well positioned for continued growth.  In this post, I wanted to offer some reflections on core attributes of a strong nonprofit board. I talk about these from the “blended” perspective of being both a nonprofit consultant as well as outgoing board chair. The article is a companion to an earlier post I wrote on nonprofit board performance (link here) and represents additional and somewhat overlapping principles that will help boards to be successful.  These principles include:

  • Developing Organizational Depth: Most nonprofit board members are earnest in their commitment to support the organization that they serve.  Indeed the commitment to a mission is often the beginning of service on a board.  Turning commitment into effectiveness, involves helping board members gain organizational depth.  It is my belief that organizational depth is experiential and best gained by engaging board members in the core of the agency’s programs and services. As examples: job shadowing, volunteering at the program level, and conducting joint board/staff training sessions are some ways to provide opportunities for board members to gain organizational depth.
  • Creating a Strong Board Chair – Executive Director Relationship: An anchor to the success of my board service with RNW was my developing a strong productive relationship with the RNW’s Executive Director.  Betsy Coddington and I developed positive working relationship that was, at various times, configured as collegial, coaching, and even confrontational.  The chair should not simply be the spokesperson for the executive director nor should it be vice versa. The relationship between board chair and executive director is based on relational authority and not positional authority. The board chair-executive director relationship is well articulated in a Journal for Nonprofit Management (linked here).
  •  Understand Nonprofit Management: Early in my board experience with RNW, I saw firsthand the challenge of having a board chair who lacked a strong understanding of board governance and nonprofit operations.  Indeed, as a human resource crisis unfolded, the chair abruptly resigned, leaving the executive committee to move forward without him. Fortunately, other and I were able to step in to help. More than any other event I ever came across, before or since, this incidence left an indelible imprint of the importance of having board leadership team who understand principles of nonprofit management and governance.  It also underscored that this resident knowledge needs to be embodied in the entire executive committee and ideally across the entire board.  Indeed, building such understanding is the reason many boards set up mentorship programs, board development workshops and structure succession planning for leadership positions.
  • Building a Board Intentionally: I posted a blog entry almost a year ago that outlined an approach to thinking about board membership (linked here). While today, I might broaden the concept of fundraising to include civic reach and use slightly more refined language (based on my evolving practice and experience) the outline of the post remains useful.  Building an intentional board is an ongoing process of the systematic expansion of a board.  The core expectation for all board members starts with an understanding of governance but beyond that expectation, a board should build membership around an alchemy of operations expertise, content expertise, and development expertise (a mix of resource planning, fundraising, and civic reach). Intentional board building takes longer than accepting any willing volunteer into board service. Intentionality implies that due diligence becomes more refined, recruitment more strategic, and that a board is willing to engage in thoughtful outreach to the community in search of strong board members.
  • Staying Focused on the Strategic: As readers of this blog know, nonprofit strategy is a core theme of my consulting practice. So it should come as no surprise that I believe that effective boards are those organizing around strategy.  At one point in my tenure as board chair at RNW, we decided intentionally not to pursue a formal strategic planning process. We chose instead to spend a fraction of the time we would have spent in strategic planning to create one-two page strategic intentions that defined a short-term strategy across four operational areas.  The board then focused on these intentions and the made significant progress across all four areas that resulted in new programs, revenues, and focus for the organization. The strategic intentions served well as a “bridge strategy ” for a short operational period. Concurrently, we sent time building the capacity of the board and, once in place, we engaged in a formal strategic planning process to guide the organization’s growth over the next 4-5 years.   A relentless focus on the strategic is essential to advancing the capacity of nonprofit agencies.
  • Establishing a Strong Advisory Network: My experience as a board member and consultant suggests that many boards often don’t understand the critical role advisors play in nonprofit management. I have heard many boards oppose investing in basic advisory support such as an accounting firm, information technology (IT) support, or a human resource (HR) service provider, even though such advisors are critical to risk management and effective governance.  Along with IT, HR, and accounting, over my years at RNW we established relationships with consultants for services such as grant writing and fundraising.  While with some initial resistance to overcome, the strategic use of consultants strengthened RNW’s organizational practices.  Effective boards recognize and value the support of external expertise.  Competent staff, an engaged board, and the strategic use of external consultants create a “three-legged stool” of support for an organization’s capacity.
  • Measuring Progress: Effective boards establish clear accountability to themselves, the agency’s staff and to the larger community.  Self assessments, quality benchmarks, performance dashboards serve as tools to increase accountability and transparency.  By periodically stopping, assessing, and reflecting a board is in a stronger position to improve, adapt, and change.  I left RNW’s board just as we completed a board self-assessment that provided rich data to be used by the board as they begin a performance improvement process.
  • Fostering Effective Board Operations. Of course there are other facets of developing a strong board such as creating a good operational structure, documenting relevant by-laws, effectively using of committees and formally evaluating board performance.  Unfortunately, many boards confuse strong board operations with a strong board but as this post illustrates, board operations are just one variable contributing to an effective board.

As the current political landscape continues to promise economic uncertainty and possibly even deep cuts to the social service infrastructure, nonprofits will need to adapt and change. For many nonprofits this ability to adapt and change will be directly correlated to the focus and strength of the agency’s board. Indeed, I suggest that only a strong and effective board is capable of designing and delivering the kind of strategic guidance that will be required to navigate the uncharted waters ahead.  While the list of effectiveness indicators in this blog is not necessarily complete, it does represent focused, actionable touch points that can serve as the basis of assessing the strengthening the effectiveness of a nonprofit board.  For any agency thinking about the future, these principles of effectiveness give a point of reference by which an agency can judge the strength and direction of its board.

As always your thoughts are welcome.

 

Resources:

Companion 12 page PDF:  Ten Steps for Building an Effective Nonprofit Board: A Checklist for Action

Further Study: To help think about board development, I would point you to a recent eNewsletter where I highlighted board development resources (link here).

 

Post Script: I would be remiss not to thank the current and former staff and board members of Resolutions Northwest who have helped shaped the organization as a power for good in the community.  And in appreciation to their dedication I encourage you to support the organization by making a one time or monthly gift to support peacemaking and conflict resolution in the greater Portland area.  You can donate here.


Leading with Strategy – Even in a Crisis

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At the heart of the work that I do with nonprofits, philanthropy and government is to help organizations find the connection between facilitation and process.  Most often that connection is at the point of strategy.  Strategy is the critical element for, among other things: a) strengthening the core of social sector agencies, b) thinking creatively about innovation and growth, and c) managing through times of challenge and crisis. The focus on strategy is often the “antidote” to the tyranny of oversimplification in all three of these categories.   In this post I want to focus on the latter challenge of thinking strategically in a time of crisis. This post is also an extension of the theme that I began in my last article about creating a culture of courage.

In a recent blog that appeared on the Chronicle of Philanthropy ‘s website titled: Bankruptcy Isn’t a Solution to Nonprofit World’s Woes, the Philadelphia Orchestra was held up as a “poster child” of an agency where bankruptcy was the wrong solution to a fiscal crisis. In this article, the author argued that debt restructuring rather than bankruptcy was the correct and more appropriate solution to the crisis.  The point of the article was to declare bankruptcy as bad strategy.  However by focusing myopically on the debt of the orchestra, the author  oversimplifies the complexity of the crisis.

In the case of the Philadelphia Orchestra, a cursory Google search reveals a number of articles and commentaries suggesting that along with debt, there were other internal and external issues contributing to the crisis that included tension with the musicians who opposed the bankruptcy,  ticket sale declines dating back to last season, fiscal pressure caused by pension obligations, as well criticisms of a lack of leadership accountability.  One thing is clear, the fiscal crisis of the Philadelphia Orchestra did not appear “ex nihilo” but was years in the making and it is an oversimplification of the crisis to suggest that the solution was simply choosing the best option for debt restructuring.

I would argue that, similar to the orchestra, that  most organizations in fiscal peril are in that place because of a composite of internal and external factors in the social-citizen sector ecosystem. With the exception of grassroots and small nonprofit organization, fiscal crisis is rarely caused by a single event. Rather, fiscal crisis is often the culmination of ongoing failures in the organization’s strategic capacity. In the case of the Philadelphia Orchestra, publicly leading with bankruptcy rather than strategy was just one more  organizational leadership failure. Leading with bankruptcy rather than strategy was the self-inflicted cause of intense public criticism leveled at the Orchestra’s top decision makers.

The purpose of this blog is not to dissect the bankruptcy decision of the Philadelphia Orchestra but focus on the what it means to lead with strategy in a time of crisis.  To this end I would suggest the following attributes of leading with strategy:

  • Lead Beyond Crisis Thinking: Over a year ago, I wrote a blog about crisis thinking where I outlined the importance of focusing on mission, vision, outcomes as well as participatory leadership as the keys to moving beyond crisis thinking. My contention was (and is) that collectively reflecting on the core of an organization’s purpose and achievements is the prerequisite step to unleashing transformative creativity.
  • Lead Systemically: Managing from strategy requires a systems view of the nonprofit agency and the local “ecosystem” in which the agency operates.  In other words, by mapping the patterns of the external ecology (i.e., local economy, grant-maker funding patterns, the political landscape) and the internal ecology (i.e., employee moral, program quality and innovation) directly effect an agency’s ability to design broad solutions to a crisis.
  • Lead with Transparency: The most critical attribute in managing in a crisis is to be relentlessly committed to transparency.  Internal staff and the external community deserve absolute transparency and honesty. Transparency discloses how the agency got into the crisis with candor and responsibility.  Without transparency a crisis in confidence linger as a cancer even if the presenting problem is resolved.
  • Lead Restoratively: The concept of restoration is a causal chain.  First and foremost, restoration presents a wholistic solution to manage and prevent recurrence of the crisis.  Crisis requires leadership repair, which, in turn leads to the repair of confidence.  Crisis evokes fractured relations with board, staff, community, funders and clients.  Leadership repairs. Without a focus on restoration, the crisis ripples to a secondary “confidence crisis” that can cast a lasting shadow over an organization.

While this post has been written from the perspective of managing while in crisis, the principles outlined are perhaps best understood as a primary or secondary prevention strategy applicable to a broad cross-section of agencies.  The leadership qualities described in this post, applied as prevention are diagnostic and beg the question, “how durable would your strategic leadership be in the time of a crisis?”  For most, the answer lies in the degree to which the agency actively cultivates the qualities of strategic leadership in the absence of crisis.  After all,  leading with strategy is simply the discipline of good leadership.

As always, your thoughts are welcome.

Developing a High Performing Nonprofit Board

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Over the last several months I have become an informal advisor to an executive director of an agency in anther state. She manages a young but growing organization serving youth at risk.  This executive director is juggling both the growth of a programs and the growth of the organizational infrastructure. As with most organizations transitioning out of the “grassroots” stage and developing into an established mid-size organization, this director and her agency’s board are struggling with questions of how how to evolve the board structure, operations and leadership. In a recent conversation with this director she was lamenting, “I wish we could create a simple pathway forward that we could all agree to that would get us to the place of being a high performing board.” We spent the next half an hour  taking about that pathway.

Fast forward to a few days ago. I was participating in a synchronous chat using Twitter on the topic of creating a “courageous nonprofit board.”  Twitter is an abysmal tool to have a meaningful conversation with forty or fifty nonprofit professionals, however, it was interesting to see the group spew out a steady stream of almost random 2-3 sentence messages.  While as coherent as the playground of a preschool, the messages passing across my computer screen did offer the opportunity for me to further self-reflect on the topic of board development.

In the past, I have written episodically on the topic of board development and, in this post, I wanted to put in writing some thoughts about an evolving framework for board development. While not complete, I hope it serves as some directional anchor points that nonprofit leaders can use to think about board development and performance.

The Oregon Attorney General has boiled Nonprofit Board service down to a 12-page booklet with lots of white space. Many nonprofit boards would do well to start organizing their operations around the core functions of care, loyalty, obedience, and oversight. However, once the basic structure is in place, it is important to get outside of the core and into the “white space.”  Indeed, once a board gets into the white space the pathway gets interesting as it in the white space where the metal of high performing boards is tempered. So what exactly is found in the white space? I would suggest the following attributes:

Commitment, Consensus and Community It is my fundamental belief that high performing boards cannot exist without a tacit sense of community. Board and staff will be successful in direct proportion to the degree that there is a shared sense of purpose and focus that is organized around a commitment and consensus (as in general agreement and not unanimity). In practical terms, it means building board membership first and foremost from the perspective of  the agency’s vision, mission, community and culture.  Without social connectivity between board member and the organization, the board will be challenged to excel.

Internalizing Theories of Change, Leverage, and Scale A second dimension of a high performing board is for members to understand how the agency seeks to effect change. It is essential that a board is clear about the social impact intended by the agency, specifically: 1) how the agency employs theories of change, 2) how the agency’s internal programs and services and its external partnerships leverage or magnify impact and 3) how the agency’s growth trajectory will ultimately scale the social impact.  Cultivating a strong understanding of the theoretical framework for the agency is not only an intellectual exercise but becomes the core language and frame of reference used by board members as they discuss strategy, performance improvement, and is the place from which the board makes decisions.

Understanding the Local Nonprofit Ecosystem A third dimension of a high performing board is for the board to understand the nonprofit and social service sector in general and possess a deep understanding of the local nonprofit and social service ecosystem. Understanding how the local nonprofit agencies, government, philanthropic organizations, citizens and business collectively work to address community needs, enables a board  to better use their civic reach to strengthen the agency they serve.

Engaging in Three Core Planning Processes One of the themes of my blog this year is to focus on the core nonprofit planning processes. As I have written before, strategic planning, evaluation planning, and resource development planning are three intersecting disciplines that serve as the strategy core for a board. Indeed, the simplest measure of board performance is the degree to which they invest time, energy, and resources in the three domains of nonprofit planning.

Organizing around the Long View A final dimension of a high performing board is to organize around the long view. It is my belief that high performing boards are measured over years and not months. Boards become high performers with an intentional and disciplined approach to developing a deep understanding of the agency it serves.  Such a board also cultivates learning and inquiry management practices that comprise an iterative learning-to-action cycle over time.  Culture, history and enthusiasm are grown with intentionality and patience. Strong boards take time to develop.

Most nonprofit board members have a passion and mission affiliation for the organization where they serve. Most board members also bring high-value skills and experiences that can support the growth the agency.  The task of leadership is to recognize the contributions of each board member and to weave together the individuals into a collective board that becomes more than the sum of its parts.  Offered in this post are germinal ideas that can be used to help nonprofit boards strengthen and clarify that process of weaving together a high performing board.

As always, your thoughts are welcome.


Facilitating a High Performing Board

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Recently, I have been working on several different projects that involve nonprofit board development issues ranging from staffing a board, to recruiting board members, and improving the effectiveness of boards.  My recent work has led me to filter my experience through a review of the literature on the characteristics of an effective boards and  strengthening  nonprofit board performance.  So this post is one more installment of my occasional series on nonprofit board development.

As I have written previously, a functional board is comprised of members capable of serving four functions that include 1) governance, 2) capacity support, 3) content expertise, and 4) resource development.  This is a critical framework to understand as it serves as the foundation of a functional board. However, a high performing board requires a different level of operating. High performing boards are based on “the highest and best use” of the talents and skills of board members.  Most nonprofit organizations seek to recruit board members who are talented individuals who are often business leaders, critical thinkers, and community activists. Unfortunately, more often than we would like to admit, the use of such  talented board members is limited to review of policies and procedures, looking over budget reports for accuracy and assisting in fundraising events. While such board activities might define some of the duties of a functional board, a high performing board is defined by engagement in ongoing strategic thinking and strategic action. Reviewing meeting minutes, agency financial reports, and blessing changes in HR policy are necessary duties of a Board but if the balance of board meetings is consumed with such pedestrian administrative tasks, then the “highest and best use of board talent “is likely missed.

A classic Harvard Business Review article published over a decade ago, suggests that high functioning boards, discover, focus and organize around “what matters” (External Link).  According to this article, what matters is “harnessing the collective efforts of accomplished individuals to advance the institution’s mission and long-term welfare.”  It goes on further to suggest that the board’s contribution is meant to be strategic, “the joint product of talented people brought together to apply their knowledge and expertise to the major challenges (and I would add, opportunities) facing the institution.”  So, if this is the description of a high performing board, what does it take to create such a board?  From my experience and a review of the literature, I would suggest five starting points.

Assess where you are and define where you want to be.  The first task of developing a high performing board is to figure out where are the gaps in performance.  A Google Search will unearth several board self-assessment tools that range from overly simplistic to overly complicated. Such tools might be useful to help a board think about its governance functions, member commitments, or help identify “holes” in a board’s operating structure.  Such a self-assessment can be a good place to benchmark the strengths of your board operation but many of these assessments do not have a strong strategic intent.  An alternative assessment would be to benchmark practices against the variables presented in the Grant Thornton 2009 National Board Governance Survey for Not-for-Profit Organizations (External Link).  In my opinion, this survey offers a timely and more strategic perspective on board operations. A third approach to assessment is to shift away from a narrow assessment of the board and conduct a larger capacity assessment.  I have written elsewhere about capacity assessments and in that article I linked to a useful assessment spreadsheet (External Link).  A capacity assessment would help the board not only reflect in its strengths and opportunities but would also be useful in discovering the “what matters.”  Whichever route you take, knowing where the board is now will help identify the performance gap related to where you want to be.

Build the Board’s Skills:  I have argued before that board development starts at a board orientation but continues as an ongoing process of raising the skills and competencies of board members.  The reality is that board members become effective as they engage their heads, hearts and hands in the work of the organization.  To me, this calls for a meaningful development agenda that includes a) ongoing board training on topics related to governance and strategy, b) opportunities for boards to get their “hands dirty” in the work of the organization, and c) learning about the larger service context in which the nonprofit agency works.  Building board skills is a strategic and long-term process that is not segregated into an annual or semi-annual training event.  Ideally, participating in a strategic agenda for board skills building should be built into board practices and be built into the expectations of board service.

Engage Strategically:  A simple yet useful exercise to help gauge the strategy of a board is to do a quick content analysis of two sources.  First, examine the pre-meeting packets sent out to board members for the last three or four months and sort the contents into the two piles of administrative and strategic.  Second, review the meeting minutes for the same time period and highlight everything that is strategic in yellow.  The balance of the piles and the presence or absence of yellow highlights will give a board a good indication of how much of the board’s time is spent in administrative review and how much of the time is spent engaged in strategy.  The second part of the exercise is to ask the question, how much of the historic content was actually dependent upon face to face meeting?  For example, could board members review and approve fiscal statements and other administrative approvals after a simple review of emailed documents?  The answer is likely to be yes.  I am not suggesting that boards should conduct business by email rather I wanted to create a perspective of time.  If board members can read and approve by reviewing email attachments, then the time allotted at board meetings should be proportional. Simple administrative review should be done in advance of meetings and, when there are no concerns about the subject matter, such tasks should take relatively little time at a board meeting. Unfortunately, too many boards are conditioned to process the nuances of organizational administration, mistaking such administrative processing for strategy.  Board meetings need to be oriented around strategy and board members engaged in the work of solving big challenges of the agency and thinking strategically two and three years out.   Performance of boards would improve dramatically if administrative review were limited to a tightly narrated quarter or a third of a total board meeting time.

Measure Performance:  Another starting point for improving board effectiveness is to measure performance.  Too often a board will measure the performance of the agency and neglect measuring their own performance. At best, many boards’ self-performance evaluation is limited to evaluating the start and end time of meetings or the quality of the takeout food served at the event.  High performing boards create meaningful measures of board performance. While it might be tempting to measure performance by attendance, percent of board members donating to the agency, and the on-time completion of the executive director performance evaluation, these are fairly un-strategic measures. Strategic measures go further and might track such benchmarks as the regularity and content of executive or planning sessions, engagement of members outside of board meetings, or the percent of meeting time spent in strategy versus administration. Additional measures might be tracking the time required to recruit skilled board members or membership retention.  For many boards shifting to performance-based board management can represent a sea change in culture and is likely only achieved after carefully facilitated strategic conversations and thoughtful planning.

Get the Right People on Board:  A final starting point is to conduct a thoughtful review of board recruitment strategies.  Does the agency have clear board member job descriptions?  Are members sought out individually for skills and expertise? Do board members invest time in cultivating potential board members?  Many small to midsized nonprofit agency have difficulty staffing their boards let alone staffing their boards with highly qualified community leaders.  Having worked with many such boards, I will not underestimate the challenge of this task.  However, establishing a clear recruitment strategy and creating a meaningful board structure with the expectations of continual learning, performance-measurement, and strategic engagement will become reinforcing cycle that raises expectations and organizational optimism.   Energy and engagement creates energy and engagement.

Developing a high performing board is not a trivial task.  Indeed, I would contend that for many agencies, creating a high performing board may an intentional process that spans a year or more. However, despite the challenges of reinventing a board, facilitating a process to develop a high performing board is critical as nonprofits seek to thrive in the continuing economic uncertainty and instability.  High performing organizations of  tomorrow are those that develop and maintain high performing boards today.

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