Nonprofit Boards: An Important Place to Invest

30 08 2010

One of my recent Next Decade conversations focused on nonprofit board development.

The person I met with is involved with several nonprofit organizations in Colorado and beyond.  He noted that there has been a proliferation of nonprofit organizations nationwide.  All nonprofits in the United States are legally required to have a Board of Directors.  In his experience, one of the biggest challenges facing nonprofits is governance

He believes (and I do too) that nonprofit organizations are much more successful if they are well governed.  He suggested that The Denver Foundation devote more resources to helping nonprofit organizations improve their governance.  This could be done by making more money available for technical assistance grants.  He advised that nonprofit organizations as well as The Denver Foundation should focus more on what outcomes they want to achieve.

Thinking about governance, I was reminded of my very first Board meeting as executive director of The Denver Foundation.  Shortly after I was hired in 1996, one of the five other staff people at The Denver Foundation resigned to take a job in the private sector.  Rather than replacing that person, I decided to reorganize the office and change the job responsibilities of several staff people.

I wrote new job descriptions and sent them to the Board as part of the Board packet prior to my first Board meeting.  At the Board meeting, the subject of Board reorganization came up on the agenda.  A member of the Board made a motion to approve the staff reorganization and to authorize me to fill the vacant position.  The motion was seconded.

Immediately, a member of the Board, Kerm Darkey, raised his hand and said he was going to vote against the motion.  I thought to myself, “Oh no!  This is my very first Board meeting and I’m already encountering a belligerent Board.”

Kerm went on to say, “The reason I am voting against this motion is that it is none of our business how David organizes the staff.  As long as he stays within the annual administrative budget that the Board has approved, the executive director should be free to create any job descriptions he wants and to hire any staff he wants.”

The woman who made the motion said, “You’re right, Kerm.  I withdraw the motion.”

I will always feel indebted to Kerm Darkey for his wisdom as a The Denver Foundation Trustee.  As an experienced business and civic leader, Kerm knew well the appropriate role of a governing board vis-à-vis the executive director and the staff.  The Board should set broad policy and the staff should implement that policy.

There is no doubt that there is a need for improved governance among many nonprofit organizations.  Is this something in which The Denver Foundation should invest a greater proportion of its resources?

— David Miller, President and CEO, The Denver Foundation

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2 responses

30 08 2010
Diana Kern

David,
Thank you for this post. I work for a nonprofit that focuses on providing high-quality governance support to nonprofits in southeast Michigan. I agree with you that boards, especially today, need to focus on their critical role in mission, ambassadorship and governance. Your example of a board member recognizing his role versus that of the Executive Director is an issue I see everyday with the nonprofits I work with. Yet, how can we expect this same behavior from all board members if we do not train our volunteer board trustees.

I have often felt that foundations could really make a difference by requiring nonprofit boards of the organization’s they fund, to be required to have a governance training by a reputable consultant as part of receiving the support. Of course, if the foundation paid for this work, there would be less resistance to the training. Board’s don’t like to spend money on their own development when things are so tight for the programs and services of the nonprofit. But, I believe, if they did focus more on their governance education they would be in better positions to help the nonprofit achieve its mission. Thanks again for your post!

8 09 2010
Linda

I think the Denver Foundation does devote resources to this, particularly in terms of our community grants reviews, where questions are asked about boards and their practices. TDF also offers technical assistance for board development. AND, we should probably do more. There is no job description for non-profit boards so mostly we get people who are interested in being involved in their communities, for any number of reasons. I find that many people from the business community apply their business skills and expertise and usually find a way to support the organization in that way. Certainly lots of good has come to non-profits in this way. BUT, I also find that most business people do not understand the difference between non-profits that are mission driven and for-profits that are driven to make a profit. I think this causes endless problems for non-profits. What are the different governance responsibilities for non-profits and for-profits and how can TDF help to articulate these more clearly to all invovled? What can the business community learn from non-profits about being driven by a mission of social good?

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