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Four Things I Wish Every Nonprofit Board Knew

Tuesday, May 31, 2016   (0 Comments)
By Rick Dunham, President and CEO, Dunham+Company

Earlier this week I sat in London over dinner with a long-time client. As we talked, our conversation veered to the challenge he is facing with his boardtheir lack of understanding of the charity’s business model and even the board’s role.

As he talked, I was reminded of countless conversations over the years that have followed the same theme: Well-meaning men and women serving on boards who have no clue about the actual financial engine that runs a nonprofit organization or the role they are supposed to be playing.

For all those out there who serve on nonprofit boards, allow me to give you some perspective that applies to 90 percent of nonprofits… four issues that have consistently surfaced over the years. And for those of you struggling with your board, feel free to quote me.
  1. Your charity will never arrive at a place where there aren’t financial challenges.

    A charity by definition is funded primarily by the goodwill of donors, and there are a multitude of variables that influence their giving. You may have the greatest fundraising operation in nonprofit history, but if the economy goes south, your income will suffer. Or other issues completely beyond your control may arise in your community, region, or the nation that can distract your supporters and end up affecting the funding of your organization. My point is that because of the dynamic nature of fundraising, you will never arrive at a place where there will no longer be financial pressures. You may have momentary victories that go on for monthsor even longerbut I can guarantee they won’t last. Funding an organization based on the goodwill of others is tricky business, and it is incredibly complex. Expect there to be storms along the way that will test you and the leadership of the organization. And in those moments, close ranks rather than point fingers.

  2. The board’s role isn’t to help make administrative decisions.

    The first and most important role of a charity board is to ensure the organization has the right leadership in place. Once that is in place, the board’s role is setting policy, approving strategic plans and budgets, holding leadership accountable, supporting that leadership, providing financial support (see #4 below), and offering wisdom in those moments where it is needed and requested. Board members, please keep your hands out of the day-to-day work of the charity. No matter how well intended, and how well qualified you may be, you disempower the very leadership you are supposed to be supporting and hurt the organization rather than helping it.

  3. Individual members of a governing board have no power.

    Why is it that the power of being on a board goes to the head of some board members? All of a sudden, they think they have the right to tell the leadership of the charity what to do. They don’t. And that goes for whoever chairs the board as well. The only power each individual board member has is when, as a board, it acts as a corporate body. Board members may think they are wiser and better equipped to guide the operations of the charity than the leadershipthey aren’t, no matter how much money they’ve made or how successful they are in their career. Nothing is more stifling to a charity than rogue board members who are meddlesome in the day-to-day affairs of the charity.

  4. Board members should become supporters and cheerleaders.

    There is nothing more motivating to the leadership of a charity than to know that the board is behind them, cheering them on, and providing support to the charity. I’ve seen firsthand the power of a positive board… and the destructive nature of a board that is constantly undermining and nipping at the heels of leadership. Being a supporter and a cheerleader means board members also provide financial support to the charity. Yes, if you are serving on a board, you have the responsibility to provide financial support. The responsibility. Why would someone outside the organization be expected to provide financial support if a board memberwho knows the inner workings of the charityis unwilling to do so? Board members: If you are unwilling to financially support the charity where you serve, please get off the board and make room for someone who really believes in the cause.

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