Note: This two-part post is adapted from an online conversation between Train Your Board partners Bob Osborne and Andy Robinson. Join the debate! We welcome your comments.
Bob
Andy, I know you believe that our current model of board and nonprofit governance may be broken, and that you’ve been exploring alternative models. It’s an interesting idea. While I am in favor of innovation, I’m not quite ready to toss out our traditional board structure.
Here’s your chance to convince me! But first, tell me why you think it’s important that we consider alternatives.
Andy
Thanks, Bob. A few reasons why different structures appeal to me:
1. Our traditional 501(c)(3) model is a legacy structure, with roots more than 100 years old. Today, we live in a different world.
2. The structure includes unhelpful hierarchies. For example, why do we have amateurs (board members) supervising professionals (staff)? Whose idea was that?
Here’s another: intentionally or not, the model relies on volunteer board members, which means that those with less available time – people working multiple jobs, one-parent families, those with limited access to transportation – are less likely to serve. Therefore, boards tend to skew whiter and wealthier.
3. Let’s talk about the “nonprofit industrial complex.” About 7 to 8% of the US economy – more than $2 trillion per year – runs through the nonprofit economy. We are a part of a huge industry with institutional funders, government grants, regulations, certifications, etc. Big industries gravitate toward the status quo. If our goal is deep social change, is this the best model for creating that change?
Bob
Those are all great points and I share your critique in many respects. However, I do think that our traditional board structure has one major advantage:
Boards, and what I’ll refer to as an organization’s volunteer corps, provide access to communities in a way that staff just can’t – given the resources required to hire the equivalent amount of staff. Boards allow an organization to scale the external work of an organization – fundraising, ambassadorship, and advocacy – in a way that staff just can’t. And done well, I think this can be an important part of movement building.
You don’t hire your Director of Development because they know a bunch of affluent people and have a broad, deep network. That’s not their role; it’s unfair to ask them to do that. Perhaps you’d hire your Executive Director because of their role and profile within the community, but they’re just one person. So how do you replace that reach?
Andy
Legitimate and important points, with one significant caveat. (At least it feels significant to me!)
I am reflecting on my role as a volunteer advocate. I am on a LOT of activist lists, it’s legislative season here in Vermont, and I’m being contacted daily to ask my representatives to support one bill or another. Here’s the caveat: 99% of these requests come from paid staff. I am trying to recall being recruited by a board member or volunteer to talk with legislators, and I’m drawing a blank.
In other words, I am a volunteer recruited and managed by staff. Which I believe is the norm for many, many nonprofits that employ at least a few people.
Furthermore, I keep getting stuck on one of your phrases above: “And done well.” How often, really, is it done well? Consultants like us are busy, in part, thanks to the not-doing-well of many boards and their organizations.
My question: Are these imperfect people operating within a pretty good model, or is the root problem the model itself? What do you think?
Bob
Well, I can’t argue that a decent amount of The Osborne Group’s work is with boards, but I’ll also say it’s rare that I run across a board that isn’t working at all. Yes, they are imperfect. But most frequently, about half the board are good advocates and fundraisers for the organization, and the other half less so.
A lot of the time a board doesn’t work as well as it could is because we don’t engage our boards in strategic decision making. The staff makes decisions and the board gets reported to and signs off. When the staff asks for help, they don’t get it because they haven’t created a sense of shared responsibility with the board and therefore the board is unengaged.
I really believe the board model can work when there is true partnership between the board and staff and both board and staff feel that any challenges facing the organization are shared and not just a problem for the staff to solve.
I think staff can and should set the agenda, so it’s no surprise that you’ve been managed by staff. Me too. But we need enough shared ownership for board members to feel comfortable and empowered to speak on behalf of the organization, most importantly around fundraising.
In our next post, the debate continues – as we discuss boards and fundraising.
Taxes. The board stands in lieu of the IRS, making sure the nonprofit is managing charitable dollars properly. If we take out boards, we’d need another structure that can oversee finances.
Duly noted, Annie. It’s a good point.
And … I’m thinking of the many nonprofit financial scandals: embezzlement, misuse of funds, self-dealing, etc. To the degree that boards “manage charitable dollars,” they do so imperfectly. We require boards to be fiduciaries and then, more often than not, they aren’t trained to fulfill that responsibility. We can blame lousy training — which is a fair critique — or we can look at the structural challenges of handing this responsibility to volunteers who are, generally speaking, amateurs. Maybe there’s a better model?
I am so grateful to see this conversation! I’ve been having a lot of the same questions that Andy raises, even though my own Board runs like a clock! Would it work to have something like a community council that helps advocate and make introductions (those critical Board roles), without giving them all the fiducuary responsibility for running the business? And if they don’t have the fiducuary responsibility, who does?
Hi Cheryl — A number of nonprofits have honorary or advisory boards — in addition to governing boards — that are involved in the kind of outreach you mention.
I’ve been researching alternative structures and will share more in the future. A few relevant posts:
Four Insights for More Equitable Nonprofit Governance
Power Below Radar: The Innovation and Influence of Ad Hoc Groups
In the meantime, one thought. These days, a LOT of money is raised via crowdfunding and other strategies that don’t require a 501(c)(3). For example, many for-profit social enterprises create change without having charitable status. So I guess I’m asking a broader question: Given the strengths and weakness of being a 501(c)(3), what are the alternatives?
Great discussion. Boards are critically important…and difficult to run/manage well. I agree that without a focus on strategic decisions and serving as ambassadors it’s a lot of time for little return.
Very little of the fault lies in the board members themselves. We’re not providing anyone with the training they need to be effective, whether that’s chairs who lead boards, the members serving on them, or the staff supporting them.
Thanks, Brian. Your point about poor training is indisputable. Board governance is a set of skills that can be learned and updated. Both you and I have facilitated a LOT of those trainings.
However, IF the challenge is structural — and not everyone believes that the structure is the problem — then better training is necessary but ultimately insufficient.
I agree with you, Brian. I don’t think we put in enough time with our boards nor do we spend the time finding board members who are in strategic alignment with our priorities. So we get little out of them. It could be as Andy suggests that the structure is flawed, but if/until we find some viable alternatives, in my opinion it’s worth getting the most out of what we have.
I am somewhat confused by the assertion that “You don’t hire your Director of Development because they know a bunch of affluent people and have a broad, deep network.” That’s exactly what I, as a board member, would be looking for in a Development Director (with other fundraising-related skills as well, of course).
I do agree that the traditional board model has problems – for example, it’s hard-to-impossible to involve BIPOC folks, at least in our rural community. The board I currently chair has both staff and non-staff on it, which brings its own issues, so my thoughts are definitely trending towards an advisory role for boards over a governance role.
Hi Pat – Yes, it’s true. We hire Development personnel for their fundraising skills, not their network, although I’d also say this is a common misunderstanding. The reason for this is that we want folks to give to us because they genuinely care about our cause, not for transactional reasons. In other words, one strong personal network does not translate into strong giving for any one organization. A strong board and volunteer corps comprising many networks hopefully yields enough people who have a genuine affinity for our organization. A good manager of relationships, a Director of Development, can manage and best take advantage of those networks and this allows you to scale your fundraising.
Pat, here’s one way to evaluate Development Directors: if they are good at engaging OTHER people in fundraising — board members, volunteers, program staff, partners, loyal donors — rather than trying to do it all themselves. Note: This was my great failing as a Development Director…
When I first became an ED, my Board Chair was indispensable in mentoring me, encouraging me to dream big, and helping me to work out how big dreams could become possible. He trusted me to set the vision, and his expertise and external connections were crucial to making that vision a reality. At the same time, and now as a Board Chair, I find it challenging to engage the full board and to find a diverse group of board members with needed skill sets, time, and inclination to serve. My experience is similar to what was stated above–half the board is engaged while the other half is…. less so. One solution might be smaller boards. Can we normalize boards of 3 – 5 competent and engaged individuals? Could we imagine giving board members modest stipends to attract more diverse candidates? Members who wanted to volunteer could reinvest their stipend into the organization, but paying board members could allow organizations to attract more qualified, talented, engaged, and diverse candidates.
Hi Kam — Yes! Smaller, more deeply engaged boards are a real possibility. Some organizations are moving in a different direction: experimenting with smaller, “minimum functioning boards” that cover the basics of compliance, but leave most decisions to professional staff.
I am OK with stipends to make board service more accessible, but first check the relevant laws, which I believe vary from US state to state.
100% – smaller is the way to go. The lack of engagement with boards isn’t because the staff aren’t trying hard enough – it’s just that frankly we don’t need most of them to do our jobs. In my last role as the CEO of a healthcare nonprofit, we had a board of 15. The only ones I meaningfully engaged with were on the executive committee/finance committee. Four to five board members would have been ideal. I can find experts or create ad hoc advisory groups if I need assistance with a specific matter. But otherwise, it just make much more work for the CEO trying to engage them all – especially challenging when you’re in the midst of important decision-making.
Hi Kate — Yes, I am intrigued by the idea of smaller, less complex boards. Here’s a previous post, The Unspoken Truth About Boards and Fundraising, that outlines the three-tier model that I experience with most boards. The top tier is fully engaged and committed; the middle tier is somewhat engaged but not interested in leadership; the bottom tier only marginally active. In the post, I framed it in terms of fundraising, but I think it’s true for all aspects of board service. My question: what if we limited our boards to that top tier? Fewer folks, more engaged, more nimble, less work for the executive director. With fewer folks, this model would limit the outreach potential of the board (I am channeling Bob here) but maybe that’s a useful trade-off.
Hi Kam – I think the challenge with smaller boards is that we lose a lot of the reach that a larger board might give us in terms of fundraising, servings as ambassadors, etc. but I also think we shouldn’t just have a big board for its own sake. Everyone we bring onto our board should have demonstrated commitment to the organization prior being recruited to the board. In other words, only put people on the board who are already acting like board members or something close to it.
Attracting diverse board candidates can be challenging and I am happy that many organizations are taking this pursuit seriously. However, I don’t think money is the issue. Plenty of POC have money and are willing to spend it on causes they care about. It’s more we generally don’t get asked, when we do it’s often solely because of our identity, and when we are on a board we don’t always feel we belong (this is true for a variety of reasons). Also, most organizations don’t try that hard to find diverse board members. Meaning they don’t always recognize that their usual means of recruitment aren’t going to work because they aren’t tapped into the right networks and POC may not see the organization as being in values alignment if they are just now looking for diverse candidates. Trust has to be built and different tactic and strategies tried. That said, I’ve seen many organizations successfully do this, particularly within the environmental space. It took time and effort, but many organizations got there.
I wholeheartedly agree with Andy on this topic. Having worked in the nonprofit sector for 30 years, 15 of them as a consultant, I’d like to highlight an additional challenge: the separation of boards from staff. The idea that boards “own” or are solely “responsible” for the organization leads to numerous problems. I have witnessed boards make decisions about staff positions without consulting or even inviting input from the staff. Additionally, they often set unreasonable goals for staff without providing the necessary support for success, such as professional development, capacity building, instilling work/life balance, and funding.
In recent years, my process when working with an organization includes both the board and staff. This approach aims to increase understanding of their purpose and programs, foster engagement, promote a team mentality, and cultivate a common culture. Often, the hierarchical nature of ‘a board that oversees staff’ detracts from developing three critical needs known to foster growth in individuals, teams, and organizations, which ultimately hinders the attainment of the mission: autonomy in decision-making, competence development leading to mastery, and a sense of relatedness and belonging. While these needs may seem disconnected from our current 501(c)(3) structure, they are intimately connected. Having a group of volunteers govern a group of committed, skilled, paid individuals can work well when there is camaraderie, appreciation, connection, trust, and respect. However, these groups often fail to mingle and develop trust, connection, and respect, which impedes achieving the mission.
The nonprofit movement is experiencing difficulties in retaining staff and filling leadership positions, and I believe the structure of nonprofits plays a significant role in this predicament.
Hi Rachel — This is thoughtful and thorough. And based on a lot of experience! Bob echoes some of your points in the follow-up post (linked below), re: the need to ensure that board and staff are fully committed to the organization’s mission and feel like they’re on the same team, working toward the same goal. Thanks for adding your perspective to the conversation.
Thanks, Andy. I’ll take a look at the next post. I’m really hopeful that we can come up with a different structure. Part of making change involves examining our structures and understanding how they influence the work we do. So, can changemakers effect change in something as fundamental as the structure of 501(c)(3) organizations? Can we practice what we preach? We are adept at urging governments and corporations to change their operations. We encourage people to change their behaviors. So, do we have the will and ability to examine the nonprofit system and ask what works and what doesn’t?
Rachel, I’ve been leading a webinar on alternatives to the 501(c)(3) model. If you know any presenting organizations (nonprofit centers, etc.) that might want to host the webinar, please connect us.
This is an important conversation, and beautiful modeling of generous peer listening.
To alternatives in reaction to broken boards side of the argument, I wonder if the amateurs-on-boards idea is actually a case of broken use of the board matrix. In other words, many boards recruit in a sleep state. Just get anyone, and if complexion and gender spread gets a boost while doing so, the recruitment process is considered a win. But without taking a very serious look at the competency gaps that would really enhance decision-making, it’s easy to end up with a full roster of board members so that terms nicely overlap, but to also be tied to that same roster for years with real competencies missing…for years.
Can you imagine a baseball team missing a short-stop for years? Howabout a pitcher? And if you indeed had a pitcher, would her voice be given additional weight in decisions about pitching? Sure, one vote person…but that is not how we assemble high performing teams. Fix our vision and use of a teams skill set as a function of our diversity efforts, and perhaps we give our boards an edge over the amateurization of governance?
What do you think?
— Russ
Hi Russ — I agree (strongly!) that most nonprofits aren’t intentional enough about board recruitment. I also believe that some of the competencies you’re talking about can be created by training existing board members. Years ago, Kim Klein wrote a guest post highlighting “a willingness to learn” as one of the most important criteria for building a board. I still agree.
However, I keep bumping up against societal changes that make it harder to recruit: people working multiple jobs, income inequality, lack of child care, retirement insecurity, growing distrust of institutions (including nonprofits), etc. As noted earlier, the 501(c)(3) is a legacy structure from a different era. What are the emerging structures? How will the board’s role change? Are we nearing a “post-board era” … and what would that look like?
What you’re suggesting is absolutely necessary but may be insufficient. I use the word “may” because I am unclear about what comes next.
I have seen way too many board members be handpicked by the ED or the Board Chair and therefore not feel accountable and/or have too similar of backgrounds/POVs to be helpful for when the org is going through any sort of upheaval/transition.
I believe that nonprofits function better when there is a committed, cohesive team (whether it’s a board or a committee) that supports the staff. However, as mentioned above, with about half of most boards being dead weight, I think one way to counteract that is to regularly put out calls to the community for new members to apply and be transparent about how much of a commitment it will be. There is something to be said for actually working to be on a board and demonstrating an interest/commitment vs saying yes reluctantly w/o a full appreciation of the time it will require.
I also like the idea of keeping the size of the board small so that there is peer pressure to actually follow through on commitments.
Thanks, Beka. I have always believed that the Number 1 criteria for serving on a board — Bob talks about this in the follow-up post — is passion for the mission. A trustee can check all the other boxes, but if they’re lukewarm on the mission and/or the work of the organization, they will be a mediocre board member at best. I also get nervous when the executive director or CEO is the primary board recruiter and/or when they start talking about “my board” rather than “our board.”