Bridging the Gap on the (Nonprofit) Board

I'm enjoying this rich discussion, but I want to ask this very thoughtful group for some practical ideas and suggestions that may help ground this some of this theory in reality.

One of the places where I think the "gap" is often most apparent is on non-profit boards...and especially during board meetings.

As it happens, I am helping to plan a board meeting that will take place in just a few weeks. Most of our board member have much more experience in the private sector than with non-profits. And, one of the key issues we will be dealing with is governance...specifically setting up a more formal goverance structure for a relatively young organization that is working internationally.

I'd really appreciate suggestions on some practical things we can do increase everyone's understanding of the issues and our ability to make good decisions in the board meeting. What tools and techniques have worked for you to prepare for board meetings, during the meeting, and in following-up afterwards, especially to help businesspeople understand the differences in the way non-profits are governed?

Thanks in advance for your help!

Anne Perlman - Jul 17, 2003 12:15 pm (#1 Total: 12)


Michael,

Thank you for such a clear context and set of questions. I thought I'd share my experience of being a businessperson on a non-profit board in case it helps.

What I brought to the board was a passion for the non-profit's mission, a sincere desire to be helpful, and some business/management/leadership skills. Other than that, I was simply a member of the community, interested in the non-profit's cause.

What worked for me in board meetings was to be educated about the topic in the context of non-profit governance. This was always done in a respectful manner, routinely included in addition to describing the topic, issue and relevant questions for the board's consideration. By contrast, in my experience on for-profit boards, context is frequently set simply by recalling for board members the history of the issue, its current status, and decisions to be wrestled, because board members all share business experience and vocabulary.

I was always aware that the presentation prior to the non-profit board requires even more work than a discussion of a similar issue for a for-profit board. Seeing this extra education effort taken seriously and being effective garnered even more respect for the presenter, and never failed to inspire humility in me.

Larry Stupski - Jul 17, 2003 3:19 pm (#2 Total: 12)


My experience is that the effectiveness of the board and the meetings is dependent upon the strength of the committee structure and the ability of the chair to chair the meeting. In a board that is part businesspeople and part community nonbusinesspeople context has to be set for the roles of committees and the whole board. The people all bring in different ideas of how much of the committeework has to be redone at the meeting. No discussion is of course too little and redoing the whole thing undercuts anyone's willingness to do committee work. Most of the boards I have served on had no what I would call "program committee" one that got very much involved with the staff in the mission, and I think therefore missed an opportunity to both advise and to get the mission and program in front of the board. Otherwise it can move to entirely issues of finance and the crisis du jour.

Eleanor Clement Glass - Jul 17, 2003 4:10 pm (#3 Total: 12)
The Foundation Incubator


Michael,

Jan Masaoka has done some groundbreaking work around nonprofit boards through CompassPoint Nonprofit Services. For example, the nonprofit board that I serve on found great utility in reading the article: "The CompassPoint Board Model for Goverenance and Support" that describes two fundamental types of nonprofit board responsibility...that of governance, and that of support to the organization, as a member of the governing group, and as an individual with skills and resources to support the Executive Director and staff and to represent the organization in the community.It allowed us to come to some agreements about how we would work together and what types of tasks the organization needed support and advise on and how what each might take on individually to support the organization.

Another helpful resource is an e-subscription to www.boardcafe.org, another fine resource by CompassPoint Nonprofit Services with short articles such as "The Strategic Board Agenda."

Clarifying the board members expectations about being a member of the board, and how they would like to contribute, would also be of help, so that the Executive Director knows how to best use the Board members and satisfy their education, networking, skill contribution needs.

Lisa Spinali - Jul 17, 2003 7:52 pm (#4 Total: 12)
The Omidyar Foundation


The other very good resource is the board assessment created by BoardSource (formerly NCNB). One of the things that I have found really helpful about using an assessment is that individuals learn what they do an don't know about their roles and governance in a very safe way--when they complete the survey individually they don't have to admit what they don't know publicly. It's also a good way to create a collective assessment of where your board stands and then build your "improvement" plan around the assessment. Hope this helps.

Janice Fry - Jul 18, 2003 4:13 pm (#5 Total: 12)
Former Vice President of HR at Sun Mircosystems


One other resource that you may find helpful is a book on Nonprofit Board best practices. It is called "For the Good of the Cause" (subtitle - "Board Building Lessons from Highly Effective Nonprofits"). It talks about the role of the Board, some key success traits, and goes through numerous case studies of actual nonprofit orgs nationally, chosen by their peers as the most effective. Also, in the back of the book, there are sample Board Member Agreements and Job Descriptions, a Self-Evaluation Tool, and a sample Board Report Card. If this sounds interesting, the book is published by the Center For Excellence in Nonprofits and is available on their website http://www.cen.org. Check it out!

Jan Masaoka - Jul 20, 2003 10:00 pm (#6 Total: 12)
Executive Director CompassPoint Nonprofit Services


Eleanor, thanks for the plug for the Board Cafe! If we recognize that one of the key characteristics of business people serving on nonprofit boards is that they are VERY BUSY, then we have to respond by having resources on boards short and easy for them to access. The Board Cafe's articles (archived at www.boardcafe.org) are each one page--such as "How to Fire Your Executive Director," "Board Assessment Survey," "A Board-Staff Contract for Financial Accountability."

With 30,000 subscribers now, I know we're reaching thousands of board members directly--not just through their CEOs/Executive Directors.

Link to Board Cafe Archives: http://www4.compasspoint.org/p.asp?WebPage_ID=661

Dragonfly - Jul 22, 2003 9:39 am (#7 Total: 12)


Do you feel it's necessary to compensate board members for their time? Will the quality of board members you can attract decrease if there is no compensation offered?

The San Jose Mercury News published this article today, I'm interested in this group's opinions on the matter.

Attachments:

Foundations reward directors.htm (14 KB)

Jeff Butler - Jul 22, 2003 3:59 pm (#8 Total: 12)
Mayfair Improvement Initiative


I personally don't think it's appropriate to compensate board members for their time. My service on the board of a local housing non-profit is without pay. No one has ever offered, but I wouldn't take it if they did.

I think boards should want people who are interested and dedicated enough in the first place to dedicate time to a particular agency or cause without being paid to do so. To those people, the feeling of being involved and making a difference are usually compensation enough. I much prefer the spirit behind the following sentence from the Mercury News article Dragonfly mentions:

"The president of the William and Flora Hewlett Foundation, Paul Brest, said the foundation offered board members $10,000 a few years ago but they weren't interested, preferring that the foundation provide matching grants to their own contributions to organizations."

As to the quality of board member you attract, I think there are talented and well-connected people out there who are also motivated enough to serve on a board. What it often takes is some extra effort to find them and convince them to serve on a particular board, but I think that's doable. Also, sometimes the most active and talented board members are people from the community or others we don't automatically think of as movers and shakers.

Finally, let's not forget that one of the perks of being on a board is also the chance to network and build contacts that could prove helpful and valuable in lots of ways.

Tim Walter - Jul 22, 2003 8:00 pm (#9 Total: 12)
Association of Small Foundations


The Mercury article is part of their continuing evaluation of foundation expenses.

As Rick Cohen observed in the article, public charities tend not to pay board members. I'd guess that is in part because the board members are usually donors or are expected to raise funds. Endowed foundations aren't faced with this particular conundrum.

The article does not make the point as to how prevalent the practice of paying boards is, but from the experience of the Association of Small Foundations (where I work) about 75% of foundations pay their boards nothing.

If they are paid, some board members receive small honoraria for attending meetings and reviewing grants, while others receive pay more akin to what a corporate director receives.

-Tim-

Michael Chertok - Jul 23, 2003 4:10 am (#10 Total: 12)


Thanks everyone for your suggestions...one of my colleagues on the board is bringing some of the Boardsource resources to me here in Cambodia...and of course I can access Boardcafe online! If this discussion is continuing after our meeting, I'll let you know how it goes.

Regarding compensation, we are considering whether we need to compensate local board members from the business community here to get their full commitment and participation on our board. In contrast to U.S. culture, it is not so typical for talented and well-connected people here to volunteer their time this way...and we feel it is important for us to have this kind of strong local guidance for our social enterprise.

I'd love to hear from anyone who has experience with board compensation in social sector organizations outside the U.S.

Janice Fry - Jul 23, 2003 1:09 pm (#11 Total: 12)
Former Vice President of HR at Sun Mircosystems


I agree with Jeff and personally do not believe that Board members of nonprofit organizations should be paid positions. Admittedly, I am less familiar with foundations, but I don't see why that should be different. In my experience, you can indeed find very competent, passionate volunteer Board members who have no interest in the pay. And as Jeff pointed out, they do get other benefits from their Board experience that can be great in both their business and personal lives.

And to Michael's question about compensation for nonprofit Boards outside the U.S., I do not have direct experience in the nonprofit sector. However from a business perspective I can tell you that it is essential to understand differences in local cultures and customs as well as the economics of pay. Globally, pay practices vary widely in different parts of the world. In some Asian countries for example, there is a huge emphasis on things like providing housing or housing allowances, or paying school expenses for the kids, and less emphasis on cash compensation. Some of this is due to local tax structures. So, in pursuing the question I would strongly urge you to do two things: understand what type of compensation (or benefit?) would be valued most, and second make sure you understand the impact on the Board members from a tax or economic perspective. I hope something is here is helpful.

Janice

Tim Walter - Jul 24, 2003 7:23 am (#12 Total: 12)
Association of Small Foundations


Just want to clarify something I wrote about foundations, and that is that there are obviously some foundations that pay board members what pretty much anyone would consider to be beyond the bounds of charitable service.

As for whether to pay boards, for public charities, I don't think one size fits all. I can imagine a board structure where a small operating board does receive pay or a stipend for their efforts, and then a larger advisory board that does not receive pay plays some of the community representation roles and has key fundraising and networking responsibilities.