[HN Gopher] Nonprofit boards are weird ___________________________________________________________________ Nonprofit boards are weird Author : apsec112 Score : 115 points Date : 2022-06-23 17:57 UTC (1 days ago) (HTM) web link (www.cold-takes.com) (TXT) w3m dump (www.cold-takes.com) | basseq wrote: | Most of this article could apply to for-profit boards as well. | Some of the key points here (e.g., lack of clear | responsibilities) come from immature governance, rather than any | particular difference in org. type. It's _easier_ to join a | nonprofit board than a for-profit board, so you get less- | experienced people (and leadership!). And nonprofit boards often | come with a) fundraising responsibility and b) networking | opportunity, so it can be a different kind of gig. | jseliger wrote: | I do grant writing for nonprofits, public agencies, and some | research-based businesses. Many if not most nonprofits only | operate through the will of a single person (usually the | executive director) or small number of people, and this can | remain true even in nonprofits with eight-figure budgets. In HN | terms, startups don't have strong boards either, because startups | only have a small number of people working at or in them. | | In addition, the more people there are on a board, the less | likely it is to do anything, thus leaving the executive director | to run the show. | | The board is often for show. Yes, the same may be true of many | for-profit businesses, but the degree is much higher at | nonprofits. Often, the board is there for signaling purposes: | https://seliger.com/2012/03/25/why-fund-organizations-throug.... | Nonprofits are more like businesses than most people realize: | https://seliger.com/2012/09/02/why-nonprofits-are-more-like-.... | | So, as in many things in human life, there is the nominal, stated | function, and the actual function. Board members are often | cultivated for their ability to donate, not govern (or, | sometimes, their ability to provide political cover). Volunteers | are similar: https://seliger.com/2014/04/20/volunteers- | nonprofits-really-.... | | I suspect the author of "Nonprofit Board Are Weird" knows or | suspects much of this. | Hellbanevil wrote: | hinkley wrote: | There have been any number of experiences in my life that I did | not appreciate until decades later, sadly in some cases after | the person who gave it has passed away. | | Being a member of an exceptionally well run club in which I was | one of the youngest members was one of them. This club wasn't | strictly a volunteer group but it put on fund raisers twice a | year which turned it into one. | | Successful volunteer groups have a number of things. They have | a leader with some sort of coherent idea of what we should be. | They have a stream of new enthusiastic members that can muscle | through plans and projects that are at risk for falling apart. | And they have old members who are practically spectators, and | whose primary contribution (besides perhaps being a reliable | source of dues) is as story tellers. They know Chesterton's | Fence. They can tell you why it's there. They remember who has | helped the club out of scrapes, and whether they are likely to | do so again or that charity has run out. | | The oscillation in clubs comes when the leadership gets too | involved, too invested, and either burns themselves out or | starts alienating people. There's something to be said about | keeping things a little at arm's length. | | A group I used to work with went and turned themselves into a | non-profit, and created a board. The board was half people who | most of us had never heard of, that in theory could open doors, | most of the rest were sort of honorary titles, bestowed on the | more gregarious long term members but not necessarily the | people I'd want in that position. I moved around then so I | don't know how or if that board has strayed from the group | culture before they formed. | yial wrote: | I would add as someone who works in this space, that they also | are kind of describing a mature board... | | There's the lifecycle of the non profit board | | https://boardsource.org/three-stages-nonprofit-board-lifecyc... | | Which describes different levels of engagement. | | And also the life cycle of the organization. | | https://socialtrendspot.medium.com/where-is-your-organizatio... | | I do agree that many non profits function because of the will | of the ED / CEO and a small group of staff. | | Volunteers are always interesting - and depends on the board. | | Some boards become obsessed with adding people to the board. | Many boards have little to no on boarding process. It's kind of | like being hired for a part time job, and then being told that | you come into work once a month/quarter/ annually. | | (This is an exaggeration to make the point). | | Many times the most functional boards are those that embrace | working on governance and fundraising. | | I agree 100% about adding board members for the ability to | donate, or political cover. The right board members can add | instant credibility to your organization. | | Unrelated -- grant writing can become very hard work! I am glad | you are helping organizations navigate that process. | danbmil99 wrote: | In my experience there are two types of boards in the for-profit | space. If the company bootstrapped itself to profitability | without taking any or very much investment, and especially not | taking investment from experienced investors, the board will be a | bunch of friends of the CEO who rubber-stamp everything. | | For companies that either are already public or are in the | pipeline of venture capital start up to acquisition or i p o, the | board dynamics can be very interesting and well dynamic. | | The main difference is that in this case the people who sit on | the board, the startup founder CEO usually, and representatives | of the various investor groups, have usually done this before and | have a play book. Their objective is to maximize the return on | their investment, and that's what they do professionally. | | Unfortunately, in my experience, in spite of the fact that this | should result in a much more functional and experienced Board of | directors, somehow things still end up getting pretty weird in a | lot of cases. It mostly comes down to Ego and head games various | directors seam inclined to play, often having to do with previous | interactions or rivalries between investor groups. Also, CEOs are | often cut from a certain type of personality cloth that plays | into this gamesmanship. I'm not talking about the founder CEO , | I'm talking about the CEO that was brought in to scale the | company up and prepare it for acquisition or public markets. He ( | it's almost always a he) needs to think about his own career, | especially if things aren't going as well as everybody would like | to think they are. It often boils down to a game of prisoner's | dilemma. | | When this sort of thing gets out of hand, it can begin to feel | like some sort of five dimensional poker game where you don't | even know the rules. A bit like the game Mao if anyone remembers | that. | alhirzel wrote: | Policy Governance[1] can really help with a lot of the weirdness | described in this article. | | [1] https://en.wikipedia.org/wiki/Policy_Governance | AlbertCory wrote: | I find this interesting because it was suggested (not urgently) | that I could be on the board of a local food bank. This article | did not even mention D&O insurance, but they said they would have | it. | | What scares the sh&t out of me is being financially responsible | for anything any volunteer ever does (and possibly that not being | covered by the insurance). None of the comments so far mention | that either. Is that fear overblown? | | >Board members who can't say much about where they expect to be | highly engaged, vs. casually advisory ... don't seem like great | bets to step up when they most need to (or stay out of the way | when they should) | | Indeed, I have no idea what I would do, so probably I should stay | off. | bell-cot wrote: | IANAL, but I was once advised on this by a friend who was. In | short, the justice system is very biased in favor of non- | profits such as food banks. Nobody needs to tell a jury "if you | award $$$$$ to the guy who ate the bulging can of bad tuna, | that'll mean a whole lot of needy people going hungry". A | lawyer deciding to sue the Food Bank (or a Director of the Food | Bank, or ...) knows that "Defend the Food Bank, for Free" is | the sort of "+10 to your own Reputation" side quest that some | real heavyweight law firm might find irresistible. Etc. | AlbertCory wrote: | Well, you have a point. I thought of it as "suing me" but | maybe "suing the food bank" is the right formulation. | | I hang out with one of the "gleaners" (the people who pick up | the unused food from the supermarket), a former engineer, and | he seems to be the business sense of this operation. They've | been inspected by the big, successful food banks, so it's not | some fly-by-night operation. | kevin_nisbet wrote: | > What scares the sh&t out of me is being financially | responsible for anything any volunteer ever does (and possibly | that not being covered by the insurance). None of the comments | so far mention that either. Is that fear overblown? | | I don't think it's overblown, and should be something to | research and understand. I'm on the board of my condominium | corporation (same idea as an HOA), and there are specific laws | outlined in the Condominium Act here in Ontario around | directors, as well as the corporation declaration and bylaws. | | To try and briefly summarize, there are two things that largely | protect directors in my case. First, the corporations insurance | policy, includes directors liability insurance. So the | corporation is purchasing insurance that covers all directors. | It's actually in the law that the condo corporation shall | purchase this insurance if reasonably available. | | The second, is so that people actually volunteer for these | boards, the laws for the most part will hold harmless a | Director that is acting in good faith. And there is context, | that the board is expected to be made up of individuals with | various background and no specific expertise or qualifications. | | There are carve outs for certain specific breaches. But it's | mostly in the realm of your not covered if you breach your duty | to act in honesty and good faith. | | In other contexts I don't know the laws, as I operate on a | board specifically governed by the condo act in Ontario. But if | you are considering boards in other jurisdictions, I do believe | it's prudent to do some due diligence and understand potential | liabilities. But in most jurisdictions I'd expect fairly strong | protections for board members. | [deleted] | compiler-guy wrote: | The assumption that boards aren't engaged seems really strange to | me. | | Of the two nonprofit boards I've been on (one very well | functioning, one not so much), both have had highly engaged board | members. | | He also seems to be assuming mid-sized or larger nonprofits. For | nonprofits with very few employees, or low budgets, board members | often are brought in for their expertise, and their willingness | to get in and do the work that would be done by employees in a | larger nonprofit. If you can't pay them as employees, and they | are volunteering their time and expertise and are highly engaged, | it makes sense to put them on the board. Why wouldn't you? | AlbertCory wrote: | My main contact there is talking to a lawyer experienced in | non-profits, and she said that, actually, the board should NOT | have all employees on it. | notahacker wrote: | > He also seems to be assuming mid-sized or larger nonprofits | | I think that's it in a nutshell. Or super ambitious nonprofits | gunning for Effective Altruist funding by having the most | Silicon Valley approach to operating and expanding possible. | | In the rest of the nonprofit world, the board member with the | legal background is there for legal advice, the one with the | media background to help promote its work; if both of them | think performance metrics is one for the board member with the | accountancy background to look into rather than for them to | study and challenge, that's _fine_ And firing the CEO (an | experienced middle manager who took a massive pay cut to get | involved) for not hitting KPIs is wayyy down the list of useful | things they could be doing | quercusa wrote: | I was involved with a non-profit with a low-eight-figure (USD) | budget. The board members were chosen because they either had | money or had influence over people with money. In other words, | busy people. Over the years the CEO reduced the amount of | information that got to the board, in part by replacing | competent staff with lackeys, and the reality of the | organization diverged ever further from the stated objectives | and value. | hmessing wrote: | I think the weirdest thing about non-profit boards is that people | in general pay (in the form of donations) to be on them, as | opposed to for profit boards where the money flows the opposite | way. Much of the interaction between the board and management is | designed to keep the donations coming, which can create a real | conflict between good governance and financial stability. | AlbertCory wrote: | Indeed, someone I know who was on an arts group board said that | his main job was fundraising. Something I'm not even a little | bit interested in doing. | ilamont wrote: | The author is making some broad generalizations ("Board members | often know almost nothing about the organization they have | complete power over") that don't match what I've seen as a | nonprofit board member. | | There are certainly best practices out there, as nonprofit | management is a very developed "industry" in the United States | and I suspect other countries as well. I don't know why he had | trouble locating this information. Identifying a capable and | engaged executive committee and limiting tactical committees and | projects in favor of strategic planning will go a long way to | making for an effective board. | | Small nonprofits will seem chaotic as there are too many things | to do, (usually) no full-time staff to manage it, board members | who don't participate and/or make demands that are not practical, | poor financial management, launching important tasks that are | never completed, and badly written bylaws at foundation that | cause problems for years after they are written. | Sniffnoy wrote: | > I don't know why he had trouble locating this information. | | If you're aware of good references to check out, it would be | helpful to list them here. | pge wrote: | I have served on a lot of private company boards (VC-backed | companies) as well as a mnumber of non-profit boards. I agree | with the sentiment that non-profit boards are weird, and I have | found them significantly less productive than for-profit boards. | Comparing for-profit and non-profit boards, I see several key | drivers of non-profit weirdness: | | * Definition of success: With for-profit boards, there is a clear | shared view of what the long-term goal is: value creation for | shareholders. While there are lots of healthy debates about how | that is accomplished, they are all in the context of the same | goal. With a non-profit, each board member may have their own | view of what the org is ultimately trying to accomplish. Further, | these differing views may never be surfaced in open conversation, | leading to people talking past each other a lot. | | * Incentives: Related to a shared view of success is the issue of | incentive. Many private company board members are shareholders | and have a clear financial incentive to make the company | successful. I won't go so far as to say this creates | accountability, but it does serve as a clear motivator to be | engaged. Non-profit directors have nothing at stake that creates | an incentive for engagement. If anything the incentive may be a | friendship with other directors or the ED, in which case, the | incentive is to maintain the relationship with that person rather | than do what is best for the org (a common cause of dysfunction). | This is a particularly acute problem when it comes to the most | important issue a board can face: when and whether to replace a | CEO. Most non-profit board members have no incentive, or a | negative incentive, to engage in such a difficult conversation. | | * Size: Non-profit boards are often very large (10+ people), | while private company boards are usually 5-7 people. Size makes | everything harder, and leads to fewer meetings, less discussion, | and less engagement. | | * Skill sets: Non-profit directors are often recruited with the | primary goal of fundraising. They often have little to no board | experience and may not have any experience with governance of an | organization of any size in either a director or executive | capacity. In my experience, even the ability to read simple | financial statements is rare, much less the ability to think | strategically about where to take an organization or how to scale | it. | kayson wrote: | More like "bad nonprofit boards are weird", though there's | definitely some truth to - great power, low engagement, unclear | responsibility, and zero accountability. But a good board and | CEO/ED will address all of these. | | First and foremost, board members are volunteers. They need to be | people who are invested in the organization and its mission, and | would be available to help as needed. They're also consultants. | The board I'm on has people with expertise in HR, finance, | accounting, marketing, medicine (very useful since COVID), | economics, education. All of their experience is incredibly | valuable in different ways, especially since the non-profit | ("medium"-sized at 1.5MM annual revenue) can't really afford | those roles. | | Engagement and responsibility has been a challenge for us, but | we've addressed it by keeping up on best practices, which | includes self-evaluation of the board and its members. As a | result of that, we've invested in our onboarding process so new | board members know what expectations and responsibilities are. We | have various committees that focus on certain areas (e.g. | finance, governance, fundraising, strategy), where board members | meet outside the formal bi-monthlies to engage with staff more | directly and help guide and support the organization. | | Overall, I've had a great experience being a part of this org. | Maybe the board I'm on is just a unicorn... | mherdeg wrote: | My town has an elected position called the "board of library | trustees" which has just a few powers, including notably the | ability to hire a new library director. | | There are usually vacancies and poorly-contested elections for | the position, even this year when the director resigned and the | town had to search for then hire a new one. The job has a fair | amount of influence on a critically important part of civic | infrastructure, but people don't seem to be stepping up to do it. | | Every time there's a vacancy I took at the state handbook that | describes what your job _should_ be if you 're one of these | trustees and I decide I am not confident I could do those tasks | as well as the job deserves: | https://mblc.state.ma.us/for/2012-Handbook.pdf . It's a LOT! | autarch wrote: | I've served on two nonprofit boards with a combined time of about | 22 years or so on them. Both were/are much more engaged than the | boards described in this piece, but I think they are an | exception. | | The other thing I'd add as a nonprofit board responsibility is to | be the final owner of the organization's mission and values, and | to make sure the organization sticks with them. To a large | degree, this is deeply entwined with evaluating the CEO, since | one way a CEO can fail is to let the org drift off mission or | fail to live up to its core values. | | Another thing I'd add, at least for smaller orgs with few | employees, is that the board can be part of regular long-term | strategic planning (1+ year plans) and budgeting discussions. But | of course this requires a more-than-normally engaged board to be | useful. | dougmwne wrote: | Oh boy, can I relate to this! I have spent about a decade working | for nonprofits and I think they are extremely weird organizations | with no good accountability or feedback loops built in unless the | CEO and Board choose to implement them. The quality of the | organization almost completely flows from a few highly engaged | board members, one or two donors that may give the majority of | funding, and the CEO. If they are spectacular, you get a | spectacular org, if they suck, you get a sucky org (and maybe | some crimes as well). | | Because the thing is, the customers of the nonprofit are the | donors which purchase the marketing story of nonprofit and | nothing else. It is sort of like bitcoin, there are no | fundamentals, just the hype and hope and that is the only fuel | needed. The actual programmatic activities of the nonprofit do | not need to bear any resemblance to the marketing story the | donors purchase. If you are very good at telling that story, you | do not need to answer to the donors at all on the real | performance metrics of your org. A very large donor may demand to | see these fundamentals, but you don't need them if you have | smaller donors. Grant making foundations also often demand | fundamentals and measures of effective philanthropy, but you can | avoid taking any grants that expose you to too much governance. | | And finally the board tends to be the society of friends of the | CEO, so they very rarely do anything but use their connections to | boost the money and influence of the org. | | In the end; the CEO does not need to answer to the board, the | donors, the beneficiaries, the shareholders, the IRS, the Gates | foundation or the employees. They answer to their own conscience. | DwnVoteHoneyPot wrote: | Reminds me of Twitter's board where they have a small ownership | stake (in % and $ terms). | | I've seen a few non-profit boards in action and they're filled | with a couple people who really care about the cause, and the | rest really care about their egos and like the title of board | member. | | While this is likely the case for for-profit boards, but having | skin in the game really matters for engagement and motivation. | Try watching a sports game with money on the line and another | without. The difference is huge. | yardie wrote: | I'm on a few non-profit boards and one of the things I don't see | the author mention at all or specifically is the primary | directive of the board is the financials. The CEO/Director is in | charge of the day to day operations. The board has very little | interest in that. A non-profit will have some or most of it's | money from donors and those donors want to make sure that | donation is being spent effectively. And that is where a good or | bad board becomes responsible. | | If the money is being spent to drive the mission of the non- | profit successfully no one cares. We show up for the board | meeting, order sandwiches, and ask questions. And plan the next | meeting. | | If the money is not being spent effectively or the mission isn't | being met well we ask questions, sometimes offer advice, or raise | more money. Maybe staff need to be changed or a new director | hired. The board does not need to know the technicalities of the | non-profit it just wants it to be governed with good care. | | You can't operate a non-profit the same technique as a for- | profit. They are orthogonal in duties. A true non-profit has to | spend almost every dollar it takes in. The board is all voluntary | and there is nothing in it for them, except those sandwiches! | ghaff wrote: | I'm on the board of a very small non-profit--actually a student | organization (that all of the board belonged to at some point | in time, often quite a few years ago). | | We actually pay quite a bit of attention to financials and | discussing them takes up a decent chunk of a board meeting | including whether fundraising letters are going out (and | reviewing them), overall financial situation, lease renewals, | larger purchases, etc. | | As for responsibilities, I'd say it's a bit of a mix. There's | an executive board--which I'm on--where specific | responsibilities are pretty clear. The rest of the board | probably much less so other than showing up for meetings. | | >A true non-profit has to spend almost every dollar it takes | in. | | We certainly try to have a reasonable reserve. And, fortunately | in recent years, we've been able to fulfill the basic mission | while staying in the black. | nickff wrote: | I think you're missing the trees for the forest, in the same | way the OP describes. If you don't take interest in, and pay | attention to the significant details, there's no way you can | understand whether "... the money is being spent to drive the | mission of the non-profit successfully...". I have served on a | non-profit board and observed this problem. | clairity wrote: | much like a startup, the key thing to understand about non- | profit boards is that the board members' primary job is to | fundraise (directly or indirectly) and secondarily to make | productive introductions (donors, partners, 'customers', | funding organizations, etc.). | | a distant (but not insignificant) third is strategic direction, | which is often what we imagine board members do, but that's a | relatively minor part of the role. some board members might | have some operational input, but that's usually not expected | for any but the smallest non-profits. | compiler-guy wrote: | "that the board members' primary job is to fundraise ... and | secondarily to make productive introductions...." | | Although this is a common structure and plan, there are | plenty of nonprofits structured differently than this-- | especially if the nonprofit is small and has only one or two | employees, or maybe none at all. | | In which case the board does work on the ground. | clairity wrote: | right, that's the "operational input", in case that wasn't | clear. | TigeriusKirk wrote: | This matches my experience on a small arts non-profit. People | were added to the board rather explicitly for their | fundraising contacts. I was there partially for my arts | contacts, but mostly because I was shameless about hitting up | local politicians for grants and such. | | The executive director was in charge strategy-wise, the rest | of us were along for the ride. Because of my particular role, | I had considerable say over which artists were involved, but | almost no input on overall direction. | | Because of the fundraising focus, it could be stressful at | times (there's never, ever enough money), but working the | government systems was very educational and I'm very happy | about the time I spent doing it. | rvba wrote: | If someone is a board member for few non-profits, is it hard to | make the jump into for profit companies? | | If a for profit compaby goes belly up, do the board members | suffer any real consequences, apart from perhaps not being | invited into other boards? | kekeblom wrote: | I would add that the probability of a task getting done, is | inversely proportional to the distance between the people | deciding about the task and the people who will actually do it. | | Since the board members are almost never the people implementing | the decisions, the plan is much less likely to get executed. The | decision needs buy-in from the CEO and then the employees. Since | the board members don't spend much time with the CEO and | employees and they have a very different view of things, that | buy-in is likely to be weak, so the plan gets watered down every | step of the way. | | Really makes you realize why things are so inefficient in public | organizations and politics. | | In a two person startup, if the founders decide to do something | and they are the people executing on that decision, the task is | very likely to get done fast and in full. If a non-profit board | decides to do something, not so much. | zachlatta wrote: | Usually the Executive Director is making decisions for the | organization, not the board. They are getting approval on their | high-level strategy and budget from the board, but all of the | day-to-day decisions lie with them. | lkgbgjjugfffffg wrote: | I served on the non profit board of my local arts centre. Worst | decision of my life. 7 years troubleshooting impossible HR | problems. At one point I had to take a two weeks off work to | carry out disciplinary proceedings against someone who had been a | family friend. Constant childish complaints from employees who | refused to communicate with each other and expected the unpaid | board members to resolve thier stupid problems. The whole thing | was a basic income program for dysfunctional people, it didn't | produce much in the way of art. I strongly urge anyone | considering joining something like this to make sure they | understand how badly it can go wrong. | BiteCode_dev wrote: | Worked for nonprofits in Africa, including the Gate foundation. | | Now if I want to help people, I give to a hobo in the street, or | take time for someone I know. | | I don't trust NGO to handle money with care, or honesty, nor do I | think most programs bring more benefits than problems. ___________________________________________________________________ (page generated 2022-06-24 23:00 UTC)