Why Nonprofit Boards start to lose their way

Updated: Jan 9




During this seemingly never-ending pandemic, it is easy for nonprofit organizations and their boards to lose their way.


What do I mean by that?


Almost every email, newsletter, and LinkedIn will discuss new ways to fundraise, how to scout out potential new funders, and how to find grants relating to COVID-19 needs. How to craft that perfect proposal, buy that new grant search database or execute a capital campaign with no face to face contact are all recurring topics in the current nonprofit discussions. I should know, I have written some of these articles and white papers in the last 90 days.



Resources are getting scarce, so what is wrong

with focusing JUST on fundraising right now?



Resource development, with individual donor development, special events, and grant submittals, are important tools, but there are many critical aspects of nonprofit management that, if ignored, could lead to unsustainable success in a nonprofit organization. Imagine a nonprofit with a $5 million budget running a deficit of over $1.5 million and the board is not "aware" of the deficit. (board and management failure) The NPO was down to less than $1 million in 3 years and well on the way to no longer serving its clients.


Often smaller nonprofits looking to recruit board members just need to show a few board members on the 990 and may not be recruiting members that are passionate and dedicated to grow the nonprofit. Then, in later years, comes shock and amazement when that nonprofit will have to fold.


All this to say, the role and responsibility of the board are important and critical to the NPO success. Board members can take a failing or small NPO to solvency and growth through dedication to the mission, a strong vision, adherence to the goals they set, and supporting the executive director. Funding does not provide these critical aspects of a nonprofit success.


TEN EASY STEPS TO CORRECT BOARD ISSUES


In 2016, Board Source, the leading authority on board development, identified ten common board problems, weaknesses, mistakes, omissions, bad judgment, and sins.


1. VEERING OFF MISSION-if the mission is not central at every board meeting it is easy to lose focus on the true purpose of the organization.

2. COMPLACENCY-Core obligation of every board member is participation. Not missing meetings, being knowledgeable on the finance, and observing the program the NPO serves, makes for an informed board member.

3. MISGUIDED MOTIVATIONS-Allowing personal preferences to affect decision-making and not putting the organization first.

4. MULTIPLE VOICES-One of the hardest to correct but necessary is to speak with one voice formulated through deliberation. A board has authority only as a group.

5. MICRO MANAGEMENT-Hire a competent executive and have a performance evaluation process in place. The board governs, the ED manages.

6. LIMITLESS TERMS-The board is stuck on their roles and no term limits are observed or even set, or the ED wants no new members that could "rock the boat". New perspectives keep the board and the organization moving forward.

7. LAWLESS GOVERNANCE-Sounds bad, but most board members do not realize that potential funders and donors first look for an organization's 990 for fiscal information. Filing a 990 timely, correctly, accurately and putting it on your website is KEY. Also, even a small board needs a board handbook and by-laws for basic governance.

8. NO BOARD ASSESSMENT-chances are most of the board members work at companies that have performance reviews and/or self-assessments come annual review time. Often not taking time to analyze the strengths, weaknesses,or review the organizational results brings on low morale, sporadic attendance, and unawareness of a declining entity.

9. LACK OF SELF IMPROVEMENT-So if #8 is not done, it is difficult to address a weakness or void on the board. When annual boards do a self-assessment it can result in a structured improvement for the board and the organization.

10. KNOTTED PURSE STRINGS-To make this simple, if 100% of the board is not financially contributing, how can anyone, staff or board, ask for financial support? Many ED's and Board Chairs do not like to list an amount in the Board Handbook for a minimum contribution, but remember, most grantors ask on the application if the organization has 100% participation in giving.


Notice how financial and resource development are only one of the 10 common problems? #t

The capability and commitment of a board is the number one driver of growth in a nonprofit.

#resourcedevelopment#fundraise

#topperformingboards


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