It is the highest community honor. You have been selected, from an extremely short list to serve on a non-profit board of trustees or directors. Your peers seek your intelligence, your wisdom, and, admittedly, a bit of your money. Your head swells with notions of prestige. You imagine life on the board as one of making vital decisions that will steer the non-profit to greater heights, while, at the same time, raising your own profile.
All of this is a misunderstanding, and is not really your fault. You have fallen victim to non-profits’ age-old culture of misdirection. For decades board nominating committees (a dated term) have gone after the wrong people for the wrong reasons, and have tried to lure them into ill-fitting jobs. “Enough,” says non-profit expert Sandra Hughes, founder of Hughes Consulting Group in Sarasota, Florida, (www.Hughesconsulting.com.). “Non-profits need to take a whole new look at their governance and sweep out the old molds.”
Hughes outlines her plans for the Princeton Regional Chamber of Commerce in a “Non-profit Leadership Workshop: The Board Building Cycle” on Tuesday, April 4, at 1:30 p.m. at the Doral Forrestal in Princeton. There is no cost, but attendance is limited to non-profit executive directors and board chairpersons. Call 609-924-1776.
Hughes literally wrote the book on her subject, “The Board Building Cycle,” which can be obtained from her old employer, the Board Source (www.boardsource.org), formerly the National Center for Non-profit Boards. The volume’s findings and suggestions are the result of a long career spent scrutinizing non-profits.
The daughter of an athletic coach, Hughes graduated from the University of Maryland in l966 and then attended Illinois University, earning a master’s degree in counseling and a doctorate (E.Ed.) in administration and organizational behavior, and eventually went to work for Levi Strauss & Co. as the company’s foundation officer. “This was my first chance to deal with community affairs,” Hughes says. “I got to assess needs, translate them into a mission, and place funds where they would do the most good.”
Hughes’ career from that point on centered on non-profit leadership. Amid a sea of lawyers, she served as CEO for the American Bar Association. She worked for eight years for the Board Source, helping non-profits fulfill their missions more effectively. She also served as CEO of the U.S. Rowing Association when it was located in Illinois. The current head, who presides over the association’s new Princeton headquarters, was an individual she hired and trained. Two years ago Hughes founded Hughes Consulting Group to guide non-profit governance along a more effective path.
The IRS has registered more than 1.7 million non-profits in America, where they employ approximately one out of every nine members of the nation’s workforce. Department of Labor statistics state that non-profits are among the fastest growing employers in the nation. It is amazing that an industry this huge, and expanding at so great a rate, should be filled with corporations that are, as Hughes puts it, “run so cavalierly.”
Too frequently the term non-profit has become linked with nonprofessional. Hughes preaches that non-profits must shift from cozy tradition into an integrated mode to survive.
Missionary stance. Board members are tools. To get the right ones, you must first accurately define the job. Virtually every non-profit has a general mission statement. An updated version of this vision, coupled with a more strategic plan, shows everyone what the company basically strives to achieve. “The board is the guardian of this mission,” says Hughes. “All those existent members and all potential candidates must buy into it.”
Once this vision is defined, the leadership development committee merely casts about for the right tools — those specifically skilled board members — to get the job done. Please note that gathering in funds is not any non-profit’s primary goal. Visions may be to feed and raise the living standards of a city’s poor; to deliver top quality innovative theater; or to inform, support, and aid communication among a particular professional group. Fund raising is just a means to an end. Therefore, selecting fund raisers as guardians of your vision may be putting a good person in the wrong job.
Pulse and purse. Traditionally non-profit boards have appointed nominating committees to scour the countryside for folks who sit tall on their wallets. Then, as time grows short and the committee tires, anyone who is still breathing is gratefully accepted. Hughes says that candidates are seduced with inaccuracies — intended or not — about how little time board membership takes, and about how nothing is demanded beyond meeting attendance. With such a sales pitch, the board shouldn’t be too surprised to find itself burdened by a whole new slate of disinterested members who place the non-profit at the bottom of their commitment lists.
The optimum board size. Hughes stands four square against the bigger-is-better board concept. “In New Jersey, and in most states, it only requires three to incorporate,” she says. “The actual governing often can be done by just this handful.”
Board penalties. One reason that obtaining a large board has become more difficult is the new terror of accountability.
On July 30, 2002, in response to the Enron, Tyco, and other accounting scandals, Congress passed the Sarbanes-Oxley Act, which demanded annual, independent, responsible auditing for all profit-making companies. Penalties for defying this Act include jail time for individual employees and board members. Immediately, many states followed up with tougher laws, applying them to non-profit corporations as well. Now boards have to not only audit themselves properly, but to convince all candidates that their board seat is not an electric chair.
Cash and creativity. While it is fine to state that non-profits should be run by only the few, the skilled, and the dedicated worthy of the honor, this is the real world. Visions, however lofty, take hard cash — and those who can raise it are very, very valued members of the team. Hughes agrees, but suggests a little creative structuring with this realism.
Able fund raisers and high contributors should be bound into the non-profit’s community. Yet the board seat is certainly not the only option, and is often the wrong one. Substantial donors may find more comfort and advantage to belonging to the non-profit’s Patrons’ Society. Fund raisers might often prefer to be named chair of the specific cash-garnering that they direct. In these roles, they get the prestige, connective contribution, and society, without having to squirm through hours of financial reports. And of course, to keep the old network of givers alive, the past-president’s association is invaluable.
Meetings and after. “And now that we’ve heard from finance, let’s turn to the equally enlightening transportation committee,” drones the chairperson. This ancient, stultifying meeting format, which Hughes terms the “liturgical agenda,” seems as changeless as scripture. Every committee gets up and reads aloud the sheet they have already sent to each of the board members.
Instead, she opts for a consent agenda, shifting the whole meeting from show-and-tell, to one of give-and-take. In this format board members agree in one omnibus motion to vote on acceptance of all of the standing committee reports and general business. They then move on and discuss the individual items that need to be addressed. To make this work, the board should have an annual retreat to cover just what kind of things really deserve prime attention in the meetings of the coming year.
As meetings come to a close and board members snap their portfolios shut, it is too often the case that all of those decisions and work assignments stay locked up until the next meeting. Hughes points out that some follow-up mechanism for each task must be set in place, even if it is only reporting to another board member. Since the CEO or executive director typically serves at the whim of the board, it is unfair to burden him with the task of nudging individual board members into activity.
As with any rapidly growing industry, non-profits are increasingly besieged by fierce competition. Talent and dollars must be spread around ever-expanding numbers. As is true for farmers, there is no room for the ones who merely work hard. Says Hughes, “the boards that place themselves under constant self-assessment and always push themselves toward the next level are continuing to thrive, despite the current harsh climate.”