Already a Bloomberg.com user?
Sign in with the same account.
According to a new study by The Chronicle of Philanthropy, contributions to the country's 400 largest charities shrunk by 11 percent in 2009. Anecdotal reports suggest that smaller organizations also are seeing significant drops in donations.
As nonprofits struggle with diminished contributions, shrinking endowments, and growing needs, board members who have the skills and experience to make tough strategic decisions are more critical than ever. It's not surprising that nonprofits are increasingly looking to business executives to strengthen their boards. Individuals with the discipline, work ethic, and functional skills to succeed in business may well become even more valuable contributors to mission-driven nonprofit boards. But the right person has to join the right board.
If you're considering whether to accept an invitation to join a nonprofit board, answering four key questions can help you make the right decision—both for the nonprofit and for you:
Is the organization's mission important to me personally?
Do I have the time to fulfill my responsibilities as a board member?
Is the board's culture a good fit for me?
Will my skills and experience make a difference?
Unless the answer to all four questions is "yes," think about whether this is the right board for you.
Many people join boards for the wrong reasons. Flattered by the invitation and wanting to do their part for society, they soon find that they lack the passion to fully engage in the board's work. They come unprepared for board meetings, put off committee work, and lack the motivation to contribute money or raise funds. Board members must be willing to serve as ambassadors for the organization—talking about it to friends and bringing resources to the table to help it succeed. Needed resources certainly include money, but also could come in the form of volunteers, office space, pro bono professional services, and more.
A recent report by GuideStar, a publisher of nonprofit information, indicates that one of the main reasons people leave boards is that they decide that they are not really committed to the organization's mission. Assessing whether you're sufficiently committed to the organization to serve on the board requires some homework. Learn what the group is trying to accomplish. Find out how successful it has been in achieving its mission.
The inquiry process also involves getting answers to questions such as: How does the organization operate on a daily basis? Does it have sufficient infrastructure to support its programming? What is its business plan? Does it evaluate its work to gauge its success? Does it have financial transparency? Is it well-funded? Does it have adequate cash flow and reserves? You also need to find out what the expectations are for you financially. How much money are you responsible for bringing into the group? Is it a "give/get" proposition, or are you expected to make the full donation yourself?
And because making this decision involves both the head and the heart, consider whether you'll find it meaningful and fulfilling on every level to be associated with the organization. Yes, you will be more committed to something if you have a personal connection. But that isn't enough to ensure a positive experience for all involved. It's just the starting point. Even if you are passionate about the nonprofit's cause, you still need to decide whether you have time to attend board meetings, serve on committees, and attend events.
Bear in mind that serving on a nonprofit board can confer prestige that is difficult to achieve in other ways. If you're asked to fill a coveted spot on a high-profile board, you will probably want to make time, since meetings and events offer opportunities to network in a rarefied atmosphere. Regardless of the specific nonprofit, you and your company can benefit by being perceived as contributing to the public good. There's also a good chance that you will learn things that you can bring back to your day job.
Another consideration is whether the prospective board will allow you to play the role that you want to. I have seen people leave boards both because they are asked to do too little and because they are asked to do too much. You need to understand where the organization fits on the spectrum of board-member participation. In many cases, this depends on the longevity and power of the organization's executive director. Find out if the executive director is also a board member and whether he/she or the board chair runs the meetings. If the nonprofit is staff-driven and has a dominant, longtime leader (especially a founder), you can generally expect fewer responsibilities and less input as a board member. If your time is limited, this might be a good board for you.
Once you decide to join a nonprofit board, you are responsible for holding the organization accountable for setting priorities, financial planning, and allocating resources. You'll need to ensure that the organization has the infrastructure necessary to support its programmatic goals. In short, as a business executive you will be expected to provide the same rigorous oversight that you would if you were serving on a corporate board.
Should you decide to accept a board position, it's also a good idea to set goals for yourself. Perhaps you will want to commit to the capital campaign, to help with succession planning, financial management, or marketing. Think about making a medium- or long-term commitment to the organization in whose mission you believe.
To be a truly effective board member, you have to help find the delicate balance between helping the organization to fulfill its mission and coming to grips with today's financial realities.