Board Recruitment & Retention. Greater Minnesota Nonprofit Summit

Transcription

1 Board Recruitment & Retention Greater Minnesota Nonprofit Summit

2 Leadership Leaders are not born but are trained Trish Hudson 2

3 Why Board Oversight Is Important 3

4 Nonprofits by the Numbers 2.8% increase from % of nonprofits are required to file IRS Form 990 Public Charities ae largest category of nonprofits This group grew by 19.5% from % of nonprofits have expenses less than $500,000 Nonprofit revenue from contributions, government grants and investment income is 26.1% of revenue 4

5 Giving (2014 data) Religious organization 32% of all giving Education organizations 15.2% Human service organizations 11.7% Gifts to foundations 11.6% Heath organizations 8.5% Arts, culture & humanities 4.8% Environment or animals 2.9% 5

6 Nonprofits in Rural Areas Role nonprofits play for most people in rural communities Need to have a well-run organization with a high performing board of directors 6

7 Duty to Care Be Informed Act in Good Faith Act like a ordinarily prudent person Does not mean always make a correct decision Attend meetings regularly Stay adequately informed read material ahead of meetings Exercise intendent judgement Prudent use of assets including facilities 7

8 Duty of Loyalty Give undivided allegiance to organization when making decisions affecting organization Act in a manner that will not harm the organization Prohibits members from obtaining personal benefit from organization Identify conflicts of interests 8

9 Duty of Obedience Members carry out the purpose of the organization Follow articles of incorporation, mission, bylaws Ensure organization complies with laws (tax returns, paying taxes, disclosures, etc.) 9

10 Issues Board Members Face 10

11 Role Ambiguity lack role-related information often times from a lack of communication between the board member and the executive imprecise objectives, conflicting expectations from stakeholders and difficulty in monitoring performance can lead to nonprofit boards not functioning well lack of attendance or board members who do not make financial commitments to the organization Degreased job performance Lower satisfaction & commitment to the organization 11

12 Role Ambiguity Knowing what to do is more important than knowing how to do it Need to engage in work that is not governance to inform their governance work (volunteering at events, problem solving with staff) 12

13 Role Ambiguity Role of the Board Member Worker Board Member Perform specific tasks Expert Board Member Specialized knowledge Representative Board Member Represent a specific group or organization Figurehead Board Member Bring prestige to board 13

14 What is a Successful Organization? 14

15 Organizational Success how to measure success. nonprofit puts mission over profit, however nonprofits can and need to make a financial profit to be sustainable need to show accountability and organization performance importance of resource development as a responsibility of the board less than one-third of boards were active in fund raising (Ostrower, 2007) 15

16 What Makes an Effective Organization? the CEO and the board agree that neither is the boss, and board and the executive work as colleagues toward the same goals (Drucker, 1990) organization s mission as well as be financially stable stakeholders can judge a successful organization differently 16

17 What Makes an Effective Organization? the board chair would be responsible for communication within the board CEO is responsible for internal operations. The board chair and the CEO are also responsible for external relations for the organization whole board is responsible for strategic direction for the organization the board to answer the question of what and the CEO to be responsible for the how 17

18 What is Success for a Nonprofit? Mission over Profit Financial Stability Board effectiveness or meeting client needs? Accountability for performance More organizations competing for a smaller financial pie 18

19 Board Training 19

20 Board Training 80% of board members receive adequate materials/agendas before meeting Receive little if any feedback or training on how to perform their role Difference between board members believing they are doing well carrying out duties but director not happy with performance 20

21 Board Training Board member orientation Basic roles and responsibilities as a member Special issues with your organization Governance policies Accountability practices Conflict of interests Performance evaluation of ED/CEO Directors and Officers Insurance Meeting attendance & preparation Mission and vision statements Organization history Strategic plan, bylaws, financial summaries NOT as important as on-going training! 21

22 Board Meetings Work Plan Calendar What month to review compensation What month to adopt a budget What month to elect new board members What month to do fundraisers 22

23 Board Meetings Board meetings Consent agenda Reports from staff and volunteers who are doing the work Clear and focused agenda Start and end on time Send out materials before the meeting for members to read/study Allot specific amount of time for each item Keep minutes 23

24 Board Meetings Committees Specific set of tasks and goals Non board members allowed? Limit board members participant on too many committees Board recruitment committee Gather references, resumes Keep track of board diversity and skills gaps on board 24

25 Board Evaluations Board member evaluation 1. Is the board and its members performing as expected? 2. Are meetings organized and frequent? 3. Are members being educated on rules and procedures? 4. Do board members get along? 5. Are meetings and discussions progressive and constructive? 6. What are the dynamics of informal gatherings? 7. How does the staff view the board? 25

26 Board Evaluation Self-Evaluation 1. Strengthen Your Abilities 2. Strengthen the Nonprofit 3. Strengthen the Community 26

27 Developing Your Board 27

28 Types of Board Members Characteristics Weak Members OK Members Good Members Great Members What they say It ll look great on my resume! What do I have to do? How may I help? Thanks for the opportunity. National Council of Nonprofit

29 Board Development Why People Join Boards Meet new people Build my resume Learn new leadership skills My boss made me Mission Why We Want Them on Our Board Fundraising Connections to others with money Help with fundraisers Expertise (financial, legal, business) Oversight of organization 29

30 Board Development Do not overload the board with names Create advisory group to honor donors/volunteers who should not be board members Build financial acumen on board Understand audit committee, budget, funding 30

31 Types of Conflict Task Conflict What to do Process Conflict How to do it Relationship Conflict Personal disagreements 31

32 Sources Brown, Hillman & Okun (2011) Wright & Millesen (2008) Doherty & Hoye (2011) Babic, Nikolic & Eric (2011) Kaplan (2001) Brown (2005) Hall (1997) Miller (2002) Lindsley, Brass & Thomas (1995) Hillman & Dalziel (2003) Callen, Klein & Tinkelman (2010) Johnson (1995) Drucker (1990) Coombes, Morris, Allen & Webb (2011) Stephens, Dawley & Stephens (2004) Brown (2007) Galindo-Kuhn & Guzley (2002) Preston & Brown (2004) Sonnenfeld (2002) Herman & Renz (2000) Pfeffer & Salancik (1978) Petrovic (2008) Dalton, Hitt, Certo & Dalton (2007) Hillman, Withers & Collins (2009) Nyberg, Fulmer Gerhart & Carpenter (2010) Daily, Dalton & Cannella (2003) Principles and Practices for Nonprofit Excellence (2005) 32

33 James Smalley, PhD, MSW, LISW Southwest Minnesota State University 1501 State Street Marshall, MN