Boards Risk the Future of the Arts When They Ignore the Youth of Today

I’m an arts buff. I love the theater, live music, dance, and the visual arts. You will often find me attending two or three plays in a weekend, or going to a museum and then on to a performance of jazz or modern dance. The more I dive into the arts, the happier I am personally, but the more fearful I am for the future of the arts. Why? I’m in my 60s, and I’m usually one of the youngest people in attendance, regardless of the genre. (Okay, so I’m not going to the rap concerts, but still….) I constantly worry about the future. Who will occupy the seats in another 20 years, especially in our classical venues?

Yes, there will always be a few young people who love Mozart or Swan Lake. In my own family I have a nephew and niece that are classical musicians. However, while young people will continue to make art, as people have done since the beginning of time, I worry whether there will be anyone who will support their art, who will buy tickets and attend the performances, allowing them to work at what they love.

This is an issue that I feel too few boards seriously grapple with. Yes, you see organizations that open up their space after work for networking and wine and cheese, but is that going to convert generations of younger people into dedicated audiences for the future? I think not. After all, it hasn’t yet. And if I’m right, what will?

Clearly, there are no easy answers. If there were, I wouldn’t be writing this essay. But I think our boards can take a more proactive role in trying to find solutions. Here are two specific approaches they can take to mitigate the loss of the arts as we know them.

Spend Time Wrestling with Generative Questions
Generative questions deal not with the “how,” but the “why.” Instead of asking, “How do we attract Millennials?” arts boards need to first understand the underlying nature of the problem. They need to ask, “Why aren’t they coming?” Is it, for instance, a lack of money to buy tickets? A lack of exposure to what is currently being offered – after all, very few people of any age are willing to spend money on an unknown? A dislike of what is being offered? A “coolness” (or lack of “coolness”) factor? An issue of not having the right clothes? A discomfort with being surrounded by people their grandparents’ age?

The board also needs to pay attention to the cues it is relying on to come to its conclusion. Is it assuming, perhaps, that young people don’t have the right clothes to wear because, on the rare occasions they do come to the theater, they always come in jeans? Or, did the board focus on the fact that less time is spent teaching the classics in school, and therefore the issue must be lack of previous exposure? To get it right, directors have to challenge their colleagues and ask questions like, “Are we focusing on the on the most logical explanations? Why do we think that? What else aren’t we considering?” They might even reframe the issue by asking questions such as, “What has our experience as parents/teachers/bosses taught us?”

The more information you have as a board, the more likely your decisions will be on target. Spend a significant part of each board meeting asking questions, delving into the “why” behind the “what” before attempting to answer “how.”

Include Young People on Arts Boards
If we want to attract the younger generations to the arts, we have to hear their voices. The best way to do that is put young people on our boards. Of course, “young” is a relative term. In Florida, for instance, “young” is often defined as under 60! But I’m advocating for YOUNG, including, though not limited to, high school and college age youth. These people are our future. They are the ones you want to attract as audience members. And, nobody knows better than they what is important to them.

Young people can serve on boards, even if state law prohibits them from are voting. Organizations like the Girl Scouts have been including them on boards for years. They serve next to adult directors and have all the same responsibilities for preparation and participation. In such organizations the adults have learned to respect the input of their young colleagues because they see the young people taking their job seriously and providing valuable insights to the group. (To learn more about how the Girl Scouts have successfully incorporated youth, read “Preparing the Board Leaders of Tomorrow by Involving Youth in Governance Today” by Olivia Selinger and Deb Walters, p. 187 of YOU and Your Nonprofit Board: Advice and Practical Tips from the Field’s Top Practitioners, Researcher, and Provocateurs, Terrie Temkin editor, CharityChannel Press, 2013)

Be sure to bring enough young people on the board to ensure a cohort. Nobody wants to be the only one “under 30” on a board. Typically recruiting three of anything – 20-somethings, Latinos or people with a dance background – ensures a comfort level for the directors, leading to better input and, ultimately, the best decisions for the organization.

These two approaches take work and neither is a magic bullet. However, invest the effort in experimenting with both and you will see a definite change for the better. Doesn’t your arts organization deserve the chance to enrich and extend its life?

Is a Strong Conflict of Interest Policy Enough? A Morality Play, Act I

The University of Miami and its president Donna Shalala got an early but ugly Valentine on February 13 when the community woke up to a front-page article in the Miami Herald entitled, "Shalala’s side job stirs up concerns." It turns out that Dr. Shalala has been sitting on two corporate boards with her trustees’ blessing. The fact that she is making for her board service more than $360,000 each year – on top of her greater than $1 million annual salary from the university – in a time of upset with the One Percent wasn’t the biggest shock. It was that the corporations are owned by university trustees.

First, I must say that I have always held Dr. Shalala in the highest regard and I trust that her ethical standards and those of her trustees Roger Medel (Mednax) and Stuart Miller (Lennar) are above reproach. I’m confident, too, that all three organizations involved here have strict conflict of interest policies to which they adhere. But that doesn’t mean that those who care about the University of Miami shouldn’t be apprehensive.

When working with clients I always suggest that the litmus test for any decision is how you will feel if you wake up one morning to find the resulting situation on the front page of the newspaper. Tuesday the 13th, it was. And the response wasn’t pretty, if the Herald’s Flashpoint comments on the Opinion page were indicative. This is a private university that relies on big donations, a number of which Dr. Shalala has personally influenced. The university is just kicking-off a $1.6 billion – yes, with a “b” – campaign. I have to wonder if this publicity won’t, at least in the short term, negatively affect charitable giving and consequently what the university can offer.

I worry about the independence of a board where there is so much overlap of leadership. The university and the community are not well served if, even at a subconscious level, trustees and/or the university president hold back from sharing their most creative ideas or raising challenges and critical issues – responsibilities inherent in good governance – because they are afraid that showing vulnerability in one setting will impact their role in another. Moreover, any other trustee who hesitates to speak his/her mind because s/he isn’t part of a perceived inner circle ultimately cheats the university of his/her best efforts.

A related concern is that by going back to the same small group of community leaders to sit on so many of our boards, we are getting only one, relatively homogeneous view of what the community needs. While presumably an intelligent view, it is still an insular one. More diversity on our boards could only benefit the university and the community as a whole.

I can appreciate why any CEO would want someone of Dr. Shalala’s caliber on his/her board. But she doesn’t have to sit on a board to offer insights. If she is going to sit on a board, she’d be wise to steer clear of the boards of her own trustees. The University of Miami Board of Trustees should insist on this. After all, that group is responsible for ensuring the health of the university. It can’t risk the loss of independence, diverse thought or potential donations.

The university has been rather quiet about this flap. Time will tell what the fallout might be. But in my mind the situation serves as a morality play for other organizations. Having a conflict of interest statement is an important first step. But in scientific terms, while necessary it is not sufficient.

What are your thoughts? Is this a lesson other organizations should learn from? Or, is it much ado about nothing? Perhaps Dr. Shalala, with a lens already on her football team, is just too big a target and others don’t have to worry. Are there situations where it is appropriate for the CEO of a nonprofit to sit on the corporate boards of his/her own trustees?

Is the Arts and Culture Community on Your List of Potential Collaborators?

Few would argue the value of arts and culture. The vibrancy of arts and culture within a community has long been a key indicator of its livability. Individuals and companies looking to move into an area frequently evaluate the number and diversity of offerings as part of their decision-making process. Art therapy has proven helpful in treating a wide variety of conditions, from Alzheimer’s to physical and emotional trauma. And, a great deal of attention has recently been paid to the substantial economic impact of arts and culture. According to the 2010 National Arts Index, a report issued by Americans for the Arts, economic activity in the U.S., while losing ground during the recession, is still a $150‐$160 billion a year business that puts more than 2 million people to work and increasingly attracts cultural tourists (the number of foreign visitors who attend cultural events or venues has increased 23% since 2003).

However, today we have another reason to value arts and culture. It’s being used “in increasingly diverse ways to engage and build communities and address the root causes of persistent societal problems, including issues of economic, educational and environmental injustice as well as inequities in civil and human rights.” (“Fusing Arts, Culture and Social Change: High Impact Strategies for Philanthropy” by Holly Sidford for the National Committee for Responsive Philanthropy, 2011) Artist-activists are pulling us in, forcing us to examine our assumptions and the way we do business.

To-date, most of this work has emerged from and been centered in the art world. Just one example from my community is the Center for Folk and Community Art, which involves the community’s residents in story-telling, using a combination of written work, murals and public presentation. In the past it has focused attention on societal issues such as gang culture and violence, bullying, abuse and violence in teen dating relationships, the environment and homelessness.

But, arts and culture could be so much more. It could be totally integrated into the fabric of social change, where artists sit at the same table as nonprofits, private businesses and governmental agencies committed to creating a healthier place for each of us to live. This is particularly important as the artistic voices of those who have previously often been disenfranchised – i.e., those making art outside of the better supported and recognized Western European, “classical” art forms – break through, since there is much to be learned from these voices.

According to the Animating Democracy’s 2010 report, “Trend or Tipping Point: Arts and Social Change Grantmaking” there are currently more than 150 funders nationwide that have recognized the value of supporting coalitions that are dedicated to social change and are inclusive of artists. I am proud that our own local community foundation is one of them. But what of the many nonprofits currently putting together coalitions to more successfully tackle community issues that are at the heart of their mission?

If your organization is contemplating collaboration, I would like to know if your board is considering the contribution artists, arts and culture could make in your success? How intentional is your board about including artists, especially those outside “mainstream arts and culture”? How are you going about finding the appropriate partners? Please write in and share your experiences and learnings.

Boards - Your Chief Administrator Wants You to Learn and Practice CEO Evaluation

Ask board members to list their responsibilities and most will include the supervision of the CEO. However, according to the findings of CompassPoint and Meyer Foundation researchers as reported in Daring to Lead 2011: A National Study of Nonprofit Executive Leadership, there is apparently a disconnect between what board members acknowledge as their responsibilities and what they take on, because close to half of the CEOs surveyed reported that they had not had a performance review within the past year. Adding concern, of those boards that do ensure their CEOs are reviewed, more than two-thirds may not be particularly skilled at the process, judging by the report that fewer than one-third of CEOs found their review either somewhat useful or very useful.

With CEOs clamoring for effective feedback there are evaluation basics that every board can incorporate. Assign a month within which the CEO review will be done, add it to your compliance calendar and make a commitment to follow through. Ask the CEO to consider process and goals and to explain what he or she feels will make the review valuable on both a personal and organizational level. Gather input from the entire board. Then select a few board members to sit down with the CEO to negotiate what the review will consist of. Be sure success measures and deadlines are clearly defined so that everyone has a clear picture of what it will look like when the CEO has successfully met all expectations. Provide interim assessments that ensure everyone is still on the same page and that movement toward goal achievement is on track. (See “Evaluating the Top Administrator: A New Approach” for more.)

But what takes evaluation beyond the basics and ensures an effective result? I would like to learn what those boards that are providing “very useful” feedback are doing. I’d also like to hear from CEOs about what would make their reviews satisfying and helpful. Are there tips that you can share with your colleagues and partners? Perhaps you’ve asked a former board chair to lead the process or brought in a consultant to guide it. Maybe you’ve found a book or article that provided helpful insights into the process or content. All input is encouraged.

An Open Question to Board Chairs: Do You Dare to Lead?

Executive directors have thrown down the gauntlet. In “Daring to Lead 2011: A National Study of Nonprofit Executive Leadership” conducted by CompassPoint and the Meyer Foundation, only 20 percent of those surveyed reported being satisfied with their board’s performance. While a few of these executive directors might have a personality conflict with their current chair or have felt particularly frustrated with their board the day they responded, there must be something more significant going on to account for 80 percent of chief administrators indicating dissatisfaction with their boards.

Determining the underlying factor(s) is particularly important in today’s rapidly changing environment where boards must be strong, strategic and steadfast so that their organizations can be responsive and achieve relevant results. Research by the likes of Herman, Renz and Heimovics, Nobbie and Brudney and others have made very clear that there is a relationship between the effectiveness of a board and the effectiveness of the organization for which the board works. While none could prove causality, each found that highly effective organizations have highly effective boards.

I don’t believe that an organization’s effectiveness can be laid at the feet of just one person. Yet, I do believe that you, as board chair, have opportunity and influence that can be brought to bear in ways that you perhaps have not tested. Be honest with yourself. What more could you do to ensure a stronger board, and ultimately a stronger organization?

For instance, research again tells us that highly effective boards use more proven practices than less effective boards. There are a lot of accepted practices out there that are actually based on myth. Are you just propagating these or are you analyzing their effectiveness? Are you making the effort to regularly read or participate in workshops and webinars to learn about governance practices rooted in science? Are you implementing what you’ve learned? If not, why not?

As an unknown sage once said, “Hope is not a method.” You cannot afford to merely come in once a month to chair a meeting, check in occasionally with your executive director and write your column for the newsletter and expect an exceptional board to emerge. Nor can you rely on years of experience with a multitude of boards. The world has changed too much. If you dare to lead, tell us what you are doing differently and what impact it has made.

Succession Planning: Is Your Board Prepared for Transition?

Everyone is talking about succession planning today. Much of the conversation is motivated by the large numbers of baby boomer executives expected to retire in the next few years. While this is a real concern deserving of our strategic attention, I have to wonder why so little attention is paid to succession on our boards of directors. After all, turnover is virtually an everyday occurrence on boards. Term limits and life’s challenges move people out of office or off the board altogether on a regular basis; and fewer and fewer individuals are stepping up and into the vacated leadership positions. The result is that boards are often forced to choose creative approaches to filling the empty chairs, such as allowing people to share the leadership responsibilities or conferring key positions on inexperienced talent. Unfortunately, experience tells us that such solutions typically result in a loss of organizational momentum or effectiveness. But, this needn’t be the case if we will commit to adequately preparing our boards for transition.

I doubt there is anything we can do to bring back the days where people will spend a decade or more working their way up to a coveted leadership position. But a strong succession plan is within reach of every organization. To see how, we must first consider what a succession plan really is, and what it isn’t. It isn’t about knowing who the next three board chairs will be. It is ensuring that you have a strong board with clear procedures in place, where everyone understands the big picture, is engaged and knows his or her role. In other words, the best succession plan is having a board that regularly operates under proven practices because a board like that will be able to continue to perform effectively regardless of what position may turn up empty tomorrow or the next day.

To determine if your board is prepared for the inevitable expected – to say nothing of sudden – transitions, answer the questions below.
 Does your board have criteria for membership?
 Does your board maintain a current pool of good prospects for board membership by continuously identifying and cultivating potential members?
 Does your board “test out” potential board members by encouraging committee or other participation first?
 Does each individual on your board have a job description?
 Does your board chair have a job description?
 Has each individual on your board gone through an orientation?
 Does your board share a collective vision for the community?
 Does your board share a passion for the mission of the organization?
 Does each individual on your board have ready access to a copy of the bylaws?
 Do the bylaws indicate how the transfer of power will operate under both normal and extenuating circumstances?
 Does your organization operate according to its bylaws?
 Are the expectations of your board members clear?
 Are board members that fail to live up to their expectations asked off the board? (Is this a given, regardless of the person’s affluence or influence?)
 Are your board members provided board education at every meeting?
 Does each individual on your board understand the issues critical to the organization’s mission?
 Do your board agendas encourage participation around substantive issues?
 Are decisions consistently made on the basis of your organization’s mission, vision, guiding principles as well as defined criteria for success?
 Is every individual on your board offered opportunities for leadership?
 Do your board members know each other well enough to look forward to working with one another?
 Does your board take time at most meetings to evaluate what it is doing well and what it could do better?
 Does your board do an annual self-evaluation?
 Does your board make changes in its behavior on the basis of its evaluations?
 Does each committee have a purpose?
 Does each committee have goals?
 Are your committees held accountable for achieving their goals?
 Does your board have a crisis management plan in place?

If you answered “no” or “only sometimes” to most of these questions, you may be left wondering if there is a future for your organization when one or more of your key leaders leave. Don’t let that happen. Make a commitment today to begin working on those conditions to which you were not able to answer a resounding “yes” and soon you’ll realize that succession is no longer an issue because your board is functioning efficiently and effectively no matter who is in the driver’s seat.

Our Boards Must Understand How They Operate

I just finished analyzing a governance assessment completed by 15 different organizations participating in a board building program sponsored by our local Community Foundation. It was fascinating. In many cases there would be one person from an organization that would answer the question in the affirmative about whether that organization had a Whistleblower Policy or a Records Retention policy – policies every organization must have. The rest of the respondents would answer “no” or “I don’t know.” In each of these cases, the executive director/CEO completed the survey along with board members. While I didn’t have the access required to manipulate the data, I’d bet my bottom dollar it was the executive director/CEO that was correctly answering the question because he or she was the one who ensured compliance. Even the answers to questions such as whether the organization employs term limits or a consent agenda revealed that oftentimes more than half the board members did not know if they did or didn’t.

While not surprised, I must admit I’m a bit disappointed. Clearly the majority of these organizations are operating according to proven practices, but the board is not aware of it. According to their answers to the question about the ease of getting a quorum, it doesn’t appear the problem lies with nonattendance. It seems as if the chief administrative officer is implementing the right policies and procedures but failing to share this with the board along the way.

What is the answer? First, maybe it’s time that the executive director/CEO turn over the implementation of board-related responsibilities to the board. Using the example above, this would mean that the development and dissemination of policies would be done by the board. And, if the board handles the job, the members would know the policies exist.

Second, perhaps the content of board education should be changed to focus more on proven practices and how the board complies with such practices. The bylaws committee might mention what section in the bylaws is guiding each action. The board development committee might create more or different talking points or initiate a short quiz at each board meeting designed to test whether the board knows how it is/should be operating. The orientation might be enhanced to ensure new board members understand what is expected and why.

Finally, there has to be a better communication. At meetings the board chair might make it a point to explain why certain actions are being taken. Committees might use a report form that spells out how recommendations relate to the organization’s strategic initiatives the budget, staffing and so on.

Hopefully, by working together more as a board each member of the board will know exactly how the board operates and why. Ultimately, that has to result in a more effective board.

Painless Giving

By Terrie Temkin

Last month I blogged about three graduate students at Rutgers University that made a life-long pledge to give a significant portion of their incomes to those less fortunate. A common response I got to the post was similar to what the three themselves have heard: “How admirable. But I wonder how long they’ll maintain that pledge once they start having families and facing the everyday responsibilities of a mortgage and car payments? But must these commitments be mutually exclusive? Can’t one still give generously without negatively impacting one’s lifestyle? There are those that would answer a resounding “no” to the first question and “yes” to the second.

After posting that last blog, I heard back almost immediately from a colleague, Dr. Donna Goldstein. She wanted to share what she does to make a difference in others’ lives that take little more from her than her time. One idea she presented is that when she goes to the grocery store she takes liberal advantage of the frequent two for one offers, even though she rarely needs the second item. She keeps the one she needs and donates the second to her local food bank. She also haunts the second-hand stores, often finding just the perfect item for her wardrobe or home. She takes the money she saves by not buying new and donates it. On top of the good feeling she gets from that, she enjoys the pleasure of the hunt.

My brother, Dr. Larry Temkin, is a Professor II in the Philosophy Department at Rutgers. A moral philosopher internationally recognized for his work on inequality, he lectures on this topic regularly. He tells his students that while some, like Donna, may actually prefer finding something unique at the second-hand store, they can still buy new and make philanthropic contributions, all without necessarily affecting their desired lifestyle. As an example he might suggest that perhaps they have been lusting over a special pair of jeans that cost $150. They are going to buy the jeans, but they just haven’t gotten around to it. Then one day, the jeans go on sale. They pick them up for half off. They were perfectly willing to buy the jeans at $150, but only had to spend $75. They could take the $75 they saved and donate that to charity without taking a dime from the pocket they know they should be designating for charitable giving.

On a smaller scale – that does add up – they can become coupon shoppers. Fifty cents here, two dollars there… If they put aside their savings, in short order they will have a full piggy-bank to share with someone less fortunate. Again, it’s all out of money they have mentally already spent, so it seems less onerous than having to come up with “extra” money that they can donate. And, of course, if they are among those that empties the change from their pockets each night and throws it into a can to sit for years and years, they have a ready source of cash that will never be missed.

I’d love to hear your suggestions for painless giving.

What Everyman Can Learn from Student Philanthropists

I’m an avid NPR listener. For awhile, now, I’ve regularly been hearing a message from the Community Foundation of Broward (Florida) on my local station that goes something like this: Bill Gates and Warren Buffet are encouraging their fellow billionaires to pledge half their fortunes to charity. But why let them have all the fun. You can participate in the joy of giving by making a gift through the Community Foundation.

I don’t know how well people are responding to this proposition. While I think it’s extremely clever and I hope it’s successful, I’m sure a large number dismiss it, believing that the Gates and Buffets of the world can afford to give half their money away to charity and never even miss it. After all, Gates’ 2010 estimated net worth is $54 billion and most of us assume that one can still live pretty nicely on $27 billion. But for Main Street USA, where, according to the Federal Reserve Board’s 2010 survey, half of Americans have a net worth of less than $84,000, giving away a significant portion of your money to charity doesn’t seem very realistic.

Yet, three graduate students at Rutgers University think it’s doable. Philosophy majors Nick Beckstead, Tim Campbell and Mark Lee have made their own significant pledge to give away a set percentage of their annual income to causes that they feel will do the most good in the world – not just over the next few years, but for life.

The three say they were influenced by Australian applied ethics philosopher Peter Singer, who holds dual appointments as the Ira W. DeCamp Professor of Bioethics at Princeton University and Laureate Professor at the Centre for Applied Philosophy and Public Ethics at the University of Melbourne. In 1972 Singer published an essay entitled “Famine, Affluence and Morality,” in response to the mass starvation found in Bangladesh. In that article Singer argues that it is a moral imperative for persons of affluence to give more to humanitarian causes than they typically do: "People do not feel in any way ashamed or guilty about spending money on new clothes or a new car instead of giving it to famine relief. (Indeed, the alternative does not occur to them.) This way of looking at the matter cannot be justified. When we buy new clothes not to keep ourselves warm but to look 'well-dressed' we are not providing for any important need."

Few would classify graduate students as affluent and therefore individuals to be held to Singer’s standard. But in a December 11, 2010 Wall Street Journal article by Shelly Banjo, “Pledging to Give What They Can,” Beckstead says. "Someone who makes $25,000 is in the top 3% of the world's wage earners." Campbell adds, "It puts things into perspective and makes you realize you're on a much higher ladder than you think."

When I read the Wall Street Journal article I was incredibly impressed and began sharing the story with friends, family and colleagues. The responses I got all credited the three for pledging something so admirable. But, almost to a person added that they’d like to follow the three over the next 10 years as they graduate, start to have families and take on obligations for feeding, sheltering, educating and paying health care costs for those families – especially in America, where the costs for such basics are far more than in many other parts of the world.

The three have obviously been told this to their face. Beckstead is again quoted in the Wall Street Journal article as saying, "When people see us pledging to give away their income, some are critical and say this is an idealistic idea that they'll realize is unworkable in the real world. We think otherwise; this is a long-term decision."

I believe that a clear vision and commitment to that vision are the first steps in actually creating the world we all want to live in. Beckstead, Campbell and Lee have that vision and commitment. Whether or not they move away over the years from the level of financial commitment to which they’ve recently pledged, they undoubtedly will continue to give. And,right now they serve as extraordinary role models. Obviously, they are role models for other young people, who might be influenced to give more of their discretionary funds to charity or even join or start a chapter of Giving What We Can – an organization pioneered in Oxford, England that the three are bringing to Rutgers. But they, probably more than Gates and Buffet, are role models for the rest of us too. After all, if they can make this commitment on a 20-something’s salary, the rest of us should be able to pledge at least a bit more.

There is beautiful saying by Leo Burnett, “If you reach for the stars, you may not quite get one, but you won’t come up with a handful of mud either.” Keep reaching Nick Beckstead, Tim Campbell and Mark Lee.

All the More Reason for Nonprofits to Collaborate…

I recently returned from the BoardSource Leadership Forum in San Francisco. BoardSource President and CEO Linda Crompton opened the convening. One of her comments was that innovation is not necessarily an event or a singular killer idea. It tends to be emergent – the result of group interaction.

I was not home more than a day before my business partner, Gail Meltzer, send me a YouTube video featuring Steven Johnson who wrote Where Good Ideas Come From. In it, Johnson suggests that true innovation comes from a series of “slow hunches” that build on one another and require time to truly incubate. Most often, he says, it is the collision of idea from others that makes the hunch lurking at the back of one person’s mind actually develop into something worthwhile. He states, therefore, that we must find spaces that will allow people with different ideas to come together and bounce those ideas off one another. He offers the analogy of the coffee houses and salons of the early 20th Century that resulted in such great art and literature.

If Crompton and Johnson are correct, then the leadership of organizations that focus internally – that is, determining how they can become better funded, attract the strongest board or gain a reputation as the ‘premier organization’ in their field – are actually working counter-productively to that end. Their organizations will never be recognized as exceptional if they don’t innovate. And, as long as they choose to avoid the interactions with the larger environment that lead to the cross-fertilization of ideas, they are doomed to merely doing more of the ‘same old, same old.’

In my mind this means that leaders must create opportunities to meet frequently with their counterparts in a wide variety of organizational entities to dialog about and to piggy-back off of ideas. The entities they choose to meet with must not only be those that are doing similar work, or that share similar visions for the future, but organizational entities that bring very different viewpoints to the table.

Obviously, this requires a certain level of trust. Therefore, the convening groups will want some rules of engagement. The guidelines for brainstorming are appropriate here – e.g., to generate as many ideas as possible, to avoid judgment, to allow time for clarification, etc. The most important guideline, however, is adopting an attitude that, once thrown out, an idea belongs to the group as a whole. Any modifications of that idea are for the benefit of the community as a whole.

Just think what we could accomplish in our communities if we all took this approach!

Study on Women Donors Presents Lessons for Board Recruitment

A study(1) released this week by the Women’s Philanthropy Institute at Indiana University’s Center on Philanthropy showed that women are the largest donors. They give more in actual dollars and they give more frequently than men. This is a reality that holds true regardless of the women’s own economic status; and, the disparity of giving increases with the individuals’ income. For instance, 35.2 percent of women who earn $23,509 or less annually make charitable contributions, opposed to 27.5 percent of men who earn at that same level. When income rises to at least $103,000, 96 percent of women give to charity, while only 75 percent of men of similar means give. The results, culled from a sample of 8,000 American households, also revealed that women typically give because they care about the work that is being done. Men tend to give because they are asked.

This study is already shaking up many who have traditionally turned to powerful men in the community for large financial commitments. However, it should also shake up those who are recruiting for boards of directors. According to the Urban Institute study, “Nonprofit Governance in the United States: Findings on performance and accountability from the first national representative study,”(2) while women make up almost half of all boards in the US (46 percent), they tend to be found on the boards of smaller organizations – typically organizations with budgets under $100,000. The percentage of women serving on the largest (budgets of $40 million plus), most prestigious boards is only 29 percent.

One reason for the above may be that, according to Ostrower’s findings, women often do not make the cut when organizations use financial skills and reputation in the community (“affluence and influence”) as recruiting criteria. If board members are expected to be among the biggest and most committed givers, the Women’s Philanthropy Institute’s study should cause us to question whether organizations are shooting themselves in the foot when they actively solicit more men than women.

Perhaps of even more import is the difference the study found in why people give. Will Brown’s work (3) shows that belief in the mission is the most important factor related to board performance. Conversely, Candace Widmer (4), in a now classic study, found that joining a board because a friend asks is a temporary incentive and provides neither ongoing rewards nor participation. So, unless the organization is quickly able to provide these board members with other, more meaningful incentives, they will not stay involved. Does it not make more sense, therefore, to recruit those who are already motivated by what the organization is doing? We now know empirically, this means recruiting more women with a demonstrated interest in our organization’s mission.


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1) Mesch, Debra. “Women Give 2010.” The Center on Philanthropy at Indiana University, 2010
2) Ostrower, Francie. “Nonprofit Governance in the United States: Findings on performance and accountability from the first national representative study.” The Urban Institute, 2007
3) Brown, Will. Presentation at the Midwest Center for Nonprofit Leadership Conference, “Boards in Uncertain Times: Exploring the implications of financial, technological and generational change for nonprofit governance.” April 2009.
4) Widmer, Candace. “Why Board Members Participate.” Journal of Voluntary Action, 1985

CEO’S ARREST SHOULD BE NOTED IN THE MINUTES

Q: Our CEO was recently arrested for a hit and run that resulted in some property damage. The situation made the newspapers. While the incident itself has been both legally resolved and handled internally in executive session, the board is divided about how to record this in our minutes. Some feel the issue should be dealt with head on. Others would prefer to merely indicate that a personnel issue was discussed and so noted in the individual's file. There is a concern that we may be exposing ourselves to a charge of libel by naming the CEO as the person discussed. How private are such personnel issues?

A: I’m sure a lot of people out there are breathing a sigh of relief that they don’t have to deal with your situation. But, the reality is that this could happen in any organization at any time. CEOs are people and people can get into messy situations. What you’ve shared happens more often than you might think.

The privacy issue you raise actually varies from state to state, so you should definitely consult a lawyer in your community. Assuming, though, that this is not a concern where you live, let me offer some other important issues for your consideration.

Normally, I subscribe to the “less is more” school of minutes. However, in this particular instance, where there was a serious offense, an arrest, it made the papers and led to some sort of restitution, I think you have to be more explicit than “a personnel issue was discussed and so noted in the individual’s file” – unless, the board opted to do nothing about it. In that case, as a colleague of mine suggests, you want to bury the subject by making any notation in the minutes as weak as possible.

A critical question that should play a role in your decision-making is, “Did the hit and run occur while the CEO was on organizational business?” If so, your response must be stronger than if it did not. But, in either case, my concern is that donors and other supporters undoubtedly read about the incident – especially if your organization is a prominent one and/or your CEO is a fairly public figure. They will question whether and how the board acted on this. If they can’t be confident that you took this seriously and acted in a responsible manner, they may doubt the board’s ability to steward the organization during challenging times. This could lead them to jump ship.

There should be no exposure to a libel charge as long as you stay with the facts and avoid anything that is supposition, since libel requires misrepresentation. (Just a reminder for other organizations that may find themselves in a similar situation, an arrest is not a conviction.) Actually, according to Steve Nill, a lawyer I consulted on this matter, the more public a figure your CEO is, the less you have to worry because that person would have to prove you acted maliciously – that is, that you knowingly included false information in the minutes.

To protect both the board and the organization, though, I would also call your insurance company. Tell your claims representative about the situation. Often insurance companies require that they be notified so that they are not surprised if someone decides to sue. But even if your company doesn’t require such notification, the representative may have some excellent suggestions for proceeding forward at this time. Some insurance companies will even provide you with legal counsel to help you avoid potential pitfalls.

One last thought… If you don’t have crisis management policies already in place, your board should run, not walk, to grab its collective pen! It is especially essential to have a plan for dealing with personnel issues like this that have the potential for becoming public, because unfortunately, as I indicated at the beginning, incidents like this or embezzlement of organizational funds, sexual harassment, and child pornography – to name just a few – tend to crop up more often then we’d care to admit. And they can leave the organization with serious egg on its face.

The plan might be to sweep any such incidents under the rug (Not my recommendation, by the way!), wait for the media to find you and pray that they don’t, or get out in front of the incidents with the media. If you decide to speak out, the plan should indicate who will serve as the voice of the organization. The plan is a good place to consider consequences for wayward individuals, as well. It’s always easier to decide these things in the abstract, when the emotions tied in with any specific individual are not at play.



A special thank you to Stephen Nill, J.D., GPC. and the founder/CEO of CharityChannel.com, for his added insights to this response.

Note should be made that even though an attorney was consulted in the construction of this answer, the above should not be construed as legal advice. Questions such as these are sent with minimal information and the answers are necessarily broad.

Who Should Facilitate the Exit Interview?

The other day a respected colleague and good friend, Carol Weisman, sent a copy of her latest blog post entitled, “Don’t Just Whack’em and Plaque’em: Exit Interviews for Retiring Board Members.” As all of Carol’s writings, it dealt with an important subject, was informative and had me in stitches – Carol is one of the smartest and funniest people I know. She spoke to the value of doing an exit interview and shared five excellent questions to use in such a situation. My only quarrel was that she put the responsibility for doing the exit interview on the executive director. I have always believed an exit interview should be conducted by the board, in the person of the chair or a member of the governance/board development committee.

She and I went back and forth with our arguments. She felt that the executive director is the constant – the one who will be there after the entire board turns over. I reasoned that there is no guarantee that the executive director will be there tomorrow, let alone years down the road. I know too many organizations that make that position a revolving door. But even in the most stable organizations, a lot of long-time executive directors are reaching the point where retirement is starting to look pretty good. We’re also starting to see a number of less fortunate dying with their boots on.

Carol asked me to honestly examine how many boards step up to the plate and take on this responsibility. While I concede that the job often defaults to the executive director, by accepting that role, the executive director makes it that much easier for the board to abdicate its responsibility in the future. It is the board that benefits most from learning what it could/should be doing differently to maximize, or at least improve, its directors’ experiences. The interviewer should be taking notes that can be kept in a board book for easy referral by future boards. Carol argued that future boards won’t bother to look back. I of the “you get what you expect school” retorted that debriefing should be an expected part of the job. After heating up cyber-space for a couple of days, we agreed to disagree.

However, I was like the store clerk who gets in an argument with a customer. Long after the customer leaves, the clerk is whining about that customer to everyone else she comes in contact with that day. I ran the arguments by another colleague, Jane Garthson. Jane said definitively that it was the board’s job to conduct exit interviews. However – sneaky devil! – she said she understood if an executive director wanted to conduct his or her own exit interview to learn what he or she might do differently in the future. So, this brings me to the question of the day. What, if any, are the arguments that we are all missing? If you even agree that exit interviews for departing board members are valuable, who do you want to see facilitating them? Why?

Should Board Members’ Contributions Be Designated To Pay For Their Education?

I was speaking with a couple of colleagues the other day and the subject of board contributions came up. Later in the conversation we transitioned into the importance of ongoing board education and organizations building a sufficiently-large line item into their budgets for this. And then the idea bubbled up: What if one of the expectations of board service was that a portion of each board member’s personal contribution to the organization went to pay specifically for board education?

Such an expectation would do several things. It would communicate to the world that the organization believes an educated board is important. It would provide necessary dollars for such board education, without cutting into dollars dedicated to programming. And, it would help board members value the education the organization provides, because research affirms that people ascribe more value to something for which they pay rather than get for free.

There are some issues to consider. When my colleagues and I were talking, someone arbitrarily threw out $500 as the portion of each board member’s contribution that would go into this board education fund. While a substantial amount, with an average-sized board of 16, that only puts $8000 into the education coffer. True, $8000 is more than most boards currently devote to board education. But, $8000 won’t go far if the money is to be used for a true retreat, conference expenses or coaching, for instance. Asking for a number larger than $500 might be a non-starter for most boards – at least at this stage in the game. And, what happens in those organizations that ask for a personally meaningful gift from each board member instead of a contribution of a specific dollar amount? Yes, the leadership could opt to allot the entire board member contribution to its education fund, or designate a percentage, but how can any organization create an education budget if the ultimate total is an unknown? Perhaps the answer is that the board would still have to assign to the board education line a dollar amount from its general operating funds and use the contributions just to enhance its educational opportunities.

The biggest issue may be that some people will resent this set-aside, either out of principle or the belief that they do not need education – perhaps they’ve sat on many boards over the years and believe they have the job down pat. My guess is, though, this reality may be off-set by those that clamor to join a board that devotes so much attention to its board members and provides leadership training that they can then take back to their jobs or on to other organizations.

As someone who firmly believes in ongoing board education at every meeting, I love what this concept could “buy.” But I recognize it would require a major culture shift in most organizations. What do you see as the pros and cons? Is this an idea with sufficient value to push?

Should US Nonprofits Adopt a Patron System?

I worked recently in Singapore. While I found many similarities in the ways nonprofits do business both there and here in the United States, I found differences as well. One of the biggest was their use of a patron system. Besides having what we would consider the familiar board structure with a chairman or president at the helm, a large number of organizations there also have a patron. Some even have a patron and a patron in chief. These are powerful individuals who wield tremendous influence. For instance, the patron in chief of Singapore’s Lyric Opera is the President of the Republic of Singapore. Its patron is the Minister for Education and Second Minister for Defense. The intent is that these individuals will provide support – including, in many cases, political clout – and encourage others to support the organization as well.

In the United States, our honorary boards could be considered the closest equivalent to the patron system of Singapore. Some organizations here are able to engage major players, such as the Gerald R. Ford Presidential Foundation which counts among its trustees James Baker, Dick Cheney, Alan Greenspan, Henry Kissinger and Donald Rumsfeld. But the number of organizations with the capability of attracting names of this caliber are far and few between. Would it be easier for nonprofits to attract a single patron? Would a patron help nonprofits that feel they lack sufficient access to affluence and influence?

I do believe that it would be easier to find a single patron than an honorary board. However, I do not believe that it would necessarily be easy. Think of all the nonprofits that have tried unsuccessfully to find a celebrity spokesperson. And, we certainly know how quickly a good name can become a liability. Tiger Woods, anyone? Singapore has experienced this with the patron system as well. The patron of their National Kidney Foundation, the wife of Goh Chok Tong, former Prime Minister of Singapore and current Chairman of the Central Bank, was forced to step down after defending the pay of the CEO, saying that his $600,000 (S) salary was “peanuts.” At least with an honorary board, one would hope there will be others whose reputations remain sterling, even if one of the names on that board turns bad.

As to whether having a patron would be helpful to organizations lacking affluence and influence...I'm not so sure. Singapore is a very small country. People tend to know one another and a patron's name alone carries clout. Here, the individual would have to be willing to actively use his/her influence on behalf of the organization to bring others along. Research done by Herman and Renz suggests that this does not happen as often as nonprofits hope. Besides, the reach of a single individual versus a larger group is necessarily limited, especially in a country the size of the United States.

So, even though I believe nonprofits in the United States can learn much from their counterparts in other countries, I'm not so sure I'd suggest our turning to a patron system here. But, I’m curious as to what others think. Is such a system an answer for us, especially in these difficult times?

Use Your Vision to Find Untapped Resources

The March 22 edition of Philanthropy Journal featured an article with the headline, Business partnerships seen boosting nonprofit causes. But, how do nonprofits identify the most appropriate partnerships? They can start by turning to their vision statements.

A well-written vision statement will have a community focus, that is, instead of speaking to how the organization will be seen – e.g., as the best, most successful, well recognized, etc. – it points to the impact it promises to make in the community. Most organizations have vision statements that actually reflect several such strategic impacts. For instance, a senior care facility might have a vision that commits to providing a warm, caring and safe environment where seniors requiring some level of outside support are able to spend their days living with dignity and respect at their full potential. In this case, the strategic impacts are 1) providing a warm, caring and safe environment for seniors; 2) helping seniors that require some level of outside support; and, 3) ensuring that these seniors have the opportunity to live to their fullest potential with dignity and respect.

Begin by identifying the strategic impacts in your vision statement. Then, for each, brainstorm those businesses or institutions that might also be interested in, or would benefit from, having a similar impact. In our example, those that might be interested in warm, caring and safe environments could include the police, security companies, other senior care facilities, real estate developers, families facing the need to find somewhere to place a loved one, families that had a bad experience when placing a loved one and who don’t want anyone else to go through something similar, doctors that know that their older patients do better – live longer and healthier – in such environments, nurses, home health companies, those that run training programs for nurses aides, and so on. Stretch. Get creative when listing possibilities.

After you have identified as many broad categories as possible for each strategic impact, determine which have the greatest capability to serve as a good strategic partner and/or to provide resources to your organization. Plug each of these types of businesses into a search engine such as Google, along with “vision” or “vision statement” and the words that make up your strategic intent. What will return are the specific businesses that share your beliefs, concerns and commitment. You now have several entities to approach and a common bond from which to start a conversation.

Avoid going in with hand outstretched. Research what their needs are and ask for an appointment to discuss how you might help each other accomplish your shared vision. Focus on advice – not money – at least at the beginning. People are almost always willing to offer intellectual capital. That often leads to money or gifts in kind however once they get to know your organization and become invested in it. In any case, your organization has successfully begun the important process of community engagement. That will bring its own rewards (the subject of another blog!).

Thanks to my colleague Steve Bowman of Conscious Governance in Australia for generously sharing this concept.

Providing Value

Andrew Kakabadse, Professor of International Management Development in the School of Management at Cranfield University in the United Kingdom, recently conducted a study of over 1200 boards from around the world. Fully 75% of those boards reported not knowing how they contribute value to their organizations. While sad, I am not surprised by this finding. The culture of most boards precludes engagement. And, if there is no engagement how can we expect anyone to have even a sense of belonging, let alone of providing import to the organization?

For instance, when was the last time your board was engaged in a substantive discussion? I don’t mean that the directors were asked to vote on a recommendation or to discuss the merits of the two companies submitting bids to fix the roof. Rather, they were expected to ask “What if…,” to explore working in tandem with a group that has always been seen as the competition or to consider how to turn a risk into a unique opportunity to move the organization forward?

I routinely ask boards with which I’m going to work to share with me their typical agenda. Most follow a format that is strong on reports. How much value can board members bring if all they are doing is listening to reports? What’s worse: reports focus on the past. Nobody can change the past. If you want board members to feel they are bringing value to your organization, you must engage them – their excitement, commitment and unique talents – around issues that they can impact. This requires providing them with the information they need or request, turning them loose to grapple with the issues and supporting their conclusions. If you have grounded your board around your organizational vision and values you have nothing to fear and much to gain.

There’s an old adage that, “If two people in business think alike, one of them is unnecessary.” We need the diversity of thought that our boards bring to the table. Our decisions become better. Best, the process cuts both ways. People who have had the opportunity to offer input feel valued.

But, all of this is for naught if we don’t share with our boards the results of their efforts. Otherwise, for all they know, they wasted their time in merely a mental exercise. If we want our boards to feel valued, we have to demonstrate that their product – their intellectual capital and their efforts – made a difference. And, it doesn’t hurt to thank them for that, either!

There's a New Normal in Town

I’ve been hearing it for awhile, now… we cannot hope to hang on until things return to “normal.” “Normal” has gone for good. There’s a new “normal” in town and it only promises to keep morphing. Regulations will become tighter. Technologies will continue to change the way we do business. Upcoming generations will want to mold projects and processes in their image. The community will demand increasing levels of participation, accountability and impact. Collaboration will emerge as something necessary, something real, something more than a “front” to satisfy funders. Creativity will rule. The sharing of knowledge will become the norm. And, so the list grows.

How can we deal with these shifting sands? People a lot smarter than I have failed to come up with a definitive answer. However, I do have some thoughts. We cannot look backwards with longing. We, like Lot’s wife, will be buried in that sand.
We must realize, as my friend and colleague Hildy Gottlieb says, that we are creating the future now, whether consciously or not, with everything we do or say. So, we need to define our desired future, claim responsibility for our actions, see the elements dropped in our laps as constructive and utilize them, moving quite deliberatively in the direction that will take us where we want to go.

We must have faith in the community – the combined intelligence and experience sets of diverse individuals, all with skin in the game – and embrace what it has to offer. This might mean flattening our organizations’ hierarchies, or at least encouraging people to build the networks they feel would be most effective without attention to reporting lines.

We need to stop viewing our organizations as turf that must be protected from trespassers and poachers at all cost. Thinking about the value easements on personal property offer to the owners of the property, as well as to the greater community, might help here. As a first step to breaking down the walls between “us” and “them” we could encourage that those in our organizations start talking to and working with individuals at all levels in other organizations, even other communities. And, we should start looking at how to leverage resources between organizations, as well.

We must encourage out-of-the-box thinking. In fact, we should be encouraging people to burn that damn box for once and for all! This might mean that we take a lesson from some Fortune 100 companies and give people time each week to work on projects unrelated to their jobs that are of personal interest to them. Incredible ideas have come out of such policies in the for-profit sector. Why aren’t we encouraging people to dream, then share what they are developing? My guess is that we’ll find things in these projects that will move organizations closer to not only their own visions, but to healthier, more vibrant communities.

It won’t be easy. Real change rarely is. However, there is a saying that “change is inevitable, only the struggle is optional.” Let’s embrace the new “normal” and together clean up Dodge.

It's Time to Judge on the Basis of Impact

The end of the year is approaching and people are hastening to make their 2009 gifts. Some generous souls will respond to any organization that makes an ask. For most, however, the process involves either going through the stack of envelopes received from organizations to which they’ve given in the past, merely to decide how much to give this year, or logging on to a charity watchdog site, such as those run by Guidestar and BBB Wise Giving Alliance, to see which organizations serving a personal passion get high marks. But, are any of these means the best way to approach this important task?

A small but increasingly vocal number of people are suggesting we should be looking at impact when we make our giving decisions. Has the organization to which we’ve given loyally over the years really lived up to its promise to the community? I can hear the contingent that turns to watchdog groups saying, “But that’s why I check these groups out!” The problem with the watchdog groups is that the criteria upon which they’ve been rating organizations are criteria that are easy to measure. They are not necessarily criteria that speak to impact.

One of the key factors upon which high ratings have been given in the past is the maintenance of low administrative costs. However, nonprofits have rightly complained for years that it takes people, facilities and equipment to provide services and achieve impact. People, facilities and equipment cost. Other key factors that result in a strong ranking include the number of dollars that are spent to raise money and the period of time the organization could maintain itself without any further fund raising. While clearly related to good business practices, neither of these criteria speak to results. Frankly, even factors such as numbers of programs, numbers served or satisfaction levels speak more to busyness than they do to impact.

Ken Berger, the CEO of Charity Navigator – one of the foremost watchdog groups – bravely came out this month to say that Charity Navigator will be redesigning its rating system to focus on impact. He admits that it won’t be easy, but believes it is necessary and doable.

Until all the watchdog organizations do our work for us, I propose that we put aside emotion and analysis based on easy but less-than-meaningful numbers to do our own assessment of impact. Is, for instance, our favorite homeless shelter merely serving more people or is it putting the people it does serve into their own homes and providing them with the skills to pay the rent and take care of the maintenance?

We can also look at how well the organizations we identify play well with others. Does that homeless shelter insist on hiring its own case managers, building out and staffing its own kitchen, or collecting its own clothing to provide to clients when it could reach out to other organizations in the community who already have case managers, a kitchen capable of feeding those in the shelter or sufficient clothing to share?

Doing this sort of research will take time, but the rewards go beyond knowing that you answered the call to ensure the status quo. It will draw you closer to the organizations you ultimately select. It will intensify the feeling you get inside when you give. It will force organizations to make a difference or leave the marketplace. And, it will allow you to live in a healthier, more robust community.

Are You Prepared for When Disaster Strikes?

This past week news has centered on little other than the devastating impact of the earthquake in Haiti. The challenges of responding to this crisis are immense. More than one newscaster has claimed the task impossible, despite the outpouring of help from around the world, the hundreds of millions of dollars in donations and the fact that Haiti has over 10,000 NGOs of its own to mobilize – the highest number of NGOs per capita of anywhere in the world. True, this is an extraordinary situation. But, it should serve as a lesson to all organizations in our sector. We must be prepared for the unexpected, whatever form that might take. After all, experience teaches us it is not a question of “if” something untoward will occur, but “when.”

No area in the world is immune to natural disasters. Therefore, your organization is susceptible. Is your data protected and retrievable even if your computers are smashed, looted or swept out to sea? Do you have a staffing plan where people know who is to report, under what circumstances, and where to report if your physical space can’t be reached, is uninhabitable or otherwise compromised? Do you have a means of checking up on staff who don’t immediately report to be sure that they are okay? What about a plan for providing service when your normal operations are disrupted? How will you access critical supplies? How will you determine which programs have priority if you cannot, for some reason, provide them all? Do you have a process in place for communicating with your clients if basic telecommunications are disrupted? How will you triage their needs? Do you have agreements with other organizations to work together or even take over for you in times like these?

Then there are man-made disasters, which are even more likely to occur. Pick up a newspaper almost any day and there is a story about someone in the public eye who said something politically incorrect when out with “friends” or in front of a live microphone that was assumed to be off. It can happen to your executive administrator or a visible member of your board. What about a trusted staff member or volunteer who absconds with organizational funds? Or, a program that gets bad publicity? Perhaps someone associated with your organization is accused of sexual harassment. Or, your property is burglarized or significantly vandalized. The possibilities are endless. Are you prepared to handle them quickly and intelligently? Have you identified an organizational spokesperson who will serve as the (only) voice of the organization in these circumstances? Do you have a policy for whether you will be proactive or reactive in dealing with the press? A script by which you control the spin? What about procedures for staying in the public’s good graces?

While it is never possible to cover all contingencies, having risk and crisis management plans in place that deal with the most likely will serve you in good stead. Not only will you be able to quickly respond to the situations you’ve previously identified, you will have a plan from which to start – one you can adapt – when faced with the unexpected.

Few people like thinking about worst case scenarios – it’s why so many die without wills, despite the knowledge that we all will die. However, your organization made a commitment to the community when it opened its doors. You cannot afford to be ill prepared to meet that commitment. As such, you need plans that are updated as new situations reveal missing elements. Bring key stakeholders in today and start them brainstorming. Tomorrow may be too late.