Q: How could I help people on nonprofit boards understand what they need to improve their governance?
A: I would tell them to set up a framework. Make sure the directors and management understood their responsibilities in the roles they perform. Ensure they were working on strategic issues, not management of the organization... things that will matter in five or 10 years.
David T. McLaughlin, chairman of the board of governors of the American Red Cross, addressed these issues in an especially insightful interview in the January 2004 issue of Directors Monthly, a prominent newsletter that the National Association of Corporate Directors distributes widely.* Mr. McLaughlin has decades of experience in the for-profit and nonprofit sectors; he's president emeritus of Dartmouth College, and past president, CEO and chairman of the Toro Company and the Aspen Institute. He has served on the boards of CBS, ARCO, Chase Manhattan Bank and Dayton Hudson Corporation, among others.
When asked about the difference between for-profit and nonprofit boards, McLaughlin replied:
People come on for different reasons, but when they come on a nonprofit board, they should have a real commitment to the cause of the organization. Their performance isn't measurable... because you don't have a bottom line. The issues are more qualitative than quantitative.EHL Consulting has generally found the overall level of commitment or passion of our clients' board members to be quite high, which is critical. But most, if not all, board members need periodic education, motivation and cultivation to remain informed and capable as spokespeople. And, sometimes, they need the adrenaline rush of a "pep rally" or other rejuvenating activity to get through the inevitable doldrums and to refocus attention on the important tasks. Boards require care, direction and nurturing to remain mindful of their fundamental role in organizational life.
What's the number one task of a nonprofit board today?
Securing the financial health of the organization -- approving budgets, setting prudent and cost effective policy and, yes . . . fundraising. As Mr. McLaughlin says in the NACD interview, "Board members are critical to fundraising success."
What role should board members play in fundraising?
Whether in a capital campaign or annual development, they must step up first and pledge their full-hearted support. And 100% participation by the board is absolutely essential! Here's why.
- Board members represent the community. Their participation in a campaign signals their profound belief that the community interest is being served. They give legitimacy to campaigns.
- They provide the first dollars of a campaign that start the ball rolling, often setting the bar for high giving levels and creating momentum.
- Through their own giving and through contact with others, they create the important "critical mass" of donors and funding sources. They enable the organization to seek the support of corporations, foundations and other community resources with confidence.
- They frequently make presentations to leading major gift prospects. Those significantly large giftgivers represent enormous credibility and influence to others. They follow the lead and the levels of support that board members establish!
In short,
people give to people who have given and who demonstrate that they care! Board members and other organizational leaders must lead the way, publicly demonstrating their leadership and dedication totheir organization and its mission.
3 KEY BOARD RESPONSIBILITIES
- Develop and sustain passion for the mission and vision of the agency
- Make capability gifts to the agency's campaign efforts
- Ask others to join in investing in the future of the agency
*For a complete copy of the NACD interview with David McLaughlin, contact Beth Galinsky at EHL Consulting (BGalinsky@ehlconsulting.com).
