News & Views

By Valyrie Laedlein, CRE Co-Director - The recent publication of Daring to Lead 2011, the national survey of over 3,000 nonprofit executive directors about their organizations and experiences in leadership, makes plain the nature of the challenge in getting a Board of Directors to make a solid contribution to the nonprofit it governs. The small to medium nonprofits participating in the survey (roughly 2/3 of respondents had organizational budgets of under $3 million) face a particular set of constraints.

Only 20% of executive directors nationally – and even less (16%) among the 245 respondents in the New York area - report that they are “very satisfied” with their Board’s performance, with nearly 40% of New York’s respondents either “not at all satisfied” or only “a little satisfied.” This suggests that over 4/5 of the executive directors surveyed see a need for improvement in their Board’s performance.

Several studies over the years by the team of Robert D. Herman, David O. Renz and Richard D. Heimovics* have made the connection between the effectiveness of Boards and the effectiveness of the organizations they serve, as well as affirmed the validity of an executive’s view about his or her Board’s effectiveness, suggesting that the Daring to Lead study’s findings have particular relevance.

So, why is this? What’s driving this poor report card on Boards?

When asked if anyone on their Board provides “significant effort to support the organization” in any of the following key areas associated with Board effectiveness, here’s how the New York-based executive directors responded. Keep in mind, this reflects even a single individual providing any of the following supports:

• Only 44% of EDs receive significant supervision or guidance in their role as ED
• Only 46% received significant support for fund development
• Only 56% see anyone on their Board offering significant support for strategic decision-making and planning
• And even in terms of financial oversight, only 2/3 of the New York City-based Boards were seen to have anyone making a significant effort.

In one important area of Board effectiveness – the Board’s role in resource development – the findings are particularly disconcerting, given the struggles nonprofits are facing in terms of financial stability. Within our “medium-to-small” segment of the nonprofit sector, something as basic as making a financial contribution to the organization from among Board members cannot be taken for granted. Almost 20% have no Board members making any personal contribution, and virtually half of the boards fail to achieve 100% annual giving of any amount among their members.

How can we as a sector turn this around and better leverage the volunteer commitment of the roughly 100,000 people who serve on nonprofit Boards in New York City?

The answer is complicated – and there are volumes written about what effective Boards and Board members are supposed to do, including my own earlier postings here in this blog.

There are three key levers suggested in the “Call to Action” on Board performance that are put forward in the Daring to Lead 2011 report:

1. Executive directors themselves need to devote time and effort to their relationship and work with their Board of Directors. A majority of New York respondents (54%) reported spending 10 hours per month or less on board-related activities. Yet 44.9% of the New York survey respondents are satisfied that they are spending the “right amount” of time on Board activities. Boards are complex collections of individuals, often quite diverse in experience, skills and background. They are entrusted with oversight and governance responsibilities, yet are convened episodically and must make decisions together with limited experience in functioning as a team and often inadequate preparation for their role. Addressing these constraints takes time and effort.
2. We need to improve the supports for finding and preparing prospective Board members for effective service. There are a few notable vehicles for identifying Board members (BoardServeNYC and Council of Urban Professionals among them), and a large amount of CRE’s work and that of colleague organizations is devoted to working with Boards on their development and functioning, including CRE’s Leadership Caucus for Board Chairs which was first offered in 2010. The content and nature of that support will be the subject of a future blog, but in this space, let me simplify one take-away from the research by Herman, Renz & Heimovics cited above: One size does NOT fit all; it is rarely simply a matter doing a “roles and responsibilities training” that moves a Board to greater effectiveness.
3. Funders need to devote greater attention to this in terms of expecting improved performance AND providing support to strengthen Boards. For this, it would behoove funders and executives who may be concerned about Board - and by extension, organizational effectiveness – to reflect on what beyond roles and responsibilities training is warranted. Attention to informing, cultivating, building and working with Boards comes down to time as much as will – and that is a function of what gets priority and what gets funded. My colleague, Holly Delany Cole, wrote in this blog last week about the risks inherent in government contracts that fund programs at a rate below true costs and thereby starve organization of investments in their own development and management. This is but one very clear example of a consequence.

*Board Practices and Board Effectiveness in Local Nonprofit Organizations, Nonprofit Management and Leadership, Volume 7, Issue 4. Pages 373-385, Summer 1996.

Click here for more information about the New York City respondents and interesting facts about their Daring to Lead responses.

Links to previous posts in the Daring to Lead series:
A Bone To Pick About Government Contracting
Daring To Lead: A National Study on Executive Leadership

Read the Daring to Lead main report and Brief 1: Leading Through a Recession.