Red Flags to Watch For

When I write about nonprofit board governance I usually spend my time addressing current nonprofit leaders – either staff or volunteers. This article is for current leadership, and also for those who are thinking about joining the board of a nonprofit organization. 

I love connecting people to organizations that they care about. But serving on a board has to be about more than a passion for the cause. It’s a commitment that should be taken as seriously as a job. In order to make a good decision for yourself, you need to ask a lot of questions. What follows are questions and topics to dig into, so that you can make a great decision about how you donate your valuable time. 

When people get caught up in an organization that is a mess, they tend to become disenchanted with the whole nonprofit sector. And that’s just not fair. There are so many great agencies, working hard everyday, to make our communities and our world a better place. To make sure you don’t end up disillusioned by this sector, here are some red flags to look for when choosing where to serve:

  • “Nonprofit” is not the business plan
  • Agency lacks focus on the mission
  • People are undervalued
  • Fundraising comes first
  • Lack of board ownership
  • Organizations that don’t know who they are or what they need

Let’s dig into each of these issues and what to look for/ask about.

Nonprofit Business = Business

Despite the confusion caused by the title “nonprofit”, all nonprofit organizations are actual legit businesses. They have to make at least as much money as they spend each year. The term “nonprofit” is a tax designation from the IRS. It’s not a philosophy for how to run a business. 

In fact, many of these organizations generate a surplus. The difference comes in what they do with that money. A nonprofit organization is required to reinvest the surplus back into the organization. This could be in the form of equipment, supplies, salaries, training, facilities, investments, etc. With a for profit business, any surplus goes into someone’s pocket. 

Board members are responsible for the fiscal health of the organization. Before joining any board, ask a lot of questions about the agency’s finances. Even if their financial situation isn’t stellar, does the board have a plan to fix it? Is that the kind of problem-solving work you like to do? Avoid any board that has financial problems that they are refusing to address. 

Benefit the Community

Nonprofit organizations exist to make our world a better place. For profit organizations exist to make money for someone – the owner(s), shareholders, investors, etc. 

Governance volunteers are charged with making decisions that are in the best interest of the constituents served and the agency. This is why board members are volunteers. When money comes into the picture, there’s personal interest that may influence their decision making. Does the agency have a conflict of interest policy? 

Another thing to look for in this area includes ego driven leaders. Agencies with either staff or volunteer leaders who make themselves the center of the work can be extremely toxic. These leaders struggle to keep the focus on the cause. They make decisions based on how they will look/benefit, rather than what is best for the organization and its mission. 

Organization Values Its People

Reputable agencies believe in the importance of fair compensation for their employees. Just because someone works for a cause-driven business, it does not mean that they don’t need a livable wage. Caring about constituents at the expense of employees is a contradiction that should be examined. 

Young organizations sometimes hire or contract part-time staff to manage operations as they grow. This is fine, as long as they are not expecting full-time work on a part-time salary. Additionally, this should be a short-term solution, while the board figures out how to get to the level of staff leadership they need to be successful. 

Strategy Drives Fundraising

So far, I have never encountered a nonprofit that didn’t need money. It’s the nature of the game. Making our world a better place takes money. However, boards that focus on fundraising first are missing the point. Fundraising efforts need to be tied to strategies that have been developed to fulfill the mission. Without connecting those dots, it’s going to be extremely difficult to raise funds. 

Integrity

It is the job of the board to uphold the integrity of the organization. If something doesn’t seem right the board MUST speak up. By asking questions about accountability, generative discussions, and where the power of the organization lies, you’ll get a good idea about the board’s leadership. 

Red flags to listen for include any board that lets the staff totally run the show, unaddressed financial issues, lack of vision held by the board, and board meetings where the volunteers just come for a “sit & get”. 

Websites like Charity Navigator and GuideStar can help you with your research. These sites rate nonprofits based on their IRS compliance and verify good standing. They provide access to Form 990 data, giving you the ability to evaluate an agency’s financial health. These resources can help you decide if an organization is a good fit for you or not. 

Culture, Values, Structure, and Needs

Making a good decision about the kind of agency you want to volunteer with involves knowing yourself. What kind of culture do you want to be part of? What are your values and how do they align with those of the organization? Do you want to be part of building a young organization or will you be more comfortable with all the policies and procedures in place? Do the skills-based-needs of the agency align with your talents? 

Other things to consider include your tolerance for risk, what you want to get out of the experience, your time availability compared to the needs, and how you think you can make a difference. Just like every person is different, every organization is also different. Take the time to make sure you find one that aligns with your wants, needs, values and interests. 

None of this is meant to scare you away from governance work. It’s meant to give you the knowledge to ask good questions, get involved with reputable organizations, and have the impact that you want to have on your community! 

If you are on a board where you see some of these red flags, it doesn’t mean that you should quit and run away. However, you might want to start asking questions and using your influence to help move the agency in a positive direction. 

Every nonprofit is different and has unique needs and challenges. Email me at Kim@Athena-CoCo.com, or schedule a Discovery Call if you would like to discuss ways to advance your Board of Directors and the work of your agency. 

Kim is a mom, lover of being active and the outdoors, and helper of nonprofit leaders.
kim@athena-coco.com 

 

Engaging Your Board Members

As I shared in my last article, the number one question I am asked by nonprofit leaders is “Where do I find good board members?” You can read here that it’s not about finding good board members, it’s about finding the right ones for your organization. The next most often asked questions are “How do I get my board members engaged?” and “What do I do with these people?” That’s what we’ll chat about today. 

Contrary to what most organizational leaders hope for, you can’t just recruit a great board member, then expect them to know exactly what to do and what your organization needs. They may be good, but they are not psychic. There’s no easy way to say this, so I’m just going to put it out there. If governance volunteers are not engaged, it’s probably not a “them” problem. It’s usually a board problem or an organizational problem. 

Let me ask a few questions:

  • Do you/does your organization know what you need from your board?
  • Have you/the organization engaged volunteers in planning?
  • What do you/your organization provide for the volunteers, to help deepen their connection?
  • Who do you/your organization have focusing on the health of the board as a whole and the engagement of individual volunteers? 

If your answers are: no, no, nothing and no one – that is probably a very big part of your engagement problem. Building off of those questions, there are the four components that I believe will set you up for developing an engaged board. Let’s dig in.

Knowing What You Need

As was discussed in the article on finding good board members, different organizations have different needs. This goes far beyond passion for the mission and the time they can commit. Think about:

    • How they want to give their time
    • Their comfort level with ambiguity
    • Experiences that align with your future goals
    • Connections in the community
    • Specialized skills 
    • Their goals for how they give their time

I would argue that you shouldn’t even start recruiting volunteers until understand your organizational needs. Maybe not ALL your needs, but have an idea of what you are asking people to do. 

Get Volunteers Involved in Planning

A board retreat or strategic planning session is a good way to connect your volunteers to the organization. While many organizations conduct very elaborate strategic planning processes, it does not have to be like that. Smaller organizations can’t always afford the time and money that it takes for a complex process. However, any agency can benefit from taking time to have deep-dive conversations about the future of the organization. 

Holding a planning retreat soon after the induction of new board members can provide several great outcomes:

    • Relationship-building between new and veteran volunteers
    • Education for newbies on the mission, vision, values, critical social issue the agency addresses, and the unique solutions the agency provides
    • Culture can be shaped based on how this event is planned and delivered
    • Volunteers will be much more connected to the strategies and action steps that they are involved in developing, than they would be in ones that are simply presented to them

I have heard the concern about brand new volunteers coming to a retreat and not knowing enough about the organization, what’s going on, or how to contribute. My argument to this is that your volunteers do not need to know all about your organization. In most cases, what nonprofits need from their volunteers is an understanding of the community or constituents they serve, business and leadership skills, and lived experiences. If your volunteers are getting down in the weeds of operations, they are not focusing on the right stuff. 

After any good retreat, you should come away with strategies for advancing the organization. Some of the action steps from the strategies may end up being staff driven; however, the goal is to come away with work for the board to focus on. Those actions should be assigned to a task force, an ad-hoc committee, or a standing committee. Again, if the volunteers have been involved in the creation of these plans, they are going to be much more invested in carrying them out. 

Make It a Two-way Street

A Board of Directors is not just about what the organization can get out of the volunteers. It should go both ways. Absolutely, the organization should benefit from having great volunteers, no question. But if you are not investing in them, they will not stick around for very long. 

Some of the ways that I have seen organizations value their volunteers include:

    • Providing a thoughtful welcome and orientation to the organization and to the board
    • Training them on things like: how to be a great board member, the critical social issues the agency addresses, community dynamics, organizational structure, etc
    • Implement a mentoring system to help newer volunteers become acclimated and provide a leadership role for seasoned volunteers
    • Send them to industry conferences
    • Provide networking opportunities with the organization’s board, community leaders, other leaders in the industry, or thought leader on the cause
    • Help them to develop their leadership skills by supporting them in projects, presentations, and community outreach
    • Recognition for their service and contributions
    • Spotlighting volunteer contributors through newsletters or at events

You could also have a generative conversation at a board meeting around ways to help volunteers grow, support them in their personal goals, and recognize their contributions. 

Board Development Committee

In my opinion, one of the best ways to engage volunteers and ensure their energy is focused on appropriate projects, is to create a Board Development Committee (also called a Board Governance Committee). This subset of the board has their finger on the pulse of the health of the board. 

There are so many ways that this committee can impact the engagement of your board. Here are some examples:

    • Establish and nurture the desired culture
    • Plan meeting structure, layout, conversations, etc.
    • Troubleshoot when problems start to surface
    • Have peer conversations
    • Evaluate the effectiveness of meetings
    • Recruit and onboard volunteers
    • Evaluate the board as a team and as individuals
    • Create social opportunities to strengthen relationships

Ideally, Boards should be self governing. With a little direction, this committee can ensure they are moving in the right direction. 

The role of your board is to look out into the community and into the future to make the best decisions they can for the organization and those served. This should be the focus of the work of your board. So often, organizations do not know what to do with their board, so they give them “check-list” items. Tasks to do that they can check off a list.

Governance leadership is not a checklist. It’s engaging people who care about your cause in high level conversations, to shape the impact and the future of the organization. If, after these suggestions, you’re still at a loss for what to do with your volunteers, below are some more ideas. 

  • Conduct program quality evaluations 
  • Examine the impact of programs
  • Drive donor appreciation 
  • Friend-raise
  • Survey – participants, the community, stakeholder, etc.
  • Plan a retreat
  • Hold community conversations around the critial social issue you are working to solve
  • Get involved in board development
  • Host new member or new participant receptions
  • Serve on a future-planning task force
  • Examine organizational succession plans 
  • Review bylaws and policies

I could truly go on and on. There are so many ways volunteers can contribute their expertise of the community, the constituents, business, leadership, planning, and more. It takes a bit of guidance to keep them out of the weeds, but once the big-picture culture is established, boards usually keep themselves future-focused. 

Every nonprofit is different and has unique needs and challenges. Email me at Kim@Athena-CoCo.com, or schedule a Discovery Call if you would like to discuss ways to effectively engage your organization’s Board of Directors. 

Kim is a mom, lover of being active and the outdoors, and helper of nonprofit leaders.
kim@athena-coco.com