Starting a Charity? 10-Year Crisis Starts in the Board Room

I once knew an executive director and founder of a nonprofit who was a voting member of the board, made up the agenda, brought it to the board meeting, ran the board meeting (even when the chairman was there) and wrote up the minutes a few days later and mailed them out. Nothing was going to get by this lady, and she would brook no interference with viewpoints other than the perspective she brought to the boardroom table.

But the board members were also complicit in this behavior. Everyone on the board was a personal and social friend of the founder/executive. So no one was really inclined to do much that would mar the surface of that continuing friendship.

More than that, there was an implicit trade-off in the relationship. The founder let the board members off the hook, so far as giving to the organization was concerned, in exchange for nobody pressing on any governance issues. And, in fact, all the board members were busy with their own problems and affairs, so none gave the time to finding out what charitable boards should be all about. No one delved into the operations of the organization, beyond approving the annual budget as presented by the founder herself. The board allowed her to do as she pleased, giving bits and pieces of advice here and there along the way, helping out where possible and necessary. But the whole board process consisted of letting the founder run things as she saw fit. They also let the founder carry all the burden and do all the work.

Dysfunctionality doesn't exist in a vacuum. It takes "two to tango," so to speak, and it is necessary for the board of a dysfunctional nonprofit to be complicit in the dysfunctionality.

Now, here, I want to take a bit of a digression to say that over the years I've seen many small nonprofits who aren't really dysfunctional to that degree, go about the process of recruiting and installing board members in such a way as to subvert the real power that good governance can bring to a nonprofit. These are the nonprofits whose executives use a process of recruitment that I would call "If it moves, put it on the board."

For example, if someone gives a $500 check a couple of times, "put her on the board." If someone volunteers frequently, or turns out to be a major help with the annual fundraising event, "put him on the board." If someone makes a suggestion that turns out well for either fundraising or program, "put her on the board." If the founder/executive is looking around the community for donors with capacity, and she finds Mr. and Mrs. Successful, then "let's get them on the board, maybe they'll give to us." If she can fog a mirror, "put her on the board."

That's the way to develop a board that
a. has no idea of its function;
b. knows nothing about governance, and
c. has a very good chance of dissolving into fractious disputes over time that detract from any true governance that might have been possible, unless the founder/executive keeps a tight hand on running the show.

So by the very nature of this type of board member recruitment process, the executive sets up the board for failure at is primary task. The trick is that financial failure may not come for 10 years, and may only begin to happen during the 6th or 7th year. So the board and the founder/executive live under the illusion that all is well for quite some time.

More on Monday.