Starting a Charity? Board Performance Evaluation

Having done that little diversion on the games board members often play, we come back to our consideration of why performance standards, and performance evaluation procedures are a good thing for nonprofit boards. And we said in a previous post that there is sometimes a fear, both among board members and among nonprofit executive staff, that a board that uses such standards of performance might get a reputation around town for being “tough.”

As for getting a tough reputation around town, that’s not likely to be problematic. Most people appreciate when they know there are two qualities to doing a job they're being asked to do as volunteers: One is the yardstick by which they know when they will succeed, and the other is the "light at the end of the tunnel" by which they know when they have successfully completed the job they were asked to do.

Consequently, if a nonprofit gets a reputation in town for evaluating the performance of its board fairly, on a regular basis, and with lots of recognition for good performance, then people of merit, people with money and connections, are going to flock to get on that nonprofit's board. This is a good reputation to have among the community's leaders.

So this means that a nonprofit organization that has thoughtfully conceived and well-written standards of performance is going to attract capable, giving, connected leadership more easily than a charity that doesn't use such measurement. In today's overcrowded philanthropic marketplace, having this ability to measure board performance and reward members can distinguish nonprofits and give them a leadership advantage that puts them ahead of the pack. That alone should serve to motivate both boards and their executives of organizations that don't have performance standards for their boards to start immediately to devise them.

One could think about it this way: Suppose we eavesdrop on three company executives having lunch together in a local restaurant. Besides reviewing the local economy and playing a quick round of one-upmanship, they're getting into the subject of corporate giving. Harry, Mary and Joe have all been asked for contributions to several local charities, and they're getting together, among other reasons, to chat a bit about what they're going to do. Joe might say he's tired of giving to the particular charity that asked him; he might complain that several people from that charity approach him many different times a year for small amounts, and he wishes they could get their act together and consolidate their "ask," which would make it a lot easier for him to justify the contribution to his board or financial committee or management team. And, besides, aren't there other charities in town to give to?

Then Mary pipes up to say that she has just been asked to sit on the board of one of the community's nonprofits, and she knows that this brings with it a commitment to raise or give $10,000 each year she is on the board. She also tells Harry and Joe that this board has pretty high performance standards, and that they are all very enthusiastic and committed people. She cites various other community leaders who are part of this group, and says that despite the requirement, she feels honored to be part of that board. She also gets around, in the discussion, to asking both Harry and Joe for a contribution that can be logged against her quota! Smart woman!

And then Harry chimes in with a comment about how if there were any board on which he would serve it would be that one on which Mary is about to be installed, because not only are the "movers and shakers" all over there, but he would feel much more comfortable being a part of something where the leadership was excited and enthusiastic about doing something really significant for the community. He cites the fact that this board does have performance standards as a reason he would seek membership on that board.

So you see, in this little example, how word spreads, how one comment spurs another, and eventually the positive word gets around that happy, productive people on a board that does performance evaluation according to specific standards of performance, are not only doing a good job, but are part of an organization seen throughout the community as effective, progressive and a true community asset.