Starting a Charity? Standards of Performance for your Board

Continuing on this thread, one of the other things we know about human nature, and particularly the executives and staff of nonprofit organizations, is that they are deathly afraid of anything that might affront or challenge the board or a board member. It's kind of ironic in a way, but when the charity is being founded, the founder/executive is afraid to offend these specially selected people because she/he needs them to be board members and get the charity off to a good start, but later, when the board becomes a self-perpetuating board, the executive and staff are afraid to offend board members because they might take things in hand and make drastic changes in the organization if their whims and fancies are not granted immunity from questioning. Like firing the executive?

Why is this? Well, probably for fear of losing their jobs, or losing the board member with all that influence and potential money, if such there be. And for fear of getting a reputation as the only charity in town that evaluates the performance of its board.

But let's examine this fear a little more deeply. Fear of losing a job suggests that the nonprofit organization is somehow the last bastion of the old fiefdom system, where the executive and staff are working for the knights and royalty of the realm and are little less than indentured servants. Such an attitude further suggests that some board members are acting in the manner of tyrants – unable or unwilling to take responsibility for holding up their end of the workload at the charity. Of course, in some charities, this is really the case.

However, the nonprofit organization is a public trust. The board of directors is appointed or elected on behalf of the whole society (even though the board may be self-perpetuating and all may be personal friends of the founder/executive) for the purpose of providing governance for the nonprofit on behalf of the whole community. They have a specific charge to perform, and they are accountable to stakeholders, public, state and Congress. Granted, there is as yet no formal method by which they are regularly and public held to account, but it's coming, and performance standards are a way for each charity to hold its board accountable for performing their responsibilities justly, wisely and with prudence.

What is the Board's job? They are in charge of steering the nonprofit in the right strategic direction in order to accomplish some specific social aims that this board, through its state registration, formative charter and by-laws, has told the society this charity will accomplish. Then they're job is to do the strategic planning, hire the executive, and make sure that program and finances are going in the right direction. No one else can do that. The executive can't do that; the staff can't do that; and outside people or agencies can't do that.

So the only people who can perform that task are the board members. So why shouldn't there be specific performance standards in place that measure how well the board is doing its job? That, as we said above, is the way to help human beings really do a good job, have a wonderful feeling of success, and feel proud of their organization.

The mere fact that it might have been the executive or staff person who came up with the suggestion of performance standards, and may have created the first draft of those metrics, should in no way be held against them. They're trying to facilitate a process that is vitally important to the board's work. Board members should, rather, be grateful that they have an executive and staff smart enough and creative enough to come up with this governance tool that will aid them in their work. There should be no question of fear in this, whatsoever.

More tomorrow.