How Nonprofit Boards Can Make Good Decisions -- Part 12 of 12

Should the CEO have his head examined? The size of his headache resulting from the discussion so far might give a clue that at least his method might need to be adjusted.

What will the CEO do next time there's something he wants from the Board? Bury it in the budget? Make a formal proposal? Take a board member to lunch? What are the learnings from this situation?

Will the CEO avail himself of the learnings? Will he sit down and write down what he has learned? Probably not. He doesn't see himself as a student, here, in the learning process. He sees himself as put upon, as underdog, continually having to wrestle the slightest advancement for the organization out of the Board's discussion.

What would you do different in this situation, dear reader?

You know what I would do? I would make or find a way to do the deliberative thinking necessary to make a good decision, but use the board's brainstorming and story telling capability to help board members have input to and develop ownership of the decision.

First, I'd take my idea to each and every Board member individually, long in advance of the board meeting, and in advance of making up the budget that would include the proposed infrastructure expense. I would demonstrate the situation now and what it is producing; I would show the need our organization has to raise more money; I would clearly state what we could expect in the way of results from an infrastructure investment.

Then I would demonstrate the financial facts of the case, the situation as we now have it and how the financial picture could change significantly for the positive. Then I would show each board member the vision of what could happen in our organization with new revenue and why this is important to do. And then I would demonstrate how that vision could become if we had that donor software and somebody to enter and massage the data.

In short, I'd build a case for support with each of those Board members, tailor-made to each board member's personality and understanding. I would make sure any questions they have are answered first. I'd ask each one whether they were ready to support the proposal unanimously, and if any said "no" I would not bring it to the Board until all objections were fully satisfied. I would wait until I knew I had board approval before even bringing it to a discussion.

At the board meeting, I would present the issue with a one-page summary of what I had told each board member privately, detailing the need, the vision and the solution. I would bring this as a separate issue before the budget discussion, so that the issue could be addressed on its own as an infrastructure issue, not as a budget issue. By the time we got to the board meeting every board member would understand the relationship between budget and infrastructure clearly and completely, and would be assenting to the conclusion of my one-page description that the infrastructure was needed and would promise to produce effective results.

But you'll probably say, "John, that's a pipe-dream. It'll never happen. It takes up too much of the CEO's time and too much of each board member's time." Perhaps you're right; perhaps you know whereof you speak. But if you don't take this route to an affirmative headache-free decision by the board, tell me, send me an email, how else would you get a decision that's based on deliberative thought, one that involves the Board members around the issue of infrastructure and engages them where they are? How would you get a decision that will move the organization ahead in a positive direction?

Boards only do two things well: they can brainstorm and they can tell stories. Boards cannot do deliberative thought. There are too many impediments in the group's process to allow deliberative thought and sound reasoning.

Tomorrow we'll see how this works in more detail.

How Nonprofit Boards Can Make Good Decisions -- Part 11 of 12

Picking up from Friday, we can see that everybody around the board table is getting into the act now. Paul made such a noise about the increase in spending for the Development Department's budget that he alienated his colleagues.

Tempus fidgets and Gloria's got to leave, we've spent the hour allotted and still are nowhere close to a decision to approve the next year's budget.

Even laid-back Sam is starting to feel some irritation and begins to say things that don't exactly lend themselves to constructive examination of the issues involved.

Each person has his/her own image of themselves and who they are, which needs constant polishing. Everyone in the group is either consciously or unconsciously working on this and the way they perceive others see them.

Each person is also trying to get something done by way of enhancing their own role and standing in the group. To top it off, there are professional agendas operating, as well as constraints on and (mis-)management of time for each of the board members.

Then there's the politics of the situation: like the matter of the way the CEO "sprung" this on the Board through the budget process. There's also the demand that the budget be approved because of the fact that the fiscal year is about to end. We have at least three components in this discussion, each of which has multiple aspects. It's complex situation. But not unusual at all.

As the discussion proceeds, we have to ask a question: Can any of the board members really see clearly enough through all the "stuff" that's on the table, all the fog generated in peoples' minds by all these factors, to suggest a way of proceeding that will lead to a decision that is wise and fair and effective at moving the organization ahead strategically? Can they, in other words, really settle down and do deliberative thought on this issue of fundraising infrastructure? My experience says that it's impossible. That's why boards do two things well: brainstorm and tell stories.

Paul's in a sweat to make himself heard, raise his point and keep it foremost. He now has a lot at stake and feels he must personally drive home a decision to scrap the database project, even if only because he first saw it as a "hidden agenda" by the CEO.

Gloria's really put off by that, has sided with the CEO, and now must bear the burden of the fact that he buried the bone in the budget even though she would rather have had it done another way. Neither she nor Paul can afford to "back off" for fear of losing "face" in the group.

Sam has really given it a try, he knows this is needed, but he's getting anxious because he sees not only the discussion falling apart, but the board's effectiveness as well. He's worried that, once again, Do-Good Charity might be in for a resignation surprise, and he doesn't want that to happen. He's looking around for some sort of way to interject an alternate plan into the discussion.

Melinda has already moved; she's putting on her coat to leave. She said her piece, her mind is no longer on the discussion at this point, she's in a rush to get outta there! Her boss is waiting. Besides, she's seen these kinds of discussions before and knows this one is going nowhere; she's convinced that it's a waste of time.

Mary doesn't know what to do. She's never comfortable in a politicized situation like this. Her peers never do this kind of thing. Knife in the back, clever manipulation, power plays, she's seen it all, but never in a loud discussion. It's always done behind the scenes in her crowd. So she's at a loss to keep up with this group.

Tom suddenly sees the incredible difference between business execs arguing like this and the members of a charity board doing it. With the business guys there's a lot of money at stake and the guy who loses or wins the argument has a lot at stake. Even if the decision isn't made well and thoroughly, it will be made and the business will either sink or swim – people will either go broke or come out with unbelievable riches. In the charity, he sees, the argument is over a few thousands of dollars and no matter who wins the outcome won't cost anybody anything except some face, a few headaches and an ulcer.

In this situation, how can deliberative thought be done on an issue as complex as the enhancements planned for fundraising infrastructure? In fact, the board members have not really yet gotten any deeper into the infrastructure issue than to dicker about the price tag. They still don't know what infrastructure will do for the organization, what it is composed of, and how it is necessary for the organization to move ahead. So they haven't really come to grips with the issue at all, in terms of being able to understand the complexities and possibilities involved.

We'll finish this thread tomorrow.

How Nonprofit Boards Can Make Good Decisions -- Part 10 of 12

More reactions of board members as they discover the real situation with the budget:

Yesterday we saw that the CEO came to the board meeting with a budget that contained a substantial increase in expenditures for fundraising infrastructure components. We've see what's on Paul's mind, and Melinda's. Now let's climb into the psyches of the other board members.

Mary's problem is that she's in a hurry. Not just today, but every day, any day. She breezed into the meeting about 15 minutes after the meeting started, which was a half hour after the meeting was supposed to begin. And she is ready to leave right after the budget discussion because her boss has an appointment lined up with a new client and she needs to be there. Mary's idea of giving priority to Do-Good's work is to allow about 2 hours for getting to, being in and getting back from any board meeting. Her office is a half hour's drive away from the board meeting location.

Now we're beginning to see just how the psycho-graphics are complicated by the board person's job responsibilities, their internal agenda and personal objectives, and their various levels of ability in managing time and attention. We're beginning to get to the heart of this issue of why boards (as groups larger than 2 or 3 people) can only brainstorm and tell stories, and cannot do deliberative thinking. Could you see it coming? The issue has been set up by the CEO in such a way that it doesn't have a prayer of succeeding. Or if it does, somebody's going to develop an ulcer over it. You've seen this before in board meetings you've attended?

Who else is around the table? Can the CEO look to Mary? Well, that's a matter of some speculation. She didn't notice the increase in the Development Department budget. She doesn't like that area; she concentrates on service delivery and likes to see how her gifts, which are not insubstantial, are being used, as represented in the various service delivery budget categories. She likes to imagine all the people being served, since it gives her a sense of satisfaction and "return on investment."

The fact that Mary didn't notice the budget increase is, of course, embarrassing; so when Paul brings this up, she has to find a way to adjust her own image of herself within the group and get their perceptions back on track. So she's working on that, plus it's doubly irritating that, once again, she's going to have to try to tone down the Development Department's penchant for bothering her wealthy friends for more money. She's preparing her multi-point speech as the discussion proceeds, looking for the right opportunity to jump in, but carefully choosing her words. She's nothing if not a diplomat in these circumstances.

Sam didn't see it coming either. But once the CEO began his explanation he could see that what is being asked for is not only reasonable but will have a long-term payoff that is very much needed by the organization for its future health. Sam is laid back on this one, because he knows the homework has been done. He also considers that he is "one up" on most of the rest of the board because he just committed to a five-year pledge and feels a little smug about it. But he won't play that trump-card in the discussion unless he needs to.

Gloria, too, is in the CEO's corner, because she knows the financial need. She hasn't yet connected with the fact that sooner or later she, too, is going to be asked for a really big multiple-year commitment, because she still feels safe hiding behind the old standby that "accountants don't get paid that much." Besides, Paul really ticks her off, the way he comes on, the way he talks about things. The two of them have knocked heads before. And she lost the last bout with him, so this time she's got it in for this arrogant attorney.

So what's your thought, dear reader? Does the CEO have a prayer of succeeding with this group? Is he going to get his database software and his new-hire? We'll find out on Monday. In the meantime, have a great weekend.

How Nonprofit Boards Can Make Good Decisions -- Part 9 of 12

OK, so we know who some of the players are as we come to the Board table to discuss whether or not to use significant resources this year to purchase donor software and hire a data entry and retrieval person.

How has the CEO, working with the Chair of the Board, set up the decision? It's buried in the budget figures for the Fund Development department. Anyone who has read the proposed budget in advance will have seen that, compared to previous years, there are significant increases in the Development Department's budget.

There is no formal proposal for this change of management direction. It's predicted to be brought up by whoever first sees the budget increase and asks about it. Then the CEO plans to explain what he sees as necessary and why. If no one raises the question, so much the better, and the budget will be passed, and this, then, gives the CEO and staff license to move ahead with the plan. If questions are raised, "we'll deal with them as they arise," said the Executive.

So Paul gets his budget, and immediately sees the increase over last year (the figures are presented side-by-side in a spreadsheet exhibit prepared specifically for the Board's consideration and approval of the budget, and because the auditors have traditionally presented the financial figures this way. (Having annually audited financial statements resulted from Gloria's work with the financial staff.)

Paul is curious to see what this expense will mean, so the first thing he does is calculate the cost of fundraising. And he discovers that the cost of raising $1 has risen from about 21 cents to about 50 cents. And he wants to know why.

Here's the first hint that not only are the psycho-graphic factors working here, but additional factors as well. Pauls' job is business, law, knowing quickly the effect of changes in the balance sheet. He also has some personal objectives he wants to accomplish in Do-Good Charity. He has felt for a long time that charities typically spend "too much" on setting up to raise money. He has had some lunch conversations with Tom, who has complained about "always being dunned for money" and, to some extent, shares that viewpoint. So the discovery of the new Development Department budget figures set off alarm bells and give him a surefire bully pulpit from which to set and accomplish his own agenda.

Melinda, on the other hand, takes the opposite viewpoint. She saw the increase, too, and called the CEO and talked with him about it. She very much supports what he wants to do, because she has the ability to think business, think long term, and she wants Do-Good to be able to double it's operating budget within 5 years, so she knows it has to raise more money. She understands just enough about fundraising to know that multiple-year commitments from individuals is the way to go on this.

We'll explore the reactions/responses of the other board members tomorrow.

How Nonprofit Boards Can Make Good Decisions -- Part 8 of 12

So what's going on around the boardroom table?

Here's Paul: Paul's a lawyer. Corporate: mergers and acquisitions. He knows a business proposition when he sees it, has seen it all in terms of financial investments gone sour or turned for the good. He's hooked on Do-Good because he knows that if you don't pay at least some attention to the poor down-and-outers, you haven't fulfilled your obligation to society. And he wants to be seen as doing that. He's a bit rough around the edges with people when he isn't in a negotiating position. He claims that "being totally honest even if it's brutal" is the way to go. Inside, Paul is a born contrarian; whatever position someone else has, he labors to find the opposing viewpoint and offer it for everyone to see.

Here's Gloria: Gloria is an accountant. She's here because she is involved as a volunteer keeping an eye on the finances of the organization and giving frequent bits of advice to the financial officer and her staff. She came in 8 years ago when financial matters had deteriorated a bit and helped straighten things out and get Do-Good back on the right fiscal track. Inside, Gloria is suspicious of any new expense that is proposed; she lives with a constant perception of scarcity.

Here's Sam: Sam is a retired school superintendent who has been on this Board for 15 years, since its founding. He's a rock, a stalwart, volunteering for many kinds of jobs in the organization's life over the years. He has confidence in the management team presently in place because he helped put them there. He's a little more laid back, too, and very accepting of many kinds of people and their personalities. Inside, Sam has a geologist's sense of time and knows the nonprofit is likely to progress in little steps, but will take great strides over long periods of time.

Here's Melinda: She's in marketing, a principal in a firm she helped found, and very successful in the radio and TV marketing business. She has a very heavy schedule but takes time out of her busy day to attend at least 4 of the 8 Board meetings that occur each year. A little high strung, Melinda knows business, and knows nonprofits. She has been a board member on one or another of the community's nonprofits for 18 years, and says she loves it. Inside, she's glad for this outlet for her energies, because she often thinks she would like working in the nonprofit sector better than in business.

Here's Mary: She's the wife of a very wealthy businessman in the community. She and her husband are scions of wealth. She's a socialite, knows everybody worth knowing, and is marvelously defensive about protecting all her friends from being, as she says, "pestered" by all the charities in town. She will not fundraise with them; she refuses to open doors with her friends for the organization. But she wants to be on the Board as part of what she sees as fulfilling her "duty" to charity. Inside, she's wary of the fact that if she asks for money from her friends, they will all come looking to her to share her own wealth.

Here's Tom: He's a manufacturer's rep, and very successful at what he does. He's high-powered in his approach to everything, always punctual, always involved in a lot of things, always the "driver." He knows business inside and out. He also knows he's sick and tired of so many charities asking for more and more money, and wishes they would stop pestering him about giving and giving more. Inside, he feels guilty that he can't give more, but his cash flow is often fairly thin because of his investment in his business.

Get the picture? We'll see something of their interaction tomorrow.

How Nonprofit Boards Can Make Good Decisions -- Part 7 of 12

Now, for our Example #2, we’re going to do an analysis of a more complicated board decision: the decision whether or not to give some major resources to bolster the organization’s fundraising infrastructure. That means this series on Board Development, where we're dealing with how boards can make fair, wise and practical decisions, will be extended to 12 parts rather than seven.

First, let's do a short review, just in case you've joined us recently and haven't had a chance to read previous posts on this subject:

In a previous post, Example #1 concerned a Board making a decision about enhancing its own level of giving to their nonprofit organization. What we dealt with there was a set of psycho-dynamic factors that make it literally impossible for a board, or any other group of more than 2 or 3 people, to do deliberative thinking. And we've tried to describe the kinds of effects these psycho-dynamics have in the context of this decision about the board's own giving.

We've had a few digressions along the way, but, ultimately, I think the best way to help a board do what it does best – which is to brainstorm and tell stories – is to be prepared to do most of the work on any serious issue coming before a nonprofit board in the background, outside the board meeting, but in a way that involves board members and takes seriously their various kinds of input, needs, wants, values and their points of view.

Now, in Example #2, this decision about whether to invest in fundraising infrastructure, and how much, we are going to see an additional set of factors that, once again, make it impossible for a board or any group of people to do deliberative thinking.

Previously, we enumerated the following elements of the psycho-dynamics affecting each board member's ability to do deliberative thinking:

Factor 1: my view of myself,
Factor 2: my view of you,
Factor 3: my understanding of how you view me,
Factor 4: my grasp to whatever degree on the image of me held by the group, and
Factor 5: my desire and strategies for changing, to one degree or another, either your view of me or my image within the group.

The effect of these, for each member around the table, tends to overpower each person's ability to do deliberative thought on a complex issue or problem facing the group.

Now, we're going to see how some additional factors come into play in a decision about funding fundraising infrastructure. As you can see, when we combine the psycho-dynamics of the board's process with additional factors, this is going to get a little complicated. But that's precisely why we say "boards can only do two things: brainstorm and tell stories." Let me set up the situation as I have seen it many times over the last 27 years of fundraising.

It's budget time, once again. The Board of Directors for Do-Good Charity is assembled for a regular meeting of the board, in which the budget discussion has been given a generous 2-hour slot. Typically, for this board, and many others, items are given 15 minutes. But today the CEO has something special in mind.

There's a proposal, represented in significantly adjusted budget figures for the fund development department, to expand fundraising infrastructure by purchasing new donor software and hiring a person to do both data entry and data retrieval. This will, as the CEO believes – and rightly so – facilitate the stewardship of donors and the start of a major gifts program that will cultivate and solicit a whole new group of donors for major 5-year commitments to the institution.

The CEO plans, over time, to turn this little investment in infrastructure into a $5.5 million increase in revenues for the organization through multiple-year commitments. Got the picture? You've probably seen it yourself, either as a fundraising professional or as a volunteer serving on a board.

You think $5.5 million is impossible? Not at all. We recently helped a client find that much in their present donor database and start cultivating and soliciting major five-year gifts. And that client was doing about $30k per year in direct mail and another $500k in special events along with a substantial grants program. Pretty elementary, yet they had enough friends to whom they had not been attending carefully but whose potential amounted to that much.

Your organization may similarly be missing the boat by not carefully analyzing the giving patterns of your donors. It takes time, it takes some investment; above all, it takes organizational commitment to fundraising. But if you don't do it, you're leaving a ton of money on the table. This CEO in our example is taking the budgeting step necessary to make it happen for Do-Good Charity.

We continue our example tomorrow.

How Nonprofit Boards Can Make Good Decisions -- Part 6 of 7

Having set a small group to work, a group that really can do deliberative thinking because they have the kind of time and assignment that gets them past the psycho-dynamics that normally impede deliberative thought, let’s go to step #4.

4. Small group recommends action. They look at the problem or issue from all sides, getting input from individual Board members they know will have a point of view. Looking at what other organizations do or have done with the same problem. They examine a variety of possible solutions, and, with that, a series of outcomes that will result from each of the possible solutions. And my thought is that it is only at this point that they can choose one of those possible solutions to recommend for Board action and implementation. You’ve got to know the field well before you can really understand which solution will work best for this organization at this time and in these particular circumstances.

It can’t be a solution based on anecdotal evidence. It can’t be a solution based on hearsay and opinion. This type of thing is typically what is going to be heard in a full-board discussion. People working in larger groups do only two things well: they can brainstorm and they can tell stories. But they can’t do deliberative thought. So they brainstorm, and, in so doing, they’re going to give you what’s on the top of their head that moment, on that day. The stories, the anecdotal evidence, and “I’ve heard that...” and so forth. But that’s just a start, just a suggestion of a direction. It’s not the basis for a good decision. So that’s why the small group is so necessary. It gets down below that superficial level and ferrets out the facts, the alternatives, then makes a solid, workable recommendation that we know in advance will meet the needs of everyone involved.

5. Executive and small group work individually with each Board member in advance. Even though we’ve had Board input on this through the small group, we still want to be sure we have everyone’s buy-in on the recommendation coming from that small group BEFORE we get to the Board meeting. Why? Because it’s important that the needs, wants and values of each particular individual board member be met by the final action the Board produces. Why? Because that keeps the Board working together, it supports governance, avoids divisions and ensures consensus.

6. Bring the issue to the Board with full documentation passed out in advance and only when we know in advance that all members can support the action. No surprises, right? Board chair and executive working hand-in-hand; small group gets input from Board members as part of its process; small group and Executive “shop” the proposed solution around the board informally to get input and make sure all needs, wants and values are heard and taken into consideration; then the decision and its documentation is published to the Board members in advance of their action meeting. The item is clearly on the agenda; it gets introduced thoroughly at Board meeting. The Board chair explains where this has been, what’s going on, what’s needed, calls for a motion, entertains “last minute” questions for clarification only, and then takes the vote.

I think the most essential work is going to be done OUTSIDE the Board meeting, but in a way that involves Board members and takes seriously their opinions, points of view, stories, prejudices, experiences and all the input they have to give, and then focuses that input on a deliberately thought out solution that has the best interests of the institution at heart and is workable given the strategic plan, the resources, the personnel and the situation at hand. Here’s where the payoff is that compensates the organization for the fact that the whole Board would be incapable of doing the deliberative thought that would bring about this quality of decision-making.

Here is a high-quality decision that I think will work, that will have participation and buy-in from all concerned, and one that will have good results for the organization.

Now, I promise that tomorrow we’re going to get over to Example #2 of Boards trying to do deliberative thought in decision-making – that’s where the Board is considering an investment of resources in fundraising infrastructure.

Tricky question, right? And you know it will come only at BUDGET TIME! Thoroughly confusing the issue.

How Nonprofit Boards Can Make Good Decisions -- Part 5 of 7

Continuing from yesterday, if the desirable outcome is a fair, just and equitable solution that's workable and focuses on the long-term good of the nonprofit organization, then you would use a process constructed to produce that kind of result. That means we need to work harder and do our homework. There are at least six steps to such a procedure, and I'm going to give those to you in just a minute, but bear with me, there's another issue we have to deal with here.

Why is it that board members can come onto a nonprofit board with the belief that so little will be expected from them?

If you look at the way nonprofits are set up, it's contradictory to the way we recruit board members, isn't it? Nonprofit boards serve a wonderful social purpose. I heard a speech by Lawrence Lindsey, a governor of the Federal Reserve Board, many years ago in Kansas City. He addressed one of the first assemblies of the National Conference on Planned Giving and said that if you give a charity a dollar, they'll most likely return about 6 dollars’ worth of service to the society. But if you give the government $6 in taxes, you're going to be lucky if you get a dollar of service in return. I assumed he knew whereof he spoke

So charities are effective and efficient, right? They serve a social purpose. What's the root of their effectiveness? VOLUNTEER BOARDS. The charities are run by volunteers who have philanthropic motivations – the love of human kind – at heart. They're self-policing. The United Way scandal a number of years ago was handled INTERNALLY, by their Board members who blew the whistle on the exorbitant salary of the national executive. They cleaned it up themselves.

So charity boards serve a distinct social purpose: their volunteer governance is responsible for achieving the social and charitable objectives of their nonprofit organization. Who in their right mind would, then, assume, that the work of the individual board member on the individual nonprofit board would be easy or without responsibility? It just doesn't make sense.

But that's what seems to happen in all too many nonprofits: board members are recruited on the flimsiest of excuses, seldom trained, frequently not told what they must do and how they should do it, never told they have to give. But yet we expect the board to perform. We expect the board to do strategic planning that directs the nonprofit in ways that will assure its achievement of its goals and purposes. We expect the board to provide the financial resources necessary to carry out that strategic plan. We expect the board members to be community leaders who give at a leadership level. But when we recruit them, what do we tell them? "Oh, it won't take that much time out of your schedule, it won't be a hassle."

Why does this happen? It happens only where there is not a well-thought-out process for recruiting board members.

What should happen is this:
1. The board has a job description written out, known in advance, repeatedly emphasized in board meetings. One that includes all the board responsibilities, including meetings, committees, giving, advocacy in the community, leadership among volunteers, etc.

2. Board members are brought on the board with a process that includes a full nine-step process:
- identifying many prospective members,
- recruiting only the best of those,
- fully disclosing to those prospective members all aspects of the board's life,
- installing them with public ceremony,
- training them in what they must do for the organization,
- evaluating their performance,
- re-training periodically in the various responsibilities, and, finally, at the end of the line,
- de-briefing them before they leave after their stated tenure is finished.

But it seems very few nonprofits do this. The really successful ones do. But of the more than 4000 groups and organizations in southeast Michigan that have 501-c-3 nonprofit status from the IRS, how many do you think engage in this kind of rigorous board recruitment process? From what I've seen in 22 years here, practicing actively among the charities for the past 10 years, my bet is that maybe 30 organizations have such a process in place.

No wonder we have a tough time getting board members to give!
But now we really MUST get to our Example #2.

How Nonprofit Boards Can Make Good Decisions -- Part 4 of 7

Well, we can't really go on to Example #2 before we give Board members their due. After all, they're human beings, too! Right?

So what do we hear around the Board table when the subject of "Board giving" comes up? Well, we hear things like: "You can't force me to give" or "I give my time, isn't that enough?" and "The approach you're using to get this done really turns me off." and "not everyone can give at the same rate?" and "nobody ever told me I'd have to be a fundraiser to serve on this board" and then there's the all-time favorite reaction "we've never had any rules about board members giving before; we don't need them now."

And each of these points of view does have a kernel of truth in it. That's what is so confusing to development staff and their executives. Each board member does have a point to make. There really can't be any force involved – it's counterproductive. Yes, people really do sacrifice other kinds of goals to give time to our non-profit and they deserve recognition of that because without that service we couldn't, as nonprofits, achieve what we do.

And, yes, there are some ways I've seen some board members lay it on their fellows in such a demanding, almost obnoxious way that the rest of the board is pretty much turned off to the idea of giving or of setting a board giving goal just as a way of reacting to that demand.

And, yes, not everyone can give at the same level. No doubt about it, some are more capable than others of both giving and "getting." Of course, if you go around the table and analyze who is likely, because of their profession or other factors, to have more capability than others, no one wants to admit they really COULD give more. But, generally speaking, you can figure that the attorneys and the business owners on a board will have greater capacity than the social workers, right?

And, yes, it is probably the case that when the board member took on this assignment he/she was NOT told they'd have to give a certain amount or at a certain level, or go out and cultivate and solicit gifts. Nonprofit staff tend to recruit anything that can fog a mirror as a board member. $500 gift? Make him a board member. Volunteered last year for the auction and did a great job? Make her a board member. Expressed interest in the cause? Make that one a board member, too! It's no wonder board members think they can be on the board without giving at leadership levels! We just put 'em on the board for the slightest of reasons, tell them "you won't have to take much time, you won't have to do anything very much." And we let it go at that, thankful that we filled the board roster again this year, now let's go on to all the other things we have to do.

So all these reactions have half a grain of truth in them. And the other half grain is more or less an excuse, a reaction to process, an internal response to the operation of the psycho-dynamics and other pressures within the board and within each board member. This is a mixture of internal and external "stuff" that mostly resides in the mind of each board member, but which also has a very real effect on the work of the whole body.

Point is, if we're going to make an intelligent decision and come up with a workable long-term solution that truly benefits the ORGANIZATION itself, we have to get beyond the half-truths and analyze the full situation, get all the issues out on the table, expose them, delve into them, find out the facts. But boards typically can't do that. They don't have the time – they're in a rush to get out of there and back to work or wherever it is they need to go after the meeting (golf, anyone?).

They don't have the inclination, either – they've got an agenda they need to accomplish before they leave the room early for their next appointment. And, even if they had the time and the inclination, you could put them in a room together all day and still not come up with a resolution on board giving that was fair, equitable and just, and that focused on the long-term good and welfare of the organization. It's just not something they're able to do because they are a group of people, and they tend to operate with the dynamics of a group, rather than being able to do deliberative thought, as an individual can do when working alone or with one other person.

Question: if all this is the case, then why do we persist – as development staffs and executives – in trying to get our boards to make decisions like this? If we know it's impossible, if we suspect there's another way to do it, why do we just waltz in there with this kind of an agenda item and hope and pray something positive happens? That's a mystery we'll delve into further tomorrow.

Your comments are appreciated. This blog is designed to be a little sharp and provocative, so if you're dander is up, that's good, and let's hear from you. Give us your thoughts.

How Nonprofit Boards Can Make Good Decisions -- Part 3 of 7

We ended yesterday’s post saying that generally the psycho-dynamics of the group will tend to overcome the board’s ability to do deliberative thought, but that may not be all that's involved here. Let’s explore this further.

Once a set of giving strategies is developed (slightly complicated "brainstorming"), the board must decide how to put these strategies in place, implement them, evaluate the results they're getting at regular intervals, and then provide a way to make any mid-course corrections that might be needed depending on what the strategy evaluation shows.

This is not only detailed work, but a fairly time-consuming activity for a board, and it will take a longer-term process than most board members can tolerate. It takes some concentration, commitment, open-mindedness and a lot of patience with the details in order to be done correctly and in a way that will bring a positive result to the organization. But the members of most boards I have seen operating feel they have neither the time nor the patience to engage in this kind of process. And, don't forget, those questions of self-image and other-perception are working unconsciously to impede this kind of work.

Not only that, but wouldn't it be good if the decision could be based on full consensus by the board rather than done by “majority vote”? But that would mean all viewpoints have been voiced, heard, taken into account and everyone fully included throughout the process. This would promote a strong sense of ownership and "buy-in" for all the Board members. But very few, if any, boards are disposed to take the time and energy to get that far in their decision-making.

Consensus decision-making can be a pretty complicated process, but it also can bring about a solid decision that has positive results. But the psycho-dynamics of a board's working together make it nearly impossible for a board to make such a decision in this way, using deliberative thought. So what generally happens?

One of two things generally happens with such a decision-making process: either the executive director of the nonprofit will have the perspicacity to have his/her staff do most of the deliberative work and bring alternatives back to the board for them to review and approve; or, what happens all too frequently, the executive just bulls on ahead, gives the board the decision, let's them go at it in helter-skelter style without any expertise or guidance, and hopes they emerge with some kind of giving process that most of the board can tolerate.

In the process, of course, the organization may well lose some good leadership as the more disgruntled board members, who feel their legitimate concerns were not heard, simply give up and resign. Pain all around.

Why pain? Because the decision is flawed to start with, which makes it difficult to carry out; pain because some people are left out or passed over; pain because the ability of the board to lead has been hampered rather than strengthened by the decision-making process; pain because the staff will have to implement the board giving program and yet have had no substantive, deliberative input.

Why? Because the board was given a task that, essentially, they are not prepared or qualified to do – they were asked to do deliberative thought, when what they really do best is brainstorming and telling stories.

Before I suggest a better way to make such a complicated decision – let's take a look at example #2, which, you’ll remember from Monday's post, has to do with the board making a decision to invest some of the nonprofit’s revenue in ramping up its fundraising infrastructure.

This is a little more complicated kind of decision that once again calls on the board members to do deliberative thought in order to produce a sound, workable decision. We'll find further insights

How Nonprofit Boards Can Make Good Decisions -- Part 2 of 7

Let's take two common examples. These are two very common decisions that Boards are called upon to make.

1. The decision about Board giving levels and making regular and substantive giving a part of the Board's life.

2. A budget-related decision about whether to invest significant financial and personnel resources in improving fundraising infrastructure for the nonprofit, and starting a major gifts cultivation and solicitation process.

Before we dig in, let's see what "deliberative thought" might entail here. We're talking about the ability to deliberate and make decisions about the complex issues involved in either one of these topics.

The reader will want to keep in mind that we're basically talking about a four-step process.
1. First comes the process of identifying and prioritizing those issues that are especially relevant to where the organization wants to go strategically. This step will be easy, because it involves brainstorming, something the group can do well.

2. The group then needs to decide on the kind of goals and objectives that will need to be accomplished to make either of the above decisions result in positive increases in the capability of the nonprofit to function and accomplish its fundraising objectives. This step is going to be more difficult for the group to do.

3. Next, the group must be able to delineate a variety of possible strategies, along with sets of tactics to implement each of those strategies. This is also a brainstorming process but is not always an easy task for a group.

4. Then the group needs judiciously to choose which of those possible strategies the organization is best equipped to carry out, in terms of its resources, its context, its methods of operating. This is perhaps the most difficult step for a board to take. It gets tedious and requires concentration away from the "image" scenarios playing themselves out in the board members' heads.

So let's start with example 1: The decision on Board Giving: Here's what needs to be done.

First, we need to brainstorm the issues involved in Board giving. Here are just a few issues that you might find surfacing in a discussion such as this. Most boards are very good at this part of the process.

1. We will find that board members vary in their ability to give
2. Board members also vary as to their motivation to give.
3. Board members also have differences in their understanding of the organization's need for leadership.
4. What is the community's image of this nonprofit and its Board?
5. How can this image be improved?
6. What are the financial needs of the organization?
7. How can the board members collectively address that need from their own personal/corporate financial resources?
8. What are the consequences of the board's refusal to take a leadership role in giving?
9. What does the organization's strategic plan call for in terms of revenues?
10. What does the strategic fundraising plan call for in terms of board giving?
11. What needs to be accomplished, and how will it be accomplished and by when?

The next step is that the board will need to prioritize these issues relative to their importance in this particular situation. Some may be more relevant and pressing than others. This is typically where boards start to have a hard time, because prioritizing issues calls for more deliberative thought; people need to match up issues with context, mission, capability, etc.

Next, we need to provide detailed answers to the questions posed. When the questions are answered, the answers need to be sorted out in a way that provides a series of alternative strategies from which the Board members will need to choose. Boards are notoriously incapable of doing this step with any kind of consistency. Even though this is mostly a "brainstorming" task, it nevertheless involves linking pieces together to form action strategies.

The next step is a complicated process: creative thought. It's similar to the scientific method – yes, that "scientific method," the one we learned in school, in chemistry or physics class.

You may remember the steps of the scientific method:
1. Form the hypothesis,
2. Test the hypothesis,
3. Evaluate the results,
4. Come to some tentative conclusions with a new hypothesis,
5. Test that new hypothesis.

It's clearly beyond the ability of most groups of people, including nonprofit boards, to do this by working together. But we frequently demand that they do this even though most board members are not equipped to carry this out, and are not psychologically prepared or capable of doing it. They can work individually; they can work with one other person. But the psycho-dynamics are too overwhelming to allow these steps to be done by the group.

But there's more to this process, and we'll see what that is tomorrow.

How Nonprofit Boards Can Make Good Decisions -- Part 1 of 7

You've probably heard the saying "A camel is a horse designed by a committee"? Does your nonprofit's Board exemplify that cliché?

A lot of boards that I have seen and worked with over the past 10 years certainly have engaged in processes that have strange-looking results as their outcome.

What's the dynamic that's operating in these kinds of situations? Why do groups of people, many with the best of intentions, and some with considerable governing experience, turn out decisional products that are convoluted, multi-faceted, illogical and hard to administer?

Essentially, the heart of the problem is the "Psycho-dynamics" that operate in groups. Boards that don't function well inevitably have some dysfunctionality because it is almost impossible for any group of three or more people who get together relatively infrequently to do any kind of productive, deliberative thinking.

Why? Because every member of the group, often unconsciously, has tons of other agenda they're trying to accomplish for themselves, personally, that simply overrides any agenda they have for the nonprofit.

You might ask, "Would Board members of a nonprofit organization really do that? Would they really have their own agenda that would override consideration of the agenda the Board is supposed to be working on?"

Sure they would... and do; regularly. Yes, even these stalwart pillars of the community who are brought together to govern a public trust, which is what a nonprofit is; they can and do bring their own agendas into the meeting and press those agendas, in some cases, to the exclusion of all else.

And your reaction may be "But wait a minute, John, I've been to lots of Board meetings and the people on those boards are quite serious and down to earth and ready to help. After all they're volunteering their time to help the nonprofit. How can you say that?"

Back to "Psycho-dynamics." This isn't something they necessarily do consciously. They don't come into the meeting and purposively give the charity's agenda short shrift. They are intelligent, for the most part well-educated, frequently very well motivated and dedicated people. They don't really set out to sabotage the work at hand. If you asked any person around the table, they would stoutly deny that there's anything untoward going on in their heads. But here's how it works.

On looking closer, we discover that there are some sub-conscious questions any person in any group of people is asking.
1. "What do I think of myself in this group, how do I see myself, what is my image of myself in this context?" Each person around the table has a set of self images upon which they draw, depending on the group they're in, the role they have to play, and what they want from the group.

2. Every Board member around the table is also very interested in the question "What is the image that the other person (each other person at the table) has of me? How do they see me? What do they want/need from me?"

3. Every Board member at the table is also internally asking "What is my image of that person – what do I think of them? What do I know about them? What do I think they want of me, what do I think I can give to them?"

4. Every Board member is sub-consciously going to go to the next level, which is "How can I either alter that person's perception of me, or confirm that perception? What do I need to do or say to bring my images of myself, my image of what that other person thinks of me, and what I think about that other person into some kind of harmony that I can accept?" And this goes on around the table ad infinitum throughout the Board meeting.

This internal mechanism of assessment of others and behavior adjustment to that assessment goes on at either a subliminal level or, sometimes, at a more conscious level. It depends on many factors operating in the particular Board member's life at that moment. But this assessment and adjustment mechanism continues operating nonetheless.

Given the fact that this kind of internal psycho-dynamic is operating in each and every Board member, and in every staff member around the room, is it any wonder that there is little room left to engage in "deliberative thought" about matters that concern the nonprofit? Each person in the room is busy sorting out and finding ways to act appropriately for their own benefit as determined by their assessment of the group context in which they find themselves.

Now, what do we mean by "deliberative thought" in this situation? Basically we mean the logical, orderly, reasoned progression of thought that solves problems and creates solutions. If you will think back to your school days, it's the "scientific method" as applied to problems of governance, planning and fundraising for the nonprofit organization. It is the steps of data gathering about a problem, stating a hypothesis about what could solve the problem, testing solutions, gathering data about what works and what does not, then evaluation of the best model and drawing a conclusion, often expressed as a policy or procedure in the board context.

What we're saying here is that this kind of decision-making is practically impossible in the nonprofit boardroom situation. In fact, people in groups of three or more persons can only do two things well: they can brainstorm and they can tell stories; but they cannot do deliberative thought.

I am indebted to my mentor in organizational dynamics Dr. Paul Dietterich, who for many years was the founder and executive director of the Center for Parish Development in Chicago, for having expressed the phenomenon that way.

But here we have a situation where we expect, and we have set this up in society, that groups of volunteers are asked to come together as "governance boards" that are given charge of a public trust: governing a nonprofit charitable institution. Yet their heads, by nature, are so jammed with the psycho-dynamics of interpersonal relationships and communication that their best productive activity is reduced to brainstorming and telling stories.

And, if we look at the story-telling process, we find that it, too, is just another, perhaps more sophisticated, version of brainstorming. It links together a series of remembered, imagined or invented thoughts to form a story that is amusing or delivers a particular point to one's audience.

Ah, but I know you're looking for more content about "deliberative thought". And there's more to be said about internal agenda in board members that isn't necessarily very subliminal. We'll take that up in the next few posts on this subject. So stay tuned for more.

Measuring Nonprofit Board Performance

So now we come to this aspect of our thread on board performance: What are appropriate elements of measurement for a board's work? What kinds of ingredients should we put into a job description and performance standards that can helpfully and effectively be used in board performance evaluation?

First, I would say that any board performance measurement vehicle needs to comprise two distinct parts: The job description and standards of performance for the board as a group; and the standards of performance for each member of the board.

For the performance evaluation of the board as a group, we might delineate the following areas of performance to be measures:

1. Strategic planning on a regular basis to reaffirm the social aims desired by the board for the institution and to update and provide mid-course corrections for the strategies that the board believes will bring about those social aims. This is also a good time to make sure that the policies the board has set are really achieving the results they thought would happen.

2. Management of the executive director – a regular procedure should be developed for the performance evaluation of the executive.

3. Program overview -- the board should be kept abreast of happenings locally and nationally, and within the organization to make sure that the strategies delineated in the strategic plan are actually working the way the board hoped they would. Otherwise mid-course corrections should be programmed into the board’s strategic planning review process. Staff should be providing regular reports on the agency’s programs and on local and national trends in the field of service.

4. Financial overview – the board should be reviewing the financial condition of the organization at least quarterly to ensure proper financial management. Staff should be providing regular reports to the board.

With regard to performance evaluation of individual board members, I think there would be at least the following specific areas:

1. How much money has the board member given personally or been able to raise from others?

2. Attendance at board and committee meetings should be well above 50%.

3. The extent to which the board member has advocated for and publicly supported the organization throughout the geographic area in which the charity is situated. Board members should be attending gatherings of other organizations in order to promote their nonprofit in the most appropriate ways.

4. Each board member attending board training sessions. These sessions should be a regular part of board meetings and should be programmed by the executive working with the board president. Topics might range from the latest strategic planning techniques to program developments, to fundraising techniques and strategies, to government and policy concerns in the field of service. Training sessions should be short but packed with information the board members need to know to do their work effectively.

These are some of the yardsticks we can use to measure board performance. You might be able to think of others. If so, I invite your comments.

Board Evaluation Attracts Good Leadership

This thread is about setting performance standards for nonprofit boards and having regular performance evaluation for board members. As part of that discussion, we detoured into an analysis of some of the games board members play and how they avoid performance evaluation by engaging in those games.

Having done that little diversion, we now come back to our consideration of why performance standards, and performance evaluation procedures are a good thing for nonprofit boards.

We have said in a previous post that there is sometimes a fear that creeps into the consciousnesses of both board members and executive staff; we suggested that this fear has to do with the idea that a board pursuing such standards of performance might get a reputation around the community for being “tough.” That would make it difficult for the executive and other board members to recruit new members to the board. But is that really a likely possibility? I don't think so.

Most people appreciate two qualities to doing a job they've been 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 be eager to obtain a seat on that nonprofit's board. This is a good reputation to have among the community's leaders.

So this means that a nonprofit organization using thoughtfully conceived and well-written set of performance standards 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, "I'm tired of giving to the Helping Hands group that asked me. Several people from that charity approach me many different times a year for small amounts, and I wish they could get their act together and consolidate their requests. That would make it a lot easier for to justify the contribution to their board. And, besides, aren't there other charities in town to give to?"

Then Mary pipes up to say, "I have just been asked to sit on the board of one of the community's nonprofits, and I knows this brings with it a commitment to raise or give $10,000 each year I'm to be on that board. This board also has pretty high performance standards, and the board members are all very enthusiastic and committed people."

Mary goes on to cite 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: "If there were any board on which I would serve it would be that one on which Mary is about to be installed. Why? because not only are the 'movers and shakers' of the community over there, but I 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."

Harry goes on to say that 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 serve on boards that do performance evaluation according to specific standards of performance. Those board members are not only doing a good job, but are part of an organization that is seen throughout the community as effective, progressive and a true community asset.

That should lay those fears about "toughness" to rest.

Games Board Members Play -- Part 2 of 2

Yesterday, we were discussing the question of why board members would resist the use of performance standards and performance evaluation. We brought up the subject of Eric Berne’s mid-1960s book “The Games People Play.” We were suggesting that one of the reasons board members of nonprofits will play games is that through those types of interpersonal transactions they derive psychological self-aggrandizement, or achieve certain advantages over other members through a series of “adult-to-child” or “child-to-adult” transactions during the process of the board’s conduct of its business. But what, exactly, does such a transaction look like?

You may remember that one of the “games” Berne identified was called “Now I’ve got you!” (Actually, Berne called this game “Now I’ve Got You, You Son Of a Bitch!” and gave it the acronym NIGYYSOB. But we’ll shorten to NIGY, for now.) In this game the object is to embarrass the other person by catching him/her out. The person playing the game sets up the other person for a fall or an indiscretion, then springs the trap and catches the other person as he/she stumbles.

In the board room, Harry might set up the situation with Phyllis by suggesting that “the auction this year really needs to have travel packages.” And Phyllis might reply, “But those are so mundane, I don’t like them and many of my friends don’t like them. Let’s just skip that for this time.” To which Harry replies, “I’ll bet you didn’t know that a recent survey by the American Travel Agents Group found that 85% of people who go to charity auctions think travel packages are the best items offered.” So this makes Phyllis and her friends look either stupid or uninformed. Harry’s inner parent is satisfied that he has “one-upped” Phyllis, and Phyllis’ inner child responds with frustration and rage.

The psycho-dynamics are never directly addressed, never said out loud, and may not develop to a conscious level. But they are operating all the same. The gain Harry has experienced comes at the expense of Phyllis and thus is, so to say, “ill gotten.” The gain for one person happens at the expense of another person. For more on this, I recommend you get Berne’s book. The newest edition is even better than the original.

The significance of this for setting standards of board and individual performance in preparation for regular (annual) performance evaluation is this: If the board members are playing transactional games with one another, they are not going to be sanguine about the presence of objective standards by which their conduct and their contribution to the organization’s governance and mission might be judged. They are going to want to continue to get away with their various games, instead.

So, for example, if they’re involved in micro-management, and thus putting aside and procrastinating on their strategic planning responsibilities, they are going to want to continue their micro-management games because this is where they’re getting their inner personal fulfillment – in the illicitly gotten personal gains of game playing. They are not going to want to be held accountable as “adult-to-adult” for having done a good job in strategic planning, because they haven’t found out how to play their games in that kind of arena, so it will seem foreign to them.

Performance standards, and the application of those standards during performance evaluation, will have the effect of breaking through the games board members play, and getting to the heart of the real reason these board members have been assembled: nonprofit governance.

Games Board Members Play -- Part 1 of 2

When we first started this thread on board development, we asked the question “Why is it that we are reluctant to provide our nonprofit governance boards with standards of performance and regular performance review?”

Well, another thing we know about human nature is that humans sometimes like to involve themselves in “game playing” behavior. Some of you readers may hark back, as I do, to the mid 1960s when a fellow named Eric Berne came out with a book called “The Games People Play.” His book was a popularized version of what at that time was called “transactional analysis,” which was developed as a way to explain the interactive behavior of humans as a series of “transactions” between our inherent “parent,” our “child” and our “adult.”

You might also remember that, for a variety of reasons, our inner child and parent tend to skew a transaction in such a way as to rather illicitly derive or force something for themselves out of the interchange at the expense of the other person, whereas our adult tends to deal straight-up, without such manipulations that favor self at the expense of the other.

In my practice, I have seen numerous nonprofit boards where both board members and staff would be horrified at the thought of performance standards for the board because they were involved in a series of games from which the members of these boards were deriving more or less “illicit” or manipulated personal aggrandizement – of a purely psychological nature, please understand – from the various transactions that go on in the course of doing a board’s business.

Would Board members of a nonprofit organization really do that? Would they really have their own agenda that would override consideration of the agenda the Board is supposed to be working on? Sure they would... and do! Regularly. Yes, even these stalwart pillars, these leaders of the community, business owners, institutional heads, self-giving volunteers who are brought together to govern a public trust (which is what a nonprofit is). They can and do bring their own agendas into the meeting and press those agendas, in some cases, to the exclusion of all else.

Your reaction, dear reader, may be "But wait a minute, John, I've been to lots of Board meetings and the people on those boards are quite serious and down to earth and ready to help. After all they're volunteering their time to help the nonprofit. How can you say that?"

This isn't something they necessarily do consciously. Most of them don't come into the meeting and purposively give the charity's agenda short shrift. They are intelligent, for the most part well-educated, frequently very dedicated people. They don't really set out to sabotage the work at hand. If you asked any person around the table, they would stoutly deny that there's anything untoward going on in their heads. But here's how it works.

What are the sub-conscious questions each person in any group of people is asking during a meeting? The first internally asked question is, "What do I think of myself in this group, how do I see myself, what is my image of myself in this context? Each person around the table has a set of self images upon which they draw, depending on the group they're in. These images are the sum of the "role" this person has elected to play in the life of the group. They will, quite naturally, keep this set of self-images in good repair, and it is through this role that they derive what they want from the group's interaction.

Second, every person around the table is very interested in "What is the image that the other person (each other person at the table) has of me? How do they see me? What do they want/need from me? What is their role regarding me"

Third, every person at the table is also asking "What is my image of that other person – what do I think of them? What do I know about them? What do I think they want of me, what do I think I can give to them?"

Fourth, again, every person at the table is sub-consciously going to go to the next level, which is "How can I either alter that person's perception of me, or confirm that perception? What do I need to do or say to bring my images of myself, my image of what that other person thinks of me, and what I think about that other person into some kind of harmony that I can accept?" And this goes on around the table ad infinitum throughout the board meeting.

This internal assessment and adjustment mechanism goes on at a subliminal level or a more conscious level depending on many factors in the particular board member's or staff person's life at that moment. Lots of factors influence that. But it is operating nonetheless.

Into this arena, then, the individual board member’s “child” or “adult” finds it easy to interject itself in a variety of ways that are designed to bring to that person rather ill-gotten or manipulated psychological gains at the expense of others in the group or at the expense of the nonprofit and its mission. Resisting that temptation takes a powerful conscious ability to deal consistently with others on an “adult-to-adult” level of transaction. And this is the thing that Berne pointed to in his book "Games People Play."

Let’s see how this might work in a typical interpersonal transaction during a board meeting in tomorrow’s post.

Standards of Performance for Board Members

Continuing on this thread of standards of performance for nonprofit boards, one of the other things we observe about the general attitude of many nonprofit executives and staff members about setting standards of performance for their boards, is that they are deathly afraid of anything that might affront or challenge a board member.

Why is this? Well, probably for fear of losing their jobs, or losing the board member and all that influence and potential money. After all, the board members serve in a volunteer capacity for which the nonprofit ought to be grateful. Even many board members seem to harbor internal thoughts like, "Who are these staff people to come along and try to impose some kind of performance standards and then force an evaluation process on us as board members?! Whatever I give out of my busy day should be satisfactory enough!" And then there's the secondary fear of maybe getting a tough reputation around town as the only charity that evaluates the performance of its board.

But let's examine this a little more deeply. Just because the board contains talented and skilled volunteers who give freely of their time doesn’t mean it will necessarily be effective. The right mix of skills, organization and leadership from the chair is crucial.

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 more than indentured servants. And it further suggests that some board members are acting like a bunch of tyrants – unable or unwilling to take responsibility for holding up their end of the workload at the charity. So that may seem to make performance standards seem like an imposition and an indication of ungratefulness. Nothing, however, could be further from the truth.

As for the board members who give generously of their time and talents, there's no question that these are needed and welcomed gifts. But it's not the executive and staff who should be suggesting that the board have performance standards and evaluation; it's the board members themselves who should be mandating performance standards for themselves and their peers, and who should be devising and executing a regular performance evaluation on themselves. This is the genius behind the establishment of the whole charitable sector: that volunteers do a good job of policing the organization so that government doesn't have to do that job.

You see, the nonprofit organization is a public trust. The board of directors is appointed or elected on behalf of the whole society for the purpose of providing governance for the nonprofit on behalf of the whole community. They are in charge of steering the nonprofit in the right strategic direction in order to accomplish some specific social aims that this board has told the society this charity will accomplish. Then their 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 the tasks board members are asked to do are the board members themselves. So why shouldn't there be specific performance standards in place that measure how well the board is doing its job? And why should it not be the board members themselves who insist on having, and going through the process of devising and enforcing performance standards, so they know, objectively and publicly, when they have done a good job? This is the fulfillment of the nonprofit sector's mandate -- that nonprofits are run by volunteers who are dutiful and watchful, and who carry the burden of operating a public trust.

That, as we said above, is the way to help board members 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 that came up with the suggestion of performance standards, and may have created the first draft of such standards, should in no way be held against them. Board members should, rather, be grateful that they have an executive and staff smart enough and creative enough to give them some assistance in coming up with this kind of governance tool.

There should be absolutely no question of fear in this, whatsoever. Board members would be eager to accept and learn from the performance standards and regular evaluation process. They are, after all, reportable to the public for their performance. Maybe the state Attorneys General should make clear statements about board responsibilities including annual performance evaluation. Maybe the IRS should insert a section on the Form 990 for nonprofits to list the evaluation standards, the evaluation process and the results of the most recent annual evaluation of the board for every nonprofit organization. Maybe that would change some board members' minds about whether the public expects them to be accountable or not.

Standards of Performance for Board Members

Why is it that we are reluctant to provide our nonprofit governance boards with standards of performance and regular performance review? I think in more than a quarter century in the fundraising profession, and 10 years in my own practice, I have come across maybe two or three nonprofits that have devised performance standards for their boards. Why do you think that is? For one thing, it flies in the face of all we know about human nature and about boards.

For instance, one of the things we know about human beings, and board members especially, is that they really like to achieve, and enjoy the feeling of success. They like to do the job that is required of them and know they've been successful at it.

That means that people like to have their work measured as they go along. It makes life simpler and easier. It prevents deviation from the norm and saves time and aggravation. If you've been assigned the task of governance of a nonprofit, that's an awesome responsibility that has several rather complex sublevels within it. There's the strategic planning task, the job of managing the organization's executive, the task of financial oversight, and the job of overseeing program goals and objectives and keeping those in line with the strategic plan. That's a lot to keep track of on a week-in-week-out basis through many board meetings. It's easy to get bogged down and lose sight of where we are in the process.

Consequently, any board member should welcome specific standards of performance as the easiest way to stay on track in terms of fulfilling the assignment for which he/she was selected. The job performance standards are going to point out the limits of board deviance from a certain norm of tasks and how they should be performed. And these, in turn, are ultimately going to be set by their peers – their fellow board members – as a way to express the greatest success as the board has defined that term for itself and its work.

Of course this is all within the context of the full realization that the board of directors of a nonprofit (which is a public trust, don't forget) are responsible to the public for providing a well-managed, efficient, cost-effective service to the community at large. Standards of performance, for the board as a group and for individuals within the board, are, therefore, something most people are going to welcome as a way to help them see through the complexity of their jobs that they are doing that job well.

Another thing we know about human nature is that most of us will slack off and take the easiest way out of a situation if someone isn't keeping our feet to the fire. Board members are no different. If you don't point out to them that they need to stay with the more difficult tasks of strategic planning and measuring progress programmatically and financially toward the strategic goals, it won't be too long before they've lapsed back into micro-managing the organization.

Consequently, a set of well-written performance standards, keyed to the four main jobs of a nonprofit board, will be a welcome reminder of what the board is NOT supposed to do, and of how easy it is to slip into the mire of micromanagement. Since this kind of deviation detracts from the management of a nonprofit, and since such activity robs the nonprofit of the kind of strategic planning that allows it to fulfill its commitment to the public, board members would be expected to welcome such a yardstick as a way to keep them from diverting time and attention from their governance tasks.