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.

Who's On First? – Part 2 of 2

Picking up from yesterday...

Just at that moment the door to the conference room opened and in waltzed Do-Good's Director of Development, Phil Marvelous, who said, "Rest easy, my good people. I had a feeling this subject might come up, so I’ve created a database of information about all our major gift prospects. Several weeks ago, we gathered with some staff and some of you board members and other prominent citizens of the community and volunteers and had a little Prospect Qualification Session.

“What I have for you this evening, friends, is a printout of the results of that session plus the various information derived from our donor database. The result is, I think you’ll agree, a rather marvelous listing of who we must solicit and in what order. Your names are attached to each of the prospects to whom you have been assigned, so that you will find it very easy to see not only your list of solicitations but also those of everyone else in the group.

Phil continued, "We know exactly where you're supposed to start, we've researched all the prospects and we can keep everyone out of trouble if you'll just handle your prospects in the order in which they were given you on your master prospect lists. Each of you has your own list, but we've taken the trouble to mark where there are crossovers and possible conflicts, so you'll know about those in advance. We have also researched your individual cultivation and solicitation capabilities, schedules, etc., and we are reasonably sure that your list matches your own particular time and activities schedule."

“Well, thank goodness!” breathed Martha, and Hank said “I knew there would have to be a way to sort out who to solicit first, second and third.” George sat quietly for a while, and then said, “is this what you were telling us two years ago at that training session we had about prospect qualification? I seem to remember something about combining our fundraising infrastructure and our knowledge of individuals in a way that could produce something like this.”

“You’re right on the mark,” said the Development Director. The reason we have been able to do this, I'm pleased to say, is because those of you who were on this board five years ago had the foresight to prioritize funds for a major fundraising infrastructure upgrade, which we completed the following year. Now we have a new donor database that gives us all kinds of information we need to make this capital campaign the smoothest yet. That information allows us to place prospects on your lists that have not only been thoroughly research, they have also been prioritized and ordered in such a way as to minimize any concerns any of us might have about who needs to be solicited first, second and third. We have taken the guesswork out of campaign solicitation. Isn't that wonderful? It should save you all a lot of work and a ton of grief during the campaign.

"Of course our goal is four times as large as we've ever raised before, but I know you will have absolutely no trouble making that goal because your cultivation and solicitation process has been expertly streamlined. Nothing could be easier than the assignments you have in this campaign. And it's all thanks to our board Chairman, Brent Lewis, who made it a point of honor to lead the board in the right direction for the infrastructure upgrade. Thanks to Brent, your job is a lot easier."

And with that, the boardroom erupted in a flurry of Huzzahs and Thanks to Brent. With that little matter out of the way, Brent called the meeting to order and the board went about its business of strategic planning.

Does your nonprofit board have a person with as much foresight as Brent Lewis? Hopefully that person has a better memory, too!

But this is what fundraising infrastructure can do, IF it's put in place in advance of the campaign.

Who's On First? – Part 1 of 2

It was a dark and stormy night, as fourteen Board members sat around the polished marble conference table in the Do-Good Citywide Charity. It was the evening before the start of DGCC's largest ever capital campaign, and the following morning these Board members would be hard at work, on their phones and in their cars. They would be talking to people, asking people to contribute significantly to the marvelous new service facility that would soon be erected – one that was futuristic enough to stimulate the imagination, but cost-effective enough to satisfy anyone’s desire for frugality.

The topic they were discussing this evening had to do with approaches to donors. Everyone in the room was abuzz with excitement and they all talked at once. George’s statement about approaching Karl and Mary triggered something in Herb’s memory that he should make sure to visit the Simpsons and the Johnsons, but in reverse order. Helen and Thelma were off in one corner exchanging notes about their closest friends. Everyone was adding prospective donors to their lists.

All of a sudden, the Chairman of the Board, Brent Lewis, groaned in a theatrical voice and said, so that everyone could hear, “Where do we start? How do we know who we’re going to solicit first, second and third? I only have so much time in a day, so at best I can do five solicitations a week. But how do we know what the best order is for soliciting. If we hit Mary first, and then Sam, it might lead Sam to feel offended; on the other hand Joyce might get herself all out of joint if she’s approached before Mary gives. Oh, what are we going to do?!”

"Well that's a fine kettle of rotten fish," said Merv Thomas.

"Why didn't someone work these details out in advance," complained Marty Bloom. "I've been on dozens of boards and usually this is all worked out by the staff in advance."

"Oh you won't find anything like that around here," Herb Marwill said bitterly. I've done two other campaigns with this board over the years and have come to believe we simply can't plan things out in advance. We don't know how to do that."

(Well, the board members seem very upset. Needless to say, dear reader, we have quite a pickle here. I'll bet you've been party to a scene like this; what's your thought? Can we get some resolution on this problem, or will the board members take this little incident into the campaign as a sour note for a beginning to their effort? Ah-h-h, but you'll have to wait until tomorrow's post to see what happens next.)