Governance as Leadership: Reframing the Work of Nonprofit Boards
Until recently there has been a narrow conception of nonprofit boards of directors, focused on their operational, oftentimes unfavorable, role as fiduciaries, authorizers and micromanagers. Conversation about board governance has centered more on lists of dos and don’ts than around compelling or competing concepts of governance. Now, current board development best practices support the idea that effective boards must become a reflective community of interpretation where trustees can and do talk seriously about organizational purpose and the nature of governance.
In their 2005 book, authors Richard P. Chait, PhD, William P. Ryan, PhD and Barbara E. Taylor, posit that there are three modes of board governance that together comprise governance as leadership:
- Type 1 the fiduciary mode, where boards are concerned primarily with the stewardship of tangible assets.
- Type 2 the strategic mode, where boards create a strategic partnership with management.
- Type 3 the generative mode, where boards provide a less recognized but critical source of leadership for the organization.
show full article ⇓
Type 1 constitutes the bedrock of governance the fiduciary work intended to ensure that nonprofits are faithful to mission, accountable for performance, and compliant with relevant laws and regulations. Without Type 1, governance would have no purpose. If a board fails as fiduciaries, the organization could be irreparably tarnished or even destroyed. Type 2 concerns the strategic work that enables boards (and management) to set the organization’s priorities and course, and to deploy resources accordingly. Without Type 2, governance would have little power or influence. If a board neglects strategy, the organization could become ineffective or irrelevant.
The Generative mode (Type 3), though the least recognized of the three modes according to the book’s authors, shapes the work of the strategic and fiduciary mode and is a critical source of input for the organization. It underscores the expressive aspects of the organization. In other words, a board that is generative is concerned not only with productivity or logic, but also with values, insights and judgments.
A generative board might inquire:
- How will a proposed program advance our mission? (in lieu of, “Will the proposed program attract enough clients or funders?”)
- Is it ethical? (in lieu of “Is it legal?”)
- Are we treating staff fairly? (in lieu of “Is staff turnover reasonable?”)
In reality most organizations encounter issues that require fiduciary, strategic and generative considerations, but often act out of only one mode. The current challenge to boards is to learn how to become and practice being more flexible and to recognize and then let go of operating out of a single mode of governance. When boards work well in the fiduciary, strategic and generative modes, the board achieves what these authors, of the book of the same name, refer to as Governance as Leadership.
For more about this book go to http://www.boardsource.org/Bookstore.asp?Item=161
Nonprofit High Performance
Accenture, a global management consulting, technology services and outsourcing company, recently surveyed more than 230 executive directors of nonprofit organizations and for-profit executives serving on nonprofit boards of directors from a variety of nonprofit organizations. The purpose of the survey was to help nonprofits identify and address key barriers to and accelerators for achieving high performance in the nonprofit community.
The top 10 issues facing nonprofits as identified by the executive directors and board members were:
- Expanding the current donor base.
- Recruiting high impact board members.
- Increasing donations from current donors.
- Attracting and retaining skilled staff.
- Increasing donor loyalty and retention.
- Cultivating a dynamic and effective culture among board members.
- Establishing a clear set of quality benchmarks for assessing services.
- Using IT to reduce costs and create value.
- Pursuing collaborative partnerships with public sector agencies, including government.
- Pursuing collaborative partnerships with the private sector.
show full article ⇓
Not surprisingly, the study found that fundraising and survival are primary issues for nonprofit executives. Expanding the donor base was the most commonly issue, identified by 77% of executives as their biggest concern. But as nonprofits maintain their intense focus on fundraising, according to Accenture, most organizations represented in the survey appeared to be overlooking opportunities to improve their own operations and more effectively leverage the funding they do have.
Accenture research found that nonprofits would benefit from embracing basic business practices and tools and the report recommends six actions that nonprofits can take to improve their operations and address the internal and external challenges they face:
- Make better use of technology.
- More effectively organizing and managing volunteers as an extension of staff.
- Explore and adopt new collaborative business models with complementary organizations.
- Convince corporate and private-sector donors to fund general operations instead of “signature” or “vanity” programs.
- Adopt appropriate metrics that enable organizations to evaluate the success and impact of their delivery of services and programs.
- Engage board members to ensure quality governance structures.
Go to https://www.accenture.com/Global/Registration/ExecutiveRegistrationStudy.htm to register to download a PDF of the full study, along with detailed appendices.
The Five Life Stages of Nonprofit Organizations
In her book, The Five Life Stages of Nonprofit Organizations, Judy Sharken Simon (published by Fieldstone Alliance, 2001) examines nonprofit organizations and their strengths and weaknesses in relation to five stages of development.
Being able to identify where your organization is developmentally can help board members and staff plan for the future, anticipate challenges, and make proactive decisions to avoid the common - though very normal - pitfalls of running and growing a nonprofit organization. The inventory examines seven arenas of organizational performance: 1) governance, 2) staff leadership, 3) financing, 4) administrative systems, 5) products and services, 6) staffing, and 7) marketing.
Though no one assessment tool should be viewed as a cure-all for diagnosing and solving an organization’s struggles, this tool may prove helpful in the following situations:
show full article ⇓
- to generate discussion at a board or staff retreat
- prior to embarking on a strategic planning process
- during times of high stress or challenge for an organization
- when engaging an organization development consultant
- prior to an executive search
- when an organization wants to see how it compares to generally recognized standards of high functioning nonprofits.
To complete the Nonprofit Life Stage Assessment online go to:
For additional resources on all aspects of nonprofit management, go to http://www.fieldstonealliance.org/.
Report For LGBT Communities
Out for Change: Racial and Economic Justice Issues in LGBT Communities is a report on how many LGBT and allied organizations are increasingly incorporating a racial and economic justice framework into their work. Out for Change outlines the range and complexity of issues faced by low-income LGBT people and LGBT people of color, profiles organizations that work primarily on these issues, highlights foundations who are supporting this work, and makes recommendations for expanding that funding base. Contact Funders for Lesbian and Gay Issues - http://www.lgbtfunders.org/or call 212-475-2930 to receive a free hard copy or PDF version of this report.
Capacity Building - A Working Definition
In an excerpt from Evaluation of Capacity Building: Lessons from the Field by Deborah Linnell, published by the Alliance for Nonprofit Management, Capacity Building refers to activities that improve an organization’s ability to achieve its mission or a person’s ability to define and realize his/her goals or to do his/her job more effectively.
For organizations, capacity building may relate to almost any aspect of its work: improved governance, leadership, mission and strategy, administration (including human resources, financial management, and legal matters), program development and implementation, fundraising and income generation, diversity, partnerships and collaboration, evaluation, advocacy and policy change, marketing, positioning, planning, etc.
show full article ⇓
For individuals, capacity building may relate to leadership development, advocacy skills, training/speaking abilities, technical skills, organizing skills, and other areas of personal and professional development.
As we continue to build this section of our website and plan our annual roster of training sessions, we encourage you, our growing list of member LGBT community centers, to let us know the types of capacity and skills building information and training you would like to see offered through our website, e-newsletter, conference calls, regional meetings and through the Community Center Institute offered each year at the annual Creating Change Conference sponsored by the National Gay and Lesbian Task Force.