Building Better Boards

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Serving on a non-profit board is probably one of the most important civic duties you can exercise. You’re volunteering your time-and your money-to make your community a better place. But if you’re on a board that’s fighting internally, struggling with money or simply lacking in commitment, board service can feel more like a waste of […]


Serving on a non-profit board is probably one of the most important civic duties you can exercise. You’re volunteering your time-and your money-to make your community a better place. But if you’re on a board that’s fighting internally, struggling with money or simply lacking in commitment, board service can feel more like a waste of time and energy.

Then there are moments when board service can be, well, scandalous. Remember the United Way of America disgrace in 1992 where the former president and CEO William Aramony was convicted of fraud? His expense account included flights on the Concorde and chauffeured cars. A couple of years ago, a local non-profit CEO did the same thing on a smaller scale, buying expensive office furniture and taking selected staff to lavish resorts for questionable retreats. The revelation shocked the board members-who should have been paying closer attention to how money was being spent-angered the stakeholders and forced the organization to go through a painful period of regrouping and overcoming negative public opinion.

Tami Conetta, a Sarasota attorney with Ruden & McClosky who last spring helped organize a pilot program about building good boards, says that strong boards start with people who want to work and understand that board service is serious business.

Unfortunately, she adds, most veterans of not-for-profit boards have seen too many members who fall short of that description. She once watched two board members with palm pilots fire off gossipy missives to one another about other people at the table during a board meeting. "It was just like middle school except instead of paper notes they beamed messages," she says. Attorney Bob Johnson, former state senator from Sarasota and current chairman of the New College of Florida Board of Trustees, says he’s sat on about 25 boards in his career and seen it all-including plenty of meetings where board members actually fall asleep. "You know they didn’t want to be there," he says.

Other stories aren’t so funny. There are boards controlled by members who believe their financial contributions entitle them to dictate to the entire organization. Johnson says he advised his wife to steer clear of one such board in Sarasota that she had been about to join. On other boards, members have divided into warring factions, wrecking friendships and the stability of the organizations. And then there are boards that simply waste your time and money because they never do what they set out to do.

Bradenton resident Sandra Hughes, the executive governance consultant for BoardSource, a Washington, D.C.-based group that works with non-profits, says finding the right board members is one of the big issues facing non-profits. Right now, there are 1.6 million non-profits in this country and three million vacancies on their boards. And the search is getting harder. More than 50,000 non-profits were created in the aftermath of 9/11, shrinking the fund-raising pie, she says. In addition, an icon of the non-profit world, the Red Cross, damaged public perception of all charities when it was accused of bungling distribution of 9/11 relief fund donations. At the same time, Hughes says, fewer people want to invest time in board service because world events have made them more interested in spending time with their families.

The corporate scandals of Enron, WorldCom and Tyco, and the ensuing congressional legislation (Sarbanes-Oxley Act of 2002) to make corporate boards more accountable for shareholders’ money have scared the non-profit world and potential board members as well. "You’re liable," says Hughes, "and now board members realize it."

The economy isn’t helping things, either. When you’re a board member, you must fund-raise in good times and bad. In the current downturn, it’s harder to ask people and corporations to open up their hearts and wallets.

Yet all these challenges have had at least one good effect: Boards are being forced to operate more efficiently and professionally. "The selection process is more strategic," says Hughes. "You’re not just calling your neighbor to be on a board and then saying, ‘Congratulations, you’re on!’" Boards are moving away from nominating committees, which have often resorted to asking family and friends, to governance committees, which meet several times a year to discuss what’s working and to identify the skills they need to succeed. Does the board need a lawyer? A prominent community leader? Access to money? Youth? Someone who understands the latest technology? Someone of color? Boards must identify these gaps in leadership and search for motivated and qualified candidates. And because there are more than 800 non-profits (including churches) in Sarasota County-the largest number of any county in the state-sometimes it seems that every board is pursuing the same few people.

"But before you ask, make sure you have a fit," says Johnson. "I have one basic experience in Sarasota. The first group that asks a newcomer to join a board is going to win, but it’s not necessarily a good fit." It’s essential to discover what the passion of the potential board member is. "Everyone would love to have Betty Schoenbaum [a longtime philanthropist who supports many local causes] on their board," Johnson says. "She’s intelligent, has business acumen and financial generosity, but she and her late husband Alex were dedicated to young people and mental health issues. I wouldn’t ask her to join a board that didn’t have those issues up front."

Making sure the potential board member has the right motives is crucial, too, says Conetta. "No. 1 on this list is commitment and excitement for the organization. Without it, they won’t be active." Unfortunately, there are always board members who join for the wrong reasons. Maybe they look at board participation as a resume booster. Maybe their company requires it. Maybe they join to build alliances for business reasons or political gain.

"When you take someone to lunch, you have to feel their energy level," advises Johnson.

But even the most motivated, best-intentioned board members in the world will be handicapped if they don’t understand what’s expected of them. Once board members are in place, they should undergo a formal orientation where a board handbook, a job description and a tutorial on how to read a financial report is presented, says Hughes. "Eighty percent of all board members can’t read a financial statement," she says. They don’t understand cash flow, profits and loss figures, or the basic tenet that every non-profit organization should be run as a business. And with the new Sarbanes-Oxley Act, standards for accountability are higher. "Sarbanes-Oxley makes more things a crime," says Ron Gelbman, who sits on two for-profit boards and four non-profits in Sarasota, including the YMCA. "People think, ‘What could be warmer and fuzzier than the Y? I’m just there to be a good guy.’ But at the Y, we have to be terribly careful. We get government funds. The board’s audit committees have become very important."

"Boards must communicate what is expected of their new members," adds Conetta. They need to know how many meetings a year there are, if they have to serve on committees and how much is expected financially.

"There should be no confusion about personal financial responsibility," cautions Debra Jacobs, the executive director of the Selby Foundation. "Some people will say, ‘I don’t raise money.’ Excuse me. Then go sit on a committee. Once you sit on a board you’re raising money." In Sarasota, much fund-raising is done on what Hughes calls the Palm Springs/L.A. model; that is, glitzy black-tie events. And while that’s been fairly effective here, she says, more local boards really need to develop the concept of annual giving.

Jacobs says the best boards have annual planning sessions where board members answer the question, "Are we doing what we should be doing?" The life of a board is a cycle, she says. Every year, the board needs to plan for the next year, establish responsibilities and accountability, monitor how well it’s meeting goals and then celebrate and plan again. "Every organization has to take a pause and ask, ‘Is this the right mission for our community?’" Hughes goes even further and says start-up boards should ask themselves if their services are necessary. If there’s another organization providing adult literacy instruction in the community, for example, don’t create one more.

Conversely, if you’re considering board participation-and many people do in Sarasota, says Hughes, who adds that one of Sarasota’s distinguishing characteristics in the non-profit world is its devotion to philanthropy-you should do some homework. Keep your ear to the rumor mill, says Johnson. Read the newspapers. Go to the oversight agencies like the Community Foundation of Sarasota County, which can tell you which boards are functioning well.

Then ask yourself: Are you passionate about the cause? Are you willing to work? Are you ready to give money and ask other people to give as well?

"Be a load carrier," Jacobs says. Often it’s only six people who end up doing all the work of an organization. If you join a board, join committees and say "yes" when someone approaches you about taking on a task. Not only does this help your organization reach its goals, but it makes you feel useful and valued-part of why you joined in the first place.

"The most exciting boards are where everyone is energized and moving in the same direction," Johnson says.

"You can create change," says Jacobs. "You can truly have an impact. Wonderful things can happen."

Sources and Resources

Help in building better boards.

In Sarasota, boards can improve their performance by using the Community Foundation of Sarasota County’s Nonprofit Resource Center (formerly SCOPE’s Nonprofit Resource Center), one of only a handful of centers in the state that provides affordable training and resources for non-profits. In the last three years of its existence, more than 900 people and 372 organizations have attended programs and training at this center. Go to www.suncoastnonprofits.org for more information.

BoardSource in Washington, D.C., has an excellent Web site, www.ncnb.org, which provides tips, training and excellent publications for nonprofits.

The Web site www.nonprofitbasics.org also offers information and comprehensive guides to help boards manage nonprofits.