September 2019 – Rick Szilagyi, Principal

Background – Nonprofit Organization and Nonprofit Board Lifecycles

Over the last few months, I have been writing about the lifecycle stages of a nonprofit organization and its board.  I reviewed the fact that the current stage of an organization is not necessarily related to how long it has been in existence.  Similarly, organizations do not always move omnidirectionally from one stage to the next.  A board and organization can remain a start-up for years, or can move back to an earlier stage on the commonly-accepted path.  To avoid the misconception that the lifecycle must occur in a specific order, perhaps the moniker “stage” is deceiving.  Perhaps we should evaluate the organization’s current “condition,” instead.  For example, is the current condition one of growth or stagnation?

Energizing Your Board

There is seldom a time when more positive energy exists in a nonprofit board than at the organization’s inception.  It is a time when the core people who brought the organization into life are emotionally tied to its mission and working as a united team.  Over time, there is a much greater likelihood of this energy waning than of it being maintained.  Original board members move on, and the board changes.  Ideally, by this time, the board will have added an Executive Director or contracted with an association management company, so that even if board energy has waned, things are still getting done.  

So, what can you do now, and how should you be thinking about maintaining the original energy of your board?  And what can you do in a mature organization where the board is losing its energy?

In seeking information on reinvigorating a board, I discovered a book by Jim Schell called How to Recharge Your Nonprofit’s Board of Directors, A Handbook for Restructuring and Re-Energizing Your Nonprofit’s Board of Directors.  Schell is a serial entrepreneur and author, and several years ago was asked to lead the turnaround of a nonprofit in his city.  Coupling his personal experience as an entrepreneur and his past experience with nonprofits, he developed his Entrepreneurial Team Model for nonprofit boards.

Schell sets the stage by stating that boards are the make-or-break of a nonprofit.  The board’s success or failure is based on the collective skills of the board members and their motivation.  He identifies three reasons for a board underperforming:

  1. Failure to understand that it is execution, not ideas, that drives an organization’s success.
  2. Failure to build a culture of accountability within the board.
  3. Failure to focus on the collaborative power of teams.

As I read the book, I kept anticipating that Schell would describe how these “teams” are different than the committees we typically see on nonprofit boards.  Finally, I emailed and discussed it with the author himself, and greatly appreciate his time and insights.  Regardless of the label, Schell’s point is this: “If an organization is entrepreneurially-biased, either by its past or by an entrepreneurial ED and/or Board Chair, the committees/teams will, by osmosis, become entrepreneurial.”  What Schell means by “entrepreneurially-biased” is this: Teams are charged with the responsibility to develop ideas, and the authority to execute them.  In his model, he makes it clear that the teams drive the board, not the other way around.  He feels that only the finance team can veto another team’s decision.

I have to say, I prefer Schell’s choice of the word “team” over “committee.”  While both terms represent groups of people working together, a team is goal-oriented, while a committee is function-oriented.  This is perhaps a fine line between the two, but “team” certainly sounds and feels more dynamic and exciting, and maybe that is enough of a reason to favor “teams.”

Nevertheless, it’s the “entrepreneurial” label in this model that is most important.  Schell states that entrepreneurial teams create synergy, competition, innovation, collaboration, achievement, and are fun to work in for the team members as successes pile-up.

The book provides a roadmap for a board to follow, whether it is in its initial assembly phase or rebuilding.  Three people are needed to make Schell’s model work:

  1. The Convener, AKA the person with the “reach” within the community/industry to attract talented/motivated board members.
  2. The Board Chair, who needs to be effective at facilitating board meetings.
  3. The Executive Director.  He or she cannot overcome a weak board, and must leverage the skills of board members.

Key Takeaways – What Are the Attributes of an Energized Board?

Coupling some of Schell’s points with observations and recommendations Lexian has made over the years (and I’ll use the term “committee” because that is the label our clients have in place) …

  1. The “work” needs to be done by committees, rather than in board meetings.
  2. A committee need to be well-constructed. Lexian advocates for a chair that leads; an analytical person to focus on the numbers; a sales person, if the committee needs funding; and a reporter charged with preparing updates for a newsletter, social media, etc.
  3. Board members need to hold each other accountable for their committee work.
  4. Committees need to function deliberately, and with goals, just as departments do in for-profit businesses. 
  5. Relative to “execution,” merely having ideas and being a “problem identifier” on a board does NOT make for a meaningful contribution.  You must also be able to move your ideas into the appropriate committee for evaluation, decision-making, and execution.
  6. Schell feels that only the finance team can veto a decision made by another committee.  I believe that all substantive committee decisions should be presented to the board for approval.  From my experience, when a well-constructed and motivated committee makes a recommendation to the board, the committee seldom receives anything but unanimous approval.  And, given that all voting officers and directors on a nonprofit board are responsible for delivering their fiduciary duties, and a well-thought-out plan will almost always get approval, let the board have its vote.
  7. Schell uses the term “convener” for a person absolutely necessary on a board, someone who has the reach within the community to attract energized board members.  I totally agree with the need for board members to be responsible for attracting new board members, just as they are responsible for ensuring funding.
  8. Finally, Schell is focused on social service nonprofits.  I am not saying it is easy for 501(c)(3) organizations to build strong boards.  However, I AM saying that unlike membership organizations—for example, a 501(c)(6) business league—the (c)(3) can cast to a much larger pool, without needing to focus only on the limited community of a specific industry.  This means that all board members on a (c)(6) should be charged with identifying current and future talent.

I recommend reading Jim Schell’s book.  It will stimulate thought, and offers a path to success.  He wants you to imagine the positive output from incremental improvements in your board of directors, and then he wants you to execute.  His book can be found on Amazon, both in hard copy and as an e-reader download.

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