Overstepping? When Should Foundations Weigh in on Grantee - - PowerPoint PPT Presentation

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Overstepping? When Should Foundations Weigh in on Grantee - - PowerPoint PPT Presentation

Dec 24, 2023 242 likes •809 views

Overstepping? When Should Foundations Weigh in on Grantee Governance Presented by Robert B. Acton, J.D. Presented by: Principal & Founder Cause Strategy Partners Cause Strategy Partners, LLC | BoardLead In Partnership with: Insert

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Presented by: Cause Strategy Partners In Partnership with:

Insert Partner Logo Overstepping? When Should Foundations Weigh in on Grantee Governance

Presented by Robert B. Acton, J.D. Principal & Founder Cause Strategy Partners, LLC | BoardLead

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Agenda

  • Introductions
  • Four Reasons this

Topic Matters

  • A Snapshot of

Nonprofit Boards Today

  • Ascertaining Board

Effectiveness

  • How You Can Help
  • Case Studies

Agenda

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Cause Strategy Partners helps social good organizations achieve their missions fueled by great leadership, great strategy and, most importantly, great results. Consulting Services:

BoardLead Our Signature Program CSR & Corporate Foundations HR / Talent: Leadership Development Board Governance Board Placement, Training & Support Board - CEO Coaching

@CauseStrategy @WeAreBoardLead

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Connect with us:

@ C a u s e S t r a t e g y @ W e A r e B

  • a

r d L e a d @ R

  • b

e r t A c t

  • n

www.causestrategypartners.com

Connect with us: @CauseStrategy @RobertActon

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@CauseStrategy @WeAreBoardLead

  • Your Name
  • Your Organization
  • Your Role

Brief Introductions

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@CauseStrategy @WeAreBoardLead

What is something you have observed in board governance at grantee organizations that has caused you anxiety or concern?

Opening Question

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Why does this topic matter?

Four good reasons

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1. A strong and engaged board is critical if

  • rganizations are to

successfully address the increased challenges and pressures they face.

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2. Research clearly establishes that nonprofit board effectiveness is a significant predictor of an

  • rganization’s financial

health.

Source: https://www.haasjr.org/sites/default/files/AdvancingGoodGovernance.pdf

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3. Today’s grantmakers and grantees operate in a context that demands increased focus on accountability.

Source: https://www.haasjr.org/sites/default/files/AdvancingGoodGovernance.pdf

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Board performance is an ongoing issue. We have to recognize that nonprofits need to do governance well on a continuous

  • basis. Board development opportunities have to be provided. It

is rudimentary to building the sector.

  • Karen Whalen, Program Director (former), W.K. Kellogg

Foundation

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“For us, it is really simple. Board governance is a major determinant of organizational efficiency and effectiveness and always has been.”

  • Chuck Hamilton, Exec. Dir. (ret.), The Clark Foundation
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For all of these reasons, funding for capacity building and investing in nonprofit leadership has never been more important.

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A Snapshot of Nonprofit Boards Today

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@CauseStrategy @WeAreBoardLead

Average Number of Board Members

?

Source: 2017 BoardSource: National Index of Nonprofit Board Practices

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@CauseStrategy @WeAreBoardLead

Average Number of Board Member

15

Source: 2017 BoardSource: National Index of Nonprofit Board Practices

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Three Baseline Questions

1. Why do nonprofits have boards?

  • IRS-designated 501(c) tax exempt organizations
  • Surplus revenues used to achieve mission
  • Vary greatly in size, purpose and operations

2. Who serves on those boards?

  • 3. Who is really leading the organization?

@CauseStrategy @WeAreBoardLead

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Three Baseline Questions

1. Why do nonprofits have boards?

  • IRS-designated 501(c) tax exempt organizations
  • Surplus revenues used to achieve mission
  • Vary greatly in size, purpose and operations

2. Who serves on those boards?

  • 3. Who is really leading the organization?

@CauseStrategy @WeAreBoardLead

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@CauseStrategy @WeAreBoardLead

  • f the US

population is female

  • f nonprofit

CEOs are female

  • f nonprofit

board members are female

72% 48%

Nonprofit Boards: Gender

Source: 2017 BoardSource: National Index of Nonprofit Board Practices

51%

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@CauseStrategy @WeAreBoardLead

  • f the US

population are People of Color

  • f nonprofit

CEOs are People of Color

  • f nonprofit board

members are People of Color

40% 40%

10% 16%

Source: 2017 BoardSource: National Index of Nonprofit Board Practices

37%

Nonprofit Boards: Race/Ethnicity

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@CauseStrategy @WeAreBoardLead

  • f Americans are

25-44

  • f nonprofit

CEOs are < 40

  • f nonprofit

board members are < 40

40% 40%

11% 17%

Source: 2017 BoardSource: National Index of Nonprofit Board Practices

31%

Nonprofit Boards: Age

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Three Baseline Questions

1. Why do nonprofits have boards?

  • IRS-designated 501(c) tax exempt organizations
  • Surplus revenues used to achieve mission
  • Vary greatly in size, purpose and operations

2. Who serves on those boards?

  • 3. Who is really leading the organization?

@CauseStrategy @WeAreBoardLead

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Diffuse Leadership Structure

Board of Directors Committees Chief Executive Staff

Source: The Bridgespan Group.

Members Volunteers

Source: The Bridgespan Group. @CauseStrategy @WeAreBoardLead

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@CauseStrategy @WeAreBoardLead Source: 2015 BoardSource: National Index of Nonprofit Board Practices

CEOs: We have the Right Board Members to Accomplish the Mission

18% 27%

“Strongly Agree” “Strongly Disagree”

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@CauseStrategy @WeAreBoardLead

Grade Board Chairs Assign to Their Board’s Composition

C+

Source: 2015 BoardSource: National Index of Nonprofit Board Practices

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Board Roles and Responsibilities

  • Determine mission & purpose
  • f the organization
  • Select the Executive Director
  • Support & evaluate the

Executive Director

  • Develop effective strategy
  • Monitor & strengthen

programs and services

  • Advocate for your mission
  • Provide financial oversight
  • Ensure adequate resources &

manage them effectively

  • Ensure legal & ethical integrity
  • Serve as an Ambassador

Source: Ten Basic Responsibilities of Nonprofit Boards (Second Edition) Richard T. Ingram. Board Source.

Source: Ten Basic Responsibilities of Nonprofit Boards (Second Edition) Richard T. Ingram. Board Source. @CauseStrategy @WeAreBoardLead

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  • 1. As a grantmaker, in

evaluating a grantee board’s performance:

  • Which of these

responsibilities is the easiest for you to assess? Why?

  • Most difficult for you to

assess? Why?

  • 2. Which one keeps you up at

night?

Discussion Questions:

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Ascertaining Board Effectiveness

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@CauseStrategy @WeAreBoardLead

In your experience, what makes a great board?

Question

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Harvard Business Review: What Do Boards Need to be Effective?

Source: Ten Basic Responsibilities of Nonprofit Boards (Second Edition) Richard T. Ingram. Board Source.

https://hbr.org/1998/01/appraising-boardroom-performance @CauseStrategy @WeAreBoardLead

TIME MOTIVATION POWER KNOWLEDGE INFORMATION

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@CauseStrategy @WeAreBoardLead

Harvard Business Review: What Makes Great Boards Great

Great Boards are “Robust, Effective Social Systems”

“So if following good-governance regulatory recipes doesn’t produce good boards, what does? The key isn’t structural, it’s

  • social. The most involved, diligent, value-adding boards may or

may not follow every recommendation in the good-governance

  • handbook. What distinguishes exemplary boards is that they are

robust, effective social systems.”

  • Jeffrey A. Sonnenfeld, Yale School of Management
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What information are you currently gathering?

❏ Board member role & responsibilities description ❏ List of board member names, titles & organizations ❏ Professional bios of board members ❏ Board meeting minutes ❏ Board meeting attendance rates ❏ 100% board giving ❏ Give and Give/Get requirements ❏ Bylaws ❏ Strategic Plan ❏ List of each board member’s personal contribution ❏ List of what each board member is asked to do beyond personal giving and fundraising (e.g. pro bono service, introducing five donors, etc.)

@CauseStrategy @WeAreBoardLead

Adopted from: http://www.grantcraft.org/blog/nurturing-nonprofit-boards-funders-can-do-more

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@CauseStrategy @WeAreBoardLead

❏ Organization is not following its bylaws ❏ Poorly attended meetings ❏ Mission statement is weak or nonexistent ❏ No strategic plan in place ❏ Frequent chief executive turnover ❏ Frequent staff turnover ❏ Lack of CEO turnover despite poor or flat org performance ❏ Lack of turnover in officer roles (esp. Board Chair) ❏ Lack of diversity and inclusion

Markers of an Unhealthy Board (that you can readily identify)

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@CauseStrategy @WeAreBoardLead

❏ Schisms ❏ Concentrated power in chief executive / founder / board chair ❏ Meetings after the meeting ❏ The leaky board ❏ The silent start ❏ The frantic beg ❏ The dominator ❏ The great escape ❏ The paper chase

Markers of an Unhealthy Board (more difficult to identify)

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“Do Something Now” Concerns

  • Questions arise about

inappropriate use of funds

  • Questions arise about legal
  • r ethical improprieties
  • Questions arise about

satisfaction with programs and services

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What can and should a funder do when a grantee’s governance is worrisome?

Two Viewpoints...

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“CEOs of community-based

  • rganizations are not

demanding enough from their

  • boards. Funders have an

important role to play in ratcheting up the level of board commitments.”

  • Peter Sloane, President & CEO,

The Heckscher Foundation for Children

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“Sometimes raising issues or making capacity building suggestions, even when responding to a nonprofit leader’s desire to build

  • rganizational capacity, can be

perceived as, ‘We grantmakers know best.’ We find those circumstances particularly dangerous around the power dynamic.”

  • Anna Pond, Anna Pond Consulting

and Jenn Bokoff, Foundation Center

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@CauseStrategy @WeAreBoardLead

Where do you fall on the continuum?

Are you a Pond/Bokoffian? Are you a Sloaneian? 1 10 5

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@CauseStrategy @WeAreBoardLead

❏ The board meets regularly, has a plan for recruitment of new members, has expanded from the original founding board, and has brought in a range of expertise. ❏ The board participates in setting the direction of the organization and evaluating its progress. ❏ The board holds the director accountable for his/her performance. ❏ The board understands the organization’s resource needs and is engaged in fundraising. ❏ The budget is developed and reviewed by staff and board. The board reviews financial reports. ❏ Commitments to racial and gender equity are reflected in the organization's leadership, staffing, and activities. The organization monitors the diversity of its board and takes appropriate steps to increase it. A Healthy Board Governance Checklist (Adapted from The New York Foundation)

Source: http://www.grantcraft.org/takeaways/healthy-nonprofit-checklist

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What We Can Do To Help (Without Overstepping)

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@CauseStrategy @WeAreBoardLead

Degree of Intrusion Degree of Likely Impact High High Low

1. Important Factor in App/Renewal Process 2. Productive Conversation 3. Capacity Building Support 4. Establish Milestones for Improvement 5. Offer Governance Training 6. Offer Governance Coaching 7. Sponsor for Board Matching

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1

Make effective governance an important part of the grant application and renewal process.

@CauseStrategy @WeAreBoardLead

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2

  • Listen. Learn. Act.

Lead a productive conversation that encourages grantees to invest in their boards.

@CauseStrategy @WeAreBoardLead

Source: http://www.grantcraft.org/takeaways/recognize

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3

Offer capacity building support.

@CauseStrategy @WeAreBoardLead

Source: https://www.haasjr.org/sites/default/files/AdvancingGoodGovernance.pdf

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4

Establish milestones for board performance improvement.

@CauseStrategy @WeAreBoardLead

Source: https://www.haasjr.org/sites/default/files/AdvancingGoodGovernance.pdf

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5

Offer grantees a governance training series in partnership with experts in the field.

@CauseStrategy @WeAreBoardLead

Source: https://www.haasjr.org/sites/default/files/AdvancingGoodGovernance.pdf

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@CauseStrategy @WeAreBoardLead

❏ Basic Role and Responsibilities of Nonprofit Board Service ❏ Board-Centered Leadership (for CEOs) ❏ Top Ten Characteristics of Great Board Leaders ❏ Six Things You Can Do Right Now to Boost Your Board’s Performance ❏ How to Build a Better Board Meeting ❏ Demystifying Fundraising for Nonprofit Boards ❏ The Role of the Board in Financial Oversight ❏ Nine Challenging Moments Every Board Will Eventually Face & How to Prepare for Them

Governance Topics for Nonprofit CEOs and Boards

Source: http://www.grantcraft.org/takeaways/healthy-nonprofit-checklist

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6

Encourage (and even pay for) CEOs and board chairs to have access to governance coaching.

@CauseStrategy @WeAreBoardLead

Source: https://www.haasjr.org/sites/default/files/AdvancingGoodGovernance.pdf

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7

Sponsor organizations to participate in effective board matching programs.

@CauseStrategy @WeAreBoardLead

Source: https://www.haasjr.org/sites/default/files/AdvancingGoodGovernance.pdf

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@CauseStrategy @WeAreBoardLead

Degree of Intrusion Degree of Likely Impact High High Low

1. Important Factor in App/Renewal Process 2. Productive Conversation 3. Capacity Building Support 4. Establish Milestones for Improvement 5. Offer Governance Training 6. Offer Governance Coaching 7. Sponsor for Board Matching

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Case Studies

Overstepping? Or... Not Overstepping? You be the Judge!

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@CauseStrategy @WeAreBoardLead

Case Study #1: Funder Felicia

Two senior staff members of an arts organization ask Funder Felicia for a private meeting at the foundation’s offices. When the three sit down together, Funder Felicia asks whether their boss -- CEO Sally -- is aware of the meeting. They indicate she isn’t. The staff members go on to express their frustrations with what they view as CEO Sally’s overly autocratic leadership style. They give two primary examples. First, she refuses to allow staff to attend board meetings. And second, they describe her as “mean-spirited” and “power hungry” and say that staff morale is at an all-time low. Funder Felicia personally believes senior staff members should attend board meetings. She also worries that the Board of Directors is asleep at the wheel and has no idea what’s going on. She calls the Board Chair, asking for a private meeting with him, so she can suggest that senior staff be included in future meetings while also passing along the staff members’ concerns.

Overstepping? Or Not Overstepping? You be the judge.

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@CauseStrategy @WeAreBoardLead

Case Study #2: Funder Phil

Funder Phil receives word that a homeless shelter in the community told city officials that they would clear the shelter

  • f clients on Christmas Eve and Christmas Day if a city

contract wasn’t awarded before the holiday break. The source of information is unclear whether and to what extent the board was involved in the decision to use shutting the shelter’s doors as a negotiation tactic with the city. Outraged, Funder Phil calls the Board Chair and demands a full explanation. Overstepping? Or Not Overstepping? You be the judge.

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@CauseStrategy @WeAreBoardLead

Case Study #3: Funder Flo

Funder Florence engages in annual grant renewal site visits with her grantee organizations and always asks that both the Board Chair and CEO participate. Based on a review of the grant application and past board minutes, Flo has ascertained that board performance is in steady decline. In the most recent fiscal year, just 35% of board members made a personal contribution and the average board attendance rate has dipped to 69%. In the hopes of pushing the organization’s leadership to refocus on building a strong board, Flo tells them that this will be their last grant from the foundation unless next year’s grant application shows 100% giving by board members and at least an 85% average board attendance rate. Overstepping? Or Not Overstepping? You be the judge.

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Connect with us:

@ C a u s e S t r a t e g y @ W e A r e B

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r d L e a d @ R

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e r t A c t

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?

C

  • n

n e c t w i t h u s : @ C a u s e S t r a t e g y @ R

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e r t A c t

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Principal & Founder Cause Strategy Partners rob@causestrategypartners.com (347) 531-5746

Robert B. Acton, J.D.