Nonprofit boards are weird

I'm on a few non-profit boards and one of the things I don't see the author mention at all or specifically is the primary directive of the board is the financials. The CEO/Director is in charge of the day to day operations. The board has very little interest in that. A non-profit will have some or most of it's money from donors and those donors want to make sure that donation is being spent effectively. And that is where a good or bad board becomes responsible.

If the money is being spent to drive the mission of the non-profit successfully no one cares. We show up for the board meeting, order sandwiches, and ask questions. And plan the next meeting.

If the money is not being spent effectively or the mission isn't being met well we ask questions, sometimes offer advice, or raise more money. Maybe staff need to be changed or a new director hired. The board does not need to know the technicalities of the non-profit it just wants it to be governed with good care.

You can't operate a non-profit the same technique as a for-profit. They are orthogonal in duties. A true non-profit has to spend almost every dollar it takes in. The board is all voluntary and there is nothing in it for them, except those sandwiches!

I do grant writing for nonprofits, public agencies, and some research-based businesses. Many if not most nonprofits only operate through the will of a single person (usually the executive director) or small number of people, and this can remain true even in nonprofits with eight-figure budgets. In HN terms, startups don't have strong boards either, because startups only have a small number of people working at or in them.

In addition, the more people there are on a board, the less likely it is to do anything, thus leaving the executive director to run the show.

The board is often for show. Yes, the same may be true of many for-profit businesses, but the degree is much higher at nonprofits. Often, the board is there for signaling purposes: https://seliger.com/2012/03/25/why-fund-organizations-throug.... Nonprofits are more like businesses than most people realize: https://seliger.com/2012/09/02/why-nonprofits-are-more-like-....

So, as in many things in human life, there is the nominal, stated function, and the actual function. Board members are often cultivated for their ability to donate, not govern (or, sometimes, their ability to provide political cover). Volunteers are similar: https://seliger.com/2014/04/20/volunteers-nonprofits-really-....

I suspect the author of "Nonprofit Board Are Weird" knows or suspects much of this.

I served on the non profit board of my local arts centre. Worst decision of my life. 7 years troubleshooting impossible HR problems. At one point I had to take a two weeks off work to carry out disciplinary proceedings against someone who had been a family friend. Constant childish complaints from employees who refused to communicate with each other and expected the unpaid board members to resolve thier stupid problems. The whole thing was a basic income program for dysfunctional people, it didn’t produce much in the way of art. I strongly urge anyone considering joining something like this to make sure they understand how badly it can go wrong.

I've served on two nonprofit boards with a combined time of about 22 years or so on them. Both were/are much more engaged than the boards described in this piece, but I think they are an exception.

The other thing I'd add as a nonprofit board responsibility is to be the final owner of the organization's mission and values, and to make sure the organization sticks with them. To a large degree, this is deeply entwined with evaluating the CEO, since one way a CEO can fail is to let the org drift off mission or fail to live up to its core values.

Another thing I'd add, at least for smaller orgs with few employees, is that the board can be part of regular long-term strategic planning (1+ year plans) and budgeting discussions. But of course this requires a more-than-normally engaged board to be useful.

I find this interesting because it was suggested (not urgently) that I could be on the board of a local food bank. This article did not even mention D&O insurance, but they said they would have it.

What scares the sh&t out of me is being financially responsible for anything any volunteer ever does (and possibly that not being covered by the insurance). None of the comments so far mention that either. Is that fear overblown?

>Board members who can't say much about where they expect to be highly engaged, vs. casually advisory ... don't seem like great bets to step up when they most need to (or stay out of the way when they should)

Indeed, I have no idea what I would do, so probably I should stay off.

The author is making some broad generalizations ("Board members often know almost nothing about the organization they have complete power over") that don't match what I've seen as a nonprofit board member.

There are certainly best practices out there, as nonprofit management is a very developed "industry" in the United States and I suspect other countries as well. I don't know why he had trouble locating this information. Identifying a capable and engaged executive committee and limiting tactical committees and projects in favor of strategic planning will go a long way to making for an effective board.

Small nonprofits will seem chaotic as there are too many things to do, (usually) no full-time staff to manage it, board members who don't participate and/or make demands that are not practical, poor financial management, launching important tasks that are never completed, and badly written bylaws at foundation that cause problems for years after they are written.

More like "bad nonprofit boards are weird", though there's definitely some truth to - great power, low engagement, unclear responsibility, and zero accountability. But a good board and CEO/ED will address all of these.

First and foremost, board members are volunteers. They need to be people who are invested in the organization and its mission, and would be available to help as needed. They're also consultants. The board I'm on has people with expertise in HR, finance, accounting, marketing, medicine (very useful since COVID), economics, education. All of their experience is incredibly valuable in different ways, especially since the non-profit ("medium"-sized at 1.5MM annual revenue) can't really afford those roles.

Engagement and responsibility has been a challenge for us, but we've addressed it by keeping up on best practices, which includes self-evaluation of the board and its members. As a result of that, we've invested in our onboarding process so new board members know what expectations and responsibilities are. We have various committees that focus on certain areas (e.g. finance, governance, fundraising, strategy), where board members meet outside the formal bi-monthlies to engage with staff more directly and help guide and support the organization.

Overall, I've had a great experience being a part of this org. Maybe the board I'm on is just a unicorn...

I think the weirdest thing about non-profit boards is that people in general pay (in the form of donations) to be on them, as opposed to for profit boards where the money flows the opposite way. Much of the interaction between the board and management is designed to keep the donations coming, which can create a real conflict between good governance and financial stability.

My town has an elected position called the "board of library trustees" which has just a few powers, including notably the ability to hire a new library director.

There are usually vacancies and poorly-contested elections for the position, even this year when the director resigned and the town had to search for then hire a new one. The job has a fair amount of influence on a critically important part of civic infrastructure, but people don't seem to be stepping up to do it.

Every time there's a vacancy I took at the state handbook that describes what your job should be if you're one of these trustees and I decide I am not confident I could do those tasks as well as the job deserves: https://mblc.state.ma.us/for/2012-Handbook.pdf . It's a LOT!

The assumption that boards aren't engaged seems really strange to me.

Of the two nonprofit boards I've been on (one very well functioning, one not so much), both have had highly engaged board members.

He also seems to be assuming mid-sized or larger nonprofits. For nonprofits with very few employees, or low budgets, board members often are brought in for their expertise, and their willingness to get in and do the work that would be done by employees in a larger nonprofit. If you can't pay them as employees, and they are volunteering their time and expertise and are highly engaged, it makes sense to put them on the board. Why wouldn't you?

Oh boy, can I relate to this! I have spent about a decade working for nonprofits and I think they are extremely weird organizations with no good accountability or feedback loops built in unless the CEO and Board choose to implement them. The quality of the organization almost completely flows from a few highly engaged board members, one or two donors that may give the majority of funding, and the CEO. If they are spectacular, you get a spectacular org, if they suck, you get a sucky org (and maybe some crimes as well).

Because the thing is, the customers of the nonprofit are the donors which purchase the marketing story of nonprofit and nothing else. It is sort of like bitcoin, there are no fundamentals, just the hype and hope and that is the only fuel needed. The actual programmatic activities of the nonprofit do not need to bear any resemblance to the marketing story the donors purchase. If you are very good at telling that story, you do not need to answer to the donors at all on the real performance metrics of your org. A very large donor may demand to see these fundamentals, but you don’t need them if you have smaller donors. Grant making foundations also often demand fundamentals and measures of effective philanthropy, but you can avoid taking any grants that expose you to too much governance.

And finally the board tends to be the society of friends of the CEO, so they very rarely do anything but use their connections to boost the money and influence of the org.

In the end; the CEO does not need to answer to the board, the donors, the beneficiaries, the shareholders, the IRS, the Gates foundation or the employees. They answer to their own conscience.

In my experience there are two types of boards in the for-profit space. If the company bootstrapped itself to profitability without taking any or very much investment, and especially not taking investment from experienced investors, the board will be a bunch of friends of the CEO who rubber-stamp everything.

For companies that either are already public or are in the pipeline of venture capital start up to acquisition or i p o, the board dynamics can be very interesting and well dynamic.

The main difference is that in this case the people who sit on the board, the startup founder CEO usually, and representatives of the various investor groups, have usually done this before and have a play book. Their objective is to maximize the return on their investment, and that's what they do professionally.

Unfortunately, in my experience, in spite of the fact that this should result in a much more functional and experienced Board of directors, somehow things still end up getting pretty weird in a lot of cases. It mostly comes down to Ego and head games various directors seam inclined to play, often having to do with previous interactions or rivalries between investor groups. Also, CEOs are often cut from a certain type of personality cloth that plays into this gamesmanship. I'm not talking about the founder CEO , I'm talking about the CEO that was brought in to scale the company up and prepare it for acquisition or public markets. He ( it's almost always a he) needs to think about his own career, especially if things aren't going as well as everybody would like to think they are. It often boils down to a game of prisoner's dilemma.

When this sort of thing gets out of hand, it can begin to feel like some sort of five dimensional poker game where you don't even know the rules. A bit like the game Mao if anyone remembers that.

This guy makes sense; e.g. also see his piece on useful vices (of the Larry Wall type) for writing about wicked problems, https://www.cold-takes.com/useful-vices-for-wicked-problems/

The notion that non profit boards are self appointed and answerable to nobody doesn't seem universal. In the model I am familiar with (the French one), non profits typically have broad and open membership, and that membership elects the board. In fact, I find it difficult to find non-profit with self appointed boards to be quite as legitimate. While the board doesn't actually own equity as shareholders would in a for profit, since they are answerable to nobody, they effectively run the organization for their own sake. They might have a charitable agenda, but there isn't much holding them to it.

I would add that the probability of a task getting done, is inversely proportional to the distance between the people deciding about the task and the people who will actually do it.

Since the board members are almost never the people implementing the decisions, the plan is much less likely to get executed. The decision needs buy-in from the CEO and then the employees. Since the board members don't spend much time with the CEO and employees and they have a very different view of things, that buy-in is likely to be weak, so the plan gets watered down every step of the way.

Really makes you realize why things are so inefficient in public organizations and politics.

In a two person startup, if the founders decide to do something and they are the people executing on that decision, the task is very likely to get done fast and in full. If a non-profit board decides to do something, not so much.

Regarding charities, I highly recommend watching this Ted talk on how the way people (generally) think about charities is wrong - https://youtu.be/bfAzi6D5FpM

Policy Governance[1] can really help with a lot of the weirdness described in this article.

[1] https://en.wikipedia.org/wiki/Policy_Governance

I have served on a lot of private company boards (VC-backed companies) as well as a mnumber of non-profit boards. I agree with the sentiment that non-profit boards are weird, and I have found them significantly less productive than for-profit boards. Comparing for-profit and non-profit boards, I see several key drivers of non-profit weirdness:

* Definition of success: With for-profit boards, there is a clear shared view of what the long-term goal is: value creation for shareholders. While there are lots of healthy debates about how that is accomplished, they are all in the context of the same goal. With a non-profit, each board member may have their own view of what the org is ultimately trying to accomplish. Further, these differing views may never be surfaced in open conversation, leading to people talking past each other a lot.

* Incentives: Related to a shared view of success is the issue of incentive. Many private company board members are shareholders and have a clear financial incentive to make the company successful. I won't go so far as to say this creates accountability, but it does serve as a clear motivator to be engaged. Non-profit directors have nothing at stake that creates an incentive for engagement. If anything the incentive may be a friendship with other directors or the ED, in which case, the incentive is to maintain the relationship with that person rather than do what is best for the org (a common cause of dysfunction). This is a particularly acute problem when it comes to the most important issue a board can face: when and whether to replace a CEO. Most non-profit board members have no incentive, or a negative incentive, to engage in such a difficult conversation.

* Size: Non-profit boards are often very large (10+ people), while private company boards are usually 5-7 people. Size makes everything harder, and leads to fewer meetings, less discussion, and less engagement.

* Skill sets: Non-profit directors are often recruited with the primary goal of fundraising. They often have little to no board experience and may not have any experience with governance of an organization of any size in either a director or executive capacity. In my experience, even the ability to read simple financial statements is rare, much less the ability to think strategically about where to take an organization or how to scale it.

Whether profit or non-profit, I think it's important that the voard represents the stakeholders of the organisation. And for a for-profit company that means not just the shareholders, but also the employees, the customers, and any other societal interests. For a non-profit, that probaboy means the donors, the employees and people representing whatever problem the organisation is addressing.

Random celebrities with no clear stake or responsibility sounds like a bad idea.

Reminds me of Twitter's board where they have a small ownership stake (in % and $ terms).

I've seen a few non-profit boards in action and they're filled with a couple people who really care about the cause, and the rest really care about their egos and like the title of board member.

While this is likely the case for for-profit boards, but having skin in the game really matters for engagement and motivation. Try watching a sports game with money on the line and another without. The difference is huge.

> Try to articulate what's so weird about nonprofit boards, fundamentally. I think a lot of it is the combination of great power, unclear responsibility, and ~zero accountability; additionally, I haven't been able to find much in the way of clear, widely accepted statements of what makes a good board member.

This can be by design if what's in the TV show Ozark reflects the reality. Powerful people need a charade to exert their influence while avoid accountability.

Most of this article could apply to for-profit boards as well. Some of the key points here (e.g., lack of clear responsibilities) come from immature governance, rather than any particular difference in org. type. It's easier to join a nonprofit board than a for-profit board, so you get less-experienced people (and leadership!). And nonprofit boards often come with a) fundraising responsibility and b) networking opportunity, so it can be a different kind of gig.

The Carver Method of Board Governance is one of the best I've found. I"ve implemented it successfully and seen great results with actually focusing a non-profit boadrd. The Board's primary responsibility is not fund raising, not organazation managment - but governance.....

https://www.carvergovernance.com/model.htm

Not weird, different. Its the publicly owned companies which are weird IMO. Schizophrenic when it comes to things like responsibility, public interest, egocentric-ism, short term PoV/profit, and so on and so forth.

Worked for nonprofits in Africa, including the Gate foundation.

Now if I want to help people, I give to a hobo in the street, or take time for someone I know.

I don't trust NGO to handle money with care, or honesty, nor do I think most programs bring more benefits than problems.

If someone is a board member for few non-profits, is it hard to make the jump into for profit companies?

If a for profit compaby goes belly up, do the board members suffer any real consequences, apart from perhaps not being invited into other boards?