Nonprofits' Viability Supported by Active Boards, Strong Governance

Many authors have attempted to answer questions about what nonprofit boards should do, what constitutes best practice, and to what extent board members themselves are aware of their roles and responsibilities. These authors suggest that ambiguity often exists regarding the board’s role, typically because of lack of communication.

At a time when our organizations are being challenged to demonstrate our public legitimacy in order to survive, there is little room for ambiguous board behavior.

Contemporary thinking on this matter was stimulated by federal legislation born from the for-profit sector. The passing of the Sarbanes Oxley Act of 2002 sparked questions about nonprofit governance and board behaviors. In this light, and as the fiscal reality of nonprofit human service organizations dawns on boards of directors, trustees are compelled to look to donors and philanthropic capacity to insure mission viability and organizational survival.

Resource acquisition and the fiscal stability of the organization are imperative board concerns for any nonprofit, but they are core survival issues for the small, community-based human service agencies—including the hundreds of members of the Alliance for Children and Families and United Neighborhood Centers of America. Failure to prioritize these realities in the current environment reflects a major lack of strategic thinking and planning on the part of the board.

Effective Governance Requires Board Engagement

It is our position that board engagement is critical to effective governance. In our view, board engagement includes active participation at board meetings, attendance at committee meetings, personal financial support of the organization, financial support of fundraising events, the offering of skills and abilities to move the mission of the organization forward, and loyal support of the organization’s mission, goals, and objectives.

A key indicator of board engagement is the degree to which a board member takes on the role of “board ambassador.” This role involves a board member functioning as an authorized representative of the mission of the agency by taking that message into their spheres of influence, as well as into new community venues.

In order to be a good board ambassador, a board member must believe in the organization and identify with its mission and goals. A board member must also be equipped to clearly answer questions such as: Why does the organization exist in the first place? What is distinct about the organization? Why does the organization merit support? What does the organization want to accomplish, and how does it intend to do it? How will the organization hold itself accountable?

When board members are effective in the role of board ambassador, the result is new and increased awareness of the organizational mission. This further supports the viability of the organization.

An engaged board member is capable of articulating the mission in such a way that others who share the organization’s values will be compelled to invest. Therefore, we suggest the probable correlation between an increase of philanthropic dollars and an effective and engaged board, as evidencing by ambassadorial behaviors.

Furthermore, we believe that this is an essential foundation for addressing the systemic under-funding of capacity that has been undermining community-based, human service organizations and their missions for more than a decade.

Organic Development of Good Governance

The underlying dynamics of a community-based philanthropic culture, and the board engagement it calls forth, support and drive principles of good governance. Fund development in the community-based, charitable sector is most typically successful with the strong support and engagement of the board.

Are we suggesting that resource development is a governance function? No, we are not. But attention to fiscal drivers and financial viability are key governance responsibilities. What we do suggest is that the board that is investing time and energy in its resource development capacity is most likely manifesting the characteristics of good governance.

In this case, form follows function. Good governance does not happen because we are committed to models of good governance; rather, good governance occurs when a board has passion for the organization’s mission, a commitment and strong connection with the community, and is engaged in ensuring the organization’s services are meaningful, relevant, and first-rate. That is also the bedrock foundation for successful resource development. Good governance arises organically from a posture of active engagement.

We suggest, and plan to undertake, further research to examine the relationship of successful resource development and excellence in board governance in community-based, charitable, child- and family-serving agencies. We believe that research will show that those agencies that are investing in and committed to excellence in resource development capacity building within their organization are, at the same time, enhancing and strengthening their board’s governance capacity and function.

Download the full report.

Simon Bisson, executive vice president and chief development officer at Starr Commonwealth, Albion, Mich.; Bob Jones, president and CEO at Children’s Aid and Family Services, Paramus, N.J.; and Betsy R. Vander Velde, president and CEO at The Family Conservancy, Kansas City, Kan., are members of the Alliance Resource Development Services (RDS) Advisory Committee. All of their organizations are members of the Alliance. Thomas E. Lengyel previously was director of research and evaluation services at the Alliance, during which time he oversaw evaluations of the RDS program.

Article PDF: 

Alliance ND 09-4 Reprint.pdf