In my first blog, I wrote about a great trusting relationship between a board chair and ED that allowed a nonprofit to transform itself and have much greater impact. My second post talked about the impact of strained relationships between board leadership and the rest of the board.
In this post, I describe an organization that found itself at great risk because no one was paying attention. But by implementing some processes and hiring consultants, the board chair was able to get back on track and start the fun part of being on a board – strategy.
How One Board Chair Avoided Risk by Asking Questions and Implementing Processes
By a Dedicated Board Member, Somewhere in USA
When my boss retired, she suggested that I join a board she had been serving on. I have the distinct memory of the executive director calling me up and saying “I want you on this board. And here is the good news: you don’t have to do anything.” That should have been a red flag right there.
Leaders Who Are Not Managers
The nonprofit does advocacy and policy work. It is about $1.7 million revenue. It has both a 501c3 and a 501c4 organization. The Executive Director (ED) had been there for decades. He had no interest in running the organization in a modern, forward-thinking way with good management or in having a functioning board. He kept the accounts in an Excel spreadsheet. He did his own IT work.
The interesting thing was the organization was doing well. They had a small cadre of smart people who had figured out how to get done what needed to get done in spite of the other issues.
Asking Questions Revealed Huge Risk But No One Was Paying Attention
I trundled along for a couple years. But then I began to realize that things were not functioning well, and the risk was huge. I started peeling back the layers on the onion, just by asking questions. Nothing had been put together in a deliberate way. It was literally just held together. None of the internal operations were happening. They had not set up the relationship between the C3 and the C4. The accounting systems were terrible. They were not tracking their lobbying. The ED was getting paid, but they thought their main job was to be testifying and talking to reporters, not looking at insurance policies and the like.
The board was also not doing its due diligence. People on the board thought “This is one of those boards where I don’t have to do anything. That’s nice!” The board was not meeting. I said, “We should have an actual meeting.” The board chair did not show up. The board chair finally said, I am not coming to this meeting. Why don’t you chair it? And then Why don’t you be the board chair? So, I found myself as the board chair.
Major foundations were providing funding and you would have thought that they were doing some oversight but for whatever reason they did not. I guess the organization was providing just enough due diligence to make foundations feel comfortable.
Having a Process Is Important to Solving Organizational Problems
Once I started peeling things back, the staff really stepped up. The staff was about 10 FTE with a couple of good leaders you could lean on. We brought in some consultants. We convinced the ED that they really did not want to be the ED of a small nonprofit. I said that we are going to do annual reviews. We developed criteria from Board Source and other places. When they saw what we had, they said this is not the stuff I want to be held accountable for. And I said OK, but that’s the role of the ED. So, they left.
Fortunately, we did not have a crisis. We worked with the consultants to get the organization straightened out. We met with accounting firms. The by-laws were 20 years old and not current best practice. The ED was a lawyer, who thought they could just do this alone, but it was not their area of expertise. So, we hired a law firm to redefine the lanes between the C3 and the C4 and to update our by-laws. We brought on some new board members. We did an ED search and found someone good. While all these changes were being put in place, we did not get to talk about the interesting stuff. Instead we were spending time talking about accounting firms and processes.
The good news is that we are getting to the strategic stuff now. We get to discuss: What is our niche? What is our goal? What is our strategy? That’s pretty exciting.
Lessons Learned: Don’t Assume Someone Else Knows and Have a Process
I think the first lesson was that it was easy to assume that someone else knew what the hell was going on. In fact, nobody knew. You need people on the board who are engaged enough to have oversight. Also, you need to have the right people in leadership positions.
Another lesson is that you need processes and by-laws, so conversations are not personal. When I worked with the ED to leave, I did not talk about them. I talked about the role of the ED and what an ED would be accountable for. They decided to leave.
Finally, I learned that you can hire people to help you – hiring the consultants was a great idea. We did not have to reinvent the wheel.