By David Greco, Social Sector Partners
In working with nonprofit organizations across the nation on their financial sustainability, the one thing that has consistently differentiated high-performing organizations from those struggling to keep the doors open and the lights on is the board of directors.
When asked to rate themselves on the basic roles and responsibilities of nonprofit boards, both nonprofit leaders and board members usually give themselves high marks on items such as determining the organization’s mission/purpose and providing legal/financial oversight. But time and again, we see boards struggling with external responsibilities such as fundraising, advocacy, and community-building and outreach.
And herein lies our dilemma. Boards do well in areas where they focus and prioritize – most often this is on fiduciary duties (legal and ethical integrity, financial, compliance, etc.). But, while fiduciary oversight is vital, it is often not the determining factor in driving financial sustainability and impact. Getting a ‘clean audit’ or submitting your IRS Form 990 on time will not save an organization from financial ruin!
Three Pillars of High-Performing Boards
Creating a high-performing organization, means having a high-performing board. It is about creating a culture that understands what it really takes to deliver on the mission and is committed to building a revenue and business model that ensures financial sustainability and drives impact. What I like to call the Three Pillars of High-Performance:
Supporting Impact & Sustainability– Board members understand the organization’s business model and what it really costs to achieve impact over the long-term.
To be an effective champion for your nonprofit, board members need to understand both the organization’s programmatic needs as well as their business and financial needs. That is, you need to be able to communicate the impact, but you also need to be able to articulate what does it really cost to achieve that impact. This means recognizing that it takes infrastructure, systems, and talent to effectively deliver on mission. This means ensuring resources not only for today but for the long-term as well.
Ensuring Adequate Resources– Board members actively support a revenue and fundraising strategy that covers the full cost of doing business
Building a fundraising-friendly board is more than just getting board members to make ‘the ask’. Board members need to understand the types of money the organization needs (from programmatic funding to investing in staff and infrastructure to building liquidity and reserves) –they need to make the right type of ask. They are open and honest with funders about what it really costs to deliver outcomes and expect that funders understand and support those full costs – they need to ask for the right amounts of money. And they behave as equal partners with funders and offer investment opportunities to partners – they do not apologize for what it costs.
Driving Continuous Quality Improvement– Board members are committed to building an engaged, passionate and committed board of directors
In many ways building a high-performing board is very similar to sales cycle where you take strangers and convert them not just to customers (donors) but ultimately promoters.
Adapted from The Board Building Cycle by Hughes, Lakey & Bobowick, 2003
This means identifying and cultivating top talent who are passionate about the work – and being very explicit as to your expectations of board members in regard to fundraising. Then once on board, helping to orient and engage board members including training on fundraising and storytelling. And of course, we need to evaluate the board’s performance to ensure we have the “right people on the bus”. An effective board building cycle fights complacency by evolving/changing what (or who) isn’t working. It allows for continued quality improvement, rejuvenation, expansion of networks and donor base, and creates a culture of accountability.
To be a truly high-performing board member means that you need to move from a box-checking fiduciary approach to a strategic thinking, decision focused way of working. If you want to help drive the sustainability and impact of the organization, understand their business and financial needs as well as their programmatic needs, embrace a full cost fundraising approach, and commit to assessing and improving the board’s performance. Be the champion your organization needs, honor and advance the mission by raising the bar, and build a culture of high-performance that delivers real results.
David Greco is the President and CEO of Social Sector Partners, a company dedicated to helping nonprofits achieve great outcomes and financial sustainability.
David is a speaker at SCLN’s Riordan Leadership Institute.
To find out more about David and Social Sector Partners, check out their website: socialsectorpartners.com.