Competent Boards, Successful Organizations

By Carl Helstrom
Published on Thursday, February 01, 2007
ARTICLES

This article is adapted from Carl Helstrom's presentation at the November 8-9, 2006 SPN Board Leadership Training Conference in Charleston, South Carolina.

A competent board is critical to an organization's success. The board helps shape the organization's character and is ultimately responsible for its governance. All the nonprofit organizational problems I've seen essentially boil down to poor or weak leadership. Today I'd like to focus on some common nonprofit management problems, briefly discuss the "nonprofit life cycle theory," and, highlight what I consider to be the most important attributes of strong boards and board members.

Founder's syndrome is probably the most prevalent problem. Any organization takes entrepreneurial energy and zeal to start. Many times only the founding entrepreneur's personality, personal contacts and abilities enable the organization to survive out of the start-up phases.

The goal is to create an organization for the long run, one that can survive beyond the entrepreneur's influence. You might be surprised how tough it is for organizations and entrepreneurs to allow this. Larry Reed (Mackinac Center) and I are familiar with a national think tank whose entrepreneurial founder died decades ago, yet his ghost still haunts the organization.

Myopia, or shortsightedness, is also common. All of us tend to focus on the minutiae of current problems and put larger, future challenges aside. Nonprofit board members and managers need to think big and far ahead.

Factionalism plagues many nonprofit boards. It takes a lot of work to make a team out of a group of volunteers who are only connected by their interest in the nonprofit's mission. Dissension in major decision-making will cripple the board and the organization.

The goal is to create an organization for the long run, one that can survive beyond the entrepreneur's influence.

It's common to analyze nonprofit management problems in terms of failure, but some nonprofits have fundamental struggles with success. Often they can't handle successes they have spent years working to attain. It is vital to prepare for success as well as failure.

The boards of younger organizations often have an inordinate obsession with major donors, landing the Big Kahuna or a Sugar Daddy who will underwrite the organization's mission and programs completely year after year. In reality, most major donors usually contribute substantially only to organizations they start, in situations in which they can have substantial control over operations, or after many years of intimate involvement with the organization at less substantial levels. The strongest nonprofits have diverse funding bases that take hard work and perseverance to build.

These and other nonprofit management problems cause organizations to drift away from their missions and result in squandered resources and poor productivity.

Life Cycle Theory

Throughout this Board Leadership Training Conference, we've discussed the life cycle approach to nonprofit management. This theory views organizational development in cycles of growth and decline - start-up, growth, maturity and eventually stagnation, demise, or renewal. It focuses on building capacity, dealing with change and meeting future challenges.

The life cycle theory appeals to me, because it's like organizational "tough love." It offers basic tools to analyze and solve difficult organizational problems realistically. It encourages straightforward self-assessment, based on personal honesty, openness to change and constructive criticism.

I believe the life cycle theory is complementary to our market-based view of the world, because it utilizes some of the best concepts we work for and promote: innovation, respect and responsibility, customer satisfaction and market awareness, and other attributes of the free society.

If nonprofit boards can cultivate these characteristics or habits, they are likely to succeed. Their commitment to excellence will filter throughout the organization's programs, employees, volunteers and supporters.

Attributes of a Strong Board

Essentially, all nonprofits have the same organizational challenges and are best served by board members with the following traits.

Passion. They are inspired and confident about the organization's mission and goals and bring great energy to their efforts on its behalf. They are enthusiastic, but cooperative and willing to work hard with fellow board members, staff and volunteers.

Prescient. They develop the ability to see the big picture and avoid micro-management of the board or staff. They can visualize both short-term and long-term goals and what it takes to achieve them. They can plan ahead realistically.

Prudent. They seek what is good and ethical for the organization and promote the principle that in any situation they themselves and the organization will do what is right. Their decisions and actions are moral and beneficial. For freedom lovers, this means the means must justify the ends.

Professional. They are respectful and responsible for themselves and the organization they represent. They treat colleagues, employees and volunteers respectfully and do not take advantage of their special positions of leadership.

A board's commitment to excellence will filter throughout the organization's programs, employees, volunteers and supporters.

Patient. They understand that most charitable and philanthropic goals take a lot of time to accomplish, usually much more than originally anticipated. Their commitment to the organization's mission, goals and programs is strong enough to weather bad times as well good. We have to be incredibly patient to achieve our ideals.

The ultimate goal of any serious nonprofit group is to build organizational capacity, defined as competence and performance. If a nonprofit can attract board members with these characteristics, change can be dealt with gradually and deliberately and any challenges the organization encounters will be manageable.

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Carl Helstrom is chairman of State Policy Network and executive director of The JM Foundation and the Milbank Foundation for Rehabilitation in New York City. He can be reached at carlhelstrom3@aol.com.

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