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Short enough to read over a cup of coffee, Board Café has everything you need and want to know to help you give and get the most out of board service.A 360-Degree Look at the Organization: Seeing Ourselves as Others See Us
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Who should judge if a meal is good? The cook? The nutritionist? The restaurant critic? Aristotle had a good answer long ago: "The guest is a better judge of the feast than the cook."
There are 360 degrees in a circle, and the 360-Degree Look places the organization at the center of the circle and looks at it from the viewpoint of its many constituencies. In particular, the 360-Degree Look helps compensate for the board's limited view of how well the organization is functioning. There are several reasons for this limited view. First, board members often have only a little time each month to spend on their volunteer board commitments. Second, board members are often unfamiliar with the program area of the organization, whether that is pesticide research, early childhood development, or nursing home standards. Hopefully, board members do know about the needs and desire of the organization's constituents, but that may not be the case. Finally, board members often receive most or all of their information from the organization's executive -- not entirely a bias-free source.
Time for a Fresh Perspective?
In a 360-Degree Look, the board and the staff management team seek feedback from those who stand around the outside of the circle as well as inside it: clients, the community, volunteers, donors, funders, and staff. While such a project might be seen as threatening or overly time-consuming by staff, it's an infrequent project, done perhaps every five years, or when a fresh perspective is wanted. Having it led by a board-staff task force can alleviate staff fears and create a precedent for such board-staff teams. Like any project, a 360-Degree Look can get bigger and bigger; keep it modest and do-able.
The following steps can be considered as examples of ways to obtain
> Read moreThe Secret to a High Impact Annual Report
We nonprofits often put a great deal of time and effort into our annual reports, especially compared with how briefly most recipients will look at them.
"The annual report is a comic book," a nonprofit executive once told me. "They look at the picture and glance at the words." The secret reality is that people do only four things with a nonprofit annual report. They:
- Read The Letter (typically from the executive director and the board chair)
- Check to see if they're listed (if they're a donor)
- Read the captions on photos
- Look at the financials to see how big you are and if you had a surplus or a deficit.
You know it's true! Yet (with the exception of The Letter) these are the areas that are often done at the last minute and without real thought.
So this year, do it differently:
> Read moreNonprofit Embezzlement: More Common and More Preventable Than You Think
"I was on the board of a national social justice organization for three years. The Development Director discovered that the "external-auditor-turned-internal-accountant" had been embezzling funds by stealing checks and using the "stamp signature" of the CEO. The day after it was discovered, the accountant shot and killed himself. He had also been embezzling from a church he volunteered for. The lesson I walked away from this tragic scene with was this -- as a board member did I do everything I could to prevent embezzlement? Why did I hesitate in saying anything when staff suggested it was a good idea to hire our auditor for internal work because 'he knew us so well'?" --Blue Avocado reader who asked to remain anonymous
Embezzlement -- fraud committed by employees and volunteers -- is especially painful in community nonprofits. Not only is real damage done to our organization, but we feel that our cause has been betrayed by someone we trusted and liked. We worry that donors and grantmakers will be less likely to give us money if they hear about it. And because embezzlement is so often kept quiet in nonprofits, we might think that we are the only ones to experience it. What are some of the most common types of nonprofit embezzlement and how to deal with them?
> Read moreThe Board Builds Its Sense of Self: Body-Building for Boards
Perhaps the single most important attribute of an effective board is also its most intangible: an independent sense of itself. This sense of self is the board's identity as a body rather than, for instance, as a loose collection of individuals who each finds ways to support the organization.
As individuals, board members act as supporters of the organization, and often see themselves as supporters of the executive director as well. They speak to the community on the organization's behalf: asking for donations, volunteer time, and support. In contrast, when acting as a BODY, the board speaks to the organization on the behalf of its constituency. And while individual board members are cheerleaders, the board as a whole is the sharp-eyed team owner: looking at both the season record and the bottom line, and evaluating the head coach.
Here are five easy ways to strengthen the board's sense of self:
> Read moreThree Steps to Effective Board Oversight of Insurance
As a board member, it is your responsibility to understand your group's insurance needs and help make sure you have the right coverage. Here are guidelines for board members who want to make sure their community nonprofit has appropriate insurance coverage:
1. Monitor suits, threats of suits, and accidents. The board (or a risk management committee of the board) should be informed of any insurance claims made against the nonprofit and when threats of suits arise. In some organizations it's appropriate for the board to set goals and monitor progress on safety and risk reduction, such as reports on the number and type of automobile accidents and whether there were injuries, and what might have been done to prevent the accident.
2. Periodically review risks, risk reduction practices, and coverages. Depending on the size of the organization, the board, a board committee, a board-staff task force, or other group should develop a list of the key risks faced by the nonprofit and have a process to periodically review incidents or claims. Obvious areas of concern are driver selection and training, policies to protect vulnerable clients, and potential for fraud and damage to property. Less obvious risks are potential damage to reputation and staff morale from poor management.Your insurance broker should be able to assist with identifying the most important risks to address.
3. Review and consider changing brokers. Every few years, the board should review itsrelationship with its broker, just as it reviews the relationship with the auditor. In this review board representatives should look over what coverages are being purchased, at what rates, from which insurance companies, and whether the nonprofit is getting the services (such as prompt payments) it deserves. We at NIAC and ANI-RRG are proud of the other services we provide free or at low cost to the nonprofits that insure through us: services such as driver training and monitoring (for organizations with vehicles), informational booklets (such as the issue of serving alcohol at special events), webinars on risk reduction, and others. Be sure that you are getting the most value out of your relationship with your broker, and with your insurance companies.
A Board Member's Guide to Nonprofit Insurance
Many board members don't think about the organization's insurance until something adverse happens. As one Blue Avocado reader commented: "Insurance isn't sexy, but it's as essential as a roof over your head." In these tight times, it's tempting to make insurance a low priority, but this strategy can be penny wise and pound foolish. Blue Avocado asked Pamela Davis, president and CEO of the Nonprofits Insurance Alliance Group (and a Blue Avocado Steering Committee member) to give us the low-down on liability.
Q: Pamela, what are the most common insurance claims against nonprofits? How much do they end up costing?
Pamela: Almost all of the claims -- 90 percent-- reported by nonprofit
> Read moreClosing Down the Right Way
When nonprofit boards have to shut down ("dissolve") the organization, they often find themselves swimming in a sea of unpaid bills, demanding creditors, frustrated and anxious staff, and desperate clients. Going broke -- like other things in life -- can be done poorly or well. Managing insolvency well can mean that client or patron services are not disrupted, that staff are given assistance in their job transitions, or that creditors can receive some satisfaction. Here are some steps for boards considering dissolution:
- Identify your legal and contractual obligations. Consult a lawyer to help you plan and implement the dissolution (there may be one willing to help on a free -- pro bono -- basis). Are there government contracts that must be fulfilled? Are there building or equipment leases in place? Do you have any restricted money or assets which must be returned to
Thinking the Unthinkable: Maybe We Should Shut Down
When we think about the important work we do at nonprofits, it's hard not to think that closing down is the ultimate disaster. But sometimes a lack of money or energy raises the question for us. Here at Blue Avocado, where we turn things on their heads to get a fresh look, we believe that just thinking about closing can be freeing: a chance to re-think not only our organization, but how best to utilize the human and other resources we have. When an organization becomes a heavy burden for staff, the board, and volunteers, it's time to look at options.
It's very hard to break the ice on a board and open a discussion about closing down. The nonprofit board of directors is responsible for the organization's future: whether to grow, change, downsize, merge, evolve, or close. And although nonprofit board members don't have personal financial stakes in the organization, they have invested their time, their energy, their financial contributions, and their hearts.
At the same time, few nonprofits are destined to thrive for centuries . . . there may> Read more How to Take a Public Policy Stand, with sample criteria
When the Colorado Recycling Center was approached to endorse the No Child Left Inside legislation, they didn't know WHAT to decide, but they know HOW to decide (see what they decided at end of article). They already had a procedure in place for deciding what public policy stands to take. But most nonprofits aren't as prepared:
Would it support your cause or help your constituencies if your organization
took an official stand on a public policy issue? Is it legal to do so? And how would you do it? Your board may be thinking of taking a stand on an international issue, on FDA regulations, on public school policies on students with disabilities, on a proposed hospital closure, on pending legislation, or on whether dogs should be allowed in a local park.
The worst time to decide on how to take a policy position is when you actually have an issue in front of you. If the board has to decide two things at the same time: how to take a stand, and whether to take a particular stand, the discussion can easily be confusing and argumentative.
We'll look first at a sample procedure for how organizations take stands, then offer a questionnaire that one organization uses when asked to sign onto letters, and finally, provide some links to additional information.
First, is it legal for a nonprofit to take a stand on a policy matter? Answer: > Read moreShould the Board Hold Executive Sessions?
Nonprofit boards are often criticized for a lack of vigor, being subservient to 
their
executive directors, and for weak evaluation of their chief executive.
The need for frank and informal discussion about staff performance, and
the importance of the board developing a sense of itself, are just two
reasons why many boards hold executive sessions.
An executive session is a meeting (or part of a meeting) of the board without staff present. In some cases an attorney or other advisor may be present, but not staff. Executive directors are often sensitive to the idea of executive sesions because that think that important matters necessitate imput from them (and they just don't like the idea -- period!).
Because one the board's chief responsibilities is to assess the performance of the agency and its executive director, boards often need to discuss sensitive
> Read more
