Board Cafe • By Jan Masaoka • June 14, 2009 • Email Print

An influential but under-the-radar form of popular culture is the urban legend. Like the mythic alligators in the New York sewers or the man who woke up in an ice-filled bathtub without a kidney, nonprofits are the victims of urban myths and legends. Common assumptions -- just by being passed along through so many people -- gain a measure of credibility just by their frequent telling and longevity. This Board Cafe article may be useful for your fellow board members, your neighbors, and others.

Urban Myth #1: Nonprofits can't make a profit. Truth: In fact, the Internal Revenue Service (IRS) guidelines do not say that nonprofits can't have profits, but they do clearly state that any profits can't be simply distributed to board members (as corporate profits are to shareholders). The IRS requires surpluses ("profits") to be reinvested in the organization's work. Such cash reserves -- built through . . .

Board Cafe • By Jan Masaoka • May 30, 2009 • Email Print

Democracy is the worst form of government, said Winston Churchill,
except for all the other ones. The same might be said of nonprofit boards. Here we take an unconventional look at three dimensions of why boards exist: legal reasons, mission reasons, and reasons related to political values.

First, all corporations, whether nonprofit or for-profit, require boards of directors, and these boards have formal responsibilities, so we'll start with a quick discussion of the nonprofit corporation.

When a group of people sitting around a kitchen table decides to take a more organized approach to realizing a vision for community change or. . .

Board Cafe • By Elizabeth C. Vibber • May 30, 2009 • Email Print

Wouldn't it be wonderful if boards could foresee the obstacles ahead  - in time to make the right decisions?

Absent a few sprinkles of fairy dust, using the devil's advocate technique might assist you in identifying such obstacles. A devil's advocate (DA) is someone who takes an opposing view to test an idea or project the board is considering. The DA's job is to ask questions and
make the best case possible against the proposal. By responding to the questions and challenges, the board is forced into healthy debate as it considers arguments it might never have thought of had it not been someone's specific task to challenge the board's thinking.
Here's how it works. Select one board member and place an index card marked DA or devil's advocate in front of that person. Throughout the meeting, this person . . .

Board Cafe • By Tim Wolfred and Jan Masaoka • June 27, 2009 • Email Print

The term "succession planning" brings to mind a large corporation with a long-time CEO first choosing, then grooming, a successor. But this practice is sharply declining even in large corporations and is even less relevant to most community-based organizations.

At the same time, more and more nonprofits are realizing that executive director transition is a crucial moment in an organization's life: a moment of great vulnerability as well as great opportunity for transformative change. Succession should be a topic broached even when no one is anticipating a change in leaders. And of course, illness and other events can lead to sudden and unanticipated departures. Planning for executive director transition is called succession planning: thinking in advance about how to set the stage for a strong transition. In many

Board Cafe • By Jan Masaoka • February 8, 2009 • Email Print

I once served on the board of a group whose executive director adamantly insisted that managing staff was her responsibility, not the board's. We stayed hands off until we started to hear rumors of favoritism. After we prevailed in a battle with her about getting a listing of staff pay, we were shocked to discover that her assistant was paid $20,000 more than the program director and nearly as much as the development director. A lesson - actually several lessons - learned.

The role of the board of directors in personnel or human resource administration is frequently a sticky issue for nonprofits. Should the board approve all salaries, or just the executive director's? If a staff member has a grievance, should it come to the board? How can the board's finance committee members, for example, be helpful in hiring accounting staff, but not usurp