Board Cafe

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.

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Six of Our Board Members are in Prison

Do you have a hard time getting board members to meetings? Justice Now, a California organization working in women's prison issues, has ten board members, of whom six are imprisoned. There is much to learn from them about involving board members in strategic decision-making, about board member mentoring of staff, and about how board members can raise money from their peers in unexpected circumstances. In this issue Board Treasurer Misty Rojo and Co-Founder/Executive Director Cynthia Chandler talk with Blue Avocado.

Blue Avocado: Misty, I understand that you were released three months ago after nearly ten years in prison, and you've been on the board for six years. How did you get involved with Justice Now?

Misty: When I was just starting my time in prison, I had some health problems. I met two women who were fellow inmates who were founding members . . .

Alligators in the Boardroom and Urban Legends About Nonprofits

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 . . .

Boards Should Only Have Three Committees!

Boards tend to be frustrated with their committees, but often don't know what to do about them. Use this article from consultant David La Piana to kick off a common-sense discussion and make the changes you know you should be making!

Most nonprofit organizations have too many board committees doing too little work. A typical nonprofit has several committees, such as Finance, Personnel, Development, and of course an Executive Committee. Often, when one committee malfunctions, the board appoints another. For example, when the Development Committee fails to raise funds, the board may appoint a special Annual Giving Committee to manage the yearly fund appeal. When none of this actually produces any appreciable increase in donations, the board may then charter a Major Gifts Committee to go after big donors.

Therefore, in most cases, nonprofits do better by replacing this cumbersome structure with a simple three-committee structure consisting of Internal Affairs, External Affairs, and Governance . . .

What Are the Board's Responsibilities for Volunteers?

Susan Ellis has one of the smartest voices in volunteerism, and she talks here about a neglected topic on boards: strategic support at the board level for the critical volunteer workforce in our organizations.

Does your organization involve volunteers in service delivery? (It already involves at least some volunteers--on the board!) If so, when did the board last focus attention on this subject?

Don't allow volunteer involvement to be the invisible personnel issue. If something is neglected, it may thrive by accident. But proactive support of volunteer involvement dramatically increases its potential achievement level. So what can a board of directors do?

1. Regularly devote time to the subject of volunteers at board meetings. This sends a strong message to everyone that volunteers are important. Develop thoughtful policies about and goals for volunteer participation. Budget adequately to support the work volunteers do. Become as involved in "raising people" as in raising money.

2. Develop an organizational vision for volunteer involvement and set standards in . . .

What's the Point of a Nonprofit Board, Anyway?

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. . .

A Devil's Advocate on the Board?

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 . . .

Loans From Nonprofit Board Members

In many nonprofits, a time comes when the question arises: should the organization accept personal loans from board members? This article does not try to answer that question. It does try to outline - very briefly - some of the choices in how such loans can be made. Use this article as a starting point for a discussion with the board or a discussion with your personal financial advisor.

Board members have often lent crucial funds to their organizations, making it possible to get through a temporary cash shortage or get started on a new venture, and have been paid back promptly. But there are also examples in which loans from board members have led to resentments and accusations, and the loans are not repaid to some or all of the board members. In short: a loan from a board member is a risky venture.

This article discusses five types of loans from board members: unsecured loans, secured loans, guaranteeing a loan or line of credit, pooled loans, floating endowments, and issuance of bonds.

Succession Planning for Nonprofits of All Sizes

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

A Board Leads an Organization Out of the Ashes

Perhaps the least-appreciated aspects of nonprofit boards is their role as a safety net. Even boards that don't seem to be doing much, or that may even have contributed to deep problems, rise up and do heroic work to fix things. Here is a First Person Nonprofit story from a board chair about such a breakthrough -- how an organization walked to the precipice of bankruptcy and then walked away.

Tom Siino, long-time board member of Big Brothers Big Sisters of the East Bay: "Three years ago our financial troubles started when we lost our executive director. Then we made a couple of false steps in hiring a replacement. At one point we were down in the ashes with one staffperson and a lot of debt. Our budget had gone from $700,000 to $75,000. Now. . .


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