To continue our Expert Giving series, we asked our very own CEO, Lawson Bader, to share his advice on how donors can give of their time by serving on non-profit boards and what that entails. Lawson is currently serving on the board of directors at State Policy Network, Atlas Network, and DonorsTrust.
I need to lodge a formal complaint. I have never liked the phrase “non-profit”.
The problem is not the existence of organizations with a bottom line devoid of generating financial returns to shareholders, investors, or employees. It is rather the insinuation that “profit” is linked with a negative. The phrase subtly suggests that that the institutional pursuit of wealth somehow dilutes or cheapens the inherent value of such pursuits.
Ironically, the most important lifeline for the “non-profit” community – namely private philanthropy – relies on profit. If one donates money, one needs to have money, and, no, it does not grow on trees.
Taken a step further, exclusively equivocating the “charitable” community with “non-profit” institutions grossly undervalues the importance of commercial operations during times of crisis. Progressives often bemoan “the corporation” by citing specific examples of unethical CEO behavior or mistaking cronyism for free enterprise. Yet in Texas and Florida it will be Walmart, Home Depot, Target, and the commercial trucking and railroad industries that will be most critical to recovery efforts.
Part of the frustration here is that we are taught that words matter. Being lazy with them, even if unintentional, conveys meanings that can be harmful. In casual conversations about vocation, sometimes one insinuates that those who work for public charities are somehow more noble or principled than those who pursue the mighty dollar. For example, one “works” in the commercial, but one “serves” the charitable.
To be fair, there is a difference. With the commercial, one is a consumer or client. With the charitable, one comes alongside an existing team and focuses on a specific audience. In this instance, it is accurate to call the work “service”.
More than Writing Checks
Donors are often asked to do more for a given charity than simply write checks. One example is being asked to serve (there it is again) on a board of directors. I currently sit on four boards – three in the non-profit community and one in the commercial. As a current (and former) CEO of a “public charity” I report to a board of directors. I find it critical that potential board members understand, clearly, what is expected of them if, and when asked.
At the macro level, the primary role of a board member is fiduciary. On a corporate board, this means ensuring fiscal responsibility and financial growth. In the charitable world, however, that fiduciary duty is to ensure the highest standard of care. Like a parent with a child, a board member protects, admonishes, encourages, defends, chastises, and embraces the organization he or she serves.
Considerations for Prospective Board Members
Once you have accepted this mantle, it is wise to ask how you will use your unique time, talent and resources to contribute to the good of the organization. Asking the following questions will help you identify your piece of the larger puzzle that makes up a governing board.
What is the institution’s culture? It is a fact that most non-profit employees are not financially compensated in a manner equal to their commercial worker counterparts (but, remember, this does not make them more “noble!”). Consequently, they have different expectations and motivations. Well-functioning non-profits help each employee to understand how he or she is tied to the organizational mission. Furthermore, leadership’s role is to create and foster a work environment that provides freedom, flexibility, and link their mission.
What is the relationship between board chairman and the CEO? Is it organizational policy that he/she be a member (or not) of the board? What are the trade-offs of such a policy? Remember, that being a CEO can be a lonely position, and the board plays an important role as lifeline to and accountability for the chief officer. If the relationship is too chummy, then it can be easy to overlook strategic lapses, or under-performance. If it is too “corporate”, the board risks alienating and frustrating the CEO to the detriment of the organization’s culture and success.
What is required of you financially, and what if you do not have significant resources? Many organizations have “pay to play” requirements for board members (this can be a direct contribution or the expectation that the board member will raise designated funds from personal and professional networks). Be wary, however, that this buy-in does not lead to an attitude of privilege. Yes, you are a donor and have skin-in-the-game, but you are a board member first, and the care and feeding of the institution is the higher priority. It is possible there is no financial obligation to be a board member, but there might be an expectation that because of your unique professional background, you can connect the institution to other donors, service providers, government officials, consultants or a host of other communities that the CEO and staff are not easily able to access. This is a vital board role, and you may be the ideal candidate to fill it.
What is the organization’s Big Picture? You, as the charity’s prime ambassador, should not only have the elevator pitch memorized, but should be able to articulate where the institution is headed and what it hopes to achieve in the near term. This is where your passion comes through, your belief not only in the organization’s leadership, but in its ability to achieve the results it seeks. If you aren’t sure about that vision, your reasons for desiring a board seat may be less than altruistic. At the same time, you may be the perfect new board member to light a fire underneath existing staff or other board members, to ensure a good idea, when combined with good people, leads to positive social change.
There are over one million public charities in the U.S. Over 25 percent of Americans volunteer in some capacity. The question is how to serve them well and enable civil society to benefit.
Charitable organizations most certainly appreciate the value of profit. Use yours well.