How Board Members Gamble with Nonprofits: 4 Ways to Protect Yours

You have your dynamite Board of Directors lined up. A group of well-connected experts that you believe can take you places. You are ready to ride their coattails on the road to success but things suddenly go south. What went wrong?

Taking on risk with the hope of benefit is not always such a bad thing. In fact, there is some level of risk in most everything a nonprofit does. But playing a game without understanding the rules first is not wise. Especially when the stakes are high, such as in a struggling charity.

Board members can gamble with nonprofits-knowingly or unknowingly-in a number of different ways. Here’s how and what you can do to protect your own nonprofit from dangerous risk taking.

Gamble #1- The Mis-Bleading Pulse.

Board members may believe they have a good handle on current developments within the organization. This, however, may not be the case at all. When an Executive Director acts as a wall-not a window-between the Board and stakeholders, the current state of affairs may be distorted. Board members gamble with the nonprofit by relying on this misinformation and making poor decisions because of it.

It is critical for a Board to have faith and confidence in its leadership. Yet it is equally important for leadership to trust those in the trenches. That extends to permitting open lines of communication at all levels. The suppression of staff, volunteer and client comments and ideas is often the sign of an insecure leader. Creating an environment of fear is an abuse of power and can cause an organization to stagnate or, in the worst case, even fail. Unfortunately, unbeknownst to the Board, a climate like this that is left unchecked can persist for quite some time and create much damage.

Rotating staff, clients, volunteers and donors through special segments of Board sessions can help to deepen the knowledge of Board members. This can also result in better decision-making to move the organization forward.



Gamble #2- Lazy Sailors Eager for Chore Leave.

Ahoy matey! Until woken from their hammock, a disengaged Board member is just extra baggage. Finding out why a Board member has lost interest in the charity can often lead to startling revelations. Is it because of a lack of time? Is the mission not really compelling enough? Are the expectations associated with Board service not being met?

The lazy sailor gambles with the organization by taking responsibilities lightly or not fulfilling them at all. Operations can be disrupted when there is a detachment from the mission, vision and values. Rolling the dice that the remaining Board members will act appropriately is an undesirable course of inaction. It also robs the nonprofit of important input on decisions. Worse of all, this approach can be contagious, thereby substantially increasing the size of the wager.

Do you have any lazy sailors? Get to the source of the problem and address the issue(s) quickly. Some signals to watch out for are poor attendance at meetings, not performing tasks on time, not voicing an opinion on important matters and disinterest in serving as an ambassador for the nonprofit and its work.

Voicing problems or concerns may be perceived as upsetting the cart of apples by the lazy sailor. Consequently, that would not be an option many Board members would necessarily choose. That is also why it is important for the nonprofit’s Executive Director to start the dialogue. Remember this is a two-way street and be ready to make your own adjustments as necessary. Just keep in mind that sometimes the real problem lies with the captain of the ship- not the sailor.

Gamble #3- Passing the Salt.

Enter the movers and shakers. Initiative is certainly a fine attribute of this group but overdoing it can be like putting too much salt on your corn. These Board members have a tendency to hastily make decisions. They gamble with the nonprofit by repeatedly attempting to move forward ideas that are not well researched. Often times, they do not understand the risks and rewards associated with a particular course of action.

A mover and shaker can even create chaos after a proposal is voted down by the Board. In some cases, they may begin to resemble the Lone Ranger and disrupt operations as they fight perceived injustices throughout the organization. An inability to push their own agenda through can lead to mover and shaker frustration-and sometimes result in a flat-out resignation. Regardless of the circumstances, the negative public relations this causes can be very damaging to the charity.

On the flip side, initiative is required to kick-start an enterprise. Nonprofits are no different. Controlled initiative, aligned with mission, vision and values along with a dose of sound decision-making, can produce fabulous results. So keep the movers and shakers at your table because they can be an asset. Operating without them is no dice.

Gamble #4- Pushing the Envelope.

Management at the post office is always pushing the envelope. Hey, its not such a bad thing for an organization to occasionally test it’s comfort zone. But a Board really gambles on a nonprofit when it attempts to micromanage it. Board leaders who can’t take off their corporate executive hats and put on their nonprofit Board hats clearly place the organization at risk. Issuing directives and making decisions from a corporate suite with a less than intimate knowledge of daily operations is dangerous. It is also inappropriate and places the nonprofit leadership in an especially uncomfortable position.

One of the responsibilities of a Board is to select a capable Executive Director and regularly rate that person’s performance. If those capabilities come into question, perhaps the Board has not done a good job in selection and/or evaluation. In fact, their own interference could be contributing to poor performance too.

On the other side of the coin, a responsibility of nonprofit leadership is to effectively tap the expertise that Board members bring to the table.

As much as is practical, lines must be drawn in the sand to separate Board and management roles. Yet those roles and the functions that are a part of them must also fit together seamlessly. Without this, the nonprofit will lose any momentum very quickly. And that’s a gamble no Board member should ever take.

How do you see Board members gambling with a nonprofit and how do you protect the organization?

#####

Picked up your free copy of the Multiplying Good blueprint yet? Head over to Wobbly Nonprofit to get it today.

#####

More Reading

3 D’s to Spice up Your Next Nonprofit Board Meeting

Gathering momentum towards your small nonprofit vision

What it takes to be a good nonprofit director

Governance Models:

What’s Right for Your Board

Founder’s Syndrome? Who Me?