So you've joined the board of a nonprofit where you care about the mission and the work, you think you can be useful, and you like some of the people you'll be working with--the ones you've met so far. What do you do next in order to be productive?
1. Learn more about the organization and the community you serve.
Spend some time with the nonprofit's CEO (and if appropriate and necessary, the CFO and senior program people) learning about the organization, its core programs, and the business model.
Make a site visit to learn about core programs and the organization's key clients and constituents.
Understand the revenue model, who the funders are and their interests, and the funding challenges and opportunities.
Be observant in the board meetings about who leads, and the nature of the group dynamics.
2. Figure out where you can be most useful.
It's very possible that you will be asked to help in a myriad of ways. Stop and consider! And discuss with the CEO and/or board chair exactly how and where you can be most useful (and where you will also find the experience most rewarding). It's best to dig in and do an outstanding job in one or two ways, and then add to your plate.
You are driving to a mission, not profits, although you should also do all that you can to help build a sustainable revenue model.
4. Glory in the work of the organization.
I have the thrill of working with nonprofit boards where I place business executives, and I myself serve on the board of Row New York. If you take the time to visit the sites and experience the important work your organization does, it is very meaningful. This will also make you a better advocate, which is an important part of your role as a board member.
5. Enjoy working with the CEO and your colleagues on the board.
You are coming together from different backgrounds and perspectives to achieve a compelling purpose. Get to know people and appreciate them!
Whether you're an management consultant, banker, attorney, manager, accountant, or other executive or professional, serving on a nonprofit board will help you do your job better.
Wendy Wysong, Partner at Clifford Chance, explained to me the following: "My experience serving on the boards of two nonprofit organizations, EngenderHealth and the Girl Scout Council of the Nation's Capital, has given me a valuable perspective for my professional work, representing and providing legal advice to corporations. The governance, audit, and ethics issues with which the nonprofit boards deal are directly analogous to those of corporate boards. Accordingly, when I make presentations to my clients' boards of directors to explain pending legal matters, I can focus on the issues that would and should concern them most."
In fact, the nonprofit board experience has been transformative for hundreds of professionals and executives whom I have placed on boards and also coached as they ascended into board leadership positions.
Here is what you have to gain:
Learn about an issue outside of (or complementary to) your area of business expertise--whether it's housing, healthcare, the environment, economic development, healthcare, or education, just to name a few.
Gain new perspectives by engaging with people from diverse backgrounds, including board and staff members, the nonprofit's funders, and the community it serves. This can help enrich your awareness of your business's and clients' broader base of customers and shareholders here in the US and globally.
Better understand the role and responsibilities of corporate governance by serving on a board yourself.
Experience the perspective of the CEO and board of the corporation, including the actual responsibility of envisioning the organization's greater potential, and creating and achieving the organization's revenue/business model.
Have an opportunity to step up to lead, by chairing a committee, or serving as an officer; you will learn how to build consensus through process, and you will understand what it means to be accountable to the community that your organization serves.
If you choose the right board, you will feel good about serving a cause you care about.
You can also learn about selling and business development (we often call it fundraising in the nonprofit world), consensus-building and process, leadership, your community, global issues, corporate governance, ethics and accountability, and a great deal more.
Being a nonprofit board member doesn't have to be limited to fiduciary oversight and fundraising. James Hagy, a board member of Family Focus, added something a bit, say...magical! Family Focus is a Chicago nonprofit that provides innovative, community-based programs to help parents, grandparents, and foster and adoptive parents, gain confidence and competence as the primary educators of their children.
For the past two months, Hagy and his wife, Sage, drove 2,500 miles to teach magic to 100 boys and girls at Family Focus centers throughout the Chicago area.
You see, Hagy and his wife worked with Family Focus's executive director Kevin Limbeck and his team to create a new "Magic Camp." By the end of the summer, each participating student had a broad variety of tricks, organized in their own, personal magic suitcase that the student constructed and decorated in a different creative way. Tricks were selected and adapted for each student, based on age level. At the end of the season, each center presented an invitational event, at which students performed for parents and guests. Afterwards, students took their magic kits home to perform for friends and perhaps continue their interest in magic (along with specially prepared instructions for their continued development and learning).
"Magic played what in retrospect was a very important part in my own development," Hagy explained. "From the time I was young, I made friends literally around the world who shared that interest. And in my later law and speaking careers, the ability to present to even a large audience and keep their attention was something with which I was already experienced and comfortable. Instead of making a rabbit appear or cutting an assistant in half every night, all I had to do was talk about law or business. No elephants to hide, at least not literal ones. We wanted to pass on the joy of that experience to these enormously enthusiastic and deserving students."
Is Hagy a professional magician? Actually, Hagy ran the worldwide practice for a leading global law firm until he asked for early retirement a few years ago in order to teach law, speak and write for international business audiences, and perform local and national community service. He does perform magic in the U.S. and abroad and writes extensively about the history of performance magic. He was a summer series speaker in London at the British Library, presenting his research about Harry Houdini.
So, how did you spend your summer? Remember, there's always magic in volunteering.
A new report by the National Council of Nonprofits provides more data about the nonprofit financial crisis, showing sharp declines from all sources, including government, corporations, foundations, and individuals, and fees for services faltering as well. Worst of all, these funding challenges occur just when communities are in greater need of nonprofit services, as people are losing jobs, homes, healthcare benefits, and credit, and various public services, including education, are being cut.
Nonprofit boards have the authority, power, and legal and fiduciary responsibility to create solutions, in partnership with the nonprofit CEOs that they hire. How can nonprofit boards improve themselves to face their difficult but essential challenges of serving our communities? Of course, in order to build and achieve a successful future, a board needs to build itself with the right people--a topic I have addressed previously.
Some of the best board members I have placed or worked with have been key revenue problem-solvers. For example, the global pricing strategist for a major consulting firm pulled a nonprofit (the local chapter of a national blood services organization) out of the red by helping them revise their pricing strategy, thereby shifting the organization into financial health.
Here are additional ways that board members play vital roles in advancing the revenues of nonprofits: public relations people helping to articulate the case for the organization and train and coach the board and staff in making the case; people with relationships with key government officials helping to build support; and people with business connections helping to leverage corporate partnerships.
For nonprofits, revenue models involve a combination of government, philanthropy--from corporations, foundations, and individuals, and fees for services. For people who serve on nonprofit boards and are committed to the missions and communities they serve, there are solutions.
Nonprofit organizations have always struggled to raise money to serve important missions--regionally, nationally, and globally. New data from NYC and Washington, DC show just how close to the edge nonprofits have been living, even before the recession. Add to that the past year's reductions in both government and private funding, and nonprofits are truly in crisis.
Nonprofit boards of directors, who are ultimately responsible for the organizations, must take this information seriously, especially with regard to who is on the board and the role of the board. And board-matching services--increasingly popular in a number of communities--need to pay heed as they consider the qualifications of the candidates they introduce to boards.
Based on a study by the Urban Institute, conducted among 2,658 DC nonprofits, 57 percent had reserves insufficient to cover three months of expenses, even before the recession, "a level that many experts consider the minimum necessary for financial stability." Furthermore, larger organizations, with budgets over $5 million, had smaller reserves. A NYC survey just released by Baruch College and the Human Services Council showed that 73 percent of NYC's social services providers either had no reserves or lines of credit or had exhausted them.
I have met with the boards of many social services organizations throughout the country where the nonprofit is almost exclusively reliant on government funding--organizations with budgets from $1 million to $80 million--where government funds account for up to 98% of revenues. It is important to understand that government funds, although vital, are often paid to the nonprofit only after services are provided, do not cover all infrastructure expenses, do not cover technology, nor research and development or program innovation, nor enough funding for competitive salaries. Also understand that government shifts its program priorities from year to year, and often reduces its funding.
So, if you are running an $80 million enterprise at multiple sites, with a few hundred employees, and you are 95% reliant on government grants and contracts, then you will have to close programs and start new ones from one year to the next (as government shifts its interests), lose employees and have to replace them often (because salaries are not competitive, and programs are shifting), and you won't have enough funds for quality infrastructure or computers to track data. Not unless your budget has a mix of revenues that includes a meaningful amount of philanthropy from corporations, foundations, and individuals, and also fees for services (or nonprofit revenue ventures).
That means that there is only one way to build a quality organization, pay competitive salaries, provide core programs that are mission-oriented on a continuous basis, and invest in developing and offering innovative programs. That one way is to build a board of highly committed, talented, and generous board members who work in partnership with an excellent and enterprising CEO (hired by the board) and his/her senior team to build and achieve a strong revenue model that includes philanthropy and fees for services.
There are in fact organizations that are growing and expanding thoughtfully and strategically even in this economy... some that are even taking on responsibility for organizations that are faltering.
Nonetheless, even an excellent CEO and the most committed and generous board might not always be able to ensure top revenues in this tough environment. They can, however, ensure that the board is fully engaged and highly supportive (including living up to a "statement of board member expectations"), continue to seek new talent for the board as needed, keep the organization very focused, ensure high quality programs, continue to invest in and support excellent staff, stay close to funders and supporters, explore partnerships and collaborations where opportunities might be leveraged, ensure that funds are managed carefully, and establish and maintain a comfortable cash reserve.
If you are on a nonprofit board, make sure that each and every person who is on the board or whom you recruit fulfills a clearly defined role in helping the board in its work to create and accomplish a vibrant strategy and robust revenue model. Also make sure that your board uses its time productively in meetings and in between meetings. And that everyone gives generously and raises funds ambitiously.
If you are considering joining a board, make sure you understand what the organization needs from you, and that you can and will provide it.
And if you are board matching, make sure you understand each organization's revenue model, and each candidate's interests and qualifications, so that any candidate you introduce has the ability and capacity to contribute what is needed to advance the organization productively and meaningfully.
Nonprofits are serious business. We depend on their services, and they are vital to economic development.
College friends Rebecca Onie and Tara Abrahams followed their passions to address healthcare and poverty. Just over a decade after graduating from Harvard, each with a graduate degree now as well, they are leaders in social enterprise and preventative healthcare, while also providing a path for hundreds (and soon thousands) of college students to engage in meaningful community service.
Rebecca Onie is the Co-Founder and CEO of Project HEALTH, that mobilizes volunteers to staff Family Help Desks at urban health centers to fill doctors' prescriptions for food, housing, job training, or other resources--by connecting patients with key community resources. Last year, Project HEALTH's volunteers connected over 12,000 children and adults in 6 cities (Boston, New York, Washington, D.C., Baltimore, Providence, and Chicago) to the resources they needed to be healthy.
With the energy, drive, and sheer force of will of someone who has only just begun, Onie declared to me that "our goal is that 100% of clinics that serve substantially low income patients will screen and refer 100% of their patients to the services they need to be healthy."
Tara Abrahams, now Director of the Foundation at Maverick Capital, founded Project HEALTH's Harlem site in New York before getting her MBA at Harvard and joining the board of Project HEALTH. As the organization moves forward into a multi-million dollar growth phase--spurred by a recent $2 million investment by the Robert Wood Johnson Foundation--Abrahams comments that "more than a decade after we started, we are now working on very different issues of strategic growth and expansion."
As Onie explained to me, "the ultimate win will be systemic change, with healthcare practiced differently. We are proving that what we do works in helping poor people access the variety of social services they need in order to improve their health and their lives."
An added value is that, in 2009, 90% of graduating Project HEALTH volunteers engaged in graduate study or work related to health or poverty following graduation, and 94% of them rank the relative importance of their Project HEALTH experience as "high" or "very high" in their selection of their post-graduate plans. This is the Teach for America effect, imbuing the next generation with a passion and the tools to create change.
Here's a company whose business enables migrants to send money back home just about anywhere in the world--385,000 locations in 200 countries and territories (up from 120,000 locations in 100 countries just 5 years ago), while the company's philanthropic foundation helps migrants and their families to get an education, get jobs, and build small businesses.
In a conversation with Luella Chavez D'Angelo, President, Western Union Foundation, she told me that "we view migrants as heroes." According to D'Angelo, "global migration is as old as history. Who is more heroic than the man or woman who leaves home to endure loneliness and alienation in order to find work in a foreign land to put food on the family's table back home and help their children have a better future." (Most of us have the good fortune to be where we are today because a relative did that for us back when.)
On a larger scale, according to "Leveraging Remittances for Development," by Dilip Ratha at the World Bank, "migrant remittances have become a major source of external development finance. They can play an effective role in reducing poverty." In 2007, remittances exceeded $300 billion (up from $193 billion in 2005). In fact, "they are larger than foreign direct investment and more than twice as large as official aid received by developing countries." Ratha's report continues further to explain that "remittances are associated with increased household investments in education, entrepreneurship, and health."
D'Angelo told me that the Western Union Foundation achieves its social agenda in collaboration with the Clinton Global Initiative, USAID, and Mercy Corps. Through these partnerships, "Western Union helps create stronger communities, improves access to education, and fosters small business development." As their ad campaign says, "Yes, to a better future."
View this video that Western Union did on global migration for a DC forum attended by The World Bank, USAID and Migration Policy Institute leaders.
When walking into a reception filled with people I need to meet, I've always been able to turn it into an enjoyable experience by asking people what kind of volunteer work they do. It's even more fun for me when they're involved on nonprofit boards; this opens up a world of wonderful conversation--all the way from learning about the work of the organization, to how the person found it, to the fascinating group dynamics of boards, to leadership, etc.
At lunch today, sitting with two corporate CEOs who were meeting for the first time, I realized that the community-involvement-ice-breaker conversation is not merely my own selfish delight and learning experience; this topic is also the perfect conversation opener and bonding opportunity for business development purposes.
At the CEO level, the topic takes on an additional dimension as they compare the leadership styles and opportunities presented by their respective CSR approaches, and the costs and benefits of philanthropy and service. Usually, CEOs who are more strategic and invested in CSR take a longer-term view of the value to the company; they talk about building a highly productive culture, attracting and retaining outstanding talent, and leadership development.
For those of you who are already involved in philanthropy and service, try talking about it with clients and customers as well as new people you meet. For those of you who are not involved, consider getting involved--mostly because it will make your life more rewarding and fulfilling--but, also perhaps to join others in this great conversation and to advance your company and the world.
City Year's vision is that one day the most commonly asked question of a young person will be, "Where are you going to do your service year?" Perhaps we're approaching the day when a commonly asked question of a business person is, "How are you involved in the community?"
Washington, D.C.'s public school system has 45,000 students and an abysmal dropout rate of about 50%, typical of large cities. With a goal to remedy this dropout "catastrophe" (Gen. Colin Powell's term), while being constrained by a tight economy, D.C. Chancellor Michelle Rhee is looking to--in her words--"leverage opportunities for the greatest change."
To this end, Rhee believes that one of the best investments that D.C. Public Schools (DCPS) has made in the past year is its partnership with City Year DC. In 2008/09, City Year corps members proved themselves in a pilot program in 4 of Washington's most challenging elementary schools.
Jeff Franco, Executive Director of City Year DC explained that "we offered to help the Chancellor to solve her worst headaches." After rigorous training, corps members coached, tutored, and mentored children in grades K to 2, and successfully demonstrated that they could help improve children's reading ability. This achievement will be instrumental in changing the life trajectory of these kids--ultimately increasing the likelihood that they will graduate from high school, go to college, and later, earn greater incomes.
"I've been thrilled with the results of this first year," Rhee told me. So thrilled that she and Franco plan a "feeder pattern" strategy to have corps members continue working with these same children all through elementary school, middle school, and high school, while also expanding City Year's involvement with additional schools. The end game: reduce the dropout rate.
Not only are corps members achieving results, but they also "relish being measured and held accountable," says Rhee. And according to Franco, the experience for the corps members is "transformative." As City Year's Web site explains, corps members "develop civic leadership skills they can use throughout a lifetime of community service."
City Year unites young people of all backgrounds for a year of full-time service, working in schools and neighborhoods in 19 U.S. locations and one in Johannesburg, South Africa. Today, more than two-thirds of City Year service initiatives take place in public schools under the Whole School, Whole Child program as "near peers" to the students they mentor.
Companies and their employees provide vital funding and volunteer resources.
While some corporate leaders have been well meaning advocates for corporate social responsibility, early adopters have been concerned that CSR will only catch on in a serious way if we can prove its value to the financial bottom line. In a measurement outcome model I developed and published in 1996 and again in 2005, I cautioned that "impact evaluation is essential to the effectiveness and viability of corporate community involvement." Further, that "companies are more likely to invest more seriously in initiatives that produce measurable results."
The good news is that McKinsey Quarterly reports in their July 2009 issue that not only are companies "creating real value through their environmental, social, and governmental activities-through increased sales, decreased costs, and reduced risks," but also that "some have developed hard data to measure even the long-term and indirect value" of such programs. Further, that "the best of them create financial value in ways the market already assesses-growth, return on capital, risk management, and quality of management."
As readers of my blog on "Leading Companies for Good" have seen, companies with strong CSR programs distinguish themselves in the marketplace, establish strong bonds with clients, customers, employees, and policy makers, and provide unique opportunities for leadership development.
I have found that the highest impact CSR programs are envisioned and led by the CEO and the board of directors and implemented with their oversight. The more effective CSR programs are aligned with the corporate mission; involve all key functions in the company, including marketing, public relations, and human resources; and integrate philanthropy along with volunteerism and nonprofit board service, as well as environmental practices.
It is heartening to see how far we've come in the past 15 years. With companies documenting CSR's value to the bottom line, there is great promise for the future!
I have the thrill of working with nonprofit boards where I place business executives, and I myself serve on the board of Row New York. If you take the time to visit the sites and experience the important work your organization does, it is very meaningful. This will also make you a better advocate, which is an important part of your role as a board member. 
