RSS


FC Expert Blog

Business People Interested in Nonprofit Boards: Up or Down In This Economy and Post-Madoff?

BY FC Expert Blogger Alice KorngoldSun May 31, 2009 at 12:40 PM
This blog is written by a member of our expert blogging community and expresses that expert's views alone.

My perspective is based on my work helping businesses with their CSR/philanthropy strategies, training and placing business executives and professionals on nonprofit boards, and consulting to global, national, and regional boards over the past 15 years. The corporations range from Fortune 100 companies, to the world’s largest global professional services firms, to $3 b funds.  80% of the nonprofits I work with have budgets between $1m-$10m, 15% from $11m-$100m, and 5% up to $1 b.  Here is my take:

Down Arrows:

  1. Companies: Many companies are giving less in 2009 than in previous years.
  2. Board candidates: There are fewer board candidates prepared to make substantial financial contributions.  Also, some business people who were interested in serving on a board last summer decided to postpone board service until they have a clearer sense about their jobs and income.
  3. Nonprofit boards:  Organizations that were becoming more ambitious in their financial expectations of board members have had to adjust their expectations.  On some boards, board members (or their spouses) are losing their jobs, or seeing their personal investment incomes dwindle, affecting their ability to make contributions and even to ask friends for the levels of contributions they had asked for previously.

Up Arrows:

  1. Companies: Are becoming more strategic about how they invest their more limited philanthropic dollars, so they are realizing the exponential impact of encouraging and supporting the participation of their executives and professionals on nonprofit boards. With fewer dollars to spare for philanthropy, marketing, and human resources, companies are seeing the multiple benefits of supporting nonprofit board service for their executives: leadership development for their executives/professionals, strengthening nonprofits, strengthening communities, and enhancing the company’s brand.  I call it “leveraging good will” by strategically integrating philanthropy, board service, and volunteerism.  This is an approach that is being more broadly adopted by companies large and small.
  2. Board candidates:  There continue to be an abundance of candidates in businesses of all sizes who are eager to serve on nonprofit boards and prepared to make meaningful financial contributions.  The over-riding concern of each and every board candidate I meet is to find a board where they can add value. (That’s my job in my practice: to find each candidate a board where he or she can add value, from the candidate’s perspective and the nonprofit’s perspective.  Also to prepare board candidates to be effective, and coach them once they are placed, since many of them rise to board leadership roles.)
  3. Nonprofit boards:  Because of new financial challenges, and greater scrutiny and transparency from media, watchdog groups and regulators, nonprofit boards are increasingly aware, seeking to understand their roles and responsibilities. 
    Boards are:
     - downsizing to be more effective 
    - updating their bylaws, including establishing conflicts of interests policies with annual   disclosure statements 
    - becoming more rigorous in creating board member statements of expectations and establishing systems of board member accountability, including with highly attentive and well-functioning Board Governance Committees. (When I created and introduced the statement of expectations and board governance committee description to boards in 1994, some old school board members were quite offended!  Today, these materials and practices are quite commonplace.) 
    - engaging in leadership succession planning to recruit well qualified board chairs to lead, as well as board members to provide a full complement of expertise and diversity of backgrounds and perspectives
    - becoming more rigorous in ensuring that the organization has a viable and sustainable revenue model; it’s important for boards to understand, however, that it is incumbent on them to help the organization to achieve financial success for the organization through their support.

Bottom line:  There is more interest than ever among businesses and business people in serving on nonprofit boards, and among their companies in using their philanthropic dollars to match their contributions.  And nonprofits are as eager as ever for talented business people to join as long as candidates are thoughtfully prepared and introduced based on their interests and qualifications.

The win-win-win is powerful.  With tens of thousands of business people, properly prepared and matched to boards, we can help to elevate the nation’s and the world’s nonprofit organizations, while preparing the next generation of leaders to build a greener, more peaceful, just, and prosperous world.

Topics:

Leadership, Ethonomics, corporate social responsibility, nonprofit boards, corporate philanthropy, Board Governance Committees, Charitable Giving, Nonprofits and NGOs


Sign in or register to comment.
or

Recent Comments | 5 Total

June 1, 2009 at 9:15am by June Bradham

Right on target! "The Truth About What Nonprofit Board Members Want", published by Wiley, brings to you the voices of high value board members and directly addresses the sentiment expressed in this well written Blog. When the board, the CEO and the Mission are aligned, each getting what they need, it is a win-win. Whether you lead a nonprofit as a board member or staff executive, your satisfaction with the experience is critical to success. Go to www.corporatedevelopmint.com to read an exerpt from the book or straight to Amazon.com/Bradham to order your copy. I am speaking to groups across the country.

By
June Bradham Experienced fundraising consultant for nonprofit institutions.

June 2, 2009 at 3:56pm by Melyana Klue

As expectations in a post-Madoff era must be adjusted, this is an encouraging report."Leveraging goodwill" by strategically integrating philanthropy and board services opens up a new horizon. A thoughtful and well written blog.

June 2, 2009 at 3:56pm by Melyana Klue

As expectations in a post-Madoff era must be adjusted, this is an encouraging report."Leveraging goodwill" by strategically integrating philanthropy and board services opens up a new horizon. A thoughtful and well written blog.

June 9, 2009 at 9:24am by Lee Boveroux

I was intrigued that, despite the title of this article, there was no discussion of Madoff. It’s certainly an issue in that the fiduciary responsibility of a nonprofit’s investments is a key factor.

That being said, the focus on for-profit companies’ leveraging their philanthropy by enabling employees to become more involved in nonprofits, particularly at the board level, is certainly a win-win situation. The nonprofit gains expertise and the employer burnishes its image, as the article states. The selection of a nonprofit board where a candidate can “add value” is definitely the most important criteria. This is a productive development for all parties concerned – the nonprofit, the employee/board member, and the employing organization.