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

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:

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:

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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.

About the author

Korngold provides strategy consulting to global corporations on sustainability, facilitating corporate-nonprofit partnerships, and training and placing hundreds of business executives on NGO/nonprofit boards for 20+ years. She provides strategy and board governance consulting to NGO/nonprofit boards, foundations, and educational and healthcare institutions.

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