To maximize the charity industry’s potential, some consultants suggest donors, especially wealthy ones with the leverage to influence, call upon nonprofits to rethink how their boards are run.
The issue presented makes the case for essentially empowering board members to readjust the traditional model switching from donating their time to being compensated for their efforts. A lead assertion is that CEO’s be given the helm to direct the boards with a compensatory element to boot. Additionally not all board members should be directly involved in fund raising. But that's another story for another day. Let the groaning begin. But before we have a collective nonprofits unite-styled coup on our hands we should look at the practicality of the suggestions.
So the general formula lays out that the more active and many times wealthier donors on charity boards should capitalize on the talents of chief executives of those organizations by making them board presidents. in this case there would be data profiles available to the public to help further rate, assess and rank working charities.
In effect the recommendations include a re-write of charitable organization's bylaws which would specifically make the CEO the chairman of the board. In many instances, if not most, this is the way things are being done at successful nonprofits anyway. Most continue to fool themselves into thinking the process is pure in that it is 100% volunteer based... but it just isn’t the majority of the cases. CEO’s as chairman models have shown historically that it greatly diminishes subjectivity and delivers an overall fiduciary well being for the nonprofit.
The reality is that the wider margin of volunteer board members do not have what is required; things essential to the task such as time, familiarity, or talents to manage the chief executive officer. So what actually happens is the CEO, by default, takes on the responsibility of managing the members of the board. It is not, by a long stretch, the best use of the CEO’s time.
If for example the CEO were made board president he could personally select and lead a more capable team of trustees who could then drive a more effective effort on behalf of the nonprofit. Corporations that have achieved great success, like Apple, had leaders that set the model and then picked highly qualified directors and officers who built the organization into a worldwide powerhouse. The same could easily happen for charitable organizations if they were only willing to to disrupt the industry status quo and for the for the better by paying qualified CEO’s to direct the whole process.
And along those lines there is a case to be made for paying the board members to participate. Not as in a full time position but rather like most for-profit entities that incentivize its board. It could positively impact the effort and rates of participation if only board members were given some basic compensation to be present both physically and mentally. A thousand dollars per meeting a few times a year would motivate action and consistent deeper involvement. Attendance would certainly reach 100% or grow close to that level. Such a simple affordable gesture would change the entire practice for board meetings and involvement rates.
There certainly would be resistance as such game-changing challenges will often incite. But nonprofits are about the bigger picture so if it proves effective it makes perfect sense. It’s certainly worth a look.