Tuesday, August 18, 2009

Charity board members and the door-mounted-brain-zappers

Last year I did a bit of work in Singapore. I met some lovely fundraisers who work in what is probably the most conservative fundraising environment anywhere in the world, with some really silly laws that prevent the country being a serious contender for being the nonprofit capital of Asia, something to which the Singapore government aspires.

Whilst there I was especially astonished at the level of interference by volunteer boards in the day-to-day running of charity business.

In one meeting I got up to have a closer look at the doors to the boardroom. The only explanation for what was happening in the boardrooms was that there must be tiny brain-zapping devices planted about head-height into the door frame.

Whoever put them there was clever - they were invisible to the eye, but, although improbable, they must have been there. Sir Arthur Conan Doyle helped me to this conclusion. "Once you eliminate the impossible, whatever is left, no matter how improbable, it must be the truth."

You see, very powerful, rich, clever business people, would spend the day wheeling and dealing, laying off hundreds of people, hiring loads more, spending millions on marketing, buying a foreign telecommunications company before breakfast, and brokering a deal between China and Australia to buy uranium over lunch.

Then they would go to the charity board meeting, walk through the door with the zapping things and turn into absolute gibbering idiots. They would start arguing about the colour of the logo at the charity ball, who would sit next to who and then give the fundraisers grief for not performing miracles and recruiting tons of donors with no money to spend.

On top of that, they would be scared to actually ask a friend for money for their charity.

In Hong Kong I investigated to see if the same thing was happening there. The answer was yes, but thankfully with a few exceptions (more exceptions than Singapore).

I reflected on my experiences of being a fundraiser and director at my previous (UK) charity employers and my experiences in Australia, New Zealand and Canada. It would appear that these zappers are pretty universal in boardrooms around the world.

So, fellow fundraisers, what are we to do about it?

Well the first thing is to understand why charity boards exist. They are there to govern. Not to manage and certainly not to do.

You may have heard the phrase ‘... in America, it is Give, Get or Get off...' which us Australians (and Brits) used to think was the case for all charities in the USA. Well, news flash - it isn't: most charities over there have board members who refuse to ask for money too. Just get over it. It is not their job to ask - it is yours. Sure, you can try and get some of them to help but don't depend on them.

There is a great book, Tiny Essentials Of An Effective Volunteer Board by Ken Burnett. Buy it. It is cheap, and tiny - and takes about an hour to read. Get all board members to read it and it will revolutionise your charity. Whatever happens, it will revolutionise your career.

Ken thinks there are five key roles for boards:

1. Watchdogs (protect public interest, brand [mission] guardian etc)
2. Strategic oversight (help develop strategy)
3. Hire and fire CEO, including monitoring performance / targets etc
4. Support management
5. Understand and approve finances

That seems sensible enough. What goes wrong though is that many boards have a total lack of understanding about fundraising. Fundraising is like a secret that is on view for everyone to see, but non-fundraisers don't actually know what happens.

The non-fundraising people of the world think charities get money from events, companies and possibly just by magic. They don't really think about it.

They don't know that across the sector, government is the biggest contributor.

They don't know that of non-government net funds only about five to ten per cent comes from companies, and about the same comes from events.

They wouldn't be expected to know that bequests account for about a third of net funds, and that those pesky junk mail letters and cheeky backpackers are dragging in nearly half.

They have no idea how expensive it is, or that everyone doesn't do things for free.

They expect charities to get free advertising, free print and free everything else.

Your board members - no matter how clever they are - don't get this either. How can they do any of the five key roles without understanding fundraising?

Logically, a charity board should comprise people with different areas of expertise enabling them to govern wisely, asking the right questions, setting the right parameters, recruiting the right CEO.

Some charities aim for a wide spectrum of board members, but it is a mystery why they never seem to ask fundraisers to be on their board.

I wondered about this; why don't boards ask fundraisers to go onto boards? Maybe they are worried about having a fundraiser from the competition on the board? What about consultants like me then? I would never want to be a board member of a client, that has a clear conflict of interest, but surely I have something to offer?

I thought maybe it was just me - bolshy, agitating, impatient; mathematician fundraisers with my personality would probably be too much. But I chatted with a few other consultants and senior fundraisers and found I was not alone.

Probably this is self-fulfilling; as I said before, boards in general don't get fundraising, so they don't understand the skills they need.

The solution is obvious. Boards need to be taught the basics and economics of fundraising. The reality. We need a board fundraising induction kit. A couple of years ago, I offered free places for board members accompanying staff to fundraising training courses but got hardly any take ups.

A typical master class nowadays will have less than five per cent of attendees being board members of a charity.

But there is a board management and fundraising kit, and I suggest you put it together for each and every one of your board members now and for every new board member appointed. The kit comprises of:

  • two books - Tiny essentials of an effective volunteer board (Ken Burnett), Tiny essentials of fundraising (Neil Sloggie)
  • a few other publications (listed at the end)
  • a presentation (at least annually) about fundraising, not your fundraising but the sector's

For your presentation, I recommend you nick bits from Givewell's annual report on giving but keep it simple. Although not written for this purpose, my white-paper ‘Ten tips to fundraising in a recession' has a load of useful charts and a good section on why return on investment is the wrong measure for fundraising.

I asked Ken Burnett for his top half dozen tips for effective boards and he sent me 21.Here is a little selection.

The board serves the organisation, not the other way around.

  1. Make sure everyone fully understands the different roles of the board and the management ‘top team'. Management manages. The board governs. Define the different roles, making clear what governance means.
  2. Keep the CEO involved (and management team too). Never meet without the CEO, unless in a crisis that involves replacing the CEO.
  3. Reduce paperwork. Make sure your meetings serve the need of the organisation, not the trustees.
  4. Get the board's balance right: introduce formal terms of service, retirement policy, gender balance, age, representation from the field, regions, retaining institutional memory etc.
  5. Run good, enjoyable and informative meetings. Make sure they start and end on time.

If you are a fundraiser, you may feel that you have little influence on the board - particularly as to how it is selected and run. If you are right about that, then it means the board needs you more than it knows. Go through the proper channels (usually the CEO) but make sure they know about the help they can get, and that you are only trying to help your beneficiaries.

Good luck.

The books mentioned can be bought from White Lion Press. My white paper is available by emailing Justine.

Also, check out:
The Essential Trustee: What You Need to Know (Free - UK)
Ten Basic Responsibilities of Nonprofit Boards (USD$27- USA)
Board Membership with Purpose and Fun (Free - UK)
Facing the Financial Crisis - Ten Smart Things Your Board Can Do Now (Free - USA)
A Process For a Formal Governance Review and Evaluation (Free - UK)

I originally wrote this for Fundraising and Philanthropy Magazine and their monthly e-bulletin.

It's a good fundraising rag - even for those beyond Australia's shores.

1 comment:

Bharati said...

It's a universal disease, Sean. I was at a Board meeting last week where every member of the Board had an executive position. We therefore had a unique situation where the Board set a direction for itself - and reported to itself! And yes, of course, Board members spent eight months quibbling about the website navigation.

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