Nonprofits' boards must include people who benefit from their services - Generocity Philly


May 11, 2017 12:58 pm

Nonprofits’ boards must include people who benefit from their services

Not more rich people, writes columnist Tivoni Devor: "A board that doesn’t have its clients represented in its governance can never be fully invested in the organization’s success and sustainability."

Your board room probably doesn't look like this.

(Photo by Flickr user ep_jhu, used under a Creative Commons license)

Tivoni Devor’sGetting Good Done” column focuses on new models of enacting impact.

Does your board truly have “skin in the game”?

That phrase, either attributed to Warren Buffet or William Shakespeare’s “The Merchant of Venice,” denotes a personal risk in an investment strategy. In “The Merchant of Venice,” they’re talking about literal skin, a pound of flesh. In the context of an investor, it means, “Trust me with your money because my money is at risk, too.”

Often for nonprofits, skin in the game is interpreted as having a giving board where all members donate money to the organization. This is used as a measurement of the board’s commitment to the organization it’s overseeing. The perception is that members will work to protect their “investment” and be committed to seeing that their money is spent wisely, equating money with knowledge.

Let’s be clear: Donating to an organization is not putting your skin in the game. This is yet another business-speak term that’s been misinterpreted in the nonprofit sector to ill effects.

As much as it gets spun, a donation is not an investment, a donation is not risk capital, you don’t mortgage your house on a hot donation tip because your brother-in-law promises you a thousand-percent return. There’s a reason that both a donation and investment loss are considered tax write-offs.

So, let’s unpack who really has really has skin in the the game of your nonprofit: Who is financially at-risk if your nonprofit fails? It’s not your board members or donors. They will not suffer if your organization fails.

Only those who receive the services your organization provides are at risk if you close up shop. They are the ones who have skin in the game. Are they on your board?

The never-ending pressure to raise money lends itself to finding board members who can give big, but stacking your board with one percent-ers further distances your board from the people you serve. A board that doesn’t have its clients represented in its governance can never be fully invested in the organization’s success and sustainability.

Client representation on the board will give your organization true 360-degree governance. One of the key responsibilities of a board is to evaluate and manage the organization’s executive director, and the people with the best first hand knowledge of the ED’s performance will be those receiving the services the organization it providing, not those that meet a few times a year for a few hours a pop.

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Client serving on boards can also bring great insight into the work the organizations as they are experiencing it firsthand: They know what works and what doesn’t, and where the gaps are that can be turned into opportunities for growth.

Look, having board members with money can be excellent and still worthwhile for the organization. But don’t let the pressure of raising every dollar imaginable exclude potential board members who are fully committed to the success of the organization and will provide insight from the user level to improve your operations and programming.

  • Sounds like good advice, but begs the question why in practice it is rarely the case that organizations (non-profit and for-profit alike) include constituents other than funders and disinterested subject matter experts on their governing boards. Some European countries mandate inclusion of employee representation on Boards, but I am not aware of any standard practice for including “clients”. By analogy, consumer companies focus considerable resources on understanding their clients, but don’t invite them to observe or vote on organizational strategy. Maybe its just class-driven 1% myopia, but I suspect there are also practical reasons why the diners are almost never invited into the kitchen to observe the sausage making. Its a point worth exploring — thanks for the article.

    • Thank you for commenting, I think in on the for-profit side Board Members, at least for public companies, prioritize stock performance/profit over all else. When American Airlines recently gave their staff a raise – something that if employees and consumers would want, wall street investors melted down. With Bcorps and L3Cs this is starting to move in a better direction.

      On the Nonprofit side, very often, EDs are in charge of recruiting their Board Members, and Board Members are the only people that can fire an ED, so there are self-preservation motives at play on who gets on the Board, which may preclude end-users who may be more critical of the ED. Also there may be inherient biases in the Board Development process when it comes to what is valued for the nonprofit to grow and what kinds of boxes are available to be ticked in a board development matrix.

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