While there is lots of good news to share, the bottom line is that nonprofit leaders give nonprofit boards a “B minus” grade in overall performance. Leading with Intent explores why that is, and — more importantly — what we can do to improve that grade.
Here are a few of the key findings:
Boards demonstrate room for improvement.
To evaluate board performance, BoardSource asked chief executives and board chairs to grade their boards. Boards earned a 2.65 or B- average — underwhelming results for the top leaders of their organizations and such high-achieving individuals. The findings reveal that boards are generally better at technical tasks, such as financial oversight and compliance, than they are at adaptive work related to strategy and community outreach, which points to key opportunities to strengthen board performance across the nonprofit sector.
Board members need to speak out more.
Board members are essential to successful community outreach and advocacy, and they have more work to do in these roles. In response to shifts in government funding and public policy, savvy nonprofits are broadening the definition of outreach and making advocacy an explicit priority. Board members need to raise their collective voices as committed and informed champions for their missions.
Board diversity is increasing but gaps persist.
Board composition — size and diversity — is changing, slowly. BoardSource research shows that average board size has declined from 19 members in 1994 to 15 members in 2014. As boards shrink, it’s even more important to carefully compose the board. The nonprofit sector has seen modest progress in increasing racial/ethnic, gender, and age diversity among chief executives and board members. But, diversity is not a numbers game; it’s the people who count, and distinct diversity gaps persist.
Best-in-class boards pay attention to culture and dynamics.
The real secret to board success — leadership culture — is difficult to measure. A productive leadership culture requires having the right people on the board, achieving clarity around roles and responsibilities, and educating and engaging board members. Strengthening the culture requires leading with intent: thoughtful planning, determined dedication, and collective commitment from chief executives, board chairs, and board members.
Board members need to embrace their roles as fundraisers.
Perennially, fundraising remains the great weakness of nonprofit boards. It once again received the lowest grades — 1.95 from CEOs and 1.87 from board chairs. And, it tops the list of board challenges — 60% of CEOs and 58% of board chairs identify it as one of the most important areas for board improvement.
Finding financial stability amid constant change requires strategic leadership.
In the wake of the economic downturn, nonprofits continue to find their funding declining and the demand for their services rising. While most organizations are doing better financially than they were a year ago, some — especially smaller organizations — are still feeling the pinch. The political, economic, and demographic forces shaping our society are constantly changing, and so must our organizations if we wish to remain vital and vibrant.