Submitted by: Dr. Elizabeth Bolton, Professor, Community Development

(Summer 2005). The Nonprofit Quarterly. Pages 58- 62. Written by Owen Heiserman

Heiserman discusses community action agencies that receive public funding. He points out that because of this board of directors frequently fail to establish adequate policies and procedures for handling public money. This kind of protocol is most frequently required when there is a contract or grant in place. The conclusion was that the passivity of the board and access to public money were linked. Many organizations have the same executive director and board of directors in place for years without ever questioning or evaluating the service of the members or the achievements of the board. It is quite common for executive directors and board members to stay “on” for many years after the organization was founded.

This article presents the results of a study by Mid-Iowa Community Action (MICA) on the crisis intervention services to community action agencies. The following factors were instrumental in the intervention by the MICA consultant group when they were called on to help stabilize the community action agencies. The loss of monetary control was the factor cited most often that required help from outside experts. This was followed by the departure of long serving individuals or the need for their departure. Community action agencies, like most nonprofits have seen increases in their budgets over the years. The increase in funding has not been followed by and increase in oversight or compliance with policies and procedures that have been implemented by the IRS or by state governments.

This study describes 23 community action agencies that experienced a breakdown of governing board oversight. A list of 26 warning signs of a board that might be in trouble was devised by Mel Gill (2001) and cited by Heiserman as the signs of boards that are in trouble. Gill’s warning signs of a board in trouble are shown below with the items under each category heading indicating a sign of trouble. The signs of an effective board are not given in the article reviewed although they have been studied and documented elsewhere.

Human Resources

• Difficulty recruiting credible board members

Financial and Organizational Performance

• Chronic unplanned or unmanaged deficits
• Call for outside audit/operational review by funders
• Persistent failure to meet individual or organizational performance targets
• Role confusion between board and CEO

Meetings

• Low attendance at board, committee meetings
  
• Low level of participation in discussions at meetings
• Poor meeting management: Lack of focus, no agendas, unprepared members
  

Board Culture

• Underground communication
• Poor communication between CEO, Chair, Full board
• Unresolved conflicts within the board
• Members feel removed from “What’s going on”
• Board divided into competing factions

Decision Making

• “Rubber Stamping” of CEO recommendations
• Focus on operational detail not big picture
• Poor communication with funders, key stakeholders
• Decision deadlock or paralysis
• Members ignoring, circumventing organizational policies and procedures
• CEO ignoring, circumventing organization policies and procedures (p. 59).

These warning signs often manifest in factions and deadlock among board members and they are not exclusive to Community Action Agencies. Rather they represent an all too common phenomenon in community nonprofit organizations that receive funds from the public or from selected donors.

The author makes recommendations for working with boards of agencies in crisis. These recommendations also serve for agencies and organizations that are not in a state of crisis but want to insure that their boards are functioning effectively.

Select and socialize board members for the mission of the organization. Boards too often act as a collection of individuals/constituencies, unless they are educated and supported in their functions and responsibilities as a group. The executive and leadership staff in a nonprofit of any size must take responsibility to nurture and support their board. (p. 60).

The author goes on to suggest that the middle of a crisis is not the time to begin board recruitment, development or change. The people who started the trouble or were the cause of it cannot usually deal with the crisis enough to make the problem go away. The author, citing the crisis intervention team, noted that the largest hurdle is for the executive and the board to understand that there is a crisis, the nature and severity of it and the options for resolving it.

Board members can and should understand their legal responsibilities and those defined in the bylaws of the organization. Executive officers should realize that board members need training and constant education to perform to their best ability that will serve the mission of the organization and the community.

Implications

This article has implications for any Extension county faculty that works with nonprofit boards, advisory committees, voluntary boards, executive officers, trustees or any of the many and varied leadership positions in community-based organizations that serve Florida citizens. The board is the leadership nerve center of the organization, no matter how large or small. The board hires the chief executive officer and although the executive may have wide leeway in terms of authority and responsibility, the quality and implementation of those decisions affects the board.

In small nonprofits, the board may actually carry out all the functions of the organization. The same principles apply. It is important to note that board development is available as Extension training through the Focus Team 5.5: Nonprofit Organizations in Community Settings. Board development and other training appropriate for work with community-based organizations are available through the annual Extension in service trainings programs.

References

The works of Mel Gill as cited by Owen Heiserman include:
“Governance in the Voluntary Sector: Summary of Case Study Findings.” The Institute on Governance, 2001, http://www.iog.ca.

nonprofits, non-profits, NGOs, boards, community-based organization, governance