Category Archives: Board Governance

Board Engagement: The Most Unorthodox Development Committee Meeting Ever

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Reprinted with permission from Creation in Common. Originally posted May 28, 2013.

“This will be the most unorthodox development committee meeting you have ever attended” promised Tom, the committee chair. Admittedly, I was skeptical, yet the energy in the room was palpable as more and more committee members stuffed themselves into the tiny, clown-car-like space, where we were meeting. While the need for the organization’s services had grown significantly, the development effort, though robust, had remained relatively flat over the last five years. This group of people committed themselves to find a way to take their work to the next level.

The board/volunteer development committee has the difficult job of generating high performance while overcoming significant negative stereotypes about fundraising. Endemic to many failed efforts is a misunderstanding about what is needed from the committee. Often we think about it in terms of more influence, better contacts, and deeper pockets. These are important, but these are the outcomes not solutions to building an effective development program. By chasing these, committee members put themselves in a very unproductive position — reacting to each others ideas, hoping that someone will discover the secret that will make asking their friends for money less painful.

What I appreciated most about Tom’s “unorthodox development committee meeting” was that this group of people had moved beyond reacting to each other’s ideas before they walked through the door. For the last few months, the committee has ruminated over reams of data about the organization’s past fundraising performance– understanding the structure of the program, the kind of results it has generated, how it cultivates new donor prospects and how it impacts the donor relationship. More importantly, they were able to dispel several assumptions creating a clear picture about their situation. Now, they were ready to begin the discussion about what a redesigned effort might look like.

According to organizational learning guru Peter Senge, “understanding the creative process is the foundation of genuine mastery.” Yet, he goes on to say, “muddling through is the strategy that characterizes most of us.” For the development committee to work (or any board committee for that matter), we need to embrace the creative process by utilizing the skills and expertise around the table to assess situations, broaden perceptions, and surface deep assumptions. From there we can take action on a fresh perspectives that will give way to strategies rooted deeply in the committee’s beliefs and collective thinking. This will lead to building new activities and processes and ultimately develop new structures and practices that will maintain the effort.

Key to the creative process is a deepening of commitment. When development committee members react to each other, there is no skin in the game. Ideas are a dime a dozen. But when members delve into the issues, examine assumptions, and discuss new solutions, they are also sharing their passions, beliefs, and desires for the organization. As the committee seeks a solution, the individual member is expressing why they are there and the group must navigate its way through these different perspectives synthesizing them into a shared vision forward.

After introductions in the small cramped room, Tom had us get up and walk next door into a larger open space and there we worked individually and in teams to explore the organization’s situation and identify potential strategies. It was not the large room, the paper on the wall, or the collaborative brainstorming that made this meeting “unorthodox.” It was that this committee was ready and energized to go to the next level, and at the end of the meeting more committed than when they started to continue on their creative journey.

Conflict of interest: not always clear-cut

A well-connected businesswoman sits on two nonprofit Boards.  Her best friend is a local philanthropist. At lunch one day, the friend asks which nonprofit she’d recommend for a donation.

Another nonprofit’s Board member has a daughter in the organization’s after-school music program. The program has poor attendance and is losing money, plus there are other organizations in town with bigger, more-established programs. The Board has to vote on whether or not to close the program.

Should a nonprofit put its reserve in a bank where the Chair is President?

Is it OK to hire a highly qualified candidate who is married to the CEO’s first cousin?

Can a Board member legitimately throw her hat into the ring for the Interim Executive Director position?

We all know when we see certain kinds of conflicts of interest (COI), like a Board member paid as a consultant, or the Executive Director hiring her husband. These are the obvious, glaring, double-dealing circumstances that at best undermine effectiveness and lead to gossip, and at worst make the headlines and send people to jail.

But most COI scenarios are subtler and more complex. In many cases COI issues arise despite all parties having the best interests of the organization in mind. These can be unforeseen, and not addressed in the organization’s COI policy, and very difficult to resolve.

How can your nonprofit prevent even hazy COI situations that can put the organization, and its staff and clients, at risk?

First of all, if you don’t have a COI policy, you need one. Immediately. At a minimum, the policy should include requirements that 1) Board members sign disclosure forms that identify potential COI on an annual basis; and 2) those with potential COI be excluded from all discussion and voting concerning financial relationships with their affiliate business or interest.

COI policies are not one-size-fits-all. We’ve compiled a list of online sources for templates to help create and refine COI policies.

In addition to having a policy, there are specific ways that nonprofits can create procedures for openness that will help avoid COI. Board Chairs should regularly remind members to consider whether they may have a COI before discussions about financial transactions or organizational partnerships.  Also, Boards should be sure to get multiple bids on any product or service that they are considering purchasing from a member’s company (or a Board or staff spouse’s company, etc.) Finally, there are many sources for legal advice and other expertise that can help your organization sort out potential conflicts. Don’t hesitate to call on trusted experts for support.

Once written policies and procedures are in place, consider the culture of your organization—attitudes, communication habits, emphasis on personal integrity. Just because Board members sign a form each year doesn’t mean you’re in the clear. Many potential conflicts are subtle and unexpected. Modeling and promoting openness and fairness is a key responsibility of leadership and a necessary tool for everyday life in a nonprofit.

To inform ongoing research and program development, the Alliance would like to hear from you about your experiences with COI. Have you seen or been part of a COI scenario? Did it resolve, and if so, how? Rest assured that any information you provide will be held in strict confidence. Please email info@npexcellence.org with your thoughts and experiences, and thank you in advance for sharing.