Scarcity is Stagnation: “The We Don’t Know Anybody Board”
I have walked into warmer rooms, that is for sure. The school leadership had already assembled when I was brought into the boardroom, and they were hopeful that my report about their development operations wasn’t what they had anticipated. To be fair, they had a solid strategy and execution for event-based fundraising. But unfortunately, events were their only development strategy. It became clear that they wanted to crow about their event success while I wanted to discuss their annual giving and donor stewardship. So, I parked the car and threw the keys out the window directly in the middle of the conversation they didn’t want to have. After a long pause, the Board Chair finally spoke up for the group. His words functioned as part history and part prophecy; I’ll never forget what he said and how he said it. “Here’s the thing John. We don’t know anybody who will help us out financially. We are all tapped out here. We have to make do with what we have now.”
If scarcity is a mindset, then stagnation is the sure-bet reality of a scarcity mindset. As a leader of your nonprofit organization, you pave the way in addressing some of our society's most critical challenges while fostering positive change that (we hope) benefits us all. Whether your firm is a learning institution, local relief mission, or global humanitarian effort, the goal is to confront societal challenges and moderate change. At the heart of your organization, the board of directors is tasked with holding the mission in trust while steering the ship toward its mission. However, when nonprofit boards shy away from taking risks, resist innovation, and fail to embrace collaboration, they may inadvertently undermine the very impact they seek to achieve. This is organizational stagnation.
What does stagnation look like?
You have hit a barrier or have plateaued in your mission achievement. At the foundational level, you exist to make a difference, and a board's unwillingness to take risks will often lead to stagnation in mission achievement. Averse to change, these boards may find themselves stuck in outdated strategies and unable to adapt to evolving needs. Moreover, they find themselves sorely behind other organizations who have embraced innovation and change as a priority. Board members must see the world as a dynamic ecosystem, and without a willingness to take calculated risks, nonprofits risk becoming irrelevant in the face of emerging challenges.
You can’t remember the last time you embraced an innovative idea. In the face of stagnation, innovation is the lifeblood of progress, even for nonprofits. When boards resist embracing new ideas and technological advancements, they miss out on opportunities to enhance their programs, reach wider audiences, and optimize their impact. Nonprofits must be adaptable and open to innovation, leveraging new tools and approaches to tackle age-old problems in more effective ways. This is particularly difficult when board governance and board makeup (membership) is the change up that is most needed.
Your key partners are disengaging, or you aren’t attracting new ones. Donors and stakeholders are drawn to organizations that demonstrate a commitment to positive change and results in the same way they are drawn to organizations that they can trust. Nonprofit boards that shy away from risk-taking and innovation will likely struggle to captivate the attention and support of their constituents. Further, they will fail to move their donors to deeper engagement without forward movement. In an era where transparency and impact measurement are paramount, a lack of dynamism can lead to donor disillusionment and reduced support.
Fellow board members aren’t sure of their roles, they attend but don’t contribute, and role expectations aren’t clarified and documented (in a Board Member Job Description). Has the boardroom become the bored room? This kind of thing does not happen because the mission is boring; rather, it is likely because the group is not 1) a cohesive team, 2) with clear roles, and 3) a shared understanding (according to policy and procedures) of what the board is supposed to do based on each trustee’s unique contribution. As a whole, the board members fulfill three primary roles critical to the organization's success.
They shoulder fiduciary responsibilities by overseeing financial matters, approving budgets, and actively participating in fundraising endeavors.
They contribute to strategic planning, ensuring alignment with the organization's mission and vision, and developing long-term goals.
They provide oversight and accountability by evaluating program effectiveness, ensuring legal compliance, and conducting performance evaluations of executive leadership.
In some instances, board members may engage in activities such as advocacy and community outreach, collectively working to uphold the organization's mission and promote its impact.
In a 2015 study of board practices and external impact of the nonprofit the board serves, Bernstein et al., (2015) found that a clear understanding of and commitment to the roles of the board impacted the organization’s external output more than any other area of focus. If you want to reverse stagnation, start with board role clarity.
Your nonprofit has lost its grit and toughness. The nonprofit landscape is changing at a rapid pace. The community (of learning, belonging, practice, etc.) has become the unit of focus in both of the worlds of research and practice. In an ever-changing landscape, organizational resilience is key to survival. Resilience requires improvisation and agility, and both must grow among key leadership. Nonprofit boards that do not prioritize this kind of organizational agility may inadvertently make their organizations more vulnerable to external shocks. By embracing calculated risks and fostering a culture of innovation, boards can position their nonprofits as agile entities capable of weathering uncertainties and adapting to new challenges.
Nonprofit boards are the stewards of social impact, and their decisions shape the trajectory of their organizations. This is critical work that you are doing! When boards resist taking organizational risks, eschew innovation, and fail to foster collaboration, they jeopardize the very essence of their mission. Your mission is active, and is clearly failing if there is stagnation. To thrive in a rapidly evolving world, nonprofits must cultivate a culture of adaptability, encouraging their boards to be bold, embrace innovation, and collaborate with like-minded partners. Only then can they navigate the complexities of the modern landscape and truly make a lasting difference in the communities they serve.
Bernstein, R., Buse, K., & Slatten, L. (2015). Nonprofit Board Performance: Board Members’ Understanding Their Roles and Responsibilities. American Journal of Management, 15(1), 24–35.
Abstract
Using survey data from nonprofit CEOs and Board Chairs this paper presents a new concept for measuring NPO effectiveness by examining the impact of certain roles and responsibilities, specifically internal board performance (practices that take place within the board room) on external performance (practices that take place outside of the board room). Data from the BoardSource Nonprofit Governance Index Survey provides information on twelve board practices. Path analysis was used to investigate the impact of internal board practices on external action. Regression analyses demonstrate how internal board functioning impacts the organization's ability to fundraise, improve community relations and outreach, and recruit new board members. Results indicate the strongest impact on the external board performance is from board members' understanding their roles and responsibilities.
