Due to bandwidth limitations I've had to move my blog. Please visit my new location:

Nonprofit Board Crisis at Typepad.

Thanks!

Diversity on boards makes a difference says John C. Gamboa in his op-ed piece in today's San Francisco Chronicle.

Mr. Gamboa writes his piece in response to Jeffrey Farber's (Koret Foundation) op-ed piece on a pending (California) Foundation Diversity and Transparency Act.

Mr. Gamboa, the executive director of of the Greenlining Institute speaks strongly in favor of the Act citing a number of reasons that the foundation community needs to be held more accountable and more importantly, should be paying out a larger portion of annual incomes.

Of equal interest to this blog is the bill's requirement that "large foundations disclose their board and grant-giving diversity. Mr. Gamboa notes that this part of the bill has "ignited a firestorm of controversy and condemnation from major foundations" who charge that "the proposed law would unleash "diversity police" or promote "reverse" racism."

Community foundations have for years been evaluating the diversity ratios of their prospective grantees as one of the criteria for approving a grant application. The philosophy is simple: a more diverse board, one that reflects the beneficiary of services, will be more responsive and sensitive. Thanks to community foundations holding up this standard, I believe this to be true and a practice that should be adopted by foundations. Foundations should have boards whose members reflect their mission and beneficiaries. The rich don't feel the pains of the poor and even middle class. That pain is helpful in identifying solutions for easing the pain

According to the Washington Post, the CEO of the Boys and Girls Clubs of Greater Washington completed a "negotiated resignation" following "the recent appointment of a new Board Chair. At the crux of the resignation, the CEO states that discussions with board members revealed plans for the new Board Chair to have a broader role and be more active than the previous Chair.

There are all kinds of various issues that certainly surround this case (like the disposition of certain properties) but I find the processes much more interesting. It appears as though the board was unhappy with the CEO's decisions and rather than overtly express this (or perhaps conduct an evaluation measured against results-focused goals) they decided to change their own leadership and give themselves, or at least their chair, new authority to get results that would be more satisfying.

This saga is a great lesson in nonprofit governance and more importantly, board:exec relationships. Great fodder for a case study.

Wow! According to the Chicago Tribune, one of Hilary Clinton's top advisors was paid $200,000 a year to serve on the board of a subprime lender (yes, there's a bunch of issues here).

I can't think of a nonprofit board where a member is paid this kind of money for service while performing a whole lot more duties than folks sitting on these corporate boards. The big question: what's wrong with this system?

The New York Times reported today on a study by four college professors who examined the incidence of fraud by nonprofit employees or volunteers and concluded it's (fraud) is huge and maybe the money defrauded cumulatively equals the amount of funds given to nonprofits by foundations and corporations -- that would indeed be HUGE!

Clearly, the only thing wrong with ...   more »

I first missed this New York Times article from March 17, 2008 but I don't want you to miss it. The article focused on a new book by North Western University Professor Weisbrod focused on revenue generating by nonprofits. Three cases were cited in the article: the Metropolitan Museum of Art which generates more than $96 million dollars from revenue sources like parking facilities; the Girl Scouts whose uniforms sales represents 41% of annual budget; and Public Television which generated $4 billion from the sale of stocks for Tickle Me Elmo.

Professor Weisbrod's book sounds more critical than supportive particularly because of the issues around tax exemption. Anyway, this sounds like a good read for all those who are students of nonprofit social enterprise.

The Maryland Zoo, in Baltimore is just not hacking it according to the Baltimore Sun which noted that pretty much anything that can go wrong, from crumbling buildings to underpaid employees and the failure to pay the water bill, is going wrong. According to the article, if things don't change, the zoo faces a very questionable future.

So who can fix the problem? The state? The city of Baltimore (like it has the money)? The under-resourced management? The Board or Friends Of? Me, I always think nonprofit fixes start with the volunteers (board) together with management. What about you?

Oral Roberts University, more like Oral Roberts, said ok to a life-changing gift of $70 million (according to the March 20, 08 Chronicle of Philanthropy).

This is the kind of deal that really gives me pause. Mind you, I like the ending but...

Should a donor have so much to say about the way an organization conducts its business? That's sort of the big question here. Oral Roberts had a board that by most standards "wasn't helping the cause". The founder-owner-operator I think basically got independence to run the university the way he saw fit. Unfortunately, the way he saw fit wasn't ensuring the university a long life.

In steps a donor who says he can do something about the situation but he wants a hand, at the board level, to make the changes necessary. And the incentive, big bucks.

Short term analysis -- stuff gets fixed in the way the donor would have it and mission continues.

Good deal?   more »

Today's LA Times reported on the "subtle and not-so-subtle bluring of commercial and nonprofit realms" as applied in this article, to the theater world. As noted in the article, the "issue boils down to procedures, values and most important, who's in control."

And as stated toward the end of this piece, "This unfortunate shift in the balance of power between art and commerce is evident in the way bragging rights for the largest theaters in our area derive from snagging Broadway tryouts and tours to their subscriber-based houses. What's conspicuously missing isn't just bold vision but the courage to buck the commercializing trend.

But the fault, dear theater-lovers, is as much our own as it is our mushy leaders'. After all, for many of us the words La Jolla Playhouse are synonymous with flashy products such as "Jersey Boys" and Billy Crystal's "700 Sundays" and what gets everyone's mouth watering is the word that "9 to 5: The Musical" will premiere at the Ahmanson this fall.

Lately, artistic directors seem more intent on wooing consumers than cultivating audiences. The chief losers in all of this are artists. The notion that there is a pile of masterpieces being overlooked while resources are squandered on yet another movie-turned-musical may be a wishful myth. Yet there are playwrights with potential masterpieces in them who are not being given a chance to evolve in the current corporate climate. Patch has helped quite a few of them in his long career in Southern California.

Before bidding him adieu, let's thank him for enriching our stages. And then let's all spend some time trying to figure out the secrets of his unbusiness-like legacy."

Effectively we must all be thinking about where nonprofit begins and ends, well beyond the theater voide. There are indeed core questions about control and voice and public interest and most importantly, purpose. There are no simple answers except for those who would not ask these questions. But for donors, these are the questions that frame giving.

Wikipedia and the foundation that oversees it is at a crossroads for thinking about how to pay for its future and the "so what" of taking certain kinds (sources) of money. It's a debate that is worth many nonrpofit's listen and it's the age old -- what's wrong with "tainted money" beyond that is there "taint" being enough of it.

As one paper noted:

"And so, much as how its base of editors and bureaucrats endlessly debate touchy articles and other changes to the site, Wikipedia's community churns with questions over how the nonprofit Wikimedia Foundation, which oversees the project, should get and spend its money.

Should it proceed on its present course, soliciting donations largely to keep its servers running? Or should it expand other sources of revenue -- with ads, perhaps, or something like a Wikipedia game show -- to fulfill grand visions of sending DVDs or printed books to people who lack computers? Is it helpful -- or counter to the project's charitable, free-information mission -- to have the Wikimedia Foundation tight with a prominent venture capital firm?And so, much as how its base of editors and bureaucrats endlessly debate touchy articles and other changes to the site, Wikipedia's community churns with questions over how the nonprofit Wikimedia Foundation, which oversees the project, should get and spend its money.

Should it proceed on its present course, soliciting donations largely to keep its servers running? Or should it expand other sources of revenue -- with ads, perhaps, or something like a Wikipedia game show -- to fulfill grand visions of sending DVDs or printed books to people who lack computers? Is it helpful -- or counter to the project's charitable, free-information mission -- to have the Wikimedia Foundation tight with a prominent venture capital firm?"

For a nonprofit, this is a good debate and one which staff and board should pursue regularly even if not facing the relatively huge challenges of Wikipedia.