Boards Urged to Focus on Charity's Mission, Leadership Shortages

Trustees of nonprofit organizations need to look beyond issues of financial accountability and get more involved in promoting the charitable missions of the groups they oversee, said speakers gathered here at a meeting attended by more than 700 board members and nonprofit officials from around the country.

In addition, they were encouraged to focus more time and attention on recruiting top-notch staff members to lead their organizations.

In the last few years, concerns about a lack of accountability — largely brought about by scandals at corporations and charities — have led many nonprofit organizations to focus on issues such as fiscal responsibility and avoiding conflicts of interest, said Arthur M. Sussman, vice president of the John D. and Catherine T. MacArthur Foundation.

"We are better governed than we were five years ago," he declared at a conference held by BoardSource, a Washington organization that offers advice and training to nonprofit board members. "Now it is time to move on to other issues. Your role begins with accountability, but doesn't end there."

He urged board members to learn more about the people the organization serves, advocate for the causes that the organization concentrates on, and work with government and foundations more closely.

He said board members should consider holding meetings with other organizations working on similar causes, and take time on business trips or travels to other cities to meet with trustees of local charities. "Know who does what you do, and know who does it better," he said.

Such steps, he said, will help trustees do a better job of making sure their organizations can perform as effectively as possible in serving society.

Not a 'Holy Grail'

Another foundation official, James Canales, chief executive of the James Irvine Foundation, in San Francisco, also urged boards to examine how well organizations are doing in meeting their social goals.

"Effective governance can't become the holy grail in and of itself," he said. "Effective governance is a tool used to achieve a mission."

He urged charity executives to educate their boards about the long-term challenges and opportunities faced by their organizations, and to bring experts on key issues to board meetings to educate trustees about important issues.

"It is far too tempting to fill a board meeting with the preoccupations of the day-to-day issues at the organization, but the board has a responsibility for taking the long view," he said.

In addition, he said boards are more effective when discussions at meetings are robust and not everybody agrees. He said some people criticized him after a recent board meeting where trustees hotly debated the merits of a proposed grant, and he was accused of "not managing the board." But he said he felt that the board made a better decision, and one it could defend, because all the pros and cons of the grant were aired.

Mr. Canales also urged charity executives to "demystify" the board members and "foster a culture of partnership." He said too many people put board members "on a pedestal."

"Think about the language you use," he said. "Is there an us versus them mentality? Is the board viewed as an obstacle to why things can't happen?"

He said he also worries that in some cases, boards of foundations have not been sufficiently involved in shaping the mission of the organization.

"In the last decade, there has been a troubling trend, where ownership of foundation work resides with the leader, staff, or both," Mr. Canales said. "When foundation staff members leave, too often their priorities leave with them."

Recruiting Top Leaders

Speakers also encouraged board members to focus on leadership issues at nonprofit groups. Thomas Tierney, chairman of Bridgespan, a Boston nonprofit group that provides strategic planning advice to charities, noted that his organization has predicted that the nonprofit world will need 640,000 new leaders in the next decade.

"The board has to take accountability for making sure nonprofit groups have the right people in the right job at the right time," he said.

Too many boards, he said, do not spend enough time dealing with succession planning or overseeing the organization's performance-review system.

What's more, he said, boards must recognize that charities will increasingly be competing with business and government for the most-talented workers and may need to pay higher salaries and offer better benefits to recruit top-quality people. As more and more baby boomers reach retirement age, "we are going to get what we pay for," he said.

Money to run nonprofit organizations, Mr. Tierney said, "is not the scarce resource, talent is."

Janet Murguía, president of the National Council of La Raza, a Washington group that advocates for the needs of Hispanic people, said she is also worried about the exodus of baby-boom workers. "This is not a tenable position," she said. "It is a bona fide crisis."

She urged board members to look "at the leadership deficit crisis as an opportunity to truly diversify the nonprofit world." While she said she knows it is a "no-brainer" for nonprofit organizations to focus on recruiting minorities, she said, "I am troubled that many nonprofit organizations continue to lag behind government and the corporate sector in staff and board diversity.

"We should be the leaders in this, not struggling to play catch-up. We should be the first to have our organizations look like America."

The problem at many charities, she said, is not a lack of interest in diversity but a lack of understanding of how best to attract minorities.

She said to start moving quickly to attract more diverse staffs, nonprofit groups must be willing to hire people who are effective leaders but "may lack the traditional credentials we look for in senior executives."

In addition, she urged board members and charity executives to get involved with national or local groups that have strong ties to minorities.

"Consider supporting, volunteering, or even joining the board at these groups," she said, to increase the opportunities for interacting with people who could become potential employees.

In the long term, she said, nonprofit institutions need to change how they view diversity efforts, and not see them as a "feel good" exercises but as essential to an organization's success.

"Imagine what would happen," she said, "if the degree of organizational diversity were made part of a nonprofit leader's evaluation or performance review, just like raising money or reaching programmatic goals."