Though President Obama (that feels so good to say and write!) wasn’t specifically addressing members of nonprofit boards of directors in his inaugural speech, I hope they were listening. “The question we ask today is not whether our government is too big or too small, but whether it works …. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. Those of us who manage the public’s dollars will be held to account — to spend wisely, reform bad habits, and do our business in the light of day — because only then can we restore the vital trust between a people and their government.”
Nonprofit boards would be wise to heed his advice. The size of the organization is not what matters; rather, it is the quality of work it does on behalf of its stakeholders. And when programs are not helping to fulfill the promises of an organization’s mission, they should end, even if “nice” dollars will be lost; where programs are doing well and making those promises happen, they should be supported with all of the resources an organization has to bear. And as managers of others’ dollars, nonprofit boards must be held to account if the sector is to receive the respect and trust it deserves. “Spend wisely, reform bad habits, and do our business in the light of day.” Sound, sound advice.
Had the members of boards of directors who got involved with Bernie Madoff or Jack Bennett heeded that advice, it would be hard to imagine any takers, and thus no organizations struggling with huge losses of funds as a result. Something about if it sounds too good to be true, or if you can’t understand the documentation? Something about due diligence that is required in the execution of the job of a board member? One the one hand, I applaud Connecticut’s Attorney General Richard Blumenthal for investigating the boards of directors of nonprofits taken in by Madoff and promising legal action if he finds that any individuals or the collective board failed to do their/its job properly. (On the other hand), I worry that such law suits might scare off good, smart individuals from wanting to do real work and service on a nonprofit board. Like anything called a job, it takes work to be a good nonprofit board member.
For many organizations, financial viability is a constant struggle. (Estimates are that one out of three nonprofits is in “perpetual financial distress.”) Quick get rich schemes will never be the solution. Assessing the strengths and weaknesses of programs, cutting out what works and doesn’t and who works and doesn’t, getting actively involved in fundraising, and fully understanding the whole financial situation of an organization—these are the things that work. These are also the things that take time, energy, attention—and commitment—to execute well.