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WASHINGTON (AFP eWire - April 12, 2004) - What makes a nonprofit board truly effective? According to an article in the most recent The McKinsey Quarterly, the best nonprofit boards not only become involved in CEO selection, fundraising and high-level policy development, but also increasingly

  • provide professional expertise;
  • focus on external relations and represent the organization to the community, the public and other outside interests;
  • continuously recruit new talent; and
  • evaluate organizational performance.

The article, written by Paul Jansen and Andrea Kilpatrick, features the results of a survey and interview with the executives and directors of 32 of the 100 charities named as top nonprofit performers by Worth magazine.

The survey also suggests that boards should 'get their hands dirty' doing the tasks they do best, but avoid micromanaging other processes and operations. In addition, the best boards understand that because of a lack of time and resources, they often need to focus on one project or task as opposed to spreading themselves too thin over several activities. Once the primary project is complete, they can then concentrate on the next challenge.

Board Pitfalls

The authors note three major problems that seem to recur throughout the charitable sector, regardless of size or mission:

1. Lack of consensus about the mission of the organization and the goals of the board
2. Poorly constituted boards that lack the relevant training or expertise to provide value to the charity
3. Failed process, usually due to poor planning and communication

Through actual examples provided by the charities involved in the survey, the article provides some possible solutions to these challenges. While charities can simply recruit new board members who have some of the newer skills nonprofits need, such as marketing, technology and public relations, the article recommends that organizations provide training to their board members in these areas. (Only 38 percent of the organizations surveyed provided fundraising training to their directors.)

What about long-time board members? Establishing term limits is one way to avoid having board members who have served for many years, and may be opposed to change or innovation, remain on the board too long. Another solution is creating a two-tier board - one that functions as a normal board and a second honorary board that can keep long-time members who have valuable experience and relationships involved with the organization.

Evaluating Performance

The article also looks at the always-difficult issue of how a board should evaluate not only the charity's performance, but also its own. Only 40 percent of those surveyed indicated their board played an active role in measuring performance. Using examples of what charities are doing in this regard, the article encourages boards to look beyond activity and efficiency and focus on impact.

Furthermore, the most critical way to develop a dynamic board is to have directors who are open to self-scrutiny and measurement, the article states. However, only 35 percent of the nonprofit directors surveyed indicated their board underwent any sort of self-assessment.

As a resource, the article includes a link to diagnostic tool developed for nonprofit boards that is intended to 'fill the dual role of educating and evaluating.'

To read the full article, visit the McKinsey Quarterly website (registration is required, but the articles are free).

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