Many of those who work in the nonprofit field do so because of their commitment to the mission of the organization or their passion for serving others. It’s these aspects that make so many Silicon Valley nonprofits effective at reaching strategic goals over the years. A management team that can juggle the multiple demands of program management, employee engagement, volunteer recruiting and fundraising is necessary for success. However, another variable in the success formula is just as important – an engaged and effective Board of Directors. Engagement levels vary across organizations, leaving management wondering about how involved members should be and how to encourage engagement. To address this concern, Urban Institute published a report, Boards of Midsize Nonprofits: Their Needs and Challenges, and here is a summary of their findings.
About the Survey
The survey includes responses from 1,862 organizations that have annual expenses between $500,000 and $5M, otherwise referred to as midsize nonprofits. According to IRS data, organizations that meet this criteria account for approximately one in five public charities in the United States.
- Board Engagement – The survey wanted to uncover what areas of operation Board members are engaged in. According to respondents, 60% are very active in financial oversight, 50% in CEO evaluation, 50% in setting policy, 40% in planning, 20% in community relations, 20% in fundraising, and 20% in educating the public. What’s interesting is that most respondents’ Board members are not very involved in external-facing roles. In fact, the survey also found that 40% are not at all active in public relations or educating the public. The data demonstrates where members are currently focused and the opportunity for organizations to engage them in more external-facing roles.
- Board Culture – The culture of the Board and ability of all members to equally influence the meeting agenda was identified as a potential variable for Board engagement. According to the survey, 85% of respondents indicated the CEO is very influential in setting the Board agenda, 70% indicated the Board Chair is very influential, while only 19% indicated other Board Members were permitted to influence the agenda. An interesting finding is that 30% of other Board members have very little to no influence in setting agenda items. The study also found that as other members are encouraged to participate their engagement level also increases.
- CEO Assessment of Board Performance – The survey also wanted to find out how CEOs rate Board performance. According to the survey:
- Fundraising – 10% of CEOs rated their members as excellent, 20% as good and 60% as poor to fair.
- Financial Oversight – 50% of CEOs rated their members as excellent, 40% as good and 10% as poor to fair.
- CEO Evaluation – 30% of CEOs rated their members as excellent, 40% as good and 30% as poor to fair.
- Setting Policy – 30% of CEOs rated their members as excellent, 50% as good and 20% as poor to fair.
- Planning – 20% of CEOs rated their members as excellent, 40% as good and 40% as poor to fair.
- Community Relations – 20% of CEOs rated their members as excellent, 30% as good and 50% as poor to fair. Given the lack of focus on external-facing activities, this rating should come as no surprise.
- Educating the Public – 10% of CEOs rated their members as excellent, 30% as good and 50% as poor to fair. Much like the results above, it appears members are just not engaged in the actively marketing of the organization.
- Recruitment Challenges – Ensuring Board member engagement also means having an approach to recruitment that results in the identification of best and brightest candidates for the organization. According to the survey, 69% of respondents say it’s at least somewhat difficult to recruit new members and 20% indicated it is very difficult to recruit new board members. The remaining 11% indicated little to no difficulty in recruiting. This data demonstrates that the number of midsize nonprofits experience difficulty. It’s possible that a contributing reason for these numbers is the low level of member participation in Board culture (i.e. setting agenda items).
Board members play an important role in the operation of a nonprofit organization. It’s obvious from the survey findings that the higher the level of member engagement, the greater the value to the organization. If you have questions about the survey or need assistance with nonprofit accounting, financial reporting or tax issues, our Nonprofit Group can help. For additional information, call us at 408-377-8700 or click here to contact us. We look forward to speaking with you soon.