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Welcome to the second installment of my seven-part series on Outstanding Nonprofit Management. For those who may not have seen the first post, which covered the first Hallmark Mission and Program, you can read it and other articles at: www.synthesis.biz/hallmarks-of-award-winning-nonprofit-management.

This series was inspired by The Alford-Axelson Award Review Committee’s use of seven Hallmarks of Nonprofit Managerial Excellence℠ to assess the nonprofit management and performance of award applicants:

Mission and Program
Leadership and Governance
Strategy and Innovation
Human Resources
Financial Strength and Performance
Resource Generation and External Relations
Accountability and Integrity

This post addresses Leadership and Governance and also provides actionable steps that your organization can take to achieve higher performance goals in these extremely important areas.

For each Hallmark our review committee used a set of underlying performance criteria to identify exemplary management, in this case:

Hallmark #2: Leadership and Governance

The board is composed of individuals who possess the special characteristics and skills needed for this specific organization to accomplish its mission including functional and program content-related expertise.
The board involvement is reflected in time and financial contributions.
The board is engaged in long-term and short-term planning activities as necessary to determine the organization‘s mission, to define specific goals and objectives related to the mission and to evaluate the success of the organization’s programs toward achieving the mission.
The board has established policies for the effective management of the organization.
The board has explicit policies and procedures, including those for term limits.
The board is responsible for its own operations, including the education, training and development of board members, periodic evaluation of its own performance, and new board member recruitment.
The board has a system in place for conducting periodic evaluation of the chief executive officer.
The senior leadership team possesses the special characteristics and skills needed for this specific organization to accomplish its mission.
There is evidence of an effective working relationship between the senior leadership of the organization and the board.
Senior leadership and the board reflect a commitment to diversity (ethnic representation, professional acumen, gender, age, etc.).

I recommend the following actionable steps to address your organization’s performance in Leadership and Governance:

For a nonprofit in its formative stage this is a unique opportunity for the founder to select initial board members who are first and foremost a good cultural fit for the organization and who are committed to the 10 performance criteria listed above. Candidates should of course also have the necessary skills to support key functional areas such as finance, accounting, HR., technology, marketing and legal, in addition to other special experience which may be required. For example, if the nonprofit’s mission is workforce related an appropriate number of board members with experience in this field should be recruited.

Founders who take advantage of this unique opportunity better insure that successor boards will perpetuate the culture and maintain these legacy performance standards as new members are added.

For established organizations with existing boards, achieving these higher standards present other challenges primarily due to peoples’ “natural” resistance to change. When board members have been working together for a while, they become used to “how things are done.” They may not be interested in pursuing new practices – even with a long-run promise of greater efficiency and effectiveness. Overcoming resistance can only be possible if leadership remains committed to change, and can make a compelling case which motivates stakeholders to commit to a process of:

Agreeing on new performance goals and strategies for how to achieve them
Assigning ownership of tasks, timelines and overall project management
Fostering leadership at every level of the organization to facilitate changes
Maintaining relevant, accurate and timely communications across the entire organization
Defining individual accountability
Measuring success in improving board performance
It is essential for any founder and/or senior leadership to engage board members in a candid assessment of leadership and governance performance relative to the 10 criteria listed above. This will uncover the degree of stakeholder alignment and set the stage for the process of change.
For measuring success and achieving performance goals, a helpful tool to use is MIT’s SMART, an acronym for Smart, Measurable, Achievable, Relevant and Time-bound.

Here are more links to valuable information regarding nonprofit Leadership and Governance:

Stanford Social Innovation Review: A Better Board Will Make You Better

Board Source: How Should a Nonprofit Board of Directors Be Structured?

Independent Sector: 33 Principles of Good Governance and Ethical Practice

MAP for Nonprofits: What Stands Between Boards and Executive Directors?

Why is all of this important?

Even if your organization doesn’t aspire to an award, these performance criteria set higher standards which are achievable for a majority of nonprofits. And achieving higher performance standards will serve to:
Increase organization alignment and focus
Create a stronger platform to support capacity building and insure sustainability
Significantly improve fundraising outcomes
Differentiate your organization from others
Further energize staff and board members, volunteers and other stakeholders

In my next post I will examine the third Hallmark of Nonprofit Managerial Excellence, Strategy and Innovation, so stay tuned!

Please post your questions/comments and share this post with others in the nonprofit world, and feel free to call/e-mail me anytime for free chat about any questions you may have.

Jim Stoynoff

jstoynoff@Synthesis.Biz or (312) 920-1700