Earlier this month, I was fortunate to moderate a panel at the On Board conference hosted by the Rustandy Center for Social Sector Innovation in Chicago. The conference works to ensure that “nonprofit leaders and their boards are equipped with the knowledge and connections to do their best work.”
My panel was titled “Untangling the Purse Strings: How Board Governance Impacts Funder Decisions.” The panelists represented a range of philanthropic and financial organizations that offer funding opportunities to nonprofit organizations:
- Kristen Pettit Grube, Cofounder and President, Impact Grants Chicago
- Lynne Herer Smith, Director-Business Design, Bill & Melinda Gates Foundation
- Beth Witczak, Head of CRA Strategy and Community Impact at CIBC
Together, we discussed how board dynamics play a key role in a non-profit’s ability to secure funding, which ultimately affects the level and depth of impact the organization can make.
Here are some of the key themes shared by our panelists:
Funders want to see that a Board is actively involved in the leadership of the organization. Board members should be engaged, and should have necessary skillsets to help the organization meet its mission. At the same time, Board members should not be running the day-to-day operations of an organization, but rather should provide oversight and guidance.
“If you’re on a Board, you have to remember that your role is not to manage the organization, your job is to guide the organization”
Organizations are much more likely to receive funding if they can clearly describe their project or program, explain how it services their mission, and define the impact they intend to have. One role an effective Board member can play is to challenge leadership to ensure proposals for funding tie directly to the organization’s mission. Impact does not always need to be demonstrated through quantitative data; sometimes, the best impact is revealed through stories of how an organization impacted lives. If equipped with the right stories, Board members can be ardent ambassadors for an organization.
“If you’re serving a particular community, how can you be effective if you don’t have representation from your community on your Board?”
-Lynne Herer Smith
Diversity is a very important consideration when forming a Board because it helps to ensure that all points of view are being considered so that optimal outcomes are achieved. Diversity can come in many forms – racial/ethnic, age, experience, gender, and other factors. For instance, McKinsey’s ‘Delivering Through Diversity’ report demonstrates that organizations in the bottom quartile for racial/ethnic diversity not only do not lead in profitability, but actually lag (these organizations are 29% less likely to achieve above-average profitability).
Aspiring Board members need to do their own due diligence before getting involved. Make sure the organization is one with which you want to truly commit to, and that you can be actively engaged for the full term.