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17 August 2016

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 August 17, 2016
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Here’s part two of our interview with Marc Pitman, where he talks about how we lie to our boards, why we lie to our boards, and how to help our board members be a little less confused. (Read Part one here, where Marc talks about why executive directors and CEOS are insecure.

MT: Your report says the crisis of nonprofit leadership causes confused boards. So could you say a little more about that?

MP: For our board members, we lie to them.

We say, oh it’s not going to be a lot of work and you’re going to have a lot of fun. Maybe in the fifties there could be these good old boy networks that get together and you got on the same board because you wanted the social connections and it seemed prestigious and the nonprofit kind of did the work anyway regardless of the decisions you made.

But we don’t live in that world anymore.

Our nonprofits need our board members to be engaged, and they need to be well engaged, informed engaged. Often, we don’t think we have the time to put into the right orientations, term limits, actually exercising term limits. I know some boards where people have been on the board for 20, 30 years, and even if they have term limits in their bylaws, they’ve never exercised them. So the moment when they want to exercise them because they want to get someone off, that person’s going to know it’s a personality thing. It’s not a systems thing.

MP: Yeah, we tell them – I think we feel almost as scared of asking people on our boards as we do asking for money. Because we’re asking for time and talent and treasure when we ask on the board. We’re usually going to people that we respect and are kind of on our chicken list. They’re the people that we look up to, we admire. We think they’ll represent our organization well. But we don’t tell them what representing the organization means.

So they do what is asked of them often, which is they come to a board meeting, and they ask about – well, why is the paper cost going up this much? What if you went to a different toner company? Because those are the parts of the financials that they understand. The research in the field shows that the vast majority of people sitting around a board table don’t understand financials. Often, it’s the people leading the organization. I’m not trying to slam them. It’s just financials are special fields. There’s rules and reasons you put things together. I’ve been blessed with CFOs who are storytellers and who can tell the story and help me tell the story too. Because it’s not a skill set for me either.

But so we bring them into a situation. We don’t teach them the philanthropic history of our nonprofit. Every nonprofit was started because people gave. So why not use that as the founding story? They gave up their time. They saw a cause. They gave you their time. They gave you their talent. They often sacrificially gave their treasure. The hospital I worked up in Maine, there were stories of people knitting bandages together during World War II at this hospital to take care of patients. These are great stories. Why not tell those stories and bring that into the board? You’re joining a culture of giving. People that are so committed to this because it’s special.

So I created a binder, the philanthropic history of the hospital. Then not being satisfied with that, I made sure that the most trafficked hallway also had that philanthropic history in big, permanent stature on a wall with a donor record of the annual giving donors and a running list of endowments and stuff. But I wanted people to know that this is a place of giving. That’s what healthcare is about. We’re serving other people. So why not tell the philanthropic history? And that’s part of the onboarding process. Part of it is also telling them in offboarding. Hey, look. If you don’t show up for meetings, we are going to let you go. Most are just, we have to fill a quorum or we have to have a certain number of names on a list, so we don’t have the guts to let people go. That confuses the board.

The board says, we said that there are rules. Why aren’t we acting on them? If those rules aren’t getting acted on, what other rules don’t? So there’s a lot of reasons why boards are confused. I don’t think it’s anybody’s fault. I think these are really tough problems. I’m not trying to point fingers or be glib. But there are systems that we’ve built up.

So here’s part of the other analysis of organizational leadership in nonprofits is, I think we are a sector that’s built scarcity into our very DNA. So many organizations, even large ones, don’t have strategic plans. They don’t have fundraising revenue plans. They’re still running hand to mouth even though they’re over $5 million in budget, and I think it’s because people really mean well. They get into this and they just are trying to fix a problem. They just want to make the problem go away, or they want to stand up for a cause.

This organizational stuff happens around them, but it’s kind of annoying because that’s not what they got into it for. So there’s this almost – kind of coloring the water is this – just I don’t know what I don’t know. So I’m not asking the right questions because I don’t know. Or I’ve always wanted to be the direct care person; I never wanted to be in management. Or there’s some scarcity, some lack of something. That confuses the board staff and leaders. It’s not in all of them, but the report you referenced to, I really wanted to help. I was hoping that the stories we heard in the nonprofit sector, you and I hear as we work through all these organizations. I’ve had some boards bully.

The other alternate to the confusion is boards thinking that each individual board member is the boss of the executive director. No. The board as a unit is the hiring and firing mechanism for the CEO. They should not be getting involved in staff relations. They are a governance organization. I’ve had increasing members and executive directors call me, almost in panic, because they’re getting bullied by their boards. They’re being treated worse than we let kids be treated on a school playground. Calls late at night, calls on the weekend, second guessing all over the place, fact fighting, secret meetings of the board behind the executive director’s back.

That’s just not right, and egos. So there’s all sorts of reasons for the confusion, but the report, I was hoping we were just going to shoot and see that the systems in the sector were actually fundamentally sound. It’s just that we hear the bad stories because those were noteworthy. Those were newsworthy. Those are something to talk about. Unfortunately that’s not really what the data pointed to.

MT: Wow. So what I’m hearing is like a lack of understanding on the board’s part of what governance is, and then how they can really keep the organization running on an even keel without overcompensating in one direction of another. Then unsure of the rules. That’s what I’m hearing.

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MP: Yeah. There’s also, I think, a feeling that there’s got to be something. Surely there must be something that people understand. There must be some way that we don’t have to keep building this out, making this up as we go along. But then when they find that something, not committing to do it, to actually implement it. Like the simple process of a strategic plan. I didn’t know if that was helpful or not. But when we did the report, we found out it was.

I’ll go into that. You can get the report too, and go into it. But it turns out that having a written strategic plan fundamentally changes the tenor of the organization. It helps you with your marketing. It helps with your fundraising. It helps in your employee relations. It helps you with your board relations. But people may have come from an organizational background knowing, yeah, we have to do a strategic plan. They may even go through a process of doing it. But the vast majority of people don’t even implement it then. It’s on the shelf or in the hard drive gathering dust or digital dust. It’s not impacting or informing.

It should inform the life of the nonprofit. That’s why we did all that work. You’ll see this in a small version of this on boards, with boards every year wanting the new elevator pitch. What’s our theme for fundraising? Because we can’t just tell good stories. We have to have themes for that, which if you want to do that, that’s fine. I feel like we spend a lot of creative work trying to create a theme when donors just want to know, am I making a difference? They don’t really care about the theme and the logo and all that.

We just need to get better at telling them, yeah, you’re making a difference. But then there were some boards that I was working with last year that wanted the elevator pitch each year, and they loved that part. Because it is fun. I’ve sat on boards. It’s fun to vision. It’s fun to dream. It’s fun to see the impact we’re making. But then they never use the elevator pitch. In part, I would submit, because we don’t as nonprofit leaders really tell the board how to do that well. It’s like storytelling. You don’t just walk up to someone and say, tell me a story. Because then they’re going to draw a blank line.

We usually tell people, we need you to help us with fundraising. But we don’t let them know that there are four or six steps of that. I’ve got an e-book with 21 different ways nonprofit board members can help with their nonprofit’s fundraising. There’s a whole smorgasbord of ways. We don’t tell them that, in part because we don’t know, and in part because we know so well we think they’re going to understand that too. But all they see is the really scary, putting themselves on the spot, putting their friend on the spot, and making an ask. If they want to do that, great. But Compass Point did a study called Underdeveloped. Seventy-five percent of the respondents said that their board wasn’t engaged enough, including board members.

I think some of the frustration is just taking that pause, taking ten, fifteen minutes for fundraising. For example, one board I know decided to commit 40 minutes a board meeting to fundraising, because they realized if we don’t have funds, we don’t have a nonprofit. So they committed every board meeting, 40 minutes to learning.

MT: Wow. I wish most boards would be that motivated to learn every single time. It’s not good enough to just do it once a year, or even just like say, oh, we’ll get to that at some point.

MP: And what was real remarkable about it, actually the executive director said she hired a development director and brought her into the board meetings because that’s where the development director needed to be, and she understood that. She understood the development director needed to be part of the conversation, which increasingly, especially since the housing crash in 2008, increasingly board – even in large organizations – board meetings are no longer having the development director even sitting on the outside of the circle.

So we as development directors, are we getting blindsided by board members coming into our office the next morning saying, I’m so thrilled you’re going to raise that extra $8,000. And you have to get a line, oh really? Yeah, tell me more about that. What parts of the plan did you really like? Because nobody asked you. We just thought it was going to be pulled of a hat.

To keep your board members engaged, focused and excited, Ask at every board meeting,

“What is our mission? What is our theme? What’s the impact we want to have?”

Then have a story of impact every board meeting, before the meeting starts.

Can you imagine what impact that would have on your board meeting? All of a sudden the petty differences go away, and the “I can’t believe he said that” sort of stuff goes away.

You’re focusing back on what brought you all together.

That can also be done with a story. Hey, one of our themes is we have a stable adult in kids’ lives every day. That’s one of the stories that we like to share about our nonprofit. So having a staff member come and say, “Hey, Sally, could you tell us a stable adult in kids’ lives story since last time the board met?”

“Let me tell you about Joey. Joey’s life was going to pieces, but man, Susan was there, one of our staff members who was able to spot it because she sees him every day. Joey didn’t go through the crisis he was going to go through. He’s getting the help at school that he needs.”

Board members won’t remember your financials.

They won’t remember the mission, vision or elevator speech.

But when they’re at the next Rotary meeting or Kiwanis meeting or Lions Club, they’ll be able to say – “I don’t remember exactly how they do it, but man, let me tell you about Joey. There’s this kid named Joey who was just going through a really hard time.”

That’s what the people they’re asking want to hear anyway.

There’s a lot we don’t know as nonprofit leaders. But you know what? I do know the impact we’re having and I do know that donors are central to that. I realized I need to tell my story clearer so I could connect the dots for boards and donors.

And then I found out that I’m developing great relationships with people that couldn’t ever do what we’re doing, but really care about it and wish they could. So I’m finding that I’m actually adding value to their lives by asking them to invest significantly in our cause, because all of a sudden the work that they do to generate that income is making an impact in something that they really, dearly value, and weren’t sure how they could ever see happen.

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Read part three of this interview where we learn what happens after boards are confused and CEOs are insecure. You lose donor trust! Read more here.

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