Abstract
There is a new addition to the plethora of books intended to help incoming board members understand their roles on a nonprofit board. Joining a Nonprofit Board: What You Need to Know, offers a slightly different slant in that it is specifically intended for the corporate business leader who has recently been selected to join a nonprofit board. A distinguishing feature of the book is the authors’ frequent references to the significant differences between corporate and nonprofit boards, describing these differences as “both profound and deep” (preface: p. xv). This is a welcome critique to the growing belief in the nonprofit sector that nonprofits, and consequently their boards, need to function more like businesses. In particular, the authors focus on the importance of governance decisions being driven by the organization’s mission, rather than its bottom line.
Similar to much of the practitioner-focused literature about boards, however, the authors prescribe a “one-size-fits-all” model when they discuss how boards should be structured and which practices all boards should adopt. It is troubling that the book’s prescriptions are not based on current governance research, and relevant nonprofit studies are neither discussed nor cited. The authors describe themselves as researchers, writing that “the book is an outgrowth of field research done over the past decade at Rice University and Harvard Business School” (p. xix), yet no research studies or data beyond several anecdotal case examples are cited. Similarly, the references that are included are very narrow in scope, and nearly all the citations come from the authors’ own publications, books generated from other Harvard faculty, or articles published by for-profit journals. As a result, we can only presume the authors’ prescriptions are based on their personal experience and observations.
Another significant limitation of the book is its narrow focus on very large nonprofits, such as hospitals, universities, golf clubs, and private preparatory schools. Although the authors do not specifically state that they intended their book for large organizations, essentially almost all their examples demonstrate this narrow scope. In so doing, the authors limit the readers’ ability to apply the book’s information to the majority of mid-sized and small community-based nonprofits, which represent a significant portion of the U.S. nonprofit sector. According to a study by the Urban Institute, about 75% of all nonprofits have annual budgets of less than US$500,000 (Roeger, Blackwood, & Pettijohn, 2011).
The book’s format includes an introduction that discusses various differences between nonprofits and for-profits, followed by chapters that describe a different key aspect. The most compelling chapter is focused on mission. The authors successfully emphasize the importance of board members taking the time to clearly understand an organization’s mission and then basing their governance decisions on that mission, especially as it relates to organizational performance. Describing the mission as “the key fulcrum against which to measure performance” (p. 25), the authors emphasize this point for corporate board members, who are more accustomed to making decisions primarily based on bottom-line financial issues rather than implementation of mission.
Yet, once again, the authors make general presumptions about the behavior of all corporate nonprofit board members, in the same way they provide mandates about board structures and process. Although the centrality of mission in this book is a positive feature, the focus on mission as the core of governance is certainly not a new concept in the governance literature, and it is discussed in many other books about nonprofit boards. The authors do make an important point in stating that “effective mission statements require intense debate between board, staff, community beneficiaries and other interested bodies” (p. 28). Although the precise makeup of “community beneficiaries” is never described, one trusts they are referring to the community the nonprofit serves, including constituents and other key stakeholders. Unfortunately, the authors neither develop this practice further nor connect it to any of the newer governance research focused on engaging stakeholders in the governance process (Fredette & Bradshaw, 2010; Guo & Saxton, 2010; Freiwirth, 2011), which would have provided a more compelling argument.
In another chapter, the authors effectively frame performance management as a core governance responsibility, taking it beyond the more common “monitoring programs” or “oversight” responsibility generally described in much of the traditional board literature, such as BoardSource’s (2010) Handbook of Nonprofit Governance. Also, the authors provide a detailed description of a logic model, which they name a “mission effectiveness model,” to help board members understand how to measure performance. However, not only do they present a model that is essentially a replication of well-established logic model methodology but they also provide only one attribution—that of an article by one of the book’s authors.
Although there is a significant emphasis in the book regarding the board’s substantial role in fundraising, one can argue that fundraising is not actually a governance responsibility; rather, governance calls for ensuring that the organization generates resources. This book, as well as a significant portion of the practitioner literature on boards, assumes that a board composed of prestigious and wealthy board members will be able to increase organizational revenues. Yet contrary to these conventional assumptions, a significant research study by Herman and Renz (2005) finds that for many organizations, there is no relationship between increasing board prestige and the improvement of an organization’s financial outcomes.
In the authors’ chapter on board structure and role, they make prescriptive claims about which committees all boards should have. For example, they state that “the single most important ad hoc committee of the board is the CEO search committee” (p. 143). Similarly, “The governance committee is the single most important committee of the board,” with the finance committee being the “second most important committee” (pp. 113-114). Once again, there is no evidence or research to support these one-size-fits-all assertions, let alone that any one committee is more important than others for all boards. Rather, current research demonstrates that governance structures are most effective when based on contingency theory—that is, choices about governance configurations and structures should be informed not by formulaic structures, but by the specific internal issues of the organization and its external context, including a nonprofit’s developmental stage, size, strategies, and environmental dimensions (Bradshaw, 2009: Ostrower & Stone, 2011).
Similarly, although the authors, in their discussion regarding board recruitment, state that boards should address the need for age and geographic distribution, there is no discussion anywhere in the book on the need for racial, class, or gender diversity or about issues of inclusion. Given the amount of recent attention in the sector regarding a lack of both racial diversity and inclusion within boards (Brown, 2002; Fredette & Bradshaw, 2010), one would expect at least some discussion of these issues.
Perhaps the most troubling section involves the authors’ reasoning for poor board meeting attendance. Rather than analyzing the underlying issues for this problem, or examining problems with the board model itself, the authors rationalize poor board-meeting attendance as something nonprofits should simply accept. In another unsupported conclusion, the authors declare that nonprofit board meetings are more poorly attended than the meetings of for-profits. They further assert that there “are three reasons for erratic attendance.” The first reason, they believe, is that all boards need to select board members for “specific and narrow purposes,” most specifically for their wealth (p. 131). The second reason relates to scheduling problems. In their third justification, the authors state, amazingly, Another reason for poor attendance is the addition of trustees who are seen as potentially very large donors to the nonprofit. Sometimes these trustees decide to miss January board meetings in the snow and instead go to their winter houses in some tropical environment. It pays to have empathy for this perspective for the financial good of the organization. This means you have to be careful to not assign them to heavy workload committees like finance or governance. (p. 132)
A book written for business leaders who are interested in learning about effective nonprofit governance and the differences between nonprofits and corporations could be quite valuable. However, that book would need to reflect both evidence-based governance practices and some of the recent research on new perspectives to governance, rather than rely on unsubstantiated, one-size-fits-all set of prescriptions. Such a book would better serve new board members and the sector as a whole. Unfortunately, the Epstein and McFarlan book fails to meet the needs of new nonprofit board members and does little to reflect the growing body of research on new governance approaches and practices.