It’s August – a month associated with vacations in many parts of the world—and a good time to contemplate the meaning of life from new viewpoints. As you break away from your everyday routine to view the big picture, be sure to give nonprofit board services some consideration. An educated guess would put the number of registered nonprofits worldwide at about 10 million—and in the United States alone there are 1.5 million charities, according to the National Center for Charitable Statistics. This includes about one million charitable organizations (501 c 3s), more than 100,000 private foundations, and nearly 400,000 other nonprofits ranging from chambers of commerce, to civic leagues, to fraternal organizations. All of them have boards of directors, and most are looking for volunteers. How about you? Here are five good reasons to consider the call.
Reason #1: Nonprofits Serve Worthy Causes
The first and foremost reason to serve on a nonprofit board is to make a difference in the world by advancing a worthy mission. Nonprofit organizations make the world a better place through a variety of channels including the arts, education, health, relief services, and public safety, and serve a variety of beneficiaries including both animals and humans throughout life cycles ranging from the very young to the very old. This is not to say that serving on a for-profit board lacks meaning; after all, businesses create jobs and provide useful goods and services. Still, for sheer moral pull, the typical nonprofit has greater “why” appeal. (If it didn’t the government wouldn’t grant it nonprofit status in the first place.)
Reason #2: Nonprofits Need Directors
Another good reason to consider serving on the board of a nonprofit is that you will have a fairly good chance of finding a seat; if you are a good match. Compared to for-profit companies, charities offer more opportunities for service, judging from turnover rates reported by the National Association of Corporate Directors (NACD). The 2014-2015 NACD Nonprofit Governance Survey, released this month based on responses from 750 board members, revealed high turnover: 88 percent of respondents indicated that their board had added or replaced at least one director in the previous 12 months. This compares to only 64 percent of public company boards and 57 percent of private company boards. This difference rate is understandable, as nearly two-thirds of nonprofits surveyed (64 percent) limit the terms of their directors, compared with only 8 percent for public companies and 14 percent for private companies.
Reason #3: Nonprofits Need You
Yet another reason to serve on a nonprofit board is that your particular skills are likely to be a good match. When asked what two skills were the most sought-after in their most recent director search, 35 percent of respondents to the NACD nonprofit survey said that experience in their particular field was a top consideration, but almost as many (31.6 percent) said that a top trait was leadership – a skill that all executives should have. Other popular choices (each selected by 10 percent of respondents or more) were strategy, finance, marketing, and diversity. Given the range of these criteria, most executives are likely to find a nonprofit board seat with their name on it.
Reason #4: Nonprofit Experience Can Help You Serve a For-Profit Board
A fourth reason to consider serving on a nonprofit board is the simple value of board experience. As you continue your career in the business world, chances are that you will eventually be reporting to or serving on for-profit board of directors. Do you know how boards work with their agendas, minutes, committees, calendars, and deep deliberations and decisions? You can read books and articles on the topic but the best teacher is experience. NACD has a Directors Registry where individuals can list their qualifications for board service, so that boards (both for-profit and nonprofit) can find them. Many for-profit boards looking for directors consider nonprofit board service to be a plus.
Reason #5: Nonprofit Board Experience Provides a Channel for Giving
As a nonprofit director, you won’t get paid much, if anything. NACD stats show that most nonprofit boards (88.7 percent) do not pay their directors, and those that do offer compensation pay very little (a retainer of less than $30,000 and meeting fees that are a fraction of that). The rewards, however, are great. This post has named four of them – including the worthy causes that nonprofits serve. But there’s more. By helping those causes you yourself will benefit. As Saint Teresa of Calcutta, aka Mother Teresa, once wrote: “At the end of life we will not be judged by how many diplomas we have received, how much money we have made, how many great things we have done. We will be judged by ‘I was hungry, and you gave me something to eat, I was naked and you clothed me. I was homeless, and you took me in.’” Nonprofit board service provides a channel to give in these important ways.
This blog was originally posted on July 29, 2015 at Bluesteps.
Few companies have disrupted so-called business-as-usual as much as the Wikimedia Foundation. The nonprofit foundation is behind the website Wikipedia, an online, crowd-sourced encyclopedia that has become the fifth most visited website in the world.
At the 2014 NACD Board Leadership Conference, Sue Gardner, the former executive director and current special advisor for Wikimedia, shared her insights on the open nature of Wikipedia and the risks involved in that business model. Her thoughts resonate not only for the technology or publishing companies, but also for corporate boardrooms across a variety of other sectors.
Wikimedia aims to encourage the growth, development, and distribution of free educational content available in multiple languages.
Nobody, however, oversees the contributors.
“I will never read all the articles on Wikipedia, right? Unlike most organizations, there’s no central point of control. It’s very much about trusting the process.”
“For the most part, Wikipedia works great,” Gardner said. The articles contributed to the website are generally cited and thoroughly researched. Contributors to the site actually are very knowledgeable about intellectual property law and copyright law, Gardner said.
“We aspire to contain the sum total of human knowledge.” “But,” Gardner said, “the Achilles’ heel of Wikipedia is that the number of people contributing to the site is small and limited in its diversity.”
“It’s a systemic bias,” she said. “In order to edit Wikipedia, you tend to be living in a wealthy country with a good Internet connection. You have to have the leisure time to edit Wikipedia. What that adds up to is that the typical content contributor is a 25-year-old male grad student in Germany. People from poor parts of the world and women are underrepresented.”
Gardner said she believes that the contributions of women are missing. Several different studies conducted by researchers have found that somewhere between 12 percent and 15 percent of content contributors are women, she said. This dynamic might be a result of what can be a process that is not very collaborative, but more of a rough, confrontational back-and-forth between content generators.
Gardner also discussed the lack of diversity among the technology industry, specifically in Silicon Valley. When she moved to the San Francisco Bay area, she began a three-month tour to seek funding for Wikimedia. In that period, the only women she met were those who held positions such as administrative assistants. None were company leaders or business investors.
“I think the lack of gender equality of the Silicon Valley area is a symptom of an immature industry,” Gardner said.
In addition to a lack of diversity, Gardner said she has another concern: data privacy. While many people are concerned about government surveillance, she is weary of vast amounts of data being collected by for-profit companies.
“I worry not just about what the advertisers know and how the information is traded, I also worry increasingly about companies that are going to be bought and sold for parts,” Gardner said. “The whole game in Silicon Valley is that a lot of companies are just going to go under. What is going to happen to the information that they have? I don’t think we’re worried enough about that.”
The differences between nonprofit and corporate governance are few and far between when the nonprofit in question has a budget of almost $700 million and operations in more than 120 different countries. But when you are a nonprofit of this size, what should the board’s expectations of management be—and vice versa? Carolyn Miles, president and CEO of Save the Children, and Dona Young, who is a director on the Save the Children board, spoke with NACD Senior Advisor Jeffrey M. Cunningham about how directors can navigate the perils and opportunities of operating around the globe while fostering a top-notch organizational culture.
One of the problems of working in the nonprofit space is controversial topics—for example, immigration, an issue that came to a head with the recent influx of children crossing the U.S. border. For Miles, Save the Children didn’t adopt the attitude of choosing sides, but rather, they chose children. With that mindset, the organization was able to push beyond the immigration debate and focus on the issue of taking care of kids and ensuring their basic human rights. It’s a position that drew criticism but doing otherwise would have been a disservice to the company’s mission.
Both Miles and Young drove home the importance of bringing into the boardroom what’s going on in the field. Young emphasized the need of having a CEO who is continuously communicative with the board. Miles explained a practice she has used of bringing people who are working in the field to attend boardroom meetings and explain their needs to directors. Those lines of communication better inform the board and is a boon to helping the board helping the company accomplish its mission.
Miles also explained how Save the Children’s directors venture out to experience the work that their organization is doing, what she believes is a critical practice. Save the Children’s directors have been to the places that are the toughest—Afghanistan, Liberia, and Iraq. On a recent trip to Liberia, Miles was confronted with about 4,000 cases of Ebola in Liberia, which has created about 2,000 orphans. As a result, Save the Children wanted to consider sending aid, even though the issue at hand was out of the company’s traditional scope.
“We vet the issues together as a board,” Young said. “At the core of our mission, we have to assume risk.” She offered the following process of evaluating resources to ensure that the company can address a certain area of risk.
Identify each component of that risk.
Identify how each component is to be addressed.
Evaluate if the board has the skill sets to attack the issue at hand.
These are tactics that are as relevant for Save the Children as they are for a company such as IBM. Although the traditional scope of Save the Children’s activity did not lie within epidemic disease control, they did, however, know a lot of the pieces of how to assist (e.g., setting up hospital), and the company was able to respond to the Ebola crisis in the ways that it could and in a fashion that was true to its core mission.
Miles also discussed the importance of metrics. From her perspective, it is critical for nonprofits to focus on metrics and not just the “greater good of the cause.” If a company is able to produce palpable results, people who bankroll the organization look to their contributions not as a donation, but as an investment. Young added the importance of the board’s role as a steward of those funds, and the need for discipline and process—if that is not in place, there’s no way company is achieving its goals.