It Pays To Improve Your Nonprofit Board Culture

It Pays to Improve Your Nonprofit Board Culture

Anyone who has started a nonprofit organization from scratch knows that it’s not an easy task, especially when it comes to board culture. Most nonprofits struggle to get started, and it can be even harder to keep them going over the long term. Nonprofit boards face many challenges, such as finding resources, building membership and attracting donors.

The culture of nonprofits is essential to building and sustaining nonprofit organizations that thrive. Culture is an intangible asset and a healthy culture strongly supports the work of the nonprofit. Conversely, an unhealthy board culture can undermine the best-intentioned efforts.

Board culture is a broad set of traditions and habits developed over time that guide behavior. As former Southwest Airlines CEO Herb Kelleher said, “Culture is what people do when no one is looking.”

Effective Board Culture

To better understand the influence of culture on nonprofit boards, let’s look at a fictitious example.

Board Chair Smith from the XYZ nonprofit contributes large sums of his personal money to the organization every year. Chair Smith runs the board meetings according to Robert’s Rules of Order and gives all board members opportunities to partake in board discussions. The chair also helped the nominating committee build a diverse board with at least one person who represents someone that the nonprofit helps.

Chair Smith attends all XYZ nonprofit events, gets to know the members, and suggests ways that they can plug in and volunteer for the organization.

The XYZ nonprofit has a small staff. Chair Smith has regular conversations with the executive director and encourages the ED to delegate some of the responsibilities to other capable employees.

It’s probably no surprise that the board directors hold Chair Smith in the highest regard, even though they contribute far less financially than Chair Smith. The employees and members of the XYZ nonprofit notice that Chair Smith is always present, but isn’t bossy and doesn’t throw his (or her) weight around. The nonprofit is growing and recently added an evening gala to the list of fundraising events. Donors are noticing how well the nonprofit runs, and XYZ nonprofit’s donor list is growing.

Chair Smith knows that XYZ nonprofit’s mission, vision and values start at the top and that it’s a team venture. Chair Smith is working to form a culture that is inclusive and that brings together the talents and abilities of the people involved in the organization.

How Nonprofit Culture Protects Organizations in the Face of Regulatory Scrutiny

The financial crisis of 2008 has not affected nonprofit organizations to the same extent as for-profit corporations, but the regulatory changes that have come about because of it do have an impact on nonprofit organizations as well. Economic instability is forcing regulatory bodies to take a look at all corporate activity, including nonprofit organizations, to make sure they are following the law and IRS rules.

A prime example is the Music Teachers National Association, which held a provision in its code of ethics that restricted members from soliciting clients from other music teachers. The Federal Trade Commission took them to court and required them to change their code of ethics, maintain an antitrust compliance program, and stop affiliating with any other group that was restricting solicitation, advertising or competition related to pricing.

Regulatory measures for nonprofits also focus on the relationship between the board president, the board of directors and the executive director. Boundaries between board members and employed staff may also come under scrutiny.

Forming an Effective Board Culture Starting at the Top

The earmarks of a healthy nonprofit culture are a culture that fosters trust, transparency and accountability from the top down. Healthy nonprofit organizations encourage open, honest discussions inside and outside the boardroom.

Much like with a for-profit corporation, board culture starts at the top of the organization with the board president and the executive director, who set the tone for everyone else. For nonprofit organizations, the culture extends to affiliates, vendors and donors. Leaders who believe in the mission, vision and values are critical to long-term sustainability and success. The board chair and the executive director need to act as one and to communicate the nonprofit’s culture from the top down.

Since nonprofit boards are typically small and board officers work so closely together, they often develop a culture of their own, which isn’t necessarily a bad thing. Their work as volunteers demands a certain degree of camaraderie.

Boards of Directors Help to Infuse a Healthy Culture

It’s not uncommon for nonprofit board directors to get their training on the job. Nearly all new board members join a nonprofit because of a personal or an emotional connection to the cause. Building a healthy culture starts at the board member orientation, where board members learn more about what makes the nonprofit tick. Volunteer service on a board of directors gives them the chance to be part of the process of building a healthy culture.

New board members bring new skills and talents to the organization. They may also need some mentoring to understand how self-assessments and board development play a role in helping to infuse a healthy culture into the organization. During their tenure, board members will surely see the benefits of fostering a culture of inclusiveness and being part of the process of resolving issues and disagreements.

Being on Alert for Culture Disruptors

As previously noted, nonprofits carry their fair share of problems. Boards can point to their culture to avoid problems like pressures from powerful donors or politicians.

The board chair plays a strong role in board culture when conducting board meetings. The board chair should invite all opinions and perspectives, drawing out opinions from the quieter members. An effective board chair doesn’t let the board directors succumb to groupthink or let the inertia in the boardroom develop a culture of its own.

Boards of directors will occasionally have to address problems directly, including renegade directors, troublemakers, and board members or others who demonstrate poor decision-making or behavior.

The board also needs to address areas of commitment like board members who do nothing more than show up for meetings or who are merely using their experience on the board for the purpose of personal or professional advancement.

Some Final Words on Nonprofit Culture

The most important takeaway about nonprofit culture is the old adage, “You reap what you sow.” Culture has to be cultivated, and that takes time. Even the strongest boards are at risk of not functioning properly when they neglect to cultivate a healthy organizational culture from the top. Don’t ignore the importance of culture or take it for granted. It’s one of the most important keys to nonprofit success.

One way you can consider improving your board’s culture, is by improving how they communicate with each other. Communication is crucial to a healthy culture. One way of doing this is by using a board portal to streamline communications and providing a secure environment for your board to interact on crucial issues. Making the move to a board portal can open opportunities for your board and allow them to progress in all aspects of communication, but will also help them improve overall culture.

Jeremy Barlow

Jeremy is the Director of Digital Marketing at BoardEffect.