With a new year underway, nonprofit directors are scanning the horizon for the challenges and opportunities their organizations will face. Fall elections, continuing shifts in hybrid work and hiring, tumultuous financial markets — these factors and more will impact what mission-driven organizations can accomplish in the current year and beyond. So nonprofit boards and CEOs must thoughtfully identify their priorities in the face of uncertainty.
We asked nonprofit leaders through an online BoardEffect survey to identify the priorities for their organizations this year and got answers as diverse as their missions, but with several common threads.
1. Improve recruitment
Is it any wonder themes of recruitment and engagement were at the top of leaders’ minds for 2024? Mission-driven organizations are constantly working on developing relationships on several fronts. Nonprofits have struggled to stay fully staffed post-2020. Recruiting and keeping volunteers is a critical part of many nonprofits’ efforts. And, of course, fundraising requires regularly soliciting, informing and acknowledging those whose generosity makes the mission work possible.
But board and leadership recruitment and engagement were what these leaders wanted to talk about. One governance professional noted, “Our world has shifted, and so has the engagement of our board members.”
2. Strengthen engagement
Why does engagement matter? Many nonprofits struggle with poor board engagement and therefore making progress on the mission. After all, no matter how stable an organization, some transitions are inevitable. As one executive director spelled out, “We have a new executive leadership team and many new senior leaders. We also have a number of new, or relatively new, board members.” Another executive director expects “a transition of a key leader” and is concerned about “onboarding new leadership.” For another respondent, the focus is on “recruiting board members and developing a robust board orientation.”
Building an effective board means looking holistically at the board makeup — as suggested by one respondent who looked to build an “effective and efficient team of board members to deliver the organizational mandate optimally.”
As we noted in an earlier blog, “Boards should have a composition incorporating all the necessary skills and abilities to make sound corporate decisions. Board directors must have implicit trust in each other to make board discussions productive, even when debates are long and wrought with many strong opinions.”
There are ways to minimize the impact of board departures and encourage retention, but transitions can also be beneficial and part of a larger strategy. Consider how thoughtful recruitment can evolve a board and help the organization adapt to changing needs.
3. Improve the culture
“Culture,” was the single-word response of two leaders, with a third elaborating, “Changing the culture of an organization still stuck in how it functioned 20 years ago, despite funding expansion” and noted that this needed to start with — yes — recruiting, orientation and engagement.
Outside of disorganized orientation, discovering a toxic culture on the board, among staff or both can be the quickest way to discourage a new board member and reduce their willingness to serve out or repeat their terms.
How does a toxic culture develop? A Blue Avocado piece covers one possible origin: “Without intentional focus, a disconnect develops between the mission/values and the agency’s daily activities, leading to an unhealthy organizational culture. This disconnect means that employees at every level of the organization do not know the mission and values, do not understand what the mission/values mean or do not know how they apply to specific, everyday roles.”
Another writeup spells out the inevitable conclusion: “Dysfunctional cultures can create a toxic environment where the quality of work and professional relationships are impacted, and the execution of the mission is jeopardized.”
Establishing and protecting a positive culture starts at the top, with the board. As one chief of staff observed, “Composition and fostering a decision-making environment are important aspects for creating a culture where a board can perform its duties.”
Recognizing the importance of a healthy board culture is the first step in achieving it.
4. Enhance financial performance and understanding
Financial issues are one of the core areas of potential crisis for a nonprofit, and nonprofits are struggling with signs of recession, ups and downs of charitable giving and more. Two respondents noted their priorities simply as “better financial control” and “making use of finance reports.”
A nonprofit board’s fiduciary responsibility looms large, so ensuring that board members understand what that entails and how to align governance practices with duty of care and more needs to be at the top of every leader’s priorities for 2024.
Additionally, building the right board composition means recruiting board members whose resources can support organizational missions, so it’s no surprise that one board president is focused on “maximizing the fundraising potential of the board of directors, so critical today for a nonprofit.”
5. Focus on strategy and leadership
Overall strategy, team-building and strategy were key for several respondents, who told us the following:
- Plan to “keep up board momentum” to keep the board “moving on the strategic goals of the organization.”
- Emphasize “more big-picture strategy and goal management” because “we have become too ‘in the weeds’ of the rules.”
- “Optimize operations and implement best practices.”
- “Integrate alignment between board, board officers, executive leadership and senior leadership.”
- “Learn more about governance and board relationship management.”
- Pursue “compliance with ESG requirements.” ESG remains one of the five key trends impacting nonprofit governance.
Most boards can become more effective, and a key is to start out by evaluating the current board, which includes reviewing the past years’ agendas and evaluating if your board spent the bulk of its time planning and strategizing.
What lies ahead for your year?
These responses likely sound familiar and may mirror your priorities for the coming year. When the optimism of a new year gives way to the realities of limited time and challenges unique to your organization, it’s necessary to look for ways to stay the course on progress to possible solutions.
Board management software helps nonprofit leaders achieve these goals and more by keeping boards on course and organized through even the most complex efforts around these five areas. Designed for purpose, a quality solution offers tools and features specific yet flexible enough to support the diverse missions of today’s organizations.
Diligent understands the needs of mission-driven organization and their boards, and we offer BoardEffect as a board management tool that adapts to meet changing priorities and supports board collaboration and efficiency in achieving goals both this year and beyond.