PMA Consulting, LLC

Charlotte Business Journal Conference: ‘Why Can’t Your Nonprofit Run More Like A Business?’

At last Friday’s Nonprofit Business Summit, hosted by the Charlotte Business Journal, Patton moderated a session titled “Why Can’t Your Nonprofit Run More Like a Business?” Panelists included Carol Hardison, Executive Director of Crisis Assistance Ministry, Robert Harrington, an attorney at Robinson, Bradshaw & Hinson, and Dr. Will Sparks, director of the Organizational Development graduate program at the McColl School of Business at Queens University.

The discussion focused on the ‘tension’ that sometimes occurs between mission-focused nonprofit staff and business-minded board members, and the panel shared their experiences and advice about how nonprofit leaders could stay true to their mission while still incorporating business practices such as strategic planning, mergers and acquisitions and even for-profit financial modeling.

Given her experiences in both the private sector and now as a nonprofit CEO, Hardison spoke about how this tension is exacerbated when dealing with low-performing board members. In her experiences as a board member and as staff at a nonprofit, she has found that establishing a strong board orientation process, as well as explicit standards for board members, assists staff down the road when issues arise. Staff then has those expectations to fall back on when confronting board members and volunteers who are absent or not fulfilling their responsibilities.

With his background in organizational development, Sparks provided the audience with several insights on the effectiveness of nonprofit boards. He contends that the ideal size of a board should be between 12-16 members, as this number allows for diverse opinions but isn’t so large that it fractures into competing subgroups. He also suggested boards that get too caught up in operational details should be reminded of their three primary objectives:

1. Do we have the right strategy?
2. Do we have the right CEO?
3. Do we have the right succession plan?

Rob Harrington provided the audience with good advice regarding thoroughly vetting potential board members and establishing terms of service. By properly screening and interviewing potential board members, organizations are able to determine if individuals are the right fit for the organization’s culture and to ensure that they can maximize their skills. Additionally, by establishing finite terms of service, the organization avoids the awkward issue of being ‘stuck’ with a board member who will not resign.

Clearly the topic resonated with many of the nonprofit professionals and board members in attendance, and is one we find exists to varying degrees with every organization with which we work. How do you manage this creative tension in your organization?