15 Key Questions for Your Nonprofit Board Assessment

Perhaps you haven’t caught the recent news about NPX Advisors. In a world where disruption is now a big yawn because it happens so frequently, the firm has introduced to Wall Street something called “impact securities.” Ted Williams and Catarina Schwab said in a Forbes article (news link at the end of this article) about the nonprofit sector,

The nonprofit sector is woefully lacking creative destruction. Mediocre and weak organizations are still attracting funding and the best organizations are not accessing the funding they need to achieve real impact. The only way to get to a more efficient and robust nonprofit market is to reward good organizations and penalize bad ones. This will only occur when there are economic consequences tied to impact.”

Schwab continued, “The nonprofit capital market is opaque and inefficient. It is a trillion-dollar industry and the money is being wasted. And it’s being wasted at the expense of human lives and the environment.”

In this world of philanthrocapitalism where Wall Street is taking on the philanthropic sector, as well as social enterprises, impact securities will be issued by nonprofits and investment funds will only go to those organizations that demonstrate a measurable outcome or impact. The philanthropic guarantor will provide returns for investors.

I don’t know about you, but I think that’s pretty attractive for major donors because they don’t have to misspend money on programs and initiatives that aren’t going to work.

Leadership is the Holy Grail

I think some nonprofit executives and board members are reading this piece and saying to themselves, that’ll never happen. Impact securities won’t get traction. Impact securities won’t impact my donors or organization.

Think again.

It may have taken time, but a lot of what nonprofits in New York have been facing for decades with Wall Street bankers pushing metrics and impact has spread throughout the nonprofit sector. Today, even small $10 donors are not in the mood to give to organizations that are not demonstrating impact or somehow showing that they are making a substantial difference.

So, where would you begin?

The answer is simple: leadership.

Success for any organization has only one path, and it’s through leadership.

Key Questions for Your Annual Board Meeting

Look at your annual meeting as an opportunity to clean house if board members that served their purpose at one point no longer do. One of the easiest ways you can tease out where board members are and suggest where they should be is to do an annual board survey. It is an opportunity to get your leadership talking and holding themselves accountable, which sets the tone.

The following are some fundamental questions that you can use for an annual survey to encourage board members to begin to look at their role within your nonprofit organization.

  1. Do you understand and support the mission of the organization?
  2. Do you feel well enough informed so you can communicate the work done by the organization to others (e.g., individuals, corporations, foundations, media) who are not familiar with the group or its work?
  3. Do you attend regular meetings of the board of directors?
  4. Do you understand the financial statements provided to you by the organization, including annual reports, audited financials, 990’s, etc.?
  5. What are your thoughts regarding your previous fundraising or giving efforts to assist the group to raise the financial resources it needs?
  6. Evaluate your effectiveness in speaking to others outside of the organization and have you been able to raise money or are you in need of additional support? Is so, how?
  7. What are your thoughts on your ability to fundraise or make a significant donation for the new fiscal year?
  8. List areas where you can use your skills more efficiently to help raise money and describe how you can be helpful in these areas (e.g., Grant proposals, government fundraising, corporate contacts).
  9. In what areas of fundraising are you willing to commit your time (e.g., Grants, special events, government fundraising, individual requests, etc.).
  10. Do you have a good working relationship with the executive director of the organization?
  11. Do you have a good working relationship with other members of the board?
  12. Do you serve on a committee of the board? If so, which one? If not, would you be willing to assist, and if so, which committee would you like to join?
  13. Do you find your board service to the organization to be rewarding to you? How?
  14. Do you know prospective board members that you would like to recommend to serve potentially?
  15. What do you recommend, if anything, to improve the performance of the entire board of directors?

Once you begin to shine the light on your board members, you can see about potentially easing out any board members in a face-saving way or recruit board members that will better serve your organization in these times. I don’t know if impact securities will gain traction, but I sense that when Wall Street is involved, it’s got a good chance. The best nonprofit leaders are those that understand it’s their role to stay ahead of the curve, and in this environment, it all begins with a look in the mirror and with all leadership.