Finding: Nonprofit board members grossly overestimate the importance of their own time and talent, and believe personal philanthropy to be the least of their responsibilities in the “time, treasure, talent” continuum.
For nonprofit executive leaders, “Give [money], get [money], or get off [the board]” seems to have been a board development maxim since the beginning of nonprofit-time. Despite this fact, many CEOs consistently struggle to raise meaningful funds from their board members. This may be due to a convenient untruth that board members may be using as an excuse to sidestep the “give, get, or get off” maxim: The belief that time, treasure, and talent are of equal value to a nonprofit organization.
A recent study conducted by IMPACTS reveals that, among visitor-serving organizations, there is a stark perceptual delta between executive leadership and board members when assessing the primary asset that board members bring to their organizations. And perhaps unsurprisingly, this difference of opinion regarding board responsibilities is pronounced within “smaller” organizations (i.e. those serving 500,000 or fewer visitors annually).
IMPACTS (the predictive technology company for which I work) was engaged to develop intelligence and analysis concerning the efficacy of nonprofit boards of trustees. The related research and interviews sought to improve the understanding of the optimal role of the board as it relates to the governance and operation of the contemporary, nonprofit, visitor-serving organization.
The data collection processes included quantitative intelligence gathering and qualitative interviews with both the executive leadership and members of the boards of 49 nonprofit, visitor-serving organizations (e.g. aquariums, museums, performing arts organizations and zoos). The study sought to include a broad, representative sample of nonprofit organizations of various types, usage levels, and annual operating budgets.
1) Staff leadership believe that securing funds is by far the most important role of board members
Giving/securing “treasure” for an organization is clearly identified as the most important role of a board member by CEOs and other executive leaders. Lending “talent” (think of an attorney on the board providing legal counsel) holds significantly less value according to these same leaders.
Qualitative assessments from leaders reveal that the delta between “treasure” and “talent” may be in large part due to an organization’s strong preference to buy talent with treasure (as opposed to relying on the “in-kind,” donated talent of their board members). Executive leadership tends to believe that this type of “hired,” on-demand, best-in-class talent puts the organization in a better position to succeed than does a board member who is potentially less specifically qualified and/or has less time dedicated to the organization. (Not to mention the fact that many nonprofit organizations have conflict of interest policies that limit or restrict a board member’s participation in aspects of the organization’s operation.)
2) With the exception of larger organizations, board members believe that lending their own talent is their key role and raising funds is the least of their responsibilities
An argument may be made that organizations serving greater than 500,000 annual visitors are necessarily larger operations and may reliably attract more experienced, “sophisticated” board members than smaller organizations. This type of board member may have more experience on a greater diversity of boards, and may have a better understanding of the needs of nonprofit organizations and their own role on the board.
Key Finding: Nonprofit board members over-emphasize the importance of their own time and talent
Some may say that my interpretation of these assessments assumes that the nonprofit CEOs have a better perspective of what will lend success to an organization than board members themselves. I’d like to propose an alternative point of view in regard to the survey outcomes: Board members seem to believe that their biggest contribution is a thing that the organization isn’t always asking for (i.e. their respective talents), and the single thing that many organizations require most to keep their doors open is the very thing that many board members do not view as their primary responsibility (i.e. treasure). From this perspective, some organizations serving 500,000 or fewer visitors per year (or boards of any nonprofit organizations with “smaller” annual revenues) may be stuck in a cycle:
Nonprofit board members may disproportionally view their own “talent” as beneficial because they don’t perceive that the organization possesses equivalent talent on-staff. So, because the organization lacks internal capacities, its board members disproportionally value their own (occasional, off-staff) “talent” – but in valuing their talents over their “treasure,” they limit the organization’s ability to develop more robust resources and capacities. Thus, the organization comes to depend on board “talent” largely because its board members choose not to alternatively supply the organization with sufficient “treasure.”
Does this mean that board perspectives are unimportant? Most certainly not. The experiences and connections afforded organizations by their board members are important assets. However, if they don’t positively impact the long-term solvency of an organization in a meaningful way, then these connections may not be worth as much as “status board” members seem to believe them to be. Connections, networks and experiences are all latent benefits that may be made manifest in terms of an organization’s financial health. Unlike these potential latent benefits that board members lend to an organization, donations provide direct benefit. Ultimately, organizations quantify financial health in numbers – and numbers don’t lie.
In Their Own Words:
“I think that it takes all three (i.e. ‘time, talent, and treasure’) to be a great board member. Arguably the greatest talent of all is realizing that your time is less valuable than your treasure.”- Chief Executive Officer, attendance = 500,000 – 1 million
“A particular challenge for many of our new board members is the time that it takes for them to understand that we didn’t ask them on the board because of their professional abilities and talents. We asked them on the board to gain access to the wealth that the practice of their professional abilities and talents has enabled.”- Vice Chairman of the Board of Trustees, attendance = 250,000 – 500,000
“I’m proud of the way that our board has evolved. It now understands it has an absolute and significant giving imperative. With all due respect to our board members’ abilities and talents, if you don’t give in a meaningful fashion, then you are short for our world.”- Chief Executive Officer, attendance = >1 million
“It drives me crazy that we still have board members who think that their job is to critique staff decisions, plan galas, and stuff envelopes. As a donor, it is embarrassing that the outside world considers these people to be my peers.” – Member, Board of Trustees, attendance = 100,000 – 250,000
“The best thing about leading a large organization was saying goodbye to the ‘bake sale boards’ of my past where every financial crisis was met with a social-status-elevating fundraiser that never netted any real funds but was deemed a success if it got the chairwomen mentioned in ‘Town & Country.’”- Chief Executive Officer, attendance = >1 million
“As a board member, you have two obligations: Number One is your fiduciary obligation to the organization. Number Two is your financial obligation to the organization. The entire ‘time, talent, and treasure’ discussion is bunk – a board member’s duty is to ensure that the organization is able to buy the time of those resources possessing the most talent.”– Chief Executive Officer, attendance = 250,000 – 500,000
“Honestly, our board is a joke. They want to derive every social benefit and milk every professional network that comes from being on our board, but they don’t think that they should pay for the privilege. We’ve let ourselves become a status symbol…the worst sort of trophy wife. What I would do to fire the whole lot of them and start over!”– Chief Executive Officer, attendance = 500,000 – 1 million
“On our board, it is both implicitly and explicitly understood that you pay for the privilege of your vote. There is no representation without taxation. If you don’t like our arrangement, then, frankly, we’d prefer that you not serve on our board.” – Chief Executive Officer, attendance= >1 million
“Over the years, I’ve been asked to speak to other boards about how they, too, can increase their respective board giving capacities. Invariably, they cite an inability to ‘attract heavy hitters’ to their boards. I ask them to survey the room – the so-called ‘heavy hitters’ don’t keep company with people who don’t value personal philanthropy. No one wants to be the deep pockets on a board who subsidizes their fellow board members. So, if a board wants to raise more money, the first step that they need to embrace is significantly increasing their own personal giving in the hopes of attracting more like-minded philanthropists. The second step often involves stepping aside and allowing these philanthropists to assume your position on the board. The best board donors try to replace themselves with even better donors on a regular, ongoing basis.”- Chairman of the Board of Trustees, attendance= > 1 million
“I appreciate how invested with their time our board members are, but I’d be lying to say that I didn’t wish that they weren’t equally invested with their money. We struggle to meet the giving benchmarks of our peers. My board’s answer to EVERYTHING is ‘Let’s have a fundraiser!” or “Let’s try for this grant!” – never anything out of their own pocket. They’re in love with other peoples’ money.”- Chief Executive Officer, attendance = 250,000 – 500,000
“A sure sign of a lousy board is a bunch of ‘talented’ people on your marketing committee. That’s where organizations dump the folks whose sole currency is hot air.”- Chief Executive Officer, attendance = 100,000 – 250,000