By Josephine Victoria Yam, J.D., LLM.
2017 November 20
A CEO of a large nonprofit asked: “Can B3 match our nonprofit board with business people who don’t come in thinking that nonprofits are inefficient"?
This is a question that many nonprofit CEOs ask us. Some nonprofit board directors apparently believe their business experiences alone can "fix a nonprofit’s inefficiencies”.
Why? This stems from the erroneous notion that businesses are more efficient than nonprofits. The Stanford Social Innovation Review article “How to Succeed on a Nonprofit Board” explains the stereotypical belief that businesses focus on being efficient to achieve shareholder value. But because nonprofits focus on social value --- which is hard to measure --- they don’t have to focus on being efficient.
Thus, many business people feel overqualified for their nonprofit board roles. They become less engaged in a nonprofit’s mission. They lack curiosity about what they can actually do to help a nonprofit achieve more impact. In other words, they “might assume they don’t need to give their full attention to do a good job”.
This lack of curiosity is fatal to becoming a successful nonprofit director. Why? Because nonprofits are often more complex to operate than businesses. Unlike for-profit business organizations, nonprofits do more with less resources. They have amorphous goals that are difficult to measure. They get things done through consensus building. (I discuss this in my blog “Three Pointers to Remember When Serving on Nonprofit Boards”).
Thus, all nonprofit board directors need to be fully engaged and curious. They need to bring the whole range of expertise, experiences and networks they have to the nonprofits they serve.
The Stanford article outlines five ways on how board directors can be curious:
Serving on a nonprofit board is a meaningful journey. To get the most of out of this journey, board directors must always be curious.
As governance expert Alice Korngold advises:
“Although businesspeople have valuable talents to offer, they are entering a new realm, with its own culture, language, and challenges, when they volunteer on a nonprofit board. [They] need to approach this new role with openness and humility, be prepared to learn, and then figure out how to use their business skills to advance the organization.”