Leadership

Stuff You Can Use: Board Ponderables and Resources

by

There were a couple board related pieces I marked on the old Google reader I wanted to share.

First was an excerpt from a talk Gene Takagi of Non-Profit Law Blog recently gave for an American Bar Association seminar this month. The portion posted on the blog site deals with common governance problems boards engage in. The six points he makes deal with how boards misunderstand their role in the organization and the laws governing non-profit organizations.

Part of the third point caught my eye because it is a common practice but I have really never heard it discussed as a problem. (My bold emphasis.)

A lack of attention paid to the internal laws of the organization. Is the organization operating in furtherance of the exempt purpose stated in their governing documents? Do the directors really know, understand, and govern consistent with their bylaws and other governance policies? This problem often results when a board adopts bylaws that it copied from another organization without careful thought and consideration about how they work under different circumstances. It’s far too common for nonprofits to ignore membership requirements they’ve inadvertently created, elect a different number of directors than is authorized, and not maintain officer positions and/or committees required under the bylaws.

Not knowing where to start with bylaws, a lot of organizations use those of others as a template. I suspect that people choose to leave in elements that sound important and potentially useful when they really aren’t that important to the organization. I say this because a board I sit on tasked one of the vice presidents with a bylaws review and he essentially reported this very situation. The bylaws had originally been copied from a closely associated sister organization and there were portions that really did not apply to our activities. Advances in technology made other portions unnecessary.

To be fair, it is likely a group starting from scratch would include rules dealing with anticipated situations in their bylaws that proved to be extraneous. Time and experience is about the only thing that will reveal this to be the case which is why it is helpful to periodically review bylaws.

The other bit of information I wanted to draw attention to was a entry on The Nonprofiteer noting the availability of BoardSource videos on “the ten responsibilities of nonprofit Board members.” She also links back to her earlier entry on the Board Member’s Bill of Rights which bears reading.

Admittedly, the entry I link to is from February. I hadn’t the time to review the BoardSource videos until now. The video’s short, episodic structure make them faster to review than I thought. The way I see it though, many boards have likely taken a hiatus over the summer due to a lack of enough members to establish a quorum. This is probably an advantageous time for me to urge people to revisit the NonProfiteer’s entry to review the materials in preparation for an increase in board activity.

Will Artists Save The Motor City?

by

NPR had a story on All Things Considered yesterday about people moving to Detroit lured by dirt cheap property costs and a belief in the potential the city has. (Listen to the story rather reading the text which doesn’t accurately reflect the audio.) Among those interviewed are a small group of artists hoping to establish a little colony that “are interested in working on houses but also interested in working in social ways. Be a part of the neighborhood themselves..”

It will be interesting to see if they bring vibrancy to part of the city…and resist being displaced by any gentrification they may inspire.

I haven’t really seen it as part of my career path, but I always thought if I had an opportunity like this and the resources to pull it off, I would buy up buildings or warehouses and turn them into spaces artists could practice their craft. Even though I am in the performing arts, I never really considered opening a performance space. I think I would have rehearsal spaces for theatre, dance and music as well as studios for visual artists. A good situation would also allow me to get an apartment building so that visual artists could be in residence a few months while they created and then move on. With other artists around, they might find inspiration and collaboration in the people and environment without actually having to move permanently.

While Detroit offers this sort of opportunity, I wonder if I have the energy to make something like this happen. I live a fairly spartan existence so the prospect of living in the back while renovating the front doesn’t bother me. I just don’t know if I can be a one man renovation squad for the time it would take to get things to a place where the project could start paying for the next phase. That is assuming enough artists move to Detroit interested in utilizing the spaces.

But as I said, since I never really saw this as part of my career path, I haven’t invested much thought in how I might accomplish it. The idea has mostly been idle speculation born of visiting many towns and cities that seemed to lack good rehearsal facilities for the individual/small group artists.

I figure it is worthwhile posting the idea here on the chance it inspires someone to explore doing it in their own town, say Detroit.

Bean Counter Hero For A Few Days

by

As the guy controlling the budget, I often have to either say no or ask people to scale back their plans. Therefore, it gives me great joy when I am in the position of telling artists that they are limiting themselves and need to think bigger. I had that opportunity about a month ago when I was discussing the site specific performance we are developing with a local performance group for next Spring. One of the artistic directors was telling me a board member was encouraging her to limit the action of the show around the theatre building.

My whole intention in approaching her about a site specific work was to get away from the building and exploit the potential in other nearby locations. Also, given that the show is about celebrity and achieving that status is divorced from formal performance settings these days thanks to our ability to record and distribute events from practically anywhere, it seemed counter intuitive to have everything happen in the theatre environs.

Given that we are about nine months out from the performance, I told her I felt it was premature to start eliminating some nearby locations that ignited both our imaginations. It felt great to be telling someone to keep dreaming about a performance.

I did feel a little bad for the nameless board member I was contradicting. Perhaps this person has made valuable suggestions in the past, but for a little while in my mind I was relegating them to the clueless board member bin. While I was feeling the hero, I was envisioning this faceless person as the stereotypical board member who valued the product, but didn’t quite understand the process of the organization which he/she served.

I didn’t think it is was particularly fair that board members end up playing that role in so many organizations. And let me be clear, since I was envisioning a theoretical board member, I certainly can’t say this is the case at all with the board of our partner organization. Let me also say that I realize this little fantasy is not only unfair to the anonymous board member, but likely short lived since the time will come soon enough when I will begin tugging on the reins and conform to the parsimonious administrator stereotype. Allow me this short time in the sun, eh?

There have been many discussions about how board members do it to themselves by not involving themselves enough. It is also true that organizations work to marginalize involvement so that the board is little more than a rubber stamp for their activities and then stays out of the way.

It seems this might be another argument for arts people not the subscribe to the notion that you have to be poor and suffer to be true to your art. In the nascent stages of some arts organizations, boards are comprised of fellow artists who understand and are invested in the work. At a certain point, it becomes clear that if the organization is to expand, it will require people of influence and means. If financial success were frowned upon less in the arts world, there would be less of a need to choose between those who get it and those who got it because they wouldn’t seem so mutually exclusive.

Merging Administrative Functions

by

On occasion I cite consolidation of administrative functions as a method by which arts organizations in a community can cut costs by cooperating with one another. However, if pressed, I would have to admit that I wasn’t aware of any examples of such a thing working in practice.

So I was extremely pleased to see that the Nonprofit Law Blog has been running a series on this very subject. They cite four options that can be pursued, “an administrative collaboration, administrative consolidation, MSO (Management Service Organization), or external service provider.” The most recent entry gave an impression the series was finished but it hadn’t covered external service providers. If it does continue, I will post an update link here.

The first entry, Administrative Consolidations and Management Service Organizations covers those structures and outlines what situations they work best in.

The second entry, Joining Forces in the Back Office – Administrative Collaboration and Consolidation, talks about the collaboration and consolidation formats and presents some case studies. This is also the entry in which they define the different structures.

“According to La Piana Associates, Inc., an administrative collaboration is an informal, not necessarily enduring, arrangement to share services or expertise while each organization retains its individual decision-making power; an administrative consolidation is a more formal agreement that involves shared decision making (without changing the corporate structure) and the sharing of specific functions; an MSO is a newly created organization for the purpose of integrating administrative functions; and an external service providerinvolves the outsourcing of certain administrative elements.”

One thing I found interesting about the case study presenting in this entry was that the organization, Chattanooga Museums Collaboration achieved things you might expect- cut costs, leveraged their purchasing power, improved productivity and increased unearned income through joint fund raising activities. But the partnership also made them more competitive in the larger business landscape.

“Although the “immediate reaction is that it’s the smaller guys who are getting the benefit,” Kret corrects this misconception stating that through CMC, the Tennessee Aquarium benefits as well by generating revenue from typically nonrevenue places like accounting, increasing retention by offering key employees a higher level of compensation, and offering their employees a much more rewarding and challenging work environment.”

The third entry, Joining Forces in the Back Office – Management Service Organizations, contained a case study of an MSO formed by five social service organizations which now serves 13 groups. While MSOs are separate organizations formed to provide these services, unlike commercial payroll and human resource companies, MSOs are formed for the benefit of specific entities.

The MSO in the case study, MACC CommonWealth, has an auditor appointed by multiple boards. If that sounds like a recipe for disaster, you will want to read the case study which acknowledges that serving the interests of multiple boards and CEOs is potentially fraught with peril. So far, it seems to be working.

The most recent entry notes there are many successful collaborations among non-profits across the country. The main thrust of the entry are observations of why a cooperative effort funded by the The Lodestar Foundation, was unsuccessful.

The Lodestar Foundation provides grants for collaborative efforts and their website can give you a sense of the scope of the efforts being made in this direction.

Emily Chan who wrote the series on Nonprofit Law Blog cites a number of studies and books on the subject so the entries themselves provide a good starting place for exploring the possibilities offered by one of these avenues.