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A Good Board Wants to Hear the Bad News

Jan Portrait 3 (2)

If you run a nonprofit organization, you probably already know this: what your board doesn’t know can cause you big problems.

Recently, a long time Milwaukee nonprofit hit the front pages with the news that its board of directors had suspended operations after discovering serious financial problems. While the details are still unfolding, one thing is strongly implied. The board of directors seems to have been surprised.

Now what I’m going to say doesn’t pertain directly to this most current organization since we don’t yet know all the details. But I’ve been in both positions – nonprofit staff and nonprofit board and I speak from that experience.

Surprises aren’t always bad. Boards love surprises like news of a big grant or receipt of a national award. Those are great surprises.

Financial problems, personnel messes, program issues – those are all surprises that boards don’t love. Surprise is the key word here.

A good board wants to hear the bad news. The problem is that, too often, the staff doesn’t want to tell the board bad news. So they omit negative things from board reports, gloss over problems or take the posture that the issue is too complex for the board to understand. Minimizing problems marginalizes the board. And board members don’t like that. They joined a board of directors to be involved, helpful and smart. Board members want their talents and resources to be used, otherwise, they think: why am I here?

When an organization hums along with routine, boring board meetings where critical issues are rarely discussed in any real depth and then something blows the lid off a problem, say, a very bad audit or inability to make payroll, board members tend to get very upset. They feel duped. They feel like staff purposely kept them in the dark. They lose trust in the staff. And that is a terrible thing for a nonprofit. Distrust between board and staff can sink the entire enterprise.

Trust is built on honesty, communication and solving problems together. Strong, effective boards reflect strong, effective staff’s commitment to sharing the good news and the bad news with no extra varnish. Just the facts. Look around at the most successful organizations. This is what they’re doing: making sure the board of directors is always totally in the know.

How healthy is your board staff relationship? Maybe time to do a little check-up!


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When and How Executive Directors Leave

In the past month, there have been four big changes in nonprofit leadership. Jan Buchler, long-time executive director of The Parenting Network, completed a year-long transition to retirement that involved a significant length of time during which her successor, newly hired, was able to shadow Jan and become acquainted with her new community. The process culminated in a unique ‘fare welcome’ luncheon that gave a couple of hundred people the chance to congratulate Jan and be introduced to the new director. Artfully done, I thought at the time. I wish all nonprofits would be so careful and deliberate.

Paul Schmitz, the driving force behind or in front of Public Allies, also recently announced that he will be resigning in several months. Paul, the author of the book, Everyone Leads, and a very popular national speaker, is likely looking at other national opportunities. We don’t know, he didn’t say. The key thing is that he has given his board of directors a good long time to find a good replacement and made himself available for consultation about that process. Paul grew Public Allies into a major training and public service organization. He will be hard to replace, but the early heads-up bodes well for the organization’s ability to continue its smooth sailing.

Contrast that to two other local organizations, Community Advocates and Safe and Sound. In both cases, there were press releases that the executive directors, Joe Volk and Barb Notestein respectively, had resigned, one to take a job at a much smaller organization in another county and the other to ‘explore other options.’ Their departures were speedy, one planned for just two weeks hence and the other already occurred, causing a lot of raised eyebrows around town. What does it mean to have long time executive directors make such sudden exits? In both cases, interim directors were appointed pending an executive search and hiring of permanent replacements.

In cases like these where an executive director suddenly resigns, on his/her own volition or at the invitation of a board of directors, there are many things to worry about. Number one is the morale of employees. When the captain of the ship gets on a skiff and motors off to shore, the rest of the sailors wonder what will happen to them. Are their jobs safe? Is the organization in trouble? Will the new person be better or worse than the person who left? A popular director’s exit could inspire departures of other key individuals. Also, a perception of a leadership vacuum can fuel in-fighting and positioning for power within the organization. So, tending carefully to morale and keeping employees feeling engaged and important to the organization are really important.

Then, obviously, the organization needs to worry about the public perception of the leadership transition. If I’m a foundation director or government bureaucrat, I may be wondering a sudden executive departure means for the overall stability of the organization. Does the organization remain a good risk in terms of the investment of philanthropic and government resources? Will programs be run efficiently and effectively. Bottom line – do people in charge know what they are doing? It is extremely important that the organization’s leadership, especially its board of directors, meets individually with funders to allay any concerns and set the course for the future relationship. It is a very bad idea to allow funders to only know what they read in the newspaper.

I was a second level executive in an organization in which the executive director was suddenly fired by the board of directors. The remaining executive team regrouped into war footing, everyone taking on additional responsibilities, and trying to tamp down the extraordinary anxiety among staff regarding the change. It was a trauma from which the organization never really recovered. More strategic and careful thinking on the part of the board of directors would have protected the organization and its employees from unnecessary upheaval.

There are lessons in these recent leadership changes for everyone running a nonprofit organization. To put it bluntly, it’s not just about you. A lot of people, in an out of the organization, will be affected by a drastic leadership change. Take care with those decisions.  Think of the people around you, those you serve, and the long-term sustainability of the organization. And just be very, very careful.


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