Board Leadership Development class met for our second session last Friday. It was a very nonprofit-y week, with the MCN-MCF joint annual conference also happening that Thursday and Friday.

The class was another excellent experience, rich with ideas and discussion. The Nonprofit Lifecycle Stages phases concept especially rang true to what I’ve seen. I couldn’t help but start mentally mapping the stages of organizations I’ve worked for.

It also rang very true when Kate explained that organization stages can be uneven across different areas: Programs, Management, Governance, Financial Resources, Administrative Systems. It’s no surprise that admin systems tend to lag far behind, I see that a lot working with nonprofits on their technology challenges. In my opinion this is probably how it should be, because you never want to build systems that get out in front of their use case (or veer off into chasing problems), but it’s a natural consequence that use cases typically outgrow existing systems and the resulting pain points and inefficiency are what drive orgs to seek change.

Another interesting new-to-me concept was the four core role-sets of a board and how they map to organizational theories of governance:

• Monitoring - agency theory
• Supporting - resource-dependency theory
• Partnering - stewardship theory
• Representing - stakeholder theory

It’s really interesting that the literature indicated the Supporting role was the only one that stood out as a statistically significant predictor of organizational effectiveness in their study. I would expect Partnering to have the most potential positive impact, but noted Kate’s comment that to govern from that base you need to be all-in towards a common goal. I wonder if the metrics don’t pan out because it’s difficult in practice. I also just wonder how the heck they’re measuring effectiveness anyway.

I embarked on a side quest digging into that concept of nonprofit organizational effectiveness this week for my qualitative research project. Kate generously shared several articles to help kickstart my reading into it. I took note that Herman and Renz’ 2004 article Doing Things Right indicated there seems to be a correlation between effective boards and effective organizations. I also learned a ton about different conceptual ways of measuring nonprofit effectiveness, and why this is such a fraught and nuanced concept. Connecting it back to this specific example, it occurred to me that a system resource approach is a primary method of conceptualizing organizational effectiveness, and a key finding in the BoardSource report from week one says boards that prioritize fundraising above all else tend to rank highly in that area. I wonder if that might indicate that boards who are fundraising focused are also more apt to consider their resource development success as an indicator of organizational effectiveness.

Class reading takeaways

Problem Boards or Board Problem?, Nonprofit Quarterly, April 2018

Three board performance problems that appear most prevalent:

• Dysfunctional group dynamics
• Disengaged members
• Uncertain roles and responsibilities

Pescriptive literature can be distilled to five functions:

• Set the organization mission and strategy
• Performance monitoring and accountability
• Hire, support, and manage the CEO
• Resource development
• Represent and advocate for the organization in the broader community

Behind board performance issues looms a fundamental problem of purpose

Can approach the problem of purpose in two ways - expose the board as an irrelevant institution, or ask whether the purposes ascribed to boards now may be necessary but insufficient.

Three causes of the problem:

• Most essential work can be the least meaningful
• Important work is sometimes institutional, not individual
• Important work is episodic

Here We Go Again: The Cyclical Nature of Board Behavior. Nonprofit Quarterly, May 2018

three distinct operating phases: Supermanaging, Corporate, and Ratifying.

The Founding Period can last years (despite its name) and has two sub-phases: Collective and Sustaining.

A characteristic response to crisis during an organization’s founding period is torecruit board members with specific professional expertise or skills. A Supermanaging board recruits members for their skill sets and networks, and is more inclined to ask questions.

Tensions may emerge between the board members and the executive as the power dynamics shift.

To some, the Corporate Phase is nonprofit governance nirvana.

During the Corporate Phase, board-recruitment efforts focus on developing a board with more community, financial,and social clout.

During the Ratifying phase, boards tend to meet less frequently and/or for shorter periods. The board may not be as cohesive, and maybe functional but largely disengaged.

A crisis occurs, and a new cycle begins, starting with the Supermanaging Phase

Board behavior is static, not dynamic, and often driven by crises.

Knowledge of the cyclical nature of boards may or may nothelp the board move more quickly through the various phases, but it can help to mitigate some of the detrimental behaviors of the board,

Nonprofit Board Balance and Perceived Performance. Nonprofit Management and Leadership, vol 25 no 4 Summer 2015

Article offers reconciliation of core roles of nonprofit boards and assesses whether specific roles affect board members’ perception of performance.

four core role-sets:

• monitoring - agency theory
  • key tenet is the need for the principal to monitor the agent
  • theory assumes people will act in their own self-interest
  • focus on power dynamics bewteen CEO and board
  • heart of power dynamic is whether the board has some control or just rubber stamps CEO
• supporting - resource dependency theory
  • resources are both relational and human capital
  • role encompasses attracting resources and maintaining credibility in the community
• partnering - stewardship theory
  • responsible management of resources
  • performance becomes the primary objective
  • includes collaboration in strategic planning between board and management in partnership
• representing - stakeholder theory
  • involves the expectation that the board will make decisions about the interests of the constituencies
  • by representing interests of constituencies, the board brings voice to those constituencies

one responsibility of a board is to critically review and recalibrate these role-sets to ensure a level of balance is maintained.

There was one statistically significant predictor of organizational effectiveness: supporting role

The data painted a clear picture that an increase in the supporting and monitoring roles will improve board members’ perceptions of organizational effectiveness. Furthermore, when board members describe any of the four role-sets as deficient, they perceive the organization as less eff ective. Conversely, board members who perceive the boards as having balance across the role-sets perceive the organization as being effective.

board members who perceived that their boards had relatively balanced emphasis across all four roles rated their organization as more effective

Governance Framework: Mapping a Nonprofit Organization’s Governance System. Ontario Nonprofit Network, 2021

ultimate goal for governance of an organization is to enable the achievement of meaningful impacts and outcomes

role of governance in a nonprofit organization is to provide stewardship, sensemaking and foresight

binding rules that drive an organization’s governance design based on the law, regulations and other compliance requirements.

external and internal factors that influence the design of an organization’s governance examples of unique circumstances that drive an org’s governance design:

• Funders and donors
• Lifecycle stage
• Beneficiaries and stakeholders
• Financial model
• Field of activity
• Organizational history
• Enabling factors:
• Governance culture
• People
• Structures
• Policies & processes

expressions of culture enable governance because they drive actions, decisions, rules and power dynamics

governance structures forms a system which defines how tasks are allocated, coordinated and overseen

Nonprofit Lifecycles. Susan Kenny Stevens, 2001

Note: This model is brilliant, rings very true. Kate showed a slide in class that’s not in the selected reading where deeper into the book they break down how different areas of an org can be at different stages.

Lifecycle theory assumes that organizations, like living organisms, develop a process starting with birth and moving through phases of growth, maturity, sometimes regeneration, and eventual death. Nonprofit lifecycles presents 7 org stages:

• Founding idea
• Start-up
• Growth
• Mature
• Decline
• Turnaround
• Terminal

The upside of the lifecycle curve (idea, start-up, growth, and maturity) represent the stages where an org is mostr attuned to the community.

The downside of the curve, particularly decline and terminal, reflect an inward, self-preservational focus.

Maturity is the optimal operational stage

Growing pains are natural, but can frequently become stalling points

Mature orgs oscillate between growth and maturity to stay vibrant

There’s no “exact” number of stages, and feel free to adapt this concept, but recognize that definitions of nonprofit capacity depend on a stage-based approach

The lifecycle model is diagnostic, not deterministic

Lifecycle model is not necessarily sequential nor evolutionary. Not all orgs go through all stages, and can jump between stages, sometimes abruptly when the world changes such as it did during the COVID-19 pandemic

It’s a long way from start up to maturity, and there are few if any shortcuts

Lifecycle challenge is to achieve balance or complete alignment among programs, management, governance, resources, and systems at each stage