Giving and Leading: Non-profit Governance

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Nonprofits rely on governing boards to help ensure their success. Kristin Merrifield, CEO of the Alliance of Arizona Nonprofits and Rick McCartney, publisher of In Business Magazine and a member of several boards, will discuss the importance, training and recruitment of nonprofit governing board members.

TED SIMONS: Tonight's edition giving and leading looks at boards in the world of nonprofits and how these boards help ensure the success of nonprofit groups. Kristin Merrifield is the CEO of the alliance of Arizona nonprofits and Rick McCartney is publisher in business magazine and a member of several nonprofit boards, thanks for joining us.

KRISTIN MERRIFIELD: Thank you for having us.

TED SIMONS: How do governing boards work with nonprofits?

KRISTIN MERRIFIELD: You know, it's really a critical part of how a nonprofit, not only starts, but also, moves through the life cycle. And really, that's the sounding board, that's the leading, governing body that really helps to shape the organization and provide it resources and guidance throughout the life cycle.

TED SIMONS: How does that compare now to the governing boards in the for profit world?

RICK MCCARTNEY: You know, less and less they are very similar these days. And I would say if the recession taught us anything, it's that we needed to be very effective in what it is we do. Nonprofits, they experience quite a bit of difficulty when it comes to time and when it comes to money. One of the best ways to ensure that you are doing that well, is good structure.

TED SIMONS: What is good structure? Give me the definition of a good structured governing board.

KRISTIN MERRIFIELD: Sure, I think that it depends on what stage of life the nonprofit is in. And if you have a start-up nonprofit, it's all hands on deck, so you need board members willing to roll you will their sleeves, willing to stuff envelopes and dial for dollars. As a nonprofit moves into their phase, it becomes more about fundraising now, and they probably have a staff, don't need the envelope stuffers anymore, and as you move into a mature organization, that means a different set of skill sets and more about introduction and is governance and oversight so it depends on what type of organization or level that that organization might be in, as far as their life cycle.

RICK MCCARTNEY: We'll give money to a well oiled machine. Those things are so important, whether it's an operational board or a governing board. Both those are very important and at different levels, but one can be very hands-on and the other really smart thinking.

TED SIMONS: As far as the diversity of opinions, diverse perspectives, how important for a nonprofit board?

RICK MCCARTNEY: The reason why you need a governance committee and you need great policy is to keep things in line, to keep that structure, bring people on the board the right way. So they are prepared for what's going to come.

TED SIMONS: How do you recruit folks for boards?

KRISTIN MERRIFIELD: I think it needs to be very thoughtful and strategic. It's not just who you know, or who likes whatever your cause is you know, you really need to take a hard look at, you know, again what life cycle are you in and what confined of skill set do you need, if you are looking for people that have access to certain types of networks and that needs to be part of the board recruitment strategy, so, thoughtful diversity is huge. Not only in thought opinion like you said, but age, race, beliefs, the whole nine.

RICK MCCARTNEY: And being sure they understand the content of the organization, what is it about and how effective can they be in selling that organization?

TED SIMONS: Politicking, power struggles, that sort of thing, put three people in a room and you will get that, with nonprofit governing boards, how do you handle that?

RICK MCCARTNEY: I am in great favor of an executive director and a board that really supports that director. That they bring on, at the end of the day they staff and manage the day-to-day, and they really do understand the organization, so board members need to listen to an executive director or a CEO, somebody that's been, you know, in the game daily.

TED SIMONS: Do you agree with that?

KRISTIN MERRIFIELD: I do, it's great to hear that from a board member. As opposed to a CEO like myself, but the other thing that I would say is that I would, if I could say one thing to people, regarding, you know, how to deal with boards and things like that. It's that the executive director, the CEO of a nonprofit organization, that they also serve on a board or have served on a board, it gives you a completely different perspective when you have sat on the other side of the table.

TED SIMONS: And let's continue this, how do you ensure everyone on the board has a voice? Has power? How do you do that?

KRISTIN MERRIFIELD: I think like Rick said, it starts with the executive director, the CEO, kind of putting out that plan, this is how the board should communicate. Then, it's a great board chair, is a great leadership that leads by example that helps to make sure that, you know, they see someone is not participating or not being engaged, that they should reach out, to we say board-to-board and CEO to staff so it goes along those lines.

RICK MCCARTNEY: And in that structure, you have committees, so you have got various other places where policy and things can be decided. That's really important, to keep everybody engaged.

TED SIMONS: What happens to the board, when there is a member or two, they are not engaged. They are not effective, and everyone kind of knows they may be lost some steam along the way or never had that much steam to begin with.

RICK MCCARTNEY: And you can bet that's going to happen. That's why we talk about the policies and why the governance committee is so important because those things are discussed. They are meant to be made accountable for an issue like that can happen. If you have a good structure.

TED SIMONS: What happens if that issue does come up? What do you do?

KRISTIN MERRIFIELD: We have -- the boards I served on, that's ok. That's almost welcomed to say, if something is not working out for someone or something has changed, or they have another passion, it's great to release them with love. It's ok to go on, we keep that open communication very present when we're having the communication.

RICK MCCARTNEY: It's also ok to encourage their involvement. I mean, because they have a conflicting opinion doesn't mean that they should not be heard.

TED SIMONS: Right.

RICK MCCARTNEY: It's what will make a better organization.

TED SIMONS: As far as outside influence, do nonprofit governing boards in general, do you get pushes from outside, little pushes and shoves and folks saying I have got a better idea but not necessarily part of it.

RICK MCCARTNEY: You are out-focused on the other organizations, they might have a better way of doing things. It's always going to be a part of it, so when you talk about policies and you talk about how you raise money and bring those partnerships and those people in. You cannot, as an organization, be afraid to say no, to some of these great opportunities. They may not be right.

KRISTIN MERRIFIELD: I think that comes along with making sure that your board is crystal clear on the mission. Otherwise, you will have a mission creep when all these things are -- you should do this or that, and it's like, well no, let's be clear about the mission and really be impactful.

TED SIMONS: Give me a sentence, define good governance for nonprofit boards.

KRISTIN MERRIFIELD: Oh, gosh, transparency and open communication.

TED SIMONS: What do you think Rick?

RICK MCCARTNEY: I would second that but also say strong policies and a great understanding of what it means to be a board member.

TED SIMONS: Very good. Good to have you here.

KRISTIN MERRIFIELD: Thank you.

TED SIMONS: Thank you very much for joining us. Wednesday on Arizona Horizon, hear from a children's advocate about the important source of education funding and find out about a group that helps abused kids find comfort in the arts. That's at 5:30 and 10:00 on the next Arizona Horizon. That is it for now. I am Ted Simons, thank you very much for joining us. You have a great evening.

VIDEO: Arizona Horizon, is made possible by contributions from eight, members of your Arizona PBS station. Thank you.

Kristin Merrifield: CEO of the Alliance of Arizona Nonprofits, Rick McCartney, publisher of In Business Magazine

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