Policy Governance and Tone at the Top – When Nonprofits Fail

Nonprofits are failing at a high rate (e.g., Flanagan, 2012; Nonprofit Trends, 2014). Despite strategic planning and fund development, supporting resources are not available to many nonprofit organizations. You and I may be familiar with the relentless begging of most nonprofits. Yet, if the organization’s mission is compelling and the business model is sound, why do nonprofits have problems attracting resources? If organizational leadership (i.e, the board of directors) cannot determine the underlying cause of business failure, then the problem may be the process of decision-making or making judgment. Are decisions based on intuition or reasoning? Can Policy Governance provide boundaries for rational or reasoned decision-making that underlie better business outcomes for nonprofits?

Yes, IF the board is committed to using their policies and following PG principles. John Carver provided a framework of governance that can help a board define its job and the job of management. PG is built on what are comfortable and known – organizational values. Organizational values are expressed in policy and policies are organized around the work that needs to be done. However, PG is far more than creating a new set of policies. The PG model goes beyond the boardroom and applies it to everyone in the organization that touches the population or consumers served. PG means that everyone in the organization has a commitment to achieving the desired future state or Ends. Everyone in the organization is aligned with organizational values and constantly seeking better ways of attaining the Ends. That alignment and commitment is what attracts resources to an organization.

In my 23-year career of either working for boards or counseling them, I’ve never seen Policy Governance® (PG) fail. Conversely, what fails is the board process. Board process refers to the culture of interactions in the boardroom. Policy Governance creates a framework for sound decision-making and robust assessment for making judgments. What it doesn’t do is dictate culture or how a board should interact. Think about it. Ground rules in any social interaction make a difference but they don’t work if people don’t commit to them or follow them. PG also takes practice, practice, practice. PG is powerful. But a board needs the skill that comes through practice to use it to its fullest effect.

PG works. But only if the board has the will to make it so.

See Flanagan (2012)
See also Nonprofit Trends (2014)
See Carver & Charney (2004) The Board Member’s Playbook

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