Getting the Governance You
Strategies to Invest in Board Leadership for
Sustainability and Growth
Melanie & Jason Friedman, Friedman Associates
• Our mission is to help MDOs and CDFIs to achieve your vision
for a sustainable and economically vibrant community – and
demonstrate the results that lead to increased funding and
• Areas of specialization include:
Product development and staff training in microfinance and
business development services
Developing systems for client tracking and program performance
Market Analysis and Capital Gap Analysis
Fund development strategies
CDFI Certification and TA/FA Applications
What is Sustainability?
“Most CDFIs view sustainability as balancing a
focus on mission, organizational capacity and
capitalization such that a CDFI can sustain or
increase it's impact over time.”
Mary Reynolds Babcock Foundation, CDFIs: A Study on Growth and
Sustainability, June 2011
The Role of Governance in Sustainability
• A critical piece of the "sustainability puzzle" is
leadership, especially your Board of Directors.
• Demands for self-sufficiency and the need to
demonstrate mission-driven success prompts us to take
deliberate steps to increase the active governance of
our organizations and ensure for our own renewal and
• In a recent study of CDFIs by the Mary Reynolds Babcock
Foundation, half of the ED’s surveys cited smart,
committed staff and board members as the most
essential catalysts for their own past growth.
You can avoid this…
“The motion has been made and seconded
that we stick our heads in sand”
“Perhaps it would help if I go over it one
• Our CDFI is changing and evolving but our Board has
not. How do we make the transition?
• How do you encourage more active board engagement?
• What is the process to build the capacity of our board?
• What tools can we use?
Our Agenda for Today
• Board Roles and Responsibilities
Normal Evolution of Nonprofits & Impact on Board Roles
Board Member Job Description & Annual Agreement
Differentiating Between Board & Staff Roles
• Ongoing Board Development
Identifying Board Development Needs Through SelfAssessment
Board Tool Needed for Excellent Governance
Board Composition, Recruitment & Training
Basic Roles and Responsibilities
• Define, protect and advance the mission
• Organizational ambassadors
• Safeguard assets (human, financial, property)
• Recruit, hire, support & review the ED
• Ensure adequate resources to carry out the mission
Nonprofit Organizational Lifecycle Model
Normal Evolution of Nonprofits & Impact on
Tend to be one of
two types: (1)
Following a founder
and passive or (2) a
working to get the
organization up and
running as hands-on
Board & staff
relations are better
balanced with board
focusing more on its
organize the board's
work with focus on
policy & strategy .
Tends to be large
and shift to focus on
capacity to give or
provide access to
Governance role is
well established &
Organization V. Board
Establish programs, secure Hands-on, operational, focused
funding, prove viability
on Mission & program delivery
Adolescence Additional paid staff, grow Less day-to-day, various
committee formation to fill
Shift to governance/strategy
focus. Fundraising and board
recruitment become priority
Shift in community needs,
loss of funding, lack of
strategy or vision
Disengaged board or
disagreement on organizational
future, high-turn over
Lifecycle and Governance
• Good governance is understanding where your
organization falls in its cycle of development and how
to build capacity along the way.
• Board members and executive staff must work together
to articulate a vision for the organization at every stage
of the nonprofit’s life and find the best ways to make it
• The role of the board will change in the organization’s
lifecycle. Accept it! Embrace it! Plan for it!
How Do You Make the Transition?
Clarify board member roles, responsibilities;
Create formal governance structure
Formalize board recruitment process;
Develop orientation & mentor program; Focus
Institute an annual board evaluation
Enhance board fundraising capacity
Enhance board committee structure
Re-energize or develop new board
Explore partnerships with others
Engage third party to mediate conflicts
“What I am I supposed to do on
Tool: The Ultimate Board Member Job
Description and Annual Agreement
Board Member Job Description &
• Regardless of where you are in the
life cycle, it is critical that you have
a detailed board member job
• Sample job description and annual
• The job description is a tool for
engagement with board members.
• Identifies board responsibilities and
• Committees have chairs, job descriptions and work plans
with deadlines like staff.
• Each committee has a staff liaison.
• The Vice-Chair is responsible for obtaining committee
reports for Board meetings.
• The Executive Committee develops board meeting
agendas with ED.
• The Chair, and not the ED, holds board members
accountable for their work and meets with them
individually each year to review performance.
• The board conducts a self-assessment periodically.
II. Ongoing Board Development
How Do We Take Care of Ourselves?
• Lack of participation,
• Weak leadership
• Great ideas, no follow
• Founder Syndrome
• Stray from the core
• Lack of time
• Lack of understanding
I.D. Board Development Needs Through
• Establish a baseline in the
attitudes, perceptions and
experiences about board
• We recommend an
anonymous board survey.
• Visual results
Board and staff roles
Policy making practices
Fiscal management practices
Fund raising practices
Board structure and practices
Board Membership & Orientation
Monitoring & Evaluation Practices
The Tool for Excellent Governance
• Board Policy Manual (BPM): A thorough and
easy-to-use manual of board policies to orient
new board members and for continuous
education of existing board members.
• Orientation handbook that provides useful
information about the organization, board
structure and operations, and fellow board
members and staff.
• Indispensable working tool and a central resource
about the organization and the board.
Why the BPM?
• Efficiency of having all on-going board policies in one
• Ability to quickly orient new board members to
• Elimination of redundant, or conflicting, policies over
• Ease of reviewing current policy when considering
• Clear, pro-active policies to guide the board and
Board Development Cycle
Board Composition, Recruitment & Training
Board Development Cycle: Board
Composition, Recruitment & Training
• The Board Development Cycle: A basic responsibility of
the board is to ensure its own renewal and
development. The board development cycle is one way
of describing the key steps in this process.
• Year round process.
Develop a Board Profile
• Develop a profile of the skills, qualities and knowledge
that the board will need in order to address the
challenges facing the organization in the next few
• The board profile is a way of translating the
organization's strategic goals and priorities into a
description of the kinds of people who are needed for
• Please note that a board profile is much easier to
create if the organization has a vision and a strategic
plan. It is recommended that a board profile be
Create an Annual Board Calendar
• Governing boards have an annual agenda of things to
• Creating a work plan or annual calendar can help a
board get organized and manage its responsibilities
• To get started, think about which activities are ongoing
and regular, which are annual, and which need
attention only occasionally.
• Take your board activities and procedures and map out
on the calendar.
For more information
Jason Friedman, Principal