Community Engagement Governance 1

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Why is board governance one of the most common and persistent problems for nonprofits? Many in the sector have come to the realization that the problem is with the traditional governance model itself and new models are urgently needed. This workshop presents a new governance framework, which has been nationally recognized as one of the true innovative developments in the field. Community-Engagement Governance™ is an innovative and effective framework that includes an organization’s stakeholders in key governance decisions for an organization’s future. It is an approach in which governance responsibility is shared among the key sectors of an organization, including its constituents and community, staff, and board to ensure community impact, responsiveness to constituent needs, and high quality decision-making. Participants will learn about this new framework and tools to help them adapt it to their own organization and communities.

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Community Engagement Governance 1

  1. 1. E N G AG E M E N T Engagement Governance for System-Wide Decision Making by Judy Freiwirth, Psy.D. I Because nonprofits NCRE A SINGLY NONPROF ITS H AV E COME TO cases does not allow constituents direct involve- recognize that traditional governance ment in the decision-making process. This can rob are ultimately models are inadequate to respond effec- organizations of their programmatic accuracy, tively to organizational challenges. This legitimacy, and most convincing champions. organized to benefit article argues that the structure of most Traditional nonprofit governance approaches boards of directors prevents nonprofits from a re modeled a fter cor porate gover na nce their constituencies, being effective and causes them to lose their con- systems, creating a strong demarcation between nection and accountability to those they serve. board and staff, with the executive director they have a Why is a more inclusive governance frame- serving as the only link between them. Tradi- work native to nonprofit work? With their roots tional approaches also create a class system responsibility to in this country’s early voluntary associations, within nonprofits. The executive director often nonprofits are vehicles for ordinary people to becomes the sole connector to the external include their primary accomplish common interests. Thus nonprofits world and filters information about an organiza- have natural constituencies that can advocate tion’s constituency, which can result in board stakeholders— the organization’s work with funders and gov- disconnection and inhibit effective governance. ernment, subsidize the organization’s work Moreover, the trend toward professionalized their constituents— through voluntarism, and direct the organiza- boards comprising “experts” can deepen the tion’s perspective on how to address problems class differential between the board and the com- in organizational and move into the future. munity, further exacerbating the board’s discon- Even though many nonprofits have become nection from those it ultimately serves. decision making. professionalized, these qualities provide organi- zations with programmatic accuracy and visibil- Beyond the Board ity. And because nonprofits are ultimately Responding to the need for new governance organized to benefit their constituencies, they model s , a net work of pr a c t it ioner s a nd have a responsibility to include their primary researchers from across the country has devel- stakeholders—their constituents—in organiza- oped an expanded notion of governance that is tional decision making. built on participatory principles and moves But the hierarchical structure of many non- beyond the board of directors as the sole locus profit boards ignores this central fact and in many of governance. A lthough it is still a work in progress, J UDY F REIW IRTH , P SY . D., is an organizational consult- “engagement governance” is a framework in ant and founder/coordinator of the Alliance for Nonprofit which governance responsibility is shared Management’s national network, which focuses on devel- throughout an organization’s key sectors: that oping new models of governance. is, constituents, staff, board, and other commu- 38 THE NONPROFIT QUARTERLY WWW.NONPROFITQUARTERLY.ORG • SUMMER 2007
  2. 2. Community-Engagement Governance Legend Desired community impact = primary purpose of governance The four governance functions are the following: • planning functions range from whole-system strategic direction- Concentric circles = stakeholder groups engaged in shared gover- setting, and coordinated planning to input on trends and priorities; nance • advocacy functions range from joint decisions about policy and The circles represent the different layers of engagement in governance, distributed advocacy activities to participation in needs assessment; with the primary stakeholders (the constituency/community) serving as • evaluation functions range from shared participation in design and active participants in meaningful decision making implementation and lending resources and expertise to feedback on Dotted lines between circles = open communication flow and trans- quality; and parency • fiduciary care activities range from stewardship and resource develop- ment to defining resource needs. Elliptical circles = governance functions The diagram identifies four governance functions: planning, advocacy, Labels outside of circles = governance competencies evaluation, and fiduciary care. The circular arrows represent the engage- Competencies intertwined with all areas of effective governance ment continuum. Within each governance function, the extent to which each stakeholder group (constituents, staff, board, other stakeholders) is The Alliance for Nonprofit Management’s Governance Affinity Group members engaged in shared decision making may vary; leadership responsibilities who contributed to this framework development are: Michael Burns, Anne Davis, within these functions may also vary among the stakeholder groups, Jane Garthson, Sue Hamersmith, Mary Hilard, Michael Kisslinger, Steven Klass, depending upon the nonprofit. Jeanne Kojis, Tim Lannan, Rae Levine, Deborah Linnell, Debbie Mason, Diane Patrick, Regina Podhorin, Brigette Rouson and Terrie Temkin. SUMMER 2007 • WWW.NONPROFITQUARTERLY.ORG THE NONPROFIT QUARTERLY 39
  3. 3. nity stakeholders. It is based on principles of those closest to the organization’s work—con- participatory democracy, self-determination, stituents and staff—are partners with the board. genuine partnership, and community-level deci- This redistribution of power makes nonprofits sion making as the building blocks of true more resilient and responsive and creates a democracy. Although no governance model fits dynamic community presence. Engagement all nonprofits, we believe that engagement gov- governance more ernance more closely reflects the essence of The Framework’s Design Principles nonprofits by creating vehicles for constituent While this framework is meant to encourage a closely reflects the empowerment and community change. variety of governance approaches based on orga- nizational needs, there are a basic set of design essence of nonprofits The Premises of the Framework principles that any organization should incorpo- Above all, the nonprofit sector should advance rate into a new system of governance. by creating vehicles democracy and self-determination rather than • A results-oriented approach. In contrast to dependency and disempowerment, and the frame- traditional governance models in which the for constituent work of engagement governance uses this premise primary focus is the effectiveness of the organi- as its starting point. Our group defines governance zation, our framework situates the desired com- empowerment and as “the provision of guidance and direction to a munity impact at its core. This reprioritizes nonprofit organization so that it fulfills its vision results as the central focus of nonprofit gover- community change. and reflects its core values while maintaining nance. accountability and fulfilling its responsibilities to • Shared authority among stakeholders. In a the community, its constituents, and government community-engagement governance framework, with which it functions.” The following are some there are three layers of an organizational premises of the framework: system: (1) the primary stakeholders (i.e., the • Because nonprofit governance frameworks constituency that the nonprofit serves; (2) the tend to replicate outdated, top-down structures, organizational board, staff, and volunteers; and they often run counter to democratic values and (3) the secondary stakeholders (i.e., funders, leg- impede an organization’s achievement of its islators, other nonprofits, and networks). mission. If those directly affected by a non- As depicted in the Community-Engagement profit’s actions are left out of decision-making Governance diagram on page 39, each layer processes, the resulting decisions can be incon- plays a significant role in this shared-governance gruent with constituency needs, let alone organi- system. The framework allows for various kinds zational mission.1 of participation by all three layers in the system. • Governance is a function and a process, not An organization determines, along a continuum, a structure, so its functions need not be located which layers of the organization currently make solely within the confines of a board. Tradition- governance decisions, which participants should ally, governance literature has centered on be involved in future decision making, and how boards of directors. But legally, there are few decisions will be made. Policy changes, for requirements about who can partner in gover- example, might first be discussed within groups nance or participate in a board. Thus a nonprofit representing the interests of each layer and then has leeway in deciding who will serve on a by the group as a whole or, in very large organi- board, how members will be selected and zations, within a cross-sectional group chosen elected, and which decisions will fall under a to represent each sector. Critical organizational board’s purview.2 Application of engagement and strategic decisions—such as key strategic governance depends on many factors, including directions or new initiatives—are generally the organization’s constituency, mission, stage made together by active constituents, staff, and of development, adaptive capacity, size, and board members. community readiness. • Open systems, ready access. An open • Governance is about power, control, author- system provides ready access to information ity, and influence. With engagement governance, needed for effective decision making at every decision making—and thus power—is redistrib- level. The “Community-Engagement Gover- uted and shared, creating joint ownership, nance” diagram illustrates an open system empowerment, and accountability. As a result, between concentric circles, representing the 40 THE NONPROFIT QUARTERLY WWW.NONPROFITQUARTERLY.ORG • SUMMER 2007
  4. 4. ongoing information flow, transparency, and tions, the board can take on the role of coordi- communication among the stakeholders and nation. Although the extent of a board’s role will organizational components. After experiment- vary among organizations, in some cases a ing with this framework in various organiza- board may design and coordinate the gover- tions, we’ve learned some key lessons, including nance decision-making process for the organi- Rather than focus on the importance of ongoing communication and zation. For a board to be effective in this role, transparency at all organizational levels. however, its composition must truly reflect the the common list of • Redistributed decision making. Rather organization’s constituency. than focus on the common list of governance We have also learned that it can be more governance roles and roles and responsibilities, it is more useful to effective to organize a cross-sectional team focus on governance functions and then look (comprising the board, staff, and primary and responsibilities, it is creatively at how they can be redistributed. The secondary stakeholders) to serve as a coordinat- Community-Engagement Governance diagram ing council. This team coordinates governance more useful to focus identifies four key governance areas to explore: responsibilities by determining the key gover- planning, advocacy, evaluation, and fiduciary nance decisions as well as who should be on governance care. In the diagram, these governance func- involved and how decisions should be made. tions are shared by the different groups of par- In many cases, a board will continue to functions and then ticipants, as represented by the “slices” within assume the fiduciary care role by overseeing the the concentric circles in the diagram. These financial management and resource develop- look creatively at functions represent a decision-making engage- ment functions. It may also coordinate an exec- ment continuum. The level and design of shared utive director’s evaluation process. how they can be decision making will vary given organizational type. It may be appropriate for a board to take a Next Steps redistributed. greater role in fiduciary care to ensure an orga- The engagement governance framework contin- nization’s sound financial management and ues to evolve as we get feedback from practition- resource development. ers and governance experts. We hope that you • Competencies. Organizations must have will offer your thoughts and experience. We have individual and organizational competencies for already received thought-provoking feedback an effective shared-governance system. Outside about engagement governance, including ques- the concentric circles in the diagram, four gover- tions about the definition of “community” and nance competencies appear: strategic thinking, the makeup of stakeholder layers, how to set up mutual accountability, shared facilitative lead- systems for shared accountability, how best to ership, and organizational learning. These com- resolve differences in inclusiveness, and how to petencies are intertwined with all areas of address issues of cultural competency and class governance work and organizational compo- differences in this shared-governance model. nents and contribute to organizational adapt- Our next step in developing the framework is to ability to environmental changes. design processes that help organizations shift to this new governance framework. Making the Framework Work We look forward to your feedback on how to Where does a board fit into this shared-gover- help nonprofits become more inclusive, account- nance system? How does an organization able, democratic, and influential. manage the decision-making process so all orga- nizational layers effectively participate in deci- Endnotes sion making? Doesn’t redistribution of decision 1. Judy Freiwirth and Maria Elena Letona, “System- making get unwieldy and inefficient? Wide Governance for Community Empowerment,” As we have experimented with this frame- the Nonprofit Quarterly, Vol. 13, No. 4, 2006. work in several organizations, we have learned 2. Internal Revenue Service “Good Governance that an organization must designate one group Practices for 501(c)(3) Organizations,” February 2, to be responsible for coordinating the different 2007. layers and components of governance. This approach also addresses how a board R E P R I N T S of this ar ticle may be ordered from can fit into the new system. In some organiza- store.nonprofitquarterly.org, using code 140207. SUMMER 2007 • WWW.NONPROFITQUARTERLY.ORG THE NONPROFIT QUARTERLY 41

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