We are writing to report on the findings of the community process that was undertaken this summer by The Nonprofit Center task force.  As you may recall, the Board convened a group of community stakeholders who had an interest in preserving the mission of this valuable community resource.  This group was charged with exploring the needs of the nonprofit sector, assessing the viability of delivering those services and making a recommendation to the Board on how to proceed.  We thank all who participated in our stakeholder meetings and/or filled out the survey.  Your time and your thoughtful and honest feedback are appreciated.

From June through September the task force met four times, convened three gatherings of stakeholders and conducted a community-wide survey of the nonprofit sector.  They also researched other organizations with missions similar to that of The Nonprofit Center that are successfully operating in other communities. The task force concluded that the greatest area of need was among smaller organizations, and this conclusion was supported by conversations with regional funders.  For smaller nonprofits, the most valued and most-needed services are:

• Education and Training to support managers, staff, board chairs, and board members.
• Convening and Connecting individuals and organizations with similar interests, for example, executive director roundtables, grant writers, or organizations that could potentially partner on grants or projects.
• Offering Referrals to high quality service providers and experts who have been screened.
• Back Office Services such as financial, legal, human resource and IT services.

The need for these services appears to exist in Kitsap and Thurston counties as well as Pierce County. The task force recommended two possible courses of action to the board:

1. Rebuild and rebrand the organization, focusing on the four areas of high-need identified above.  This option would require the infusion of significant start-up capital and the recruitment of highly dynamic and visionary management and board leadership.
2. Responsibly close The Nonprofit Center to allow the mission to be carried on by other interested parties in the community.  This option would require the board to be conscientious about ensuring the well-being of current clients and protecting any assets of the organization so that they can be handed off to another organization serving the needs of the nonprofit sector.

After careful and deliberate consideration the board has decided that the course of action that will best advance the mission of serving the nonprofit sector and the communities we serve is to formally dissolve The Nonprofit Center.  We will be taking steps over the next few weeks to do so responsibly and ask for your support and understanding throughout this process.  The Nonprofit Center has added significant value to the Puget Sound nonprofit community and this is of course a direct result of the dedicated, committed and passionate past and current staff, volunteers, and community members who have so generously donated their time, sweat and tears for this vital mission over the years.  The board wishes to thank everyone who has been involved with The Nonprofit Center.

For those agencies currently being served by Center staff for your financial services, Alan Strand and Christine Garst will continue to provide nonprofit bookkeeping services.  Their professional and knowledgeable services will continue to be an asset for the nonprofit sector and we thank them for their contributions. Alan can be contacted at www.notforprofitaccounting.net and alan@notforprofitaccounting.net. Christine can be contacted at cbgarst@gmail.com.

Despite the challenges facing all of us and The Nonprofit Center these past few months, we are heartened by the task force process.  It brought to light the significant level of community engagement and energy for the continuation of nonprofit capacity building services to exist in the south Sound.  It is the sincere hope of the board and the task force that this positive energy will result in other organizations and individuals stepping up to rebuild, recreate and find solutions for improving the capacity of the nonprofit sector to make our communities better places to live, work and play.

We are confident that leadership will emerge from those who expressed a desire to continue this mission into the future and we encourage you to be an active participant in whatever should develop.  Thank you for your continued support during this time and for sharing your thoughts, opinions and expertise.

The nonprofit sector has a proud past in this region and makes a significant impact in all of our lives.  We are confident in the resiliency, passion and determination that exist in our South Puget Sound nonprofit sector.

Sincerely,

Dave Petrich, Board President

Joe Lawless Board Vice-President and Task Force Chair

I hope I convinced her otherwise because she would be a very valuable board member for a nonprofit. She does have a great deal to offer in terms of community connections, values and outstanding common sense. She understands how groups should work, and she is great at follow-through.

She also doesn’t like fund raising. She doesn’t want to be told how much to give. On that topic she’s less than convinced, but maybe she can be brought around. I am not a fan of giving board members a specific amount of money they must give. Instead, board members should be invited to make a gift that is equal to their commitment to the organization. Let them determine what that amount is.

Our conversation turned to mission, and my friend talked about reading of a growing interest in people writing their own mission statements. She thought she might give that a try. I hope she does, and I hope all of you do. If you can write down your mission, then it will be much easier to connect with an organization whose mission relates to yours. And, if you share missions, you are going to be a fantastic board member, volunteer, staff member or donor.

Many people want to learn more about what it means to be on a nonprofit board. Below is a short quiz that may help. It is based directly on the “Ten Basic Responsibilities of Nonprofit Boards” developed by BoardSource.

We call this the “Healthy Board Checklist” and here are some of the indicators. Ask yourself if these are true statements for your board.

• All board members regularly prepare for, attend and participate in meetings.
• The mission is clearly defined, and board members can state it without looking it up.
• The board regularly spends time learning about trends in the field of service.
• The board exercises diligent financial oversight.
• The board is involved with policies and issues rather than day-to-day management (except with grassroots organizations).
• Each member of the board makes a personal financial contribution each year.
• All board members are actively involved in raising money for the agency.
• Board members set aside personal considerations for the common good and act ethically.
• Working relationships among board members and with staff are harmonious.

If 7 to 9 of these statements are true for your board, give yourselves a gold star. Would you like to become mentors for members of other boards? If so, give us a call at The Nonprofit Center.

If 5 or 6 of these statements accurately describe your board, you’re ok. You need to do a little work, but you’re on the right track.

If only 1 to 4 statements are true for your board, it’s time to take a hard look at setting some development goals for your board. Involving everyone on the board in some training and planning would be a very good first step.

Thanks to NPQ’s Nonprofit Newswire, published daily by the folks at the Nonprofit Quarterly, I’ve just read an interesting but disturbing article. The key statement is that the authors (university researchers) found that consumers perceive nonprofits to be “less competent than for-profits.” This belief makes people “more likely to buy products from for-profits than non-profits.” [Click here for the full article.]

So why am I writing about this in an article about governance?

Because changing this perception is ultimately up to you as board members!

And you do want to change these perceptions because, in our world, “buying products” is equivalent to making donations. True, donations are grounded in shared passions. But, more and more, that is not enough. I attended a fundraiser for a small nonprofit recently, and, because I believe in the value of what these people do, I was prepared to make a donation of $50. Not a lot of money, but a decent-sized gift for me.

I didn’t make that donation. During the course of the event, I realized that the people involved in this organization, while deeply committed to their work, were not knowledgeable about financial matters. It came down to the fact that I felt no assurance that my credit card information would be treated with confidentiality.  The gift envelope is still in my purse.

So what’s a board to do?

At the very least, recognize that your organization will be much more effective if it has a good level of management competence. The more you have built the capacity of your staff to manage finances, human resources, operations and evaluation well, the better use you can make of the contributed resources given to you.

You need to build your capacity too. All board members need to beef up their financial knowledge, for example. I cannot count the number of board members who have said to me, “I can’t understand financial reports, but I don’t have to. Our Treasurer takes care of that.” If you say this, you are violating your legal Duty of Care as a board member.  All board members must understand the financial reports and their implications for the future of the organization.

But it doesn’t end there. Once you have built your agency’s capacity to operate effectively, and once your board is skilled at its responsibilities of planning, budgeting, financial oversight and policy setting,  you need to let people know. Start with your donors. Tell them how you are investing in improvements so their gifts are better used. Tell the whole community as well. The more you tell the story of your commitment to competence, the stronger will be the community’s support of your work.

You can change consumers’ (donors’) perceptions. It’s not easy, but it is essential.

Several people have asked me lately if nonprofit board meetings are subject to the requirements of the open meetings laws. While I’m not an attorney, I believe the answer is no. Our boards are not required by law to make sure our meetings are announced to the general public or to welcome anyone who wishes to attend (unless specific funding sources require adherence to the Open Meetings Law). That’s the legal side of the issue.

The disturbing side of the issue is that there are those who believe it is fine for nonprofit board meetings to be closed to all but board members. Don’t let clients attend. No donors. No organizational members. Keep the doors closed and don’t share information is their apparent philosophy.

Wrong!

While the law doesn’t tell us we must open our meetings, our sense of who we are and the foundations on which we are built should make it clear. All nonprofits exist because of the generosity of the community, and we owe our communities the highest degree of accountability and transparency possible. We must not hide.

Here’s the fundamental fact. We, as nonprofits, agree to provide a community service – our charitable purpose. In exchange, the community, through the IRS, tells us we do not have to pay federal income tax on our revenue and allows people who contribute to us to take a tax deduction. That’s the deal on which all 501(c)(3) nonprofits are founded. It is what I call a Charitable Compact.

Implicit in that Compact is that we honor the relationship with our community by being honest and open in all our dealings. The community has a right to know what we do and how we do it. There are, of course, situations when meetings need to be closed (discussion of personnel issues and major capital purchase plans, for example). But that’s it.

Because too many nonprofit leaders have been unwilling to be open and accountable, federal and state government officials are pushing for new nonprofit regulatory legislation. Because of actions of some “bad apples,” donor distrust is growing at alarming rates. We must change that environment. We must be open and accountable – there is no other way for a nonprofit to behave.