Is Your NonProfit Board Built to Prevent Stagnation?

This month we had the opportunity to meet with museum leaders from all over the Midwest at the Association of Midwest Museums conference in Chicago. For those who aren’t familiar, the conference brings together hundreds of museum professionals, board members, and industry partners to share ideas, discuss emerging challenges, and consider what the future of museums should look like. 

We were there to share our Museum 2035 Report, but a lot of the most interesting conversations weren’t even about technology. We did talk a lot about leadership, governance, and one theme in particular: the current status of nonprofit boards. Many organizations asked some form of the question “Are today’s nonprofit boards prepared to navigate such an uncertain future?” 

It’s a critical inquiry, and the truth is that recent events point to the answer being: no, not really. 

From the conversations we’ve had, in addition to recent research and current events, it seems there is a trend happening with nonprofit boards, and it’s one that can quickly become scary. Many boards have become so focused on prestige, fundraising, continuity, and tradition that they lose the ability to provide meaningful strategic governance–at a time when doing so is crucial. 

Good Governance Requires More Than Good Intentions

As many of our articles discuss, almost all organizations are operating in an increasingly complicated environment. This is especially true for nonprofits (like museums) who also have to deal with funding priorities changing and government priorities shifting, in addition to new technology and workforce dynamics. 

Organizations that depend on grants, appropriations, philanthropy, or public support can find themselves exposed to risks far outside their direct control. It’s not like a nonprofit board should be expected to anticipate all of those scenarios; obviously they can’t. 

The real challenge is whether or not these boards are structured to help nonprofits prepare for and excel in a new environment. That requires more than an impressive collection of resumes, influential community members, or a decades-long family commitment. It requires the right board. 

The right nonprofit board isn't necessarily the biggest, most prestigious, or most well-connected board. It's the board that has the right skills, structure, accountability, and willingness to challenge assumptions when the organization needs it most. Successful boards have experiential diversity as well as demographic diversity, with a mix of knowledge across: 

• Technology

• Cybersecurity

• Finance

• Risk management

• Fundraising

• Government relations

• Community engagement

• Strategic planning

• Industry specialties

Risk Management Begins Before a Crisis

One of the biggest governance gaps we heard about is the tendency to become reactive. Think: a nonprofit discovers a major grant has been eliminated, or a key donor leaves. Or, in a recent real-world example, a new government institution starts seriously slashing funding that was already approved. 

The board meets, everyone scrambles, and plans are developed under pressure. The problem is, effective risk management should have started long before the crisis took place. Once these difficulties are underway, the board is in reactive mode–which never produces the results that a proactive plan would have. 

Consider the recent changes in federal funding a useful example. Public media organizations, universities, cultural institutions, and other nonprofits are facing significant uncertainty around government funding and grants. No individual nonprofit board could have prevented those policy changes.

But an organization that had already modeled the loss of a major funding source, identified alternative revenue streams, evaluated discretionary spending, and developed contingency plans would have been in a fundamentally different position when the change occurred.

You can't always control the risk. You can control how prepared you are for it.

Is the Board You Need the Board You Have? A Checklist

It’s important to acknowledge that stability can quickly turn to stagnation. Many nonprofit boards become bloated over time, because the members are also key donors that the organization doesn’t want to lose. This results in boards that become too large to be nimble or efficient, while also lacking the essential skills and experiences needed to maneuver the key challenges. 

In these cases, decisions are delayed and eventually the nonprofit becomes stale or ineffective. Some strong governance measures like these could help: 

• Requiring maximum age limits and/or creating a non-voting class member

• Implementing term limits for board members

• Scheduling occasional in-person meetings

• Enforcing minimum attendance requirements 

• Reviewing demographic and experiential diversity requirements

Building a truly impactful board can require asking some uncomfortable questions. If you’re reading this and thinking about your own nonprofit and how they might weather a cybersecurity crisis or funding cut, ask yourself these questions: 

• Does the group as a whole have the right expertise? 

• Are we recruiting for the organization's future or simply rewarding its past? 

• Do board members understand (and care about) their responsibilities? 

• Are members actively participating? 

• Is the board small enough to have meaningful discussions? 

• Are action items accomplished in board meetings, or are most motions tabled for another time? 

• Do we have clear term and attendance expectations? 

• Are we conducting independent assessments of organizational risk? 

• Do we have contingency plans for the risks that could materially affect our mission? 

• Is there a “board within a board” with only a few individuals actively making decisions? 

And perhaps most importantly of all: 

Would we build this exact same board if we were starting the organization today?

If the answer is no, it may be time for a reset (or at least a governance review). That doesn't mean discarding institutional knowledge or diminishing the contributions of long-serving members. It means recognizing that organizations evolve, and their boards need to evolve with them. 

The conversations SAGIN had at the Association of Midwest Museums conference reinforced something we see across organizations: uncertainty isn't going away. We’re here to work with nonprofit organizations across technology, governance, and risk by providing meaningful ideas, challenging assumptions, and anticipating the challenges of the future.