Tuesday, January 1, 2008

Report Discloses That Areas of Lowest Board Performance Include Fundraising, Diversity and Oversight of the CEO

On January 1, 2008, Nonprofit Business Advisor (LRP Publications), published an article concerning a new report by Boardsource (www.boardsource.org) on the shortcomings of nonprofit boards.  The areas identified in the report as needing the greatest improvement include:

* Fundraising and financial sustainability. Fundraising is the most pressing organizational issue requiring improvement based on chief executive and board member responses. Less than half (46 percent) of charities reported full board participation in giving. On average, just under three quarters of each board's members give to the organization. Many are uncomfortable asking for donations.

* Board demographics and diversity. The 2007 Index found that nearly half (49 percent) of nonprofit chief executives surveyed were somewhat or very dissatisfied with board diversity. Chief executives ranked board composition as a leading challenge for nonprofit boards, second only to fundraising, but board members ranked diversity further down the list at number five.

Despite chief-executive concerns, the demographic makeup of nonprofit boards has remained fairly consistent for more than a decade. The majority of board members are White (86 percent), male (57 percent) and older (49 percent were 50 to 64 years old).

The BoardSource report shows that board and budget size tend to influence the demographics of boards. As nonprofit budgets increase, boards are likely to include more African Americans and people age 65 and older, but fewer women and young people.

* Board oversight of CEO. The nonprofit chief executive is typically a board of directors' only employee, yet just over a quarter of organizations (26 percent) do not conduct a formal, written evaluation of the CEO by the board.

(excerpt from the Nonprofit Business Advisor article)

For the full Nonprofit Business Advisor article, see LRP Publications website at www.lrp.com.  A complete copy of the "Nonprofit Governance Index 2007" report is available in the "knowledge center" portion of the boardsource website.

DAB

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