Friday, November 8, 2013

3 Governance Missteps

The father of modern management, Peter Drucker, wrote a fascinating novel with a memorable title, The Temptation to Do Good.  It’s instructive for every nonprofit CEO and board member.

“The temptation to do good” is on my Top-3 list of governance missteps—those fatal stumbles that may derail even the most well-meaning board members. Here’s the list:

Governance Misstep #1. When launching a new nonprofit ministry, you write your bylaws and incorporate before you spiritually discern your philosophy of ministry and philosophy of governance. 

That’s backwards. You should plan, recruit and then incorporate. Seek counsel first from a strategic planning consultant or a savvy CEO who will walk you through a spiritual discernment and planning process. Next, cultivate and recruit board members whose governance philosophies align with your unique mission and ministry philosophy. (One size doesn’t fit all.) Then, and only then, invite your legal counsel to create incorporation documents that will also align with your God-blessed mission, vision and governance philosophy.

Governance Misstep #2. When recruiting board members to both new and established ministries, you rely on the old adage that board members can pick and choose how they'll be engaged: “Pick One: Wealth, or Wisdom or Work.” 

That’s bad theology and bad practice. You need full engagement from every board member. In the new book, Stewardship as a Lifestyle: Seeking to Live as a Steward and Disciple, John R. Frank points out: “Some may believe that if you give time as a volunteer then you do not need to be a financial donor to the organization.  While all gifts of time, leadership and volunteering are appreciated, there is no measurement system in scripture to allow a gift of one type to cancel the need to grow in one’s holistic stewardship.”

Jesus reminds us in Matthew 6:21 (NIV), “Where your treasure is, there your heart will be also.” Board members of every economic bracket can prioritize their giving so (as some boards require) your organization is one of every board members’ Top-3 giving priorities each year. (That's not in the Bible, but it's good policy.)

Governance Misstep #3.  When meeting human and spiritual needs, we say yes to every opportunity (“the temptation to do good”)—and we blame God if he doesn’t fund our ill-conceived efforts.

That’s irresponsible. Guided by good governance and a focused mission statement, a ministry must prioritize (and say no frequently) and be results-driven versus activity-driven, or tempted to meet every need.  Priorities are paramount.

Why? According to Michael E. Gerber, 40 percent of all small businesses fail in their first year.  Of those that survive one year, 80 percent fail in the next five years. Only 20 percent that make it past five years are around for 10 years. Yikes! (My guess: the nonprofit failure rate is even higher.)

If your CEO has not read the E-Myth literature (to learn how to grow sustainable organizations), check out my review of The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It

May God protect you from governance missteps!

QUESTION: What other governance missteps could be obstacles to accomplishing God’s plan for our ministry?

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