Friday, October 31, 2014

Top 10 Governance Survey Highlights

There are a few surprises among the Top 10 Highlights from the hot-off-the-press executive summary of the ECFA 3rd Annual Nonprofit Governance Survey. It’s available as a download to ECFA-accredited organizations and subscribers. (Click here.)  

Highlights include board giving, CEO succession, the gap between knowing and doing, operating reserves and measurable goals. Here are the 10:

1. Boards affirm distinctiveness of Christ-centered governance. There has been a dramatic and encouraging change in board member thinking, over 3 years, about the distinctives between “secular” board governance and “Christ-centered” board governance.

2. Strengths and spiritual gifts: more knowing than doing. While more than 95% of CEOs, board chairs and board members say it is important to leverage the God-given strengths of every board member, only about 17-21% of boards have completed a strengths assessment.  Somewhat more encouraging, 33-44% of board members say they know the spiritual gifts of their board colleagues.

3. Healthy governance: not there yet.  On the governance continuum of “Micromanagement (1) to Healthy (10),” about 35-40% of CEOs and board members rated their boards at 7 or less—but about 90% would like to be at “Healthy Governance” (8, 9 or 10) within 12-18 months.

4. In rating the three aspects of governance, fiduciary governance rated high, but generative governance rated the lowest. Board members agree that they are very effective in their “Fiduciary Governance” roles, but much less effective in their “Generative Governance” roles—the re-imagining of the organization, in light of trends and opportunities.

5. CEOs and board members agree that all board members should be givers and encourage others to give, but… while a healthy 87% to 91% agree that board members should be annual givers—less than 42% of their organizations provide training to equip and inspire board members on the “how to” of inviting others to give.

6. About one-third have operating reserves of 6 months or more, while up to 84% want at least 3 months of reserves within the next 24 months.  Based on their last fiscal year, 57% or more of survey participants said they had three or more months in operating reserves—and 30% to 33% reported reserves of six months or more.

7. Over one-third of board members recognize they dip into tactical versus strategic issues always or frequently. Yet overall, CEOs and board members said several unhealthy boardroom habits are usually avoided in their board meetings and/or addressed by the board chair.

8. Majority of board members not prepared for CEO succession.  In response to key questions “every board member must ask,” only 30-35% of board chairs and board members (the lowest response of the 13 questions) said they were prepared to name their next CEO.

9. Fundraising continues to be top area needing improvement. For the third year, CEOs, board chairs and board members were asked to select the Top 5 areas needing the greatest improvement in their ministries. Four areas have remained the same for all three years of the survey.

10. Almost 60% of CEOs and senior staff have annual measurable goals. Over 85% of CEOs say that donors are interested in mission impact—yet more than one-third of CEOs do not have board-approved CEO annual measurable goals. But good news: 84% of CEOs say their boards understand their role and God’s role in goal-setting and kingdom outcomes.

QUESTION: Download the executive summary and photocopy the 20 “Board Member Self-Assessment” questions (page 60) for your next board meeting. Then ask, “What are the Top 3 areas that need improvement in our board work?”

Note: A brief article on the Top 10 highlights is featured on page one of ECFA’s Focus on Nonprofit Accountability (Third Quarter 2014). View it here.

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