Rebuilding Nonprofit Boards: When a New Board Can Be a Fresh Start

Article Highlights:

• Good board governance is key to a healthy nonprofit.
• But the hemorrhage didn’t end there.
• A Time for Transition
• How We Rebuilt
• Challenges Bring Learning

This author had no prior experience in rebuilding nonprofit boards. Here he recounts the journey of how he went about building a brand new board and restructuring leadership in the face of dysfunction.

Good board governance is key to a healthy nonprofit.

In the nonprofit world, governance is often a quiet cornerstone — until it falters. As a retiring grant writer looking to give back to a local museum that had been pivotal in my career, I was unexpectedly thrust into the heart of such a governance crisis. The museum’s support organization was in turmoil, marked by resignations and conflict rooted in personality clashes that no one dared address. This article is more than just a recount of my journey from observer to active participant in rebuilding a failing board. It’s a guide filled with lessons on navigating and restructuring nonprofit leadership, aimed at ensuring that other small nonprofits might avoid or repair similar fractures in their own governance structures.

As I considered how I could get involved in the museum’s nonprofit, which appeared to be in turmoil, four of the seven board members resigned in a short span of time. When asked, most of the departing board members cited issues with one board member in particular; they no longer wanted to serve on the board with this person.

To make matters worse, this issue among the board was never addressed: The departing members continued to support the museum, and no one told the accused that their behavior/personality was the source of so much strife.

Basically, the problem was this: The accused person was a long-time member and large donor. No one wanted to be responsible for losing their support, including the other board members, and so no one stood up and communicated the negative impact this individual had, ultimately leading to the loss of good people. Unfortunately, this may be an all-too-common occurrence among nonprofits — especially small nonprofits in small communities.

But the hemorrhage didn’t end there.

Before I was going to commit myself to this, I wanted to get my bearings, so I reached out to the museum’s director (who was not a board member at the time). He said that this turmoil was nothing new; the board had been dysfunctional for years. They had even banned the director from board meetings and refused to inform him about membership, donors, or the organization’s financials.

Adding to this complete dysfunction was the orientation of the nonprofit itself, including tension between the museum “staff” and nonprofit board. This museum nonprofit only had one part-time employee, who had another full-time job and could only work in the evenings when both the museum and shop were closed. As such, a cohort of volunteers ran the shop. There was little-to-no oversight of either the employee or these volunteers — which may have accounted for potential discrepancies in terms of inventory. The shop was minimally a fundraiser for the museum, but sometimes even lost money.

When the singular employee decided to leave, the remaining board members stepped in to manage the daily operational tasks. Unfortunately, this left no time for nonprofit governance. Rather than scaling operations down, the board took on more responsibility and more tasks. Perhaps unsurprisingly, only a few board members were doing most of this work. This all resulted in burnout: Of the three remaining board members, one thought that she could continue the work. Of course, a board of one is not a board at all. Ultimately, the nonprofit suffered from governance neglect. The volunteer-staffed museum shop even had to close, despite its popularity in the community.

It became clear that the museum nonprofit was barely limping along, and if we didn’t do something — and fast — it wouldn’t survive much longer.

A Time for Transition

While I declined the first ask to be part of the clearly dysfunctional board, I still wanted to help the museum — what I had started out to do. As such, the director and I began a series of (many) conversations regarding where exactly the museum nonprofit (and perhaps, more specifically, its board) could go from there. Eventually, we settled on a raze-and-rebirth strategy: We needed a completely new board if we were ever going to get the museum nonprofit back on track.

We talked it over with the remaining board members, and they agreed on resigning so that the nonprofit could start over. Prior to their resignation, they voted in four new board members as a transition team. We chose the term “transition” as we thought this would be more palatable to museum members, donors, and previous board members. We stated that this board would be in place for one year, including approving new bylaws which I drafted with the museum director.

And thus began the true yearlong effort to transform the nonprofit.

How We Rebuilt

For the new board, our focus was on creating a strong nonprofit organization to support the museum. To wit, we made a series of changes to address specific problems we noticed within the board.

Change 1: Refocus Mission and Purpose

One of the problems that we — like many nonprofits — faced was scope creep. Over the years, the mission statement kept on adding references. At some point, it read more like a task list than any kind of singular mission, and it made knowing what choices to make in terms of board governance utterly impossible.

As such, the first change the transition board implemented was winnowing down our mission statement. We needed to articulate a singular purpose for our nonprofit.

Through discussions, we concluded that the most important task for this nonprofit is to support the local museum; it is why this nonprofit exists.

From there, it was easy to come up with a new mission statement: to support the museum through fundraising and advocacy. Everything fits into these two areas. However, we decided on listing fundraising first because of its importance: Without fundraising, the museum nonprofit simply cannot exist. As a result, the nonprofit’s goal should be, first and foremost, to raise funds to support the museum.

Change 2: Sediment the Bylaws

The second thing we did was take a look at the bylaws to try and understand what governance — if any — was specified therein. We had a sneaky suspicion that the board members not being in-sync with one another might be related to their duties not being clearly outlined in these bylaws.

And we weren’t wrong: What we found was a jumble of outdated and often unclear policies that usually confused more than they clarified, and often left us wondering, “What were they thinking?” For example, the previous board (or boards — there was no recordkeeping of who implemented these changes — or when) removed all references to director term limits and had seemingly arbitrarily increased the board size. There was also a long list of inactive committees and subcommittees whose purpose we couldn’t entirely intuit.

As a collective, we decided to edit the bylaws to create a smaller board of 5-9 members who focused on good governance as opposed to operations. We also decided on staggered terms so the board wouldn’t face the same kind of rapid turnover of the multiple successive resignations. We wanted some kind of consistency, but we also recognized the need for flexibility. To assist in recruitment, then, we implemented the option for one-year terms for new members in their first year.

One of the most important things we discussed in the bylaws was the process by which personal and personality conflicts must be addressed. We did not want what had happened in the past to happen again — no board can withstand multiple resignations in a short period of time — and so we knew we had to have processes and policies in place for future confrontations.

Throughout the first year, we continued to make minor tweaks to these bylaws while keeping their strength and solidity to help orient our new board.

Change 3: Structure Organization and Governance

With the bylaws providing a solid footing, we knew we needed to also articulate the organizational structure as well as identify its patterns of governance. After all, we wanted to avoid the previous problem the board had faced with long-term member syndrome.¹ For those of us who have served on nonprofit boards, we’re probably all-too familiar with the excuses generated by long-term member syndrome: “I know best,” “You can’t do x,” and the inevitable “But we’ve always done it this way!”

As we saw with our particular nonprofit, this obstinacy can become increasingly challenging when paired with another all-too-familiar malady: Large donor syndrome. Just because a board member donated a lot of money did not mean that they got to dictate how the organization was structured or to what ends. In fact, the more we talked about and reflected on the past boards, the more we realized that board power and governance could not be relegated to the hands of an individual but instead must be distributed among the committee and subcommittee structures.

But outlining this structure did not happen overnight. Throughout the year, we identified the most necessary committees and subcommittees while discussing who might serve as officers. As a small nonprofit with no paid staff, this was critical to get the work done and to not burn out board members. Using the mission as guidance and the bylaws to outline function, we established four major committees (Fundraising, Investment, Advocacy, and Executive) while deciding that any subcommittees established will likely be ad hoc.

Change 4: Develop Processes to Streamline Operations

After discovering 12 different email addresses and learning that many vendor accounts were established using board members’ personal email addresses and mobile phone numbers, we decided enough was enough. No more creating accounts that future board members could not access. It was messy and a lot of work, but eventually we organized and centralized both email and vendor accounts. We also have formally adopted six new policies to address everything from budget to vendor account management in the hopes that any future boards will not face these same issues.

In the process of this reorganization, we also learned that the nonprofit’s website was a security risk for online payments. As such, we decided to partner with the museum for a page on their website. One benefit from this approach was that it showed our donors, volunteers, and the public that we are partners with the museum.

Of course, because the previous board had more or less been dissolved, our transition board had inherited incomplete projects (alongside the rampant vendor issues). To help streamline operations, our board has decided to only take on projects that can be accomplished within a year (or perhaps within a lead board member’s term). We are all too keenly aware that projects that drag on and on — especially fundraising projects — quickly lose their momentum. All too often, they die out with little ROI and a whole lot of wasted time and energy. Part of streamlining operations, then, meant getting rid of zombie projects and focusing our attention on short fundraising activities that work and yield results.

Change 5: Get the Numbers in (aka Fundraising and Advocacy)

One of the biggest problems our nonprofit faced (other than the aforementioned interpersonal conflicts) was the lack of data collected. Our financial reports did not provide the necessary information to help with decisions, and the overall lack of data (and accompanying goals and targets) made measuring success impossible.

In particular, the success of the museum shop became a sticking point for our transition board. It needs to serve as a fundraiser for the museum in order for the board to justify its reopening. As such, the museum director (as an ex-officio board member) is currently working on a formal business plan to strategize ways to make it profitable — and thereby successful.

We have also recognized membership as an untapped resource for this nonprofit and the museum. We are currently working to clean up the membership database and plan to restructure membership and associated benefits. We plan on hosting membership drives in the near future, always keeping in mind what the purpose of our nonprofit is: To fundraise for the museum.

To wit, we have established a 2-year budget that aligns with the museum’s 2-year strategy initiatives. Initially, we offered the museum more money, but then had to shift our approach due to the museum’s limited staffing capacity. As such, we decided to run two new staffing programs as “demonstrations.” This will provide the museum with seed money and time to document the need for additional permanent staffing, identifying the benefits of new staff positions to the municipality, donors, and the community.

We have also begun advocacy work. We’ve started simple enough: Mostly just learning more about available resources in the museum field. However, we have begun actively investigating community partnerships and plan to develop an official advocacy plan in 2024.

Challenges Bring Learning

One year later, we still have our work cut out for us. Currently, we are drafting a board orientation program to be used for new board member recruitment which we would like to start six months before our terms expire. This is a priority for 2024.

When we began, we charted a course to reform this nonprofit with a single purpose: To support the associated museum. We are proud of our accomplishments, and we are most grateful for the relationship we have developed with the museum staff. This has truly been transformative and a change in the culture between the two organizations will have a lasting and positive impact.

It has been a tremendous amount of work. There were definitely times when I wondered what I was doing. Yet with every new discovery of challenges, we were able to talk through things as a board and eventually learn lessons from this process. And each lesson has brought us one step closer to building a well-governed, strong nonprofit.

As this article is completed, the museum nonprofit has received community support for the changes. Many people have also approached this organization about their interest in getting involved, including serving on the board. We know that this increase in community support is a result of rebuilding good board governance, and we look forward to continuing our work in the future.

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Footnote:

1. This is often the board’s version of founder’s syndrome, more or less. ↩︎

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• Insider Newsletters: An Easy Way to Keep Your Board in the Loop and Engaged
• Board Horror Stories: How to Reduce Board Resignations
• Five Lessons for Creating an Effective (and Accountable) Nonprofit Board
• A Cautionary Tale: Overcoming Governance Nightmares in Nonprofit Organizations
• How to Persuade a New Generation to Join Your Nonprofit’s Board

 

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