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Board Diversity Impacts ROI

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It’s hardFoliage as Shapes - IMG_0052 s.c to find an organization today that’s not focused on, or at least giving lip service to, diversity. But have you ever considered the cost to your organization of not having a diverse leadership team? When Catalyst first came out with their study about the ROI for investors of companies with more diverse boards, many were surprised. But the numbers were clear: Return on Equity, Return on Sales and Return on Invested Capital were all significantly higher (53%, 42% and 66% respectively) for companies with more women on their boards.

The same is true for nonprofit boards.  Boards lacking diversity can make poor financial decisions, such as investing the bulk of their endowment with an investment manager  “everyone knows.” Boards lacking diversity can miss big opportunities to reach new communities and new donors. They can miss out on creating new partnerships.

So how can you create a more diverse board?

First, let’s define diversity. When I meet with boards on this topic, everyone’s first instinct is to think ethnicity and gender. These are important. But just as vital to decision-making are having people of diverse ages, life experiences, socio-economic backgrounds, family structures, and more.

Range of Ages. The most common lack of diversity I see on boards is related to age. And the most common form of ageism I see is against younger people (which on boards tends to mean under- 35). Yet the views of the 18-35 set, and their facility with the internet and social media tools, makes them especially valuable on boards.

Varied Life Experiences. Another area where boards often lack diversity is in life experiences. That’s because so many people are recruited to boards by friends, business associates or college/grad school classmates. So if you have one corporate lawyer on your board, you’re likely to have two or more. That’s not to say anything against lawyers, but there is also diversity among types of legal expertise and it could benefit your board to have more than one kind. Life experiences also include living overseas, blended families, military families, LGBT, and religious background.

Personal Attributes. A third area for boards to focus on when attaining diversity is a mix of personal styles and personality attributes. Even if you’re board is every color of the rainbow, if every person on it is a forceful leader, you’re going to have trouble filling your committees. By the same token, if everyone is a quiet, behind-the-scenes type of operator, you’ll have trouble finding committee chairs every year. You need a mix of several personality types to make a board fully functional.

Varied Connections. Finally, board diversity requires diverse community connections. One of the most overlooked areas for recruiting board members is among the clergy. Rabbis, priests, and ministers tend to know a lot of people in their communities, as well as other organizations that are making a difference there. That makes them great “connectors” to have on your board, irrespective of whether your organization has a religious mission. Other great connectors are people who volunteer in communities in which your organization wants to reach. And also don’t overlook individuals who serve on national boards, where they make contacts all across the country.

Tapping diverse talents always leads to a stronger board. And a stronger board helps you avoid costly mistakes and deliver on your bottom line: the mission.

Amy DeLouise is a video producer/director and consultant who works primarily with nonprofits and their leadership teams.

Your Board is a Branding Asset

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Many nonprofits struggle with how to engage the board in branding and marketing. Sometimes staff even view the board as adversaries in this work, who think marketing is a distraction from mission. But the board may be your hidden asset if you give them the right tools. Consider these five ways to engage the board on behalf of this important work.

1. Connect Marketing to Mission. Board members are involved because they care about the mission and are connected to it in some personal way.  Set aside time at one meeting to have each board member identify a core aspect of your mission that they find most important and why.  Have each board member name one or two ways they could connect another circle they move in (social, work, alumni, etc.) to this aspect of your mission.

2. Find Examples From Other Spaces. Nonprofit board members often work in the for-profit world. Bring them examples they recognize–from banking or real estate or law.  A legal video that went viral on YouTube (there are some!), a business Twitter campaign, a newspaper story that generated web views and buzz. All of these can help your brand ambassadors understand the role of marketing in delivering on the mission.

3. Help Board Members Use Social Media. Many board members skew older than staff.  They may not be comfortable using social tools, or they may not consider using them to promote the work of the organization. Give board members monthly updates with hashtags, photos and other resources to help promote your upcoming fundraiser or event.  Give them examples of how retweeting or tagging and posting a photo on their Facebook page might net you hundreds of new views and real dollars.

4. Give Board Members Tangible Updates of Your Messaging Impact. Give board members an inside look at your social metrics–what pages on your website are most “sticky” and why, how many people follow your blog, what happens when you tweet, when you post a new item on Facebook.  Give them not just numbers but stories about who your communities are, what they need from you, and what they respond to.

5. Show and Tell. Do a live demo of as you interact with various communities and constituencies through your different social networks. Let board members see in realtime the kind of impact you have, and how the message can be multiplied exponentially.

Polishing the Tarnished Brand of Private Philanthropy

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Last week Claire Gaudiani wrote in the San Francisco Examiner about organizations such as the Greenlining Institute and the National Committee for Responsive Philanthropy, who charge that today’s private foundations do not sufficiently meet the needs of society’s poorest and most marginalized populations. In other words, they think private foundations have a poor brand–often for good reason–and it needs fixing. Greenlining and NCRP have been advocating both for set percentages of funding (as much as 50%) for such groups, and also that foundations report the ethnic and racial composition of their boards and staffs.  In many ways, these actions could serve to increase the responsiveness of the foundation sector to people in need. In other ways, these goals could be counterproductive.

First, let’s take the diversity goal. When I work with nonprofit boards, particularly in the area of governance, I am always pushing for diversity. But what I often find is not so much a lack of racial and ethnic diversity as a lack of economic and age diversity.  Age, what’s that got to do with it, you say? Well, a lot.  When I poll boards before working with them, I typically find the bulk of members are within a ten-year age range.  While some boards skew older and some younger, in most cases they are missing members in their 20’s and 30’s and those in their 70’s and 80’s.  From the younger group they could gain a better understanding of the power of social media–with tools like social networks, web video, podcasts, and mobile technologies–to reach donors and service-users alike. (For example, mobile phone use is very high in so-called under-served populations.)  In the older group, they would find experience running organizations, managing investments, and excellent community connections.

In terms of the charge that private foundations should provide more grants to marginalized populations, one of the key stumbling blocks to this funding may be ensuring the readiness of grantees to actually manage the grant, with its reporting, communications, and financial responsibilities. The US Agency for International Development (USAID) provides a good model in the way it provides capacity-building grants to nonprofit re-granting organizations that act as bridges, helping communities and very small nonprofits learn to manage the funding process, build community-based solutions and improve their capacity, so that in the future AID can make them direct grants.  This is a model followed by many private foundations as well, and so the target measurements should take this into account.

There’s no question private foundations can improve their work, and their image. The question is how to do it in a way that benefits society, and builds more capacity within the donor organizations, too.

Does Your Board Support Your Brand?

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This past week I spoke on a teleconference workshop about tools to engage boards to supporBarn in the Palouse- s.ct fundraising auctions. Many of the 50+ organizations who signed up indicated that their board members are not fully engaged in outreach events and fundraising. Does this mean they have the wrong board members? Do they need to define roles and expectations?  Or do board members actually need some training? I find it’s a bit of each. Whether you are a for-profit or nonprofit, your Board of Directors is a critical component of how you connect to the communities and constituencies you serve. They need to be supporting your brand in multiple ways. How can you help them do this?

Board members need to know their financial role.

As we all know from the recent financial meltdown, governing boards were blamed for taking their eye off the ball. What are you doing to be sure your board knows its role and its responsibilities when it comes to fundraising and financial oversight?  Prospective board members should be clear on the requirements of their role. They need to know the hours of the commitment, the dollars they will be expected to give or raise, and how they can help you propel the mission.  They also need to feel comfortable with nonprofit financial statements, which can look very different than corporate ones.  New board members should have an orientation to remind them of their roles and help them with tools in the areas where they are the least comfortable (i.e. making an “ask” for your organization). Even experienced board members need refreshers, especially if you have an important event coming up or a major campaign.

Board members need to see the goalposts.

Board members need more than the annual report. They need specifics.  If you’re holding an auction, what is your fundraising goal? What happens if you don’t meet it?  What are your most important programs? What outcomes will determine your success?

Board members need to learn about your brand.

Board members are obviously committed volunteers, but sometimes they are connected to your organization through only one pathway (i.e. a child with a disease that you are trying to cure, a son at your school, as a professional member of your association, etc.)   They need to be briefed on the big picture about your brand promise to all of your “customers,” including the experience you promote for your donors, your staff and your other volunteers.  They need to be able to easily talk about your “elevator pitch” and connect it to their own experience with your organization.   Give them talking points. Let them practice on one another.  This way, your board members can be better—and more comfortable—cheerleaders.

Board members need recognition.

Board members need more than their names on the masthead. They need to be publicly thanked when they do a good job of supporting your mission. When involved board members receive thanks and recognition—whether it’s for a report well-researched or getting out more volunteers for your walkathon—then other volunteers are more inclined to give you their time, talents and money.

Engaging boards can be a challenge, but it’s one worth the effort. When they are part of a team with staff, the winner is your mission.  Do you have a good story to share about supporting boards? Please share it!