Member, Director, or Trustee?

Until his recent death, William Safire’s weekly On Language column in The New York Times Magazine reminded us that words do matter.

The same is certainly true for the words we use to describe those who serve on nonprofit governing boards, as well as the people who hold executive positions in nonprofit human service organizations. Common terminology for each has changed dramatically over the years.

These changes reflect, embody, and encourage new thinking about the role of nonprofit governance and management. They reinforce strength and significance, as well as position individuals who serve on boards of directors and as the heads of organizations for “leadership” rather than “followership.”

The ‘Members’ Versus ‘Directors’ Debate

Historically, in the nonprofit sector, members of the governance team—what we know as “the board of directors”—were not usually called “directors.” It’s somewhat peculiar because “board of directors” has almost always been used to describe the team, even as individuals retained the title of “member.”

Microsoft Word’s thesaurus provides three areas of definition for the word member: associate (associate, affiliate), part (part, constituent, element, portion), and limb (limb, appendage, organ). Yet, none of these options conveys a robust orientation or disposition to accomplish great service.

Recently, the concept of “director” has become more common; even this publication, the Nonprofit Director, borrows the term for its title. This trend began in the 1980s as President Ronald Reagan cut back government services and as nonprofits became more frontline. At least, that’s how it appeared to some; others, including us, believe that nonprofits have always been front line.

The use of the “director” nomenclature, a term that is also favored by the for-profit sector, began to take hold. “Director” conveys more leadership than followership. Indeed, it may well be that the past lackluster performance of many nonprofit board members, and the boards as a whole, was in part produced by mere association with the concept of member.

The Appeal of ‘Trustee’

Other governance terms are also used by the nonprofit sector, but none has taken off universally. We’re referring to terms such as “board of governors” or “board of regents,” designations frequently adopted in higher education, as well as “board of trustees,” a term which has come into favor more recently.

Trustees are the same as members, directors, regents, or governors, but the term trustee implies more of a custodial function that is appropriate for social-benefit, as opposed to investor-benefit, organizations.

Along those lines, another nomenclature discussion—one that probably warrants its own discussion in a future column—relates to the definition of social-benefit organizations.

Because most nonprofits are deemed to work for the community good, society—through its elected officials—authorizes tax exemptions for these organizations. We prefer, however, to use the term “tax expenditure,” because it better reflects how society invests in the mission of social-benefit organizations. In a sense, the exemptions are expenditures, or investments, in the work of these organizations. In return, nonprofits produce a value proposition that makes these investments worthwhile.

The same reasoning applies to explain why the term “trustee” has appeal. It connotes positive action, as well as action that’s “in trust” for a higher purpose.

Implications of ‘President and CEO’

The second area of the changing nomenclature within the nonprofit sector involves the name of organizations’ lead executives.

Early in the 20th century, the highest paid employee was called the “secretary” of the organization or “general secretary.” Later the title “executive secretary” emerged, followed by “executive director.”

These titles were distinct from the for-profit sector, which preferred titles such as “chief executive officer” (CEO) or “president.” In the nonprofit sector, “president” was typically reserved for the president of the board.

In time, nonprofit executives began thinking about their role in new terms. Many executives felt that since they often work with volunteer trustees who themselves are for-profit CEOs or presidents, nonprofit heads should have comparable titles. Thus, today many executives—perhaps the majority of the largest nonprofit organizations—go by president, CEO, or president and CEO.

As nonprofit executives began assuming this new title, the term “chair” or “board chair” began to be applied, almost universally, for the board leader.

A couple of implications are worth noting. One is that these changes embody a movement of status for the executive away from a subordinate role as “secretary” to at least an equal level as “president and CEO.” From numerous conversations with trustees, we believe that directors are expecting more leadership from the CEO. Whereas historically the “secretary” was the servant of the board, now that role is more dynamically called to lead the agency in fulfillment of its mission.

Second, the change in status for the nonprofit executive has also frequently led to the president and CEO becoming a voting member of the board. This goes beyond an issue of status. The CEO, as the facilitator of information sharing with the board, has an enormously influential role in the functioning of the board even without a vote.

Is there an additional value in the CEO having a vote? If there is a close vote in which there is barely a majority, does a CEO benefit by being on record? Success or failure of a policy’s implementation could, realistically, be attributed to the CEO’s deciding vote.

This is a serious implication of the shift in how the sector thinks about organization executives, and it’s one that should be considered thoughtfully. It certainly would be a good subject for one of our future columns.

 View the archive of On Board with Nonprofit Governance columns.

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Alliance ND 09-4 On Board.pdf

Nonprofits' Viability Supported by Active Boards, Strong Governance

Many authors have attempted to answer questions about what nonprofit boards should do, what constitutes best practice, and to what extent board members themselves are aware of their roles and responsibilities. These authors suggest that ambiguity often exists regarding the board’s role, typically because of lack of communication.

At a time when our organizations are being challenged to demonstrate our public legitimacy in order to survive, there is little room for ambiguous board behavior.

Contemporary thinking on this matter was stimulated by federal legislation born from the for-profit sector. The passing of the Sarbanes Oxley Act of 2002 sparked questions about nonprofit governance and board behaviors. In this light, and as the fiscal reality of nonprofit human service organizations dawns on boards of directors, trustees are compelled to look to donors and philanthropic capacity to insure mission viability and organizational survival.

Resource acquisition and the fiscal stability of the organization are imperative board concerns for any nonprofit, but they are core survival issues for the small, community-based human service agencies—including the hundreds of members of the Alliance for Children and Families and United Neighborhood Centers of America. Failure to prioritize these realities in the current environment reflects a major lack of strategic thinking and planning on the part of the board.

Effective Governance Requires Board Engagement

It is our position that board engagement is critical to effective governance. In our view, board engagement includes active participation at board meetings, attendance at committee meetings, personal financial support of the organization, financial support of fundraising events, the offering of skills and abilities to move the mission of the organization forward, and loyal support of the organization’s mission, goals, and objectives.

A key indicator of board engagement is the degree to which a board member takes on the role of “board ambassador.” This role involves a board member functioning as an authorized representative of the mission of the agency by taking that message into their spheres of influence, as well as into new community venues.

In order to be a good board ambassador, a board member must believe in the organization and identify with its mission and goals. A board member must also be equipped to clearly answer questions such as: Why does the organization exist in the first place? What is distinct about the organization? Why does the organization merit support? What does the organization want to accomplish, and how does it intend to do it? How will the organization hold itself accountable?

When board members are effective in the role of board ambassador, the result is new and increased awareness of the organizational mission. This further supports the viability of the organization.

An engaged board member is capable of articulating the mission in such a way that others who share the organization’s values will be compelled to invest. Therefore, we suggest the probable correlation between an increase of philanthropic dollars and an effective and engaged board, as evidencing by ambassadorial behaviors.

Furthermore, we believe that this is an essential foundation for addressing the systemic under-funding of capacity that has been undermining community-based, human service organizations and their missions for more than a decade.

Organic Development of Good Governance

The underlying dynamics of a community-based philanthropic culture, and the board engagement it calls forth, support and drive principles of good governance. Fund development in the community-based, charitable sector is most typically successful with the strong support and engagement of the board.

Are we suggesting that resource development is a governance function? No, we are not. But attention to fiscal drivers and financial viability are key governance responsibilities. What we do suggest is that the board that is investing time and energy in its resource development capacity is most likely manifesting the characteristics of good governance.

In this case, form follows function. Good governance does not happen because we are committed to models of good governance; rather, good governance occurs when a board has passion for the organization’s mission, a commitment and strong connection with the community, and is engaged in ensuring the organization’s services are meaningful, relevant, and first-rate. That is also the bedrock foundation for successful resource development. Good governance arises organically from a posture of active engagement.

We suggest, and plan to undertake, further research to examine the relationship of successful resource development and excellence in board governance in community-based, charitable, child- and family-serving agencies. We believe that research will show that those agencies that are investing in and committed to excellence in resource development capacity building within their organization are, at the same time, enhancing and strengthening their board’s governance capacity and function.

Download the full report.

Simon Bisson, executive vice president and chief development officer at Starr Commonwealth, Albion, Mich.; Bob Jones, president and CEO at Children’s Aid and Family Services, Paramus, N.J.; and Betsy R. Vander Velde, president and CEO at The Family Conservancy, Kansas City, Kan., are members of the Alliance Resource Development Services (RDS) Advisory Committee. All of their organizations are members of the Alliance. Thomas E. Lengyel previously was director of research and evaluation services at the Alliance, during which time he oversaw evaluations of the RDS program.

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Alliance ND 09-4 Reprint.pdf

Board Service Requires Mutual Understanding of Motivations, says Former Alliance Board Member

She says she’s served on boards with individuals who lacked that sincere passion for the organization and its work. Oftentimes they serve because it looks good on their resume, or because it helps their business or political careers. When that happens, she says that the board, organization, and community are deprived of the critical leadership they need.

In addition to knowing her own motivations, her service has always been guided by an understanding of the organization’s goals in seeking new directors. Jackson says effective board members are those who know why they are being asked to serve.

“You have to know that what you can contribute is of real value to the board and that your contributions will be used well,” she says.

That has, on occasion, created difficult choices for Jackson. As an African American, she believes that some organizations have only asked her to serve because they sought diversity.

“I turned those down,” she recalls. Boards should aspire to represent the diversity of the community the organization serves, she says, but finding individuals with the appropriate skills, passion, and qualifications should be the first priority.

The Fund Development Function

There’s more to being an effective director or trustee than passion, however.

“You have to love asking for money,” Jackson says with a chuckle. She acknowledges that some board members view asking for funds to be the most challenging part of their role.

	Left to right: Jane Pirsig, executive director of Alliance member Aurora Family Service, Milwaukee, and Gwen Jackson

Asking for financial support for organizations she’s passionate about is not difficult for Jackson however, because she knows how critical financial resources are in order for those organizations to achieve mission.

She also says that asking for donations or other financial support comes more naturally to her because she’s not afraid of rejection. If someone says they can’t provide financial support, she doesn’t take it personally. “I just respect their situation and say I will be back again next year, when their circumstances may be different.”

Effective board members do more than ask for money, however. They must “walk the talk,” Jackson says. Their dedication must be demonstrated through personal financial commitment.

“It doesn’t have to be a large contribution,” she says, “but it should be something within their scope of giving.”

Walking on ‘Nonprofit Water’

As one of the Milwaukee community’s most well-known and beloved activists, there are few local charitable nonprofit organizations that Jackson hasn’t touched. Through this work, she’s impacted the lives of tens of thousands of men, women, and children.

“She walks on nonprofit water,” says Peter Goldberg, president and CEO of the Alliance and a Milwaukee-area resident.

Goldberg worked with Jackson during her time on the Alliance board. “When Gwen Jackson speaks, people think,” he says. “It is more than just listen. Her values and commitment over a lifetime are heroic and admirable. We all have such a tremendous amount of respect for her commitment and insight.”

The list of organizations Jackson has served reads like a “who’s who” of Milwaukee nonprofits; among them are the YWCA of Greater Milwaukee, Girl Scouts of Wisconsin Southeast, Greater Milwaukee Foundation, Women’s Fund of Milwaukee, Milwaukee County Commission on Aging, Milwaukee Art Museum, Milwaukee Urban League, and United Way of Greater Milwaukee.

Jackson has also committed a tremendous amount of energy to support the American Red Cross. She began serving the organization in 1960, and that tradition continues today. During these more than 55 years, she has served the organization in numerous volunteer leadership capacities, including at the local, regional, national, and international levels. Jackson even continues to maintain an office at the Milwaukee chapter.

She was named the American Red Cross’ National Chairman of Volunteers, the highest volunteer position in the organization, in 1988. She is also Chairman Emeritus of the Red Cross of Southeastern Wisconsin, and in 2003 she won national recognition from the organization for her volunteer work.

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Alliance ND 09-4 BMP.pdf