Serving on the Board

Serving on the Board or Committee of Management for a non-profit can sometimes be exhilerating and other times damned frustrating. One thing is guaranteed it will likely always be interesting.

Unless your being asked to serve on the Board of a biggie such as Red Cross or the Salvation Army or something similar then it is unlikely you will be faced with issues of global significance. You will, however, be served a wide variety of regional or local issues to work upon. You will also likely be asked to give up far more time than the minimal one meeting per month; especially those with skills and experience in areas such as strategic planning, financial management and human resources - areas where small non-profits are particularly deficit.

Everyone knows the boardroom of your average non-profit is a hot-bed of conflicting interests and petty politics. These are people with passion. They are there because they believe. This passion does not always lead to logical decision making. For those of us that are more logic-driven than emotion-driven, the process can be frustrating. Despite the best intentions of those more anal creatures who actually believe logic overrules emotions, there will always be people on your board that will never follow logic. At least not your perspective and definition of logic.

Logic-driven people need patience. Lot's of patience. They also need well developed communication skills, the ability to sell a big picture. This helps to counter the narrow interests (and vision) of those on the board due to their passion. It's a complimentary process as those committee members with a global perspective often do not have a good understanding of local issues. This is the challenge faced by various chairpersons as they seek to bring together various perspectives. The chairperson needs to have a well balanced personality and be respected by all board members for his or her ability to blend the various perspectives.

Repore between the Chairperson and the organisations Executive Officer is critical. When relationships break down between these two people the potential for conflict and personal lose is great. The Executive Officer heads the organisation at the request of the board and reports directly to the board. While it requires extreme dislocation for a board to remove an executive officer from office; it is a brave, or foolish, executive officer that goes head to head with the governance group. Far better to spend time discussing and understanding the needs of all board members and using that understanding to help create healthy debate and informed decision making.

In theory the governance group are there to help the Executive Officer to establish policy and strategy and to provide advice when sought. It is also a role of the board to hold the Executive Officer accountable for the implementation of strategy. In practice, the theory isn't always applied. The low level of suitable candidates to serve on boards, particularly in rural areas, can lead to a form of in-built nepotism, where board members become 'yes' people and serve to simply rubber stamp the ideas of the executive officer. The risk here is that mediocrity can set in and the best qualified people end up leaving the board. The key strategy is to have in place a robust process for recruiting new board members and rotating existing members, rather than just making a 'mates appointment' when a vacancy occurs.

Membership of many non-profit boards is membership driven. You become a member and then become eligible for board membership. Given the shortage of suitable candidates for board duty, the selection process is often superficial. Very little consideration is given to required levels of expertise or skill. It is important for boards to conduct an analysis of the expertise required by the organisation they serve and proactively seek out potential board members with that experience.

Sustainability is created through meeting community needs

The bottom line for community organisations is sustainability - the ability to effectively deliver services, as funded, to those in need; and where possible, to also add value through the creation of community programs designed to meet the needs of those that fall outside funding body guidelines.


An organisation can only effectively deliver services if it has in place three things. One, effective systems and processes, including quality financial management systems. Two, management and administrative support and three, a team of experienced people to deliver services. These three form the legs of a triangle. Remove one of the three legs and the ability of the organisation to remain effective will be severely compromised.


Sustainability is created by ongoing funding. This can only be ensured by achieving outcomes. Funding bodies are overwhelmed by submissions for funding. To be considered your organisation must be seen to be able to achieve the outcomes it committed to achieving. Your ability to do this is enhanced by having in place appropriate systems and support.


The key to achieving outcomes is for all involved with the organisation to remember the reason for their existance; that being to help those in need within the community. All the funding, all the systems and all the people should be in place to achieve just that. Your organisation will be judged by funding bodies based upon your ability to implement programs and achieve agreed upon outcomes or service standards. Ongoing funding is dependent upon your ability to meet agreed upon outcomes.


One of the risks of being a recipient of funding grants can be that the focus is entirely on service delivery in line with funding requirements. The ease of accessing mainstream funding can often remove the need to understand the needs of the community; instead the funding guidelines become accepted as the indicative community need.

Sustainability is enhanced by understanding community need and being in a position to meet as much of that need as practical. Don't become reliant upon the guidelines of funding bodies. Become familiar with the needs of your community and with the capacity of both your organisation and others in the community sector to meet that need. The greater your understanding of community need the better your ability to attract greater levels of funding from multiple sources. In that way your organisation will achieve sustainability and the community will benefit.

A corporate focus

At a recent conference held by the New Zealand Council of Christian Social Services, Lin Hatfield Dodds, (Press Releases NZCCSS, Monday April 14th), was reported as saying it is time for the community sector to stop referring to itself as being 'not for profit'. I absolutely agree with this statement. It is time the sector grew up and realised that to effectively deliver services beyond the basics demanded by Government funding bodies it is necessary to earn more than we spend. Every organisation in the community sector that generates funds is first and foremost a business. If it generates revenue and spends that revenue then it is a business and it should be operated in a business-like manner.

Dodd's suggests the call to mimic the corporate world is a challenge to the core identity of community sector organisations. On this point I disagree. If we fail to operate in a structured manner our community organisations will remain ineffective, be unable to deliver any more than a basic service, continue to operate under restrictive funding models, be unable to attract quality key staff in an era of looming staff shortages, be unable to provide existing staff with an enjoyable work environment and the list goes on. The best outcomes can only be achieved if firstly the organisation is operated along established business practices.

It is not a given that a corporate approach ignores or somehow jeopardises our ability to meet the needs of people. Such thinking is a state of mind. The key factor that enables a community organisation to help those in need is money - good, old fashioned, dirty old lucre - without it your community organisation can achieve very little. It is true that a corporate-like approach to service delivery enhances our ability to maximise the benefits to the widest possible group of people. People deliver services not corporations, however these people need behind them systems and processes that enable them to deliver their service in an effortless manner. This support costs money.

I am not denigrating the thousands of small volunteer run community organisations when I say that there is a limit to what can be achieved by each individual community organisation that chooses to be run entirely by volunteers. I fully comprehend the value many of these organisations add to our community. I believe also they could contribute a lot more if they moved away from protecting their own little kingdom and looked at the options for improved service delivery.

Dodd's and others suggest the community sector should be a 'people sector'. One that puts people ahead of profits. Agreed, we are in the people sector. More to the point it is not about making a profit; it is about generating sufficient revenue. Government funding options will never be sufficient to meet a need. Additional funding has to be obtained from a variety of sectors, each which demands a degree of accountability. I would suggest the reason a service is curtailed or not made available is because the provider has insufficient 'revenue' to do so.

The mentality in many community organisations is to tailor their service delivery to match the level of current funding. Instinctively this suggests costs will be cut to match operational funding and to avoid any use of reserves. This approach is self defeating. It limits the ability of the organisation to be truly effective. It creates fear at all levels within the organisation, it discourages creativity and initiative and it stifles innovation. Worse still it ensures we only attract people to our organisations that are completely risk averse.

I would suggest that instead of focussing on cutting expenses to the level of revenue, your organisation would be well served by identifying the level of service it believes is needed and can effectively be delivered, the appropriate systems and process and the resources and people needed to deliver that service. Having done that, go out and source the amount of funding from a variety of sources, that enables your service to be delivered, that enables the maximum number of people to benefit. Don't tailoring the service to the revenue, instead maximise revenue to maximise service delivery.

The Gap Between Big and Small nfp's

A glance through any directory off not for profit organisations will quickly illustrate a single statistic. That is the gap between the large not-for-profit organisations and the small not-for-profit organisations. This gap is measured is gross operating revenue - much in the same way as we would measure those organisations in the for profit sector!

In Australia it is estimated there are around 700,000 nfp organisations, which around 30,000 employ staff, the remainder are operated mainly by corps of volunteers. In New Zealand it is estimated there are around 30,000 nfp organisations. The vast majority of not for profit organisations are small, have only a handful of paid staff, if any, and survive (just) on meagre resources. For the majority their revenue comes from small time sources such membership fees, fundraising activities and donations.

At the 'big end' of town, again to borrow terminology from our colleagues in the for-profit sector, we have those non-Government, not-for-profits primarily funded by Government to deliver services on behalf of the Government. In total, these nfp's number few yet they have access to the vast majority of funding and resources. Let us not forget also, the nfp's at the big end of town are also significant employers of staff.

This dichotomy clearly disadvantages the majority of not-for-profit organisations, yet it is a natural process. Tirrana Surhood labelled this larger group Small Non-Government Organisations (SNGO's) in a paper she presented to the Partnerships and Activism conference at the University of Western Sydney in 2000 when she called for SNGO's to create a 'voice' for themselves - so that they may be heard. Tirrana's call may have been ahead of its time, or maybe no one was listening back then. I believe the rationale that Tirrana applied then remains relevant today - maybe even more so.

The emerging environment of the nfp sector favours those larger, better resourced, more coordinated organisations, in particular those able to distribute services into multiple communities. I stated earlier that the division of organisations based upon size is a natural process - to a degree - yet i do not believe it needs to be an inevitable process. I also believe it is unhealthy for any market, whether it be in the commercial sector or the nfp sector, to be dominated by a small number of suppliers. The ultimate losers will be those the organisation is supposed to help.

Divisions in the corporate sector occur as a result of competition. Some organisations are better at doing the job than others therefore they garner a greater share of the market. The not for profit sector is not a competitive sector, at least not in the sense that the sector 'sells' its services. The pricing mechanism within the not for profit sector is not used as a competitive tool. Divisions in the not-for-profit sector are created by funding bodies being selective in their distribution of funds. In their desire to make life easy for themselves funding bodies prefer to deal with one larger provider than several smaller organisations. While this is understandable it is debatable as to whether such selective practices actually create efficiencies in service delivery.

The reality is this. The division between large and small already exists and it will continue to exist into the future. Those SNGO's can elect to sit on their bums and await the inevitable grim reaper or they can elect to become proactive in controlling their own destiny. Tirranna Surhood was right, the smaller nfp's need a voice, a coordinated peak body that will speak and act for them, that will advocate and attempt to influence funding decisions. Tirranna even suggested in her paper that the 'voice' may not need to be a national one; that a combining of resources at a community level may be even more effective. But even more is needed. the larger nfp's should recognise the inherent benefits of a diverse group of providers. They have the resources, courtesy of inequitable funding distributions, and they are in the business of helping others - it is time to extend some of that help to the smaller not for profit organisations that work along side them. There are many ways in which this could be achieved, from seconding key staff to sharing resources to providing back office support in the form of human resources and many, many others.

In turn the SNGO's need to become more proactive, they in turn need to explore how they might latch onto the resources and expertise that exist within larger organisations. Near to where I live a large nfp aged care provider prepares the payroll for a much smaller nfp aged care provider. They compete for customers yet they collaborate and they cooperate and both survive in a market that is much richer for the diversity and choice that is then available to the customer.

Nurturing those middle managers

It has been stated that middle managers are the glue that holds an organisation together. Well okay, we will live with the generalisation. It is also possible that were there much better collaborative and participative management processes in place then there would be less requirement for middle managers, and for many senior managers for that matter!

Regardless of whether your organisation is the traditional command and control model or whether it operates within a flattened hierarcy , you will have some middle managers, or supervisory staff. They are important. They form the link between management and staff. They are the implementers of strategy. Executives design strategy but they rely upon the skills of their middle managers to build collaborative relationships with staff, to sell the benefits, to negotiate the change process and to provide feedback that enables adaptation. Without middle managers, the traditional organisation would grind to a standstill.

Yet this group of managers remain the most maligned and mistreated individuals in an organisation. They are between a rock and a hard place. Neither management nor staff. Unable to be loyal to any faction other than themselves. Some 20 percent of middle managers will eventually progress into an executive role. Another 20 percent will drop back into a staff role. This leaves 60 percent that will remain in a middle management role; for better or for worse. It is in the interest of the organisation to ensure those 60 percent are effective.

Just as there are numerous examples of ineffective senior executives creating blockages to progress, there are also examples of middle managers doing the same. The difference is that a senior executive will likely be found wanting when they are monitored for their ability to plan and implement strategy far quicker than a middle manager who is often protected by a senior executive. Of course, the removal of a senior executive that has been shielding a middle manager can result in the middle manager becoming exposed to the scrutiny of an incoming manager. It is doubtful an ineffective middle manager would survive such scrutiny.

The problem for organisations with middle managers is that only a small percentage of supervisors will progress into an executive role. In some organisations it will be less than the suggested 20 percent. This can lead to either a high turnover of middle managers or stagnation fueled by frustration, which in turn, leads to mediocrity. Those middle managers on the bottom of the heap, the blindingly obvious bad managers will out themselves and slide back into the ranks of general staff. The challenge for organisation is this. How can they get the best out of their middle managers?

It is recommended all middle managers have a mentor, or two, or three. Different mentors serve best at different times or in different circumstances. The benefit of mentoring is widely understood, however it is a relationship the middle manager needs to instigate. Mentors rarely present themselves to a manager. You have to approach them with the idea. Mentoring relationships are build upon mutual respect, the mentors understanding of your workplace environment and a willingness by the manager to be open and honest.

Management coaching can be expensive and has traditionally been reserved for the ranks of senior executives or up and coming middle managers on a fast track to the corner office. This needs to change. Our experience of providing coaching to middle managers has always been positive. Traditional practice suggests executive managers benefit most from coaching. Our experience is that many senior executives have become entrenched in their behaviors and find it difficult to acknowledge their faults after they have gained higher office. Middle managers, on the other hand, still have progress available to them, they have more to gain from coaching and are likely to offer more back to the organisation as a result. Effective organisations will remove ineffective middle managers and provide coaching to those in this role; simply because good management behavior developed during middle management years transfers to good executive behaviour in later years.

We persist with the belief that managers are born not made - well at least we do when it comes to providing management training. It appears that we believe any manager worth their salt will develop competencies by osmosis. This is partially true, much management competency is the result of accumulated experience. In the past, when managers took many years to work their way up through the system, this was very true. In today's workplace we promote the majority of managers on demonstrated competency rather than longevity. The result is many managers are younger and have not had the opportunity to accumulate experience. So what do we do? We send them away to residential management courses to learn the theory. Yes while there they engage in role places and situational game play, but these are no substitute for practical experience. Dont misunderstand. Management training, and ongoing training is essential, some would even suggest critical. The key is to apply critical analysis to those providing the training. Look for trainers with practical experience to back up the theory. Look for trainers with practical experience rather than just case studies. Look for trainers able to blend theory, case studies and their practical experience. Look for trainers that follow up their training with coaching, so as to increase the potential for implementation of concepts and methods.

Do organisations need middle managers? Yes they do. Do they need a lot of middle managers? No they should minimise the number of middle managers by creating more collaborative and participatory workplaces at all levels (very scary for senior executives). The outcome of this will be more effective middle managers and more effective senior executives and this will lead to more effective organisations.

Hybrid nfp organisations

Should not for profit organisations seek to implement a hybrid model? On the surface this question would be answered with an emphatic yes; the hybrid model where a not for profit seeks to generate a surplus through commercial activities makes economic sense. Under the surface is another matter. NFP's operate on a set of values. These values underpin the ethos and operations of the organisation. They do not operate on a commercial basis where making money for the sake of doing so is considered normal behavior. NFP's have a focus upon service delivery, often to a captive audience. Not only does this philosophy shape their operational structure it also shapes their strategic thinking process. Making money requires a different mindset to one where the focus is entirely upon service delivery. Many governance teams struggle with the concept of making a profit from commercial operations, especially those that have been weaned on Government funding.

The obvious benefit of the hybrid model is the ability to generate funds that in turn can fund programs which would not otherwise be funded by mainstream funding. A greater percentage of self-generated income reduces reliance upon Government funding and can enable the organisation to operate independently and without fear of upsetting funding bodies.

Despite these advantages, overcoming the in-built and traditional fears of committee members, employees, volunteers and clients can prove to be challenge that is to great for even the most imaginative executive officer. The process of changing cultures on such a scale, even for a modest sized organisation is long, convoluted, time consuming and fraught with personal risk.

Seminar - Practical Project Management

You gotta go to this seminar! Why? Cause I designed it and I deliver it and I can promise that you will learn a helluva lot about practical aspects of project management, including practical strategies for common issues, practical easy to use tools to assist with project planning, strategies to improve stakeholder communications and improve teamwork - all this will contribute to you achieving a successful outcome for your project. Who should attend? There is stuff in this seminar for Executive Officers, CEO's, Operations Managers, Project leaders and supervisors.

The first was held yesterday (May 15th) in Adelaide. The feedback from participants was fantastic and all positive. Everyone learned something helpful, many learned many helpful things. Just listening to the input and feedback from participants was energising. Next week we deliver this seminar in Auckland - this session is already fully subscribed and a further event has been scheduled for Auckland on August 19th. Registrations are rolling in fast for all scheduled events throughout Australia and New Zealand. Register now. Email john@johncoxon.com.au to reserve your place and to request a comprehensive information kit - it contains all the details - so go for it, do it NOW.

Seminars are scheduled for -

May 15th - Adelaide (completed)
May 22nd - Auckland (fully subscribed)
June 19th - Hobart
June 24th - Melbourne
July 10th - Perth
July 17th - Sydney
August 19th - Auckland
August 21st - Christchurch
September 18th - Brisbane
October 23rd - Wellington
November 13th - Canberra