Tuesday, January 10, 2017

Book Review - Charities and Not-for-Profit Administration and Governance Handbook

One of the trends we noticed in last summer's museum evaluations was that most museums appeared to have great governance practices in place, but then struggled in the management section. I suspect that if we dug a little deeper we'd find a variety of issues at play. Maybe some aren't actually following their policies and procedures, others might still be operating as a casual hobby group, and some might might not have orientation procedures in place and so their board doesn't actually understand its responsibilities as it should. Whatever the reasons for the issues, I think we need to spend some more time in this area.
That brought me back to our reference library for Donald J. Bourgeois's Charities and Not-for-Profit Administration and Governance Handbook. Yes, it is about as exciting as it sounds, but I was still tabbing pages and quotes as I read it. Important, foundational stuff. Following is my highlights reel, but if you want to delve deeper you can borrow the book and get lots of great info from its 5 chapters:
1) Directors and Their Role in Managing the Organization
2) Tools of Governance and Accountability
3) Managing Risk
4) Managing the Organization's Assets
5) Managing the Organizational Structure

Bourgeois begins by outlining many shifts and dynamics that affected governance practices as we moved into the 21st century. As we enter 2017, most of the points are firmly understood as the current reality, such as globalization, sponsorship, and an increase in competitiveness in the charitable sector. But two points jumped out at me as important reminders for museums:
- "greater demands for accountability by governments, funders and the general public. Accountability is defined not only in terms of proper use of funds but in the effectiveness and efficiency of the organization and in meeting the needs of the community"
and
- "more knowledgeable volunteers who have specific 'wants' from their volunteer experiences".
We hear so often from museums that are struggling with visitation and volunteers and just can't seem to engage their community. To be frank, a lot of these cases involve people wondering the same tactics they've employed since the museum opened in 1967 are no longer working. To quote my Mom (yup, playing the Mom card here), the seven dying words of an organization are "we've never done it that way before".

Something else we noticed in evaluation was how many museums are still using 1980s-era mission statements; cookie cutter statements about existing to collect, preserve, interpret...ugh. I'll be addressing that in a later blog post. In Chapter 1 Bourgeois reminds us of the role of the board, specifically that "the board needs to oversee and monitor the mission on a regular basis. It can do so by establishing measurable goals...[with] 'desired outcomes' or 'impacts' [rather than] 'inputs or activities'." Also in his list is the oversight of human resources...something that saw many museums struggle with in their evaluation. "Human resources includes staff and volunteers." Yes! And it is the job of the board to ensure that those people have the skills, training, and backgrounds for the positions they hold. Yes!! "Proper recruitment processes, job descriptions and performance appraisals are the responsibility of the [board of] directors - either directly or through management staff reporting to the directors." Be still my heart...it's so nice to hear someone else say this!! He further reminds of the importance of planning for succession and diversity; that it is critical for organizations to "reflect the diversity of the community in which they operate".
But perhaps my favourite paragraph in this chapter is about the fiscal responsibility of the board. "Boards too often fail to devote the resources that are necessary to ensure that prudent financial practices occur. However, without the resources being available and properly managed, the organization cannot fulfil its objectives and the underlying purpose of the organization is not possible. Organizations that become insolvent or that have substantial losses due to defalcation or misuse of funds that could have been avoided are not trusted. The voluntary sector operates on the basis of "trust" - both trust in its legal sense and in its human sense". Wow. You should probably go back and read that again. Let it really sink in. It is a huge responsibility and should be enough to make any board member nervous.

Chapter 2 (Tools of Governance and Accountability) takes a little return visit to the world of mission statements, which I quite enjoyed. Bourgeois stated that "mission statements are short in verbiage, but long in meaning". Isn't that fantastic? He went on to say that each word should have thought, emotion, and resonance behind it, because these are the key words that define the organization, and that tell the public what it hopes to be. Wow. Does that definition apply to your mission statement?

There was quite the conversation about assessment and evaluation in this chapter. Bourgeois admits that historically, not-for-profit organizations haven't been the best in this area. Some have never assessed their operation, and I think that is still the case today for some museums. But it is a crucial element of both accountability and planning. Data needs to be collected, issues need to be addressed, and stakeholders need to be kept informed so that public trust is built.

Chapter 3 is all about managing various risks. It touts the virtue of policies and procedures in minimizing an organization's risk , and delves into a variety of areas such as board nominations, financial reporting, etc. My favourite statement though is that "the success or failure of an organization is also dependent in large measure on the board being effective." I think we all know that and nod our heads in agreement, but at the same time I can recall many conversations about boards being there "in name only" and "not helping much" with fundraising or policy work or other museum activities. Hopefully that doesn't apply to your board. Again Bourgeois doesn't mince words, and reminds readers that "the overall purpose of the board is to manage the affairs of the organization. In doing so, the board provides direction to the organization to permit it to carry out its objects and to ensure that the organization meets its legal obligations, maintains its status and is financially responsible."

Chapter 4 is all about managing assets - be they financial, human resources, intellectual property, or anything else. Again the human resources section really jumped out at me because of evaluation results. Something that really surprised me was that a number of museums don't understand the difference between volunteers and board members. I like how Bourgeois discusses this point. In referring to board members, he explains that "they are unique volunteers in that they more than any other volunteer set the tone of the organization, make the decisions that should matter and plan for the future. They are more accountable than other volunteers or even employees." Yes, they are! Someone who shows up to help with the annual tea party is vastly different from your treasurer.

Other info in the book includes discussions about insurance, operating models, the importance of working with partner organizations and neighbouring community groups, and how to carry out revenue-generating and political activities without crossing any notorious lines. And for those that know me, you know I love templates and workbooks and other tools that will help make the job easier. And Bourgeois delivers this in his appendices. If you don't have a board development committee, he gives you sample terms of reference. He also provides Finance & Audit Committee terms of reference, a Conflict of Interest Policy, Executive Director Performance Appraisal, Program and Initiatives Presentations Guidelines, a Monitoring Schedule, and a Good Practice Guide for Effective Stewardship Analysis.
Overall, this is one of those important but sort of boring books to read...well worth the effort, a relief when you're finished, and just maybe the exact thing you needed to help your museum make a few adjustments to its operation.