Gabrielle Ritchie, Director: The Change Room
3rd June 2016
Are you and your fellow NPO Board members fundraising-fit? What does this even mean?
My last blog provided a “short” list of 16 points (I know…) to keep top of mind when doing an organisational audit of your capacity to attract funding resources. Good governance practice was at no.2, after “there are no short cuts”:
You have to have your governance in order. This is critical. No donor is going to fund an organisation with poor governance.
Let’s take as a given that the Board must ensure that the organisation’s finances are in good order. This is the key legal responsibility of the Board – its primary fiduciary duty – and there can be horrible implications for Board members as individuals (depending on the type of entity) if the money gets messed with and is not appropriately stewarded by the Board. This is a legislated requirement. So, simply put – a Board is responsible for an organisation’s finances and this responsibility cannot be delegated, so make sure there are formal accounting practices in place, that audited financial statements are delivered up and signed off by the Board at the end of every financial year (and submitted to the NPO Directorate), that the money is being used in line with the organisation’s mission and in line with standing legal restrictions on the uses of NPO funds.
And that nobody is stealing or crooking or frauding or deriving any private or personal benefit whatsoever from the organisation’s funds. Basic. Board Responsibility 101.
However, besides legislative compliance (which is an obvious deal-breaker – comply or close), what is required of you as a Board member as good and ethical practice in terms of your responsibility for what is, effectively, public money for public good? What do you need to attend to at Board level to ensure you are in good shape?
Here are a few key pointers:
- Know what you are getting into before you accept a Board position. You will need to have a handle on what level of involvement will be required of you as a Board member – and you will need to be willing to be involved at that level.
- As a Board member, you are part of the organisation. Voluntary, but a part nevertheless. As such you are a representative of, and spokesperson for, the organisation and what it stands for. Be willing and prepared to play this role.
- To do this, best you know what is going on in the organisation – not at the fiddly operational level (although greater hands-on involvement has recently been argued), but at the overall level. Understand the organisational culture – ignore at your peril. No, this is not “nothing to do with you”. As we know, culture eats strategy for breakfast – so you can strategise at Board level till the end of days, but a negative organisational culture can eat your strategy. And can derail an organisation.
- Know your Board stuff – what type of entity the organisation is registered as, the content of the NPOs articles of association/ memorandum of incorporation/ trust deed etc.
- Get involved in organisational resourcing – your role as a Board member is critical in the development of partnerships, and your knowledge and networks no doubt a key factor in your being invited to be a Board member. Be willing to use them. Open doors, make introductions, promote the organisation, talk about its mission and the excellent work it does, encourage others to get involved in supporting the organisation.
- Understand your role (legally, obviously, but strategically and ethically as well) and your obligations – a Board should have an induction process and information pack for new members on joining. Your level of involvement in organisational matters, and the scope of what is required of you as a Board member, will depend on the state of the organisation. For example, a well-resourced and well-staffed organisation will probably need your time and skills less than an organisation that is perhaps starting out, or struggling in some way.
- Don’t get blinded by shiny organisational reports – since the organisational head is employed by the Board, and reports to the Board, they will generally present reports that shine. Avoid a situation of an organisation reaching crisis point before the Board gets its hands dirty. This means reading reports, interrogating content, having difficult discussions, arguing amongst the Board, and being prepared to work through hard issues.
- Things can get messy at Board level – board membership is by no means all accolades (and good food at board meetings – though that helps …). Organisations go through seriously rough times, and this can manifest most starkly at Board level. Be prepared for this, and always bear the good of the organisation in mind.
The Independent Code of Governance for Non-Profit Organisations in South Africa is an excellent guide to your commitments as a Board member. As a values- and principles-based Code, it is easy reading, covering the following essential topics:
- Ensuring adherence to eight basic values
- Ensuring leadership in six key areas
- Ensuring good implementation in five key legal and fiscal areas
Reading this Code is essential for anyone involved in NPO governance. It is essential for anyone involved in an NPO.
With all of the above being taken care of under your watchful eye, the rest will follow. Give it a go – from a position of principled, ethical commitment to solid values and to the long-term strengthening of the organisation.