A Guide to Governing Charities: Success in the Boardroom Starts with Asking the Right Questions
Just as there is a high rate of failure among business startups, charities can go under just as quickly. That's why founders of new charities must think long and hard about why, where, and when it makes sense to start a new organization. Unfortunately, not everyone who starts a charity has thought out his or her idea. Don't make the mistake of just jumping into the nonprofit arena.
Think carefully before starting your charitable nonprofit and follow these steps. Having a passion for your cause is important, but remember that a nonprofit is essentially a business, and you need to be realistic in starting one. Is there a need for your organization?
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Or could you team up with another, existing nonprofit? Another nonprofit can even serve as your fiscal sponsor instead of or until you can become registered. Are you sure that a nonprofit is the best business structure for your idea? A nonprofit is simply another version of a business. You need to have at least as much money coming in as going out even to survive, much less succeed in your mission.
You might have a great idea but are you sure it will qualify as a charitable cause? There are many types of nonprofits. Member Login Search Keyword or Phrase. Sort by Relevance Most Recent. Diversity on Nonprofit Boards. Printer-friendly version Having a board with diverse perspectives is critically important.
Why is diversity useful? A diverse board will improve the nonprofit's ability to respond to external influences that are changing the environment for those served and in which it is working.
Better decision-making: When a nonprofit board is facing a major decision, diverse perspectives on the board are better qualified to identify the full range of opportunities and risks. Boards that are not diverse risk becoming stagnant: if all the board members travel in the same social circle, identifying and cultivating new board members will be a constant challenge.
Look for candidates with a variety of professional expertise, cultural backgrounds, spectrum of life experiences, and geographic reach, who can help the nonprofit respond to future needs. Conduct a self-assessment of your board to find out. Here is a special self-assessment focused on diversity, inclusion, and equity courtesy of the Michigan Nonprofit Association. The schools become desirable project activities within the organization. But rarely does anyone ask how much—or even if —they are really helping Peruvian children. The answer is no. For those truly concerned about serving people in need, a clearly defined set of goals and yardsticks to measure progress should be very reassuring.
You do not vitiate an idea by clarifying it, even when you subject it to statistical analysis. Rather, you render your ideas more doable. Meeting with donors, coping with reporting demands, explaining programs and policies to committees, placating and organizing volunteers, satisfying the often burdensome requirements of institutional supporters, and fundraising all make heavy demands on the managers.
They are thus continually distracted and easily misled into thinking that being busy means accomplishing something worthwhile. Board members and donors often accept descriptions of activity as substitutes for progress toward goals, permitting unfocused and fragmented activity to continue. Nonprofits have no financial report cards to tell them how they are doing. In the for-profit world, balance sheets and profit-and-loss statements tell managers a lot about how close they are to meeting their objectives.follow
Charities Need a Bottom Line Too
How can nonprofit managers deal with the inevitable conflicts and confusion over goals? The answer is not simple, but neither is it difficult to comprehend. Nonprofit managers must work with board members, donors, and other key players to reach an agreement on goals and priorities.
Then they must write down these goals and make sure that staff members at all levels of the organization understand and accept them.
Charities Need a Bottom Line Too
Finally, they must see to it that the financial and human resources of the organization are consistently applied to these objectives. This process is not always easy. But it was also clear that India needed a private, independent relief agency that could assist the government in times of emergency.
Unfortunately, because the discussion took so long, there was no time left to define the goals any further or to establish measurable performance standards within these categories. In situations like that, the solution is to agree on what you can agree on. The program had three major goals:.
Improving the long-term nutritional condition of the children. Nothing wrong with that. A few surveys could easily have determined the extent to which this goal was being met. Providing more food to presumably hungry kids. Easy to measure. The only remaining questions were whether there were even needier kids not in school there were, but there was no good mechanism for reaching them and whether the children were actually getting the food they were.
Keeping kids in school longer nutritious lunches drew students and keeping them more alert during classes. Surprisingly, many CARE officials agreed that this might be the most important long-term result of the school feeding project. In all three cases—nutritional status, relief feeding, school attendance—CARE could quantify the goals, measure the results, and make cost-to-result calculations.
In fact, CARE has now adopted such practices in many of its programs. The process of defining and clarifying such goals and assessing their value in light of their costs is a healthy one. Does it cost too much? Goals must not be defined so broadly that they cannot be quantified.
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It is difficult to quantify the output of social programs, but if managers define their goals well, it can be done. Another example of quantified goals combined with effective measurement yardsticks comes from the international population field. Social marketing of contraceptives combines the social motives of reducing population growth and unwanted pregnancies with the efficiencies of free market distribution. That is, donor organizations like the U. Agency for International Development AID heavily subsidize the cost of contraceptive sales, but after the products arrive in bulk they are packaged attractively, marketed through regular commercial distribution networks, and supported by consumer advertising.
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When it was established in , the organization set two long-range goals: 1 improving family health and preventing infant deaths by enabling parents to space the births of their children and 2 lowering birth rates in countries with otherwise exploding populations. The founders decided that PSI could achieve both goals by providing sustained birth control services to a target market of couples who were fertile, sexually active, and motivated to plan their pregnancies. Since a woman must use 13 cycles of contraceptive pills per year to avoid a pregnancy, for example, 13 cycles would equal one couple-year of protection.
Use of condoms needed a more subjective evaluation.