Leading by Design

MY MENTAL LIST OF CULTURAL ORGANIZATIONS ABOUT TO GO UNDER was significantly lengthened this week.  Just yesterday a neighbor told me that a small environmental/ natural history research organization she works with was about to fold.  She was told that the board was casting around for a place to transfer the organization's collections of books, maps, photos and videos (although no one knows exactly where that will be despite the fact that they may have to shut their doors in a couple of weeks).   The day before that, a colleague called to say she was retiring from her organization and that there's a movement afoot to dissolve it (not her doing).  A third organization has burned through its endowment fund to the point where some board members think it's time to close the whole place down.   That's all in just the last week. I've been hearing for a long time that the pace of consolidations and dissolutions in the nonprofit sector would speed up as the ...

I won't soon forget getting that letter in the mail.  An 80-year old cultural organization was reaching out to members and friends to tell us that its survival was in jeopardy.  It asked for our advice and our financial support.  The first paragraph closed by stating, "Without an immediate and substantial infusion of funds, it appears that we will be required to close our doors while we work to implement a prudent fiscal strategy." A day or two later the news hit the local papers.  And a week or so after that, the director of another cultural called to say that her board was debating the merits of "going public" with their own financial difficulties.  Some thought it might shake loose more support; others were wary of hanging out the dirty linen....or being perceived as the boy who cried wolf. Contrast that with a third organization -- vastly smaller than the other two -- that routinely publishes lengthy pleas for assistance mixed with "the-sky-is-falling...

Linda Compton, President and CEO of BoardSource, opened this year's Board Leadership Forum by citing a variety of implications this economic crisis will bring to nonprofit work.  She offers this challenge, as well: So, now, more than ever, we need courage as nonprofit leaders, as our organizations look to us for the way through these challenging times. Now is the time for board members to ask the courageous questions:  How do we respond to the new financial environment? How can we continue to carry out our mission? What changes do we have to make? And how can we best position ourselves to be ready when the recovery comes?   You can read her entire message here .

When it comes to stepping up to the plate, it doesn't make any difference if your institution is a small-budgeted organization running on volunteered energy or a large and complex cultural entity -- nonprofit boards and their leadership staff are responsible for the financial health of their institutions.  That they be held accountable for this basic tenet of nonprofit governance is what the LA Times art critic Christopher Knight's "open letter" to the board members of the Museum of Contemporary Art is all about. The Chronicle of Philanthropy states, "Writing in the  Los Angeles Times,  Mr. Knight — who notes that in 1998 the museum operated with a $50-million endowment, now rumored to have shrunk to $7-million — says the trustees “must call an urgent board meeting, gather round the table, pull out your checkbooks and calculators, and stay in that room until you have cobbled together at least $25 million.” He suggests this act be followed by budget cuts and the c...