The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
The text below is an excerpt from the complete document. Read the full paper in PDF format.
Abstract
Nonprofit boards are receiving increased attention from policymakers, media, researchers and the public. Yet most research, policy proposals, and best practice guidelines have been oriented toward large organizations. This brief helps fill a major gap in our understanding by focusing on governance among midsize nonprofits, identifying certain problem areas, and suggesting strategies that those engaged with midsize nonprofits may find helpful in strengthening their boards. The discussion uses data on the subset of 1,862 midsize organizations in our Urban Institute National Survey of Nonprofit Governance, the first national representative study of nonprofit governance.
Introduction
Nonprofit boards are increasingly a focus
of those interested in nonprofit accountability
and transparency, including policymakers,
the media, researchers, and the
public. Yet most of the research has focused
on boards of large nonprofits.1 Likewise,
policy proposals and best practice guidelines
often seem designed with large organizations
in mind, raising concern among
representatives of smaller organizations
who feel the proposals may be inappropriate
for their institutions.2 This brief helps
fill a major gap in our understanding by
focusing on governance among midsize
nonprofits, identifying certain problem
areas and suggesting strategies that
trustees, managers, and others engaged
with midsize nonprofits may find helpful
in strengthening their boards.
The discussion uses data from our
Urban Institute National Survey of Nonprofit
Governance, the first national representative
survey of governance in the
United States.3 This brief focuses on the
subset of 1,862 organizations in that survey
that have annual expenses between
$500,000 and $5 million, hereafter referred
to as “midsize” nonprofits. Nonprofits in
this size range make up approximately one
in five public charities that file the Internal
Revenue Service Form 990 (Pollak and
Blackwood 2007). This report was funded
by the Evelyn and Walter Haas, Jr. Fund,
who asked that we employ our survey data
to examine this subset of nonprofits. We
also refer at points to our survey data on
1,101 larger nonprofits for purposes of
comparison.
Comparing midsize nonprofits with
their larger counterparts, we find that their
boards are less engaged in many basic
stewardship responsibilities. Midsize nonprofits’
boards also have greater difficulty
attracting new members. These comparisons
underscore the need for efforts targeted
at midsize nonprofits to help them
strengthen their governance. This paper
highlights areas in which that need seems
greatest and suggests some strategies that
may help. In particular, the brief addresses
the following broad questions:
- How actively engaged are midsize nonprofits’
board members, and what factors
promote greater engagement?
- How well do midsize nonprofits perform
various responsibilities, and what
factors promote stronger performance?
- Who serves on midsize nonprofits’
boards, and what populations might
they target to expand their pool of
potential members?
The paper also contributes to a recent
discussion about the leadership crisis in
the nonprofit sector sparked by the Daring
to Lead study (Bell, Moyers, and Wolfred
2006). The study found that a high percentage
of CEOs plan to leave their job and
pinpointed frustration with board performance,
particularly in the fundraising
arena, as a key reason. Our findings on
CEO ratings of their board’s performance
in fundraising resonate with the study and
highlight other areas where CEOs view
boards poorly. More broadly, our study
leads to a more general conclusion: discussions
about nonprofit leadership challenges,
now focused on CEOs, should be
expanded to include boards. Our findings
on levels of board engagement strongly
suggest that unless measures are taken to
strengthen boards and help them attract
members—and unless boards start taking a
more active role in monitoring their own
performance—it is unlikely that they will
be able to offer the assistance to CEOs and
the effective oversight and governance that
they are being called upon to give.
(End of excerpt. The entire paper is available in PDF format.)
Usage, posting and reprint of materials on the UI web site:
Most publications may be downloaded free of charge from the web site in PDF format. This information may be used and copies made for research, academic, policy or other non-commercial purposes. Proper attribution is required. Copyright of the written materials contained within the Urban Institute website is owned or controlled by the Urban Institute. Posting UI research papers on other websites is permitted subject to prior approval from the Urban Institute—contact paffairs@ui.urban.org.
If you are unable to access or print the PDF document please contact us or call the Publications Office at (202) 261-5687.
Disclaimer: The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
