Is a not-for-profit board role more difficult than a for-profit role?
For many aspiring to be a company director, time on a not-for-profit board is seen as a prerequisite. It’s almost as though time on a not-for-profit board is a form of apprenticeship for the company board role. Go on a not-for-profit board, learn how it operates, get some practical experience then apply for a company board role.
But in my experience of being on both and as a board advisor, many people struggle with being on a not-for-profit board and often find being on a company board easier. Is being on a not-for-profit board really harder?
Perhaps, but they are different types of organisations and, as such, not fully understanding the differences can make time on a not-for-profit board for aspiring company directors difficult.
The differences can be distilled into three areas – mission, finance and executive.
With mission, a not-for-profit places great weight on the underlying purpose, service to that purpose, long-term focus and non-financial performance metrics. Financial metrics, internally generated funding and short-term goals have greater weight in a for-profit company.
A not-for-profit board is often quite large and has many committees. The chair is usually a volunteer director and the CEO is skilled in delivery of the underlying purpose. Whereas a for-profit board is small, paid and may only have a couple of committees. The chair is an experienced company director and the CEO is skilled in running a business.
While these differences are reasonable it can make it very difficult for a company director to adapt to the not-for-profit board and it can make it difficult for the not-for-profit to adapt to the company director.
Directors from a business background joining a not-for-profit board may struggle with the inefficiencies of a large board and with the greater operational focus than they would expect on a company Board.
There may also be members who have been there since the organisation’s inception and find the corporatisation and higher professionalism from a board with directors from a business background as culturally challenging.
Well-regarded people from the business world can be ineffective as not-for-profit board members if they do not show the level of commitment that they would to a company board. This may be in part due the voluntary nature of the not-for-profit board.
People value what they pay for and, often due to the voluntary nature, board members do not attend every meeting, almost as attendance is optional. They also seem to leave their analytical and business skills, and their ‘toughness’, at the door. These are some of the exact attributes that the board requires and why a board member from a business background was appointed.
Not-for-profit boards often weight two attributes higher than business skills. One is the board member’s contact list. Relationship capital is worth a lot to a not-for-profit organisation and peer-to-peer influence can improve fundraising, recruitment and even board capability. A company board recruitment advisor made a comment that has stuck: “Boards don’t appoint nobodies – become a somebody.”
Joining a not-for-profit board without a large and influential contact list can be frustrating as the ability to leverage and be an ambassador is limited. Equally, organisations should be helping board members and themselves effectively use the contacts and networks.
Organisations should get board members to promote the organisation through social media or get the board members to host or speak at an event. Make it easy for board members to be ambassadors at all times.
Recently a not-for-profit client was recruiting for new appointed board members. Ads went out on various job boards and the response was woeful. I was told it was extremely difficult to find a board candidate with the appropriate skills.
However, not one of the current board members promoted either the board opportunity or the organisation on any of their social media platforms – something that would have taken five minutes of their time. Neither did the organisation promote it on their social media platforms.
This organisation has more than 200,000 members – that is first connections – and let’s say each of them has 20 mutually exclusive connections –a potential 4 million people could have been informed of the opportunity and the organisation as a whole. I think out of that pool of 4 million people they could have found a few more potential board members if the directors and the organisation had leveraged their contacts.
The other highly weighted attribute is passion for the cause or purpose. If someone has passion for a cause they will be able to engage more easily with the various stakeholders. They will also have a greater understanding of the issues and willingly devote more time to the organisation.
I attended a not-for-profit client’s board meeting and several of the board were there by virtual of their day job. Their boss had nominated them to sit on the board and attend the meetings. The meeting went for two days and these particular board members were checking their emails the whole time, on calls back to the office in the breaks and had early flights home to ensure they were back in business hours.
While they had some interest in the not-for-profit organisation, they clearly had no underlying passion and drive. Being on a board where you do not have that passion will make your time on the board feel like watching paint dry and you are wasting the time and resources of the organisation.
So, if you are thinking about joining a not-for-profit board make sure you are doing so for the right reasons. Understand the differences between for-profit and not-for-profit organisations. Don’t use a not-for profit board as a stepping stone to company boards.
Not treating a not-for-profit board with the same level of commitment as a company board, not having a passion for the purpose or cause, treating it as having less value because it is voluntary, leaving your analytical skills, business skills and ‘toughness’ at the door, and not opening up your contacts and being an ambassador for the organisation will make your time on the board extremely difficult.
It will be a lot harder than being on a for-profit board and will be unrewarding for you and ineffective for the organisation.