What if We Compensate Non-profit Boards?

While the details of what actually happened will likely become a ‘he said/she said’ wrangle, the very fact that the California attorney general’s office demanded recently that the board of the Museum of Contemporary Art in Los Angeles go back to school and receive basic governance training is notable. While the wreckage has been salvaged by the generosity of Founding Chairman, Eli Broad, the charges—and the assigned training highlight again the all too familiar theme of spending down the endowment and misappropriating restricted funds.

This incident (and too many others we read about) begs the question of whether we have traded what we need from our boards for what we want from our boards. And what we need most now is good judgment.

Judgment that’s offered on behalf of the community, that at best challenges and at a minimum contextualizes the major decisions of the enterprise. The kind of judgment that executive and artistic leaders could benefit from, whether at MOCA, the Harlem School for the Arts, or an endless string of other organizations where the board apparently cared too much, and demanded too little, while letting their passion and acquiescence override their objectivity and fiduciary obligation to the public.

While it may be fiscally expedient, selling gala tables, hitting up friends for money, and shilling for our artistry and programs are poor surrogates for what we really need: a true partnership with our boards where they challenge us to innovate and adapt while asking us the hard and helpful questions that assure prudence and accountability.

So, instead of compromising such a role by asking them to ‘give, get, or get off’, what if we compensated them? An annual honorarium for service that says come to the table prepared with your best questions and keenest insights. While annual budgets may shrink a bit, such honest appraisals and straightforward engagement could contribute significantly to our sustainability, and the credibility of our field.

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7 thoughts on “What if We Compensate Non-profit Boards?

  1. Ron Wormsre December 13, 2011 at 3:12 pm Reply

    As a retired CFO/COO of nonprofits, current board members and consultant on, et.al. governance, paying board members to try to reward, or bribe, them into focusing on issues other than giving-getting focuses on the symptom rather than the cause.
    I couldn’t agree more with the core idea, “we have traded what we need from our boards for what we want from our boards. And what we need most now is good judgment.”
    That the traditional role of boards – to attend to what is needed not what is wanted – became, first, overtaken and subsequently to be see as ‘out of date’ is one of sorriest chapters in the evolution of nonprofits.
    Before “give, get or go”, the manta for board service was that trustees needed to possess any two of the following three criteria: work, wisdom or wealth.
    The point: traditionally, work, wisdom and wealth were all seen as essential board responsibilities, and for good reason. The narrowing focus on wealth -on giving and getting – inevitably diminished the availability and benefits of work and wisdom.
    The irony that the singular focus on wealth has resulted in many more nonprofits and many more in precarious financial straights offers a valuable lesson.
    The solution is not to use money to discourage a singular focus on money, but to revisit, rethink and return to a broader conception of the board’s role in governance.

  2. […] members of not-for-profit boards is a somewhat controversial topic, especially because some board members, although they volunteer their service, may get reimbursed […]

  3. P.K. McCary June 14, 2010 at 8:20 pm Reply

    As a person who has served on several boards, local, national and international, I find that there are some missing components to the question of whether board members or trustees should be compensated. One missing component is how do you have diverse boards (men and women, young and old, racially and socially and economically) that contribute to the well-being of an organization if only those who can afford to serve are members of boards? Most of the time, board members are people who can afford to participate. I believe that in non-profits, board members serve. This is where inequities show up. If I take a weekend or a week to attend meetings, I am leaving my job (that pays) to do so. If the job supports the individual in the work as a board member (albeit another organization), that’s great. But, what if the board member has to leave work or doesn’t get paid when he or she participates as a board member? I’ve been looking at articles that talk about big corporations where board members do get paid and they don’t do the work. How do you value work and input? How do you utilize the strengths of board members so that they are an asset to the organization, but not be bankrupted by participation?

  4. john April 25, 2010 at 10:42 am Reply

    While compensation is referenced in the subject line and suggested in the posting, the fundamental question is, what do we need from trustees, and how is the best way to get it? My belief, based on observation and experience is that we need them to serve the communitity by serving on our boards with dispassionate objectivity and rigorous inquiry, which begs the question about whether or not this role gets short shrift when we recruit them as volunteer fundraisers and defacto cheerleaders.

  5. Donna April 23, 2010 at 4:34 pm Reply

    Touché! While altruism is an admirable quality, many individuals who serve any cause voluntarily without compensation often do so by their leave. Many studies have supported the fact that attendance is usually better when refreshments and/or meals are provided or are, at least, readily available. (That’s why food is always a major feature at conventions and conferences.) Extrinsic motivators are often used to reinforce intrinsic motivations.

    To ensure that board members are fully engaged in the best interests of the communities, organizations or causes that they represent (regardless, of their missions) even token reimbursement would give value to the input of their time and efforts and would most probably improve their performances. Some non-profit board members in other areas of expertise are already being paid. Perhaps research comparing the performances and successes of paid to non-paid board members would be the next step towards validating this premise.

    • Maureen Carruthers April 24, 2010 at 6:59 am Reply

      I hadn’t connected treating volunteers well (which is how I see the value of providing food and comfortable space) with the idea of offering an honorarium. If the honorarium was seen as an extension of that thank you, I agree it could be helpful.

      My fear is, as often as not, paid board members would subconsciously believe they have been paid to do $xx worth of work. Since no nonprofit will be able to pay board members what their time is really worth, the level of commitment from board members will actually decrease.

      I would also love to see the research. There is definitely room for improvement on many nonprofit boards and if paying honorariums helped make that happen, I’d be happy to be wrong.

  6. Maureen Carruthers April 23, 2010 at 2:41 pm Reply

    I agree it might be more useful to ask board members to come to the table with, as you say, “their best questions and keenest insights” rather than (or possibly, in addition to) their checkbooks, but I don’t think paying them for their time is the way to make that happen.

    Having just finished Drive, by Daniel Pink I’m very leery of any plan that basically trades intrinsic motivation for extrinsic motivation.

    There must be a way to encourage board members to bring their best thinking, a willingness to ask hard questions, and to discuss un-discussable issues to the table–because that’s what’s required for the organization to achieve it’s mission–not because they are being paid to do so.

    Most corporate board positions are paid and the money certainly hasn’t kept those boards from being full of “yes-men.”

    Looking forward to hearing from others–this should be a great conversation, John!

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