Making Common Cause with the Board

Recognize that helping a board through an executive transition can be a long process:

A grantmaker with a community foundation recalled a meeting with the board chair of a grantee organization soon after the agency’s CEO had abruptly resigned. The chair was “totally thrown” and desperate to replace the CEO immediately. The abrupt departure after nearly 15 years left ill feelings, low staff morale, a deficit that necessitated layoffs and reductions, and a practice of drawing down the endowment that could not be sustained. The program officer saw her job as reassuring the board chair that the organization could afford to take time to hire the right person and also do a thorough organizational assessment.

Recommend an analysis of the organization’s finances:

As several grantmakers reported, a careful examination not only of audits and budgets, but of outstanding bills, anticipated bills, debts, and credit — in a word, cashflow — often reveals that, as one funder put it, “a startling number of our grantees are living on the financial edge.” One noted that this is especially the case among organizations led by founding or long-time executives, “charismatic leaders” who “somehow keep everything going.” Frequently, the grantmaker observed, the board does not know how precarious the situation really is. That means that the new CEO may well be blindsided when he or she arrives and delves into the financials. Funders can help organizations avoid this kind of financial crisis, she urges funders to “get our grants out in as timely a way as possible.” She also raises questions concerning the nonprofit’s capacity to do good financial management.