Are you a Not for Profit board director, especially one whose personal work experience is outside of the sector? Then, this article is for you.
I’ve been heavily involved with Not for Profits (NFP) most of my adult life while working concurrently in the IT sector. I helped a client set up a US-based charity when I was just 25 years old. Six years later, I joined my first board with Meals on Wheels in Los Angeles.
Since that time, I’ve worked with a lot of Not for Profit boards in the US, Africa and Australia – either as a director, an executive or a strategic advisor. From that experience, I’d like to share a few lessons I’ve learned along the way that may help you and your organisation, particularly if you’re new to the sector.
LESSON #1: Not for Profits never lack the desire to achieve big goals, just the resources.
I remember the first time I was the President of a Not for Profit. While I had been a director of these types of organisations before, this was the first time that I was the chair. I was working for a large IT company at the time, and I had so many great ideas to strategically improve the organisation. Or so I thought!
The challenge was that my aspirations for the organisation were far greater than our resources. While we could certainly achieve some of the new goals, there wasn’t enough time, budget or people to fulfil the full list of priorities.
This is not uncommon in Not for Profits. In fact, I recently pulled data from the Australian Charities Report, which showed that 65.5% of the organisations had 6 or fewer employees on average. I expect this percentage to be even higher for the rest of the Not for Profit sector.
As time passed throughout my first President’s term, I realised that capacity was our greatest constraint. And until we could address that issue, I needed to adjust the annual business goals to be more realistic.
LESSON #2: There is a lot less waste in NFPs than in companies and government.
I spent most of my career working with large companies and public sector organisations. Some of the work I did in the early days was to help these organisations reduce their operational expenses.
I’d crouch around a computer for weeks, pouring over spreadsheets from their financial systems to understand where supplies and services could be purchased in a smarter way. It was easy to find waste in these larger organisations.
More times than not, there were silos which meant that the different departments were buying similar things without the other one realising it. Savings could quickly be realised just by centralising the buying function of that commodity.
Then, I became the CEO of RSPCA ACT – my first paid position in the Not for Profit sector. I remember asking the admin person for some sticky notes and pens. She gave me one pen and a little pad of paper. I realised then that things were very different there.
Staff were incredibly conscious about costs as they knew that every dollar that was wasted was one less dollar spent on the animals. This included everything from rostering to purchases. As such, savings opportunities were harder to find.
LESSON #3: A Not for Profit board director should help more with fundraising.
Because reducing expenses is so hard, much of an executive’s attention is on generating more revenue. This is something that has been a common theme with all the Not for Profits I’ve worked with in the past and even today.
Unfortunately, this priority is often delegated to the management team with little help from their Not for Profit board directors, especially in Australia.
Do your directors actively participate in fundraising activities? Do you put together a table for the charity’s ball? Or if a professional association, have you invited your entire work department to the annual conference?
Many board directors don’t even do these practical things that make a big difference to the bottom line, much less fully engage in their fundraising strategic plans.
If there is one meaningful way to really support your Executive team and the organisation, it would be to help them raise revenue.
LESSON #4: IT requires ongoing investment
Not for Profits are notoriously bad at investing in their back-office, especially their IT infrastructure. After all, if it’s overhead – it’s bad, right? WRONG!
For better or worse, Not for Profits are just as dependent on their system applications and networks as businesses and government. As a result, failure to invest and manage these systems well often results in significant risks for the organisation from both a cybersecurity and business continuity perspective.
Furthermore, the lack of proper investment creates technical debt and probably also means that your staff are unnecessarily burdened with manual processes.
Whether it be trying to duplicate information in two different systems that lack integration, working around systems that no longer meet the organisation’s needs or spending hours in Excel for reporting – this can all be fixed with good investments in IT.
Just think how much more time the staff could spend on your mission if these admin tasks were simplified and automated.
For more information, you may find this article helpful: Why NFPs will fail if they don’t increase their annual IT operating budgets.
LESSON #5: Master the operational basics first
I heard it in two different events from two different organisations during the same week, “My board director doesn’t want to invest in a new solution (CRM) until the pathway of AI (artificial intelligence) is clear.”
My response was, “For Not for Profits – AI is not a strategy, it’s an enabler.”
However, what I really wanted to say was, “Your organisation is probably not mastering the basics of operations yet. Focus on that first before you try to adopt the latest technology.”
Those thoughts may seem harsh, but they are so true for most of the Not for Profits I speak to every day.
If you’re a board director who has worked in larger for-profit or government organisations, this may shock you. Nevertheless, many Not for Profits would struggle to answer the most basic questions in IT.
For example, the following questions may be on a cybersecurity insurance policy application, and yet your Not for Profit leadership team would probably need help to answer them:
- Who has access to Privacy (PII) data?
- Where do you store credit card information?
- When was the last time your computer had security updates?
- When was the last time your staff had cybersecurity training?
If we look beyond cybersecurity, few staff members would have mastered your current systems (often due to lack of training). Therefore, I see expensive systems that are often underutilised or poorly used with external paper-based processes.
In the future, AI will most definitely help your staff be more productive. However, unless you’re already an organisation that has mastered your basic operations, choosing a new CRM shouldn’t be dependent on new technical developments such as AI.
For more information about AI, you may find this article helpful: Are you practicing safe AI?
SUMMARY: 5 Lessons Learned for a Not for Profit Board Director
Most Not for Profit board director roles are unpaid, thankless acts of time and passion for the mission. Yet, your strategic influence on the organisation is so vital.
I hope you find my 5 Lessons helpful to you and the Not for Profit you support.
- Not for Profits never lack the desire to achieve big goals, just the resources.
- There is a lot less waste in NFPs than in companies and government.
- A Not for Profit board director should help more with fundraising.
- IT requires ongoing investment.
- Master the operational basics first.
if you have any other Lessons Learned to add to my list, please let me know. I’d value your thoughts too!
I regularly help Not for Profits with strategic IT decisions, especially around IT investments. Let me know if you need some help.
Tammy Ven Dange is a former charity CEO, Association President, Not for Profit Board Member and IT Executive. Today she helps NFPs with strategic IT decisions, especially around investments.
