Clearly, one size or practice does not fit all. Yet the field remains dominated by a corporate governance model, one that seeks to define the roles of a board and paid staff, and that places all of the decision-making authority and responsibility for implementation in the hands of one or the other. This model is deeply flawed for our sector. But in this era of corporate reform, fueled by scandals and the resulting Sarbanes-Oxley legislation, state attorney generals and other regulators could potentially transfer some of these principles to nonprofit organizations. It would behoove us all, as illustrated by the case studies, to take a step back before initiating such sweeping reforms, and consider the nature of our field.
Each of these cases originate with a local, regional or national need that, in response, leads to the formation of a nonprofit organization. The foundation of our country as a democracy partially relies upon concerned people being organized around issues that matter to them. The formation of nonprofit organizations, associations and community-based organizations are all reflections of this tradition. While some evolve into behemoth organizations, rivaling private businesses in the size, scale and complexity of their operations, others remain small, or wax or wane as needed. Any attempts to standardize practices, beyond a common set of principles, may quell the civic vitality and creativity of people.
Even if one size does not fit all, I strongly believe common principles should apply. First, volunteer leadership—regardless of whether it is a formally constituted board or not—must be shared. The province of a single individual or simply the chair and executive director should not exist. Under our laws, public benefits are bestowed on nonprofit organizations because they serve the common good. A single dominant individual in the mix should raise serious questions about the balance and diversity needed for reflection and accountability.
Second, volunteer leadership owes its fiduciary duty first to the community and only secondly to its organization. The resources that are garnered on behalf of the organization are provided to achieve a public purpose, not just to serve the organization. Volunteer leaders must understand their responsibility to review and challenge the efficacy of their organization in the context of the community. This duty requires that volunteer leaders be knowledgeable about the organization’s mission, strategy and operations, and, at the same time, understand broader conditions affecting their field and community.
My hope is that discussion through the work of the Nonprofit Quarterly and others can drive alternative thinking about best practices toward common principles. We should allow organizations to continue to tinker, and recognize that the diversity of interests, people and programs they represent requires it.
Kelvin Taketa is the president and CEO of the Hawaii Community Foundation.