Editors’ note: This article was adapted from “Community Foundation Strategy: Doing Good and the Moderating Effects of Fear, Tradition, and Serendipity” (Nonprofit and Voluntary Sector Quarterly 43, no. 5, 2013), with permission. It comes from the Nonprofit Quarterly’s spring 2018 edition, “Dynamics and Domains: Networked Governance in Civic Space.”
Nearly every nonprofit is faced with the responsibility of balancing the needs of multiple stakeholders, and nonprofits do this with varying degrees of insight and success. As one example, community foundation leaders must successfully balance the expectations of donors, grant recipients, and community simultaneously. All of these expectations must be taken into account in all functional areas, including fund development, strategy and planning, financial oversight, public relations, board member vitality, and policy oversight, among others. The selections they make among these competing interests help set the strategic course for the organization and its work.
The implicit assumption in much of this work, however, is that these roles compete for attention, and board members select, prioritize, or implicitly favor one role over the other. Furthermore, the presumption is that the selections they make among these roles help set the strategic course for the nonprofit. Thus, board decision making is typically characterized as a highly rational process in which individuals interpret organizational and environmental realities and transform them into strategic direction. We are not the first to address this. Over twenty years ago, in a study of managerial elites, Andrew Pettigrew suspected that the public availability of demographic data regarding boards of directors led to studies that made “great inferential leaps…from input variables such as board composition to outcome variables such as board performance with no direct evidence on the processes and mechanisms that presumably link the inputs to the outputs.”1 He strongly encouraged “serious social science research on the conduct and performance of boards and their directors.”2
Francie Ostrower and Melissa Stone echoed this call for research when they asserted that there were “major gaps in our theoretical and empirical knowledge” regarding nonprofit boards of directors.3 They concluded that future research must address the contextual and contingent elements of governance and make explicit the implications of these considerations. Elizabeth Graddy and Donald Morgan furthered this stream of work by isolating the organizational life cycle effects, community characteristics, and external forces influencing community foundation strategy.4 Our study builds on previous work by providing insight into how board members interpret these elements, advocate the significance of their interpretation, and use those interpretations to inform decision making.
Drawing on conversations that took place in the boardroom and subsequent interviews with board members discussing those conversations, we focused on two types of decisions: those that led to inertia and those that preceded change. Our data suggested that inertia tended to be related to fear or tradition. Fear manifested in two ways: fear of alienation or fear of the unknown. Tradition was closely associated with the notion that “we have always done it this way.” When boards participated in decisions that resulted in change, we found that quite often change was a result of serendipity—being in the right place at the right time—or what boards described as “visionary leadership.” Interestingly, serendipity did not always result in change. Sometimes, even when there was a fortuitous event, board members engaged familiar tactics to thwart efforts at change (because of fear and tradition). And they used what we describe as “hedging tactics” to avoid painful decisions, or post hoc justification to rationalize the lack of bold maneuvers.
We argue that although the board is presumed to take a leadership role in setting organizational direction by balancing multiple competing expectations, these kinds of strategic discussions rarely take place. This is not to suggest that the board does not affect decision making; in fact, quite the opposite is true. What we found was that more often than not, even though board members might not be wrestling with competing expectations or envisioning a potential future, these groups spent a great deal of time justifying inertia or rationalizing serendipity. This finding is actually quite consistent with Graddy and Morgan’s assertion that board decision making results in either adaptive strategy in the form of a proactive response to environmental stimuli (serendipity) or inertia (strategy that is constrained by fear or tradition).5
Thus, our data suggest that board decision-making processes rarely involve the kinds of balancing discussions posited in the literature. The choice between these roles (or role preferences) is not always a strategic one based on competing expectations but rather an expression of how the leadership communicates its commitment to “doing good” that is often moderated by fear, tradition, and serendipity. Even though our data come from a study of community foundation governance, the findings apply to all nonprofits, particularly if the leadership is open to considering how these same drivers might play out in their own boardrooms.
We gathered data for this project in two stages. We started with BoardSource self-assessment data, collected from a representative sample of forty-five community foundations from across the country, that evaluated board performance vis-à-vis thirteen specific responsibility areas. We then recruited fifteen organizations (representative of size and geographical considerations) from that initial study for more intense observations and interviews with CEOs and at least five members of each board.
Drawing on these data, we focused our analysis on developing a better understanding of board decision-making processes, particularly those choices regarding role preference and strategy. Our data show that a conservative, risk-averse desire to “do some good in the community” retrospectively justified most decisions. Factors such as fear and tradition profoundly influenced strategic direction irrespective of any focused planning efforts, which meant there was often very little strategic movement away from the status quo. When community foundations were engaged in community leadership activities, board members were quick to credit an individual “leader” or a serendipito