This issue of the Nonprofit Quarterly focuses on governance, and the topic is apropos for two reasons:
• the IRS has recently issued a draft of a new Form 990 that for the first time includes governance-related questions; and
• an independent report on a lack of oversight at the Smithsonian Institution was released on June 20, and it’s a doozy.
Like many such forensic reports, it’s a sordid tale of intrigue, self-enrichment, and quid pro quo relationships at the highest level—and all on the public dime. The transgressions involve many of the areas that the IRS has questions about: increasingly problematic interrelationships with business, hidden and overgenerous employee compensation, and conflicts of interest—not to mention whistle-blowing policies.
While it is critical for your board to pay attention to this stuff, there is much more to board effectiveness. This issue delves into several of these governance concerns such as the following:
• the inadequacy of standard best-practice prescriptions in addressing board design and culture and in meeting the needs of small organizations;
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• the characteristics of highly effective and highly ineffective board chairs;
• the oppositional role of the board;
• the primary responsibility of the board to create the best possible outcomes for program beneficiaries.
We are also proud to host a “new” governance model (see “Engagement Governance for System-Wide Decision Making”). We use the word new with a caveat, because we believe that this model of distributed governance is natural to our sector and many communities have used this model in modified form. Unfortunately, the governance literature doesn’t address how distributed governance might work better.
In this issue, you will also find an installment of the Nonprofit Ethicist, a critique of the Pew Foundation, an update by National Correspondent Rick Cohen on the group of foundations famously exposed for their misdeeds in the Boston Globe Spotlight series, and a memo from Jon Pratt of the Minnesota Council of Nonprofits proposing an online project to censure those who make millions of dollars exploiting the poor and who then attempt to redeem themselves through philanthropy.
And as a special treat, we’ve created our very own board horoscope in handy placemat form, which you can tear out and use. Bon appétit, and many thanks to our friend and mentor David Renz for this concept.