When Do Nonprofit Boards Act on Financial Performance?
About this episode
This episode explores the financial indicators that nonprofit boards respond to and the implications of board capture.
Most board packets are full of numbers boards don't act on. New research looked at a decade of financial data from the largest nonprofits in the country and asked a simple question: which financial signals do boards respond to? It turns out, many of the indicators we build our reporting around, including revenue, expenses, profit margin, and savings margin, show no measurable effect on board action. There's one measure boards do respond to, but by the time it moves, the financial decline has usually been underway for years. Boards catch the problem late enough that fixing it means cutting programs instead of adjusting course. In this episode we get into what board capture is, why it happens without anyone acting in bad faith, and what to do with all of it depending on which chair you're sitting in.
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- Rethinking What Makes a Nonprofit Resilient
- How to Predict What Your Nonprofit Will Need
- Credible Data, Better Decisions: Lessons from the Research
- Why Most Nonprofit Collaborations Fail- And What to Do Instead
- Every Nonprofit Is a Hypothesis
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