Next-gen donors’ appetite for engagement was cited earlier this year in one of the first large studies of high-capacity donors in their 20s and 30s (a report that received grant support from the Meyer Foundation, where I work, and several other grant makers).  Some of the 300 participants were entrepreneurs in the early stages of their careers who are just beginning to think of themselves as philanthropists. Others came from families with established foundations that will soon be governed by a new generation of trustees.

Whatever their current circumstances, these donors are poised to become even more influential in the decades to come as control of major institutions and an estimated $40-trillion is passed to the children and grandchildren of baby boomers.

In their report, “Next Gen Donors: Respecting Legacy, Revolutionizing Philanthropy,” the philanthropic consulting firm 21/64 and researchers at the Johnson Center for Philanthropy at Grand Valley State University describe next-gen donors as driven by personal values, often those transmitted from their parents and grandparents, and motivated primarily by a desire for social impact rather than a sense of obligation or a need for recognition.

Perhaps most significant for nonprofits and their boards was the desire of younger donors to go “all in” once they engage: to develop close relationships with the organizations and causes they support, to offer their personal and professional talents in support of the cause, and to encourage their peers to give and participate as well.

For organizations that are constantly on the prowl for skilled, engaged board members with deep pockets, next-generation donors represent an unprecedented opportunity to revitalize their boards and engage the skills and resources of a fresh cohort of supporters who are just beginning to come into their own as philanthropists.

Yet despite their appetite for deep engagement, younger donors are likely to be put off by board service unless boards can improve the way they function.

A decade’s worth of research suggests that board performance is at best uneven and at worst highly dysfunctional. A majority of executive directors are at least somewhat dissatisfied with their board’s performance; many are very dissatisfied. Large numbers of trustees report low levels of engagement across almost every area of board responsibility. For far too many people, serving on a board is a frustrating and daunting experience, and many trustees wonder whether their service is making a difference. The experience of serving on a board—unless it is high functioning, superbly led, supported by a skilled staff, and working in a true partnership with the executive—is often quite the opposite of engaging.

Simply adding younger people to the mix—no matter how enthusiastic and skilled they are—is not going to change the fundamental dynamics of nonprofit board service. Even worse, a next-gen donor who has a negative board experience may become disenchanted with the organization and its cause—or even with board service in general.

Nonprofit organizations, and our sector as a whole, can’t afford for that to happen. We need the values, skills, and resources next-gen donors can bring. To engage them, nonprofit boardrooms need to become welcoming places where real work gets done. Nonprofit executives need to get better at tapping the expertise and networks of their trustees. And boards need to have more serious conversations about impact.

A new generation of donors and philanthropic leaders is coming into its own. Boards need to get ready.

That’s why I was surprised when he advanced an argument I’ve heard many times from board members of other organizations. It goes like this:

“Our executive director is terrific but doesn’t have a background in fundraising or time to focus on it. Our board members want to help, but they don’t have friends with deep pockets and are not fundraising experts. What we really need is a topnotch fundraising professional on staff. But we can’t raise enough money to hire one, so we’re stuck. We’re never going to be really good at raising money until we can hire a development director.”

Some parts of this argument do ring true. UnderDeveloped, a new national study from CompassPoint and the Evelyn and Walter Haas Jr. Fund, provides plenty of evidence that small nonprofits have a hard time finding and keeping skilled development directors, in part because they don’t have the money to pay competitive salaries.

But the report also illustrates why I take issue with the suggestion that, for many small organizations, hiring a development director is a magic bullet for solving fundraising woes.

Even among organizations fortunate enough to have development directors, large numbers of boards and executives continue to be unhappy with fundraising results and to blame the development director when things go poorly. Nearly a third of the executive directors in the CompassPoint/Haas Jr. Fund survey were at least somewhat dissatisfied with their development director’s performance, and a quarter said they had fired their previous development director.

At the same time, significant numbers of development directors—one in five in the CompassPoint study—describe their partnership with the executive director as weak or non-existent. And many complain that they don’t have enough involvement in developing budgets and fundraising targets to ensure realistic performance goals.

With dissatisfaction so widespread, clearly the mere presence of a development director is not sufficient to guarantee successful fundraising. In some cases, it may even be a hindrance—leading boards and executives to the mistaken conclusion that fundraising is someone else’s responsibility.

I don’t mean to suggest that a great development director can’t help an organization take its fundraising to new levels of success. Many do. But many others take the fall for disappointing fundraising performance, or limp along for a year or two without the support or systems they need to be successful, and then depart for better pay or more functional organizations.

Hiring a development director will only be transformative under the right conditions, which include:

• A board and executive who view bringing on a development director as a strategy for expanding and enhancing their essential roles in fundraising, rather than a way to avoid or minimize their involvement.
• A clear job description for the development director, with realistic performance expectations on the part of the executive director and board.
• A high level of trust and engagement between the executive director and the development director.
• Input from the development director on budgets and fundraising goals.
• A willingness on the part of the organization to invest in systems and infrastructure, such as software and formal planning, to support fundraising.
• An understanding among all staff that fundraising and stewardship are part of everyone’s job, not the responsibility of one person, and that fundraising is important programmatic work—not just a necessary evil.

Admittedly, not many nonprofits have all those elements in place. However, the list is useful as a reality check for boards and executives considering a development director hire.

My concern is that too many executives and boards, beleaguered by relentless pressure to raise money, have unrealistic expectations about what a development director can accomplish. For most executive directors—and especially for leaders of small organizations—fundraising is an integral and important part of their jobs. Hiring a development director won’t make that go away.

And most organizations need the support and engagement of board members as donors, ambassadors, solicitors, and networkers. A good development director will create more opportunities for board engagement in fundraising, rather than lessening the board’s involvement.

Assuming that the organization has a compelling mission and does good work, the real keys to effective fundraising are the leadership, vision, and skill of the executive director; an engaged, committed, and high-functioning board; and a strong working partnership between the board and the executive. If those things are in place, a development director can be successful.

And if those things are not in place, even the most talented development director will struggle.

Which suggests that perhaps organizations and their boards should focus less on fundraising as the function of a single staff member or department and more on the underlying conditions that allow organizations to be successful at fundraising.

The development director is only one factor in a complicated equation.

Ms. Brinker, who created the nonprofit in 1982, announced last month that she was stepping down as Komen’s chief executive. Her decision is the latest in a series of turbulent events for the charity, which is still looking to undo the damage that followed its decision to withdraw, and then reinstate, grants to Planned Parenthood.

Although she will no longer be the organization’s chief executive, Ms. Brinker will retain her lifetime seat on Komen’s eight-member board. She will also be chairwoman of the board’s executive committee, which is responsible for hiring her successor.

As a result, Ms. Brinker remains Komen’s de facto leader. And the board seems unlikely to ask her to step down, even if such a move would help the organization.

Of the seven other directors, one has served on the board since 1982. The current chairman had also served since 1982, retired in 2010, and then rejoined the board this year after the previous chair stepped down in the wake of the Planned Parenthood controversy. Several other board members have long associations with the organization.

This small group, whose core members have been with Komen for decades, may be too closely associated with Ms. Brinker to overrule her in the event that her wishes conflict with what is best for the organization.

Effective nonprofit boards need to have the ability to stand up to the chief executive when necessary to maintain their independence and authority.

And when the top executive is the founder, the board’s independence and authority are even more critical.

For many founders, the work of starting and running their organizations is all-consuming, requiring long hours and considerable personal sacrifice. Because they are so bound up in the venture, some founders have difficulty distinguishing between themselves and their organizations.

The board can’t share that confusion.

A board and its members have a legal and moral obligation to act in an organization’s best interests. They must act on behalf of the organization’s mission, its supporters, and the people it serves. In turn, they have a responsibility to hold founders accountable for their stewardship of the organization and its resources.

Susan G. Komen for the Cure is no longer a start-up organization. As the leading international organization dedicated to finding a cure for breast cancer, Komen needs a board that is large enough to include diverse viewpoints, including those of its affiliates around the world. It needs board members with the skills and perspective to safeguard the organization’s brand and reputation. But perhaps most of all, Komen needs a board that can distinguish between the organization and its founder.

The question is not whether Ms. Brinker should step down—that’s for her and the board to sort out. The real question is whether Komen has a board that would know when it was time for Ms. Brinker to resign and that would be capable of asking her to.

Komen’s former vice president for public affairs Karen Handel, who resigned following the Planned Parenthood controversy, recently spoke about Ms. Brinker’s influence on the fight against breast cancer in an interview with The Daily Beast.

“Her organization has done more to move the fight against breast cancer forward than any other organization,” Ms. Handel said. “This organization is, in very large part, her. She is the organization.”

While many people may share that perception, it’s simply not true. Susan G. Komen for the Cure needs a board that understands that—and so do many other organizations being run by founders.

For board members of all types of nonprofits, this episode should serve as a cautionary tale about what can go wrong when a board and its leaders are not clear about their roles. Trouble often erupts when people forget that boards govern, board members do not.

The drama at the University of Virginia began in mid-June when the chairman and deputy chair of the board met with Teresa Sullivan, the university’s highly regarded and popular president, who had been on the job for less than two years.

The board chairman, Helen Dragas, a University of Virginia alumna who heads a Virginia Beach homebuilding firm, told Ms. Sullivan that she had lined up enough votes on the 16-member board to fire her and asked her to resign. According to news-media accounts, Ms. Sullivan was taken completely by surprise.

Two days later, Ms. Dragas convened the executive committee to accept Ms. Sullivan’s resignation. The emergency meeting was held on a Sunday afternoon with only a few hours’ notice, and just two other board members—the minimum required for a quorum—attended.

After the news was announced, the university’s students, faculty, and major donors almost immediately began asking why Ms. Sullivan had been fired and, perhaps more important, whether the board had handled her dismissal in a way that was consistent with the university’s core values of honor and trust.

Over subsequent days, Ms. Dragas failed to communicate to almost anyone’s satisfaction why she had asked Ms. Sullivan to step down, and the anger grew more bitter and drew nationwide attention.

As more details came to light, it became apparent that her dismissal had been quietly engineered by a small group of board members who believed that she was not acting swiftly or boldly enough to maintain the University of Virginia’s position in the top tier of public universities.

But the way those board members acted on their discontent was so flawed that the board was forced to change course and give Ms. Sullivan her job back.

Ms. Dragas and other critics of Ms. Sullivan lost sight of the concept that boards make major decisions, such as firing the chief executive, only when meeting as a body at a duly constituted board meeting. Individual board members —including officers and even the chair—have no authority to make decisions unless authorized by the board.

Polling board members individually and tallying votes, as Ms. Dragas did before she asked Ms. Sullivan to resign, is not good governance and does not constitute a board decision.

Ms. Dragas’s strategy of informally gathering proxies and using them to force a change in leadership would seem more appropriate to the board room of a publicly traded company but is rarely used in the nonprofit sector.

When making significant decisions—and no decision is more significant than firing the staff leader—boards should have the opportunity for substantive discussion that includes the viewpoints and perspectives of all board members. Anything less leaves board actions and decisions vulnerable to criticism for being secretive, manipulated by a few people, and perhaps not even reflecting the views of the board as a whole.

By most accounts (including President Sullivan’s), Ms. Dragas is a committed and talented leader who acted out of a strong conviction that the University of Virginia needed a different leader to maintain its greatness. At the same meeting at which the university’s board voted to reinstate Ms. Sullivan, it also expressed confidence in Ms. Dragas. And last month, Virginia’s governor appointed her to another four-year term on the board.

Her future success as a board leader hinges on her ability to recognize that boards—not board members—govern. Board chairs, however strong their own views, should lead in ways that respect governance responsibilities reserved exclusively for the board and provide opportunities for thoughtful decisions informed by open discussion and occasional honest disagreement.

Anything less creates the potential for a huge distraction from mission, as the University of Virginia’s board learned last month.

As a result, anyone with a little spare time and access to the Web can take a crash course on the basics of board effectiveness. Those with an appetite to dig deeper can find books to buy, training sessions to attend, and organizations to join.

So why are many boards still falling short?

One possibility is that we have misdiagnosed the causes of lackluster board performance—and our faulty diagnosis has led us to prescribe the wrong cure.

What if the problem is not that board members misunderstand their responsibilities. What if the problem is that nonprofits just can’t find the right board members?

Boards are, after all, teams of individuals working together to fulfill a collective set of responsibilities to help an organization achieve its mission.

Jim Collins, the management consultant and bestselling author, has famously compared the role of a chief executive to that of a bus driver in charge of determining a destination and a way to get there. In Mr. Collins’s view, “getting the right people on the bus” is the first and most important step in taking an organization’s performance from good to great—more important, even, than defining the destination and route.

Admittedly, the bus-driver analogy doesn’t translate perfectly into the nonprofit context. Having some idea of where your organization is headed does help you know who needs to be on the bus. But, to Mr. Collins’ point, having the right people on your team will make all the difference when the journey becomes difficult.

But what if you just can’t find the right people?

Nearly every major study of nonprofit boards over the past two decades has identified recruitment as a significant challenge for board members and nonprofit executives.

It’s a tall order to find board members who care deeply about the work of the organization, who have the skills the board and the organization need, who are willing to commit the time and resources to do a good job, and who understand their role.

Too often, nonprofits are forced to settle for two or three of those attributes rather than the full list.

Is it possible that the performance of many nonprofit boards, and the organizations they serve, is languishing because the right people are not on the bus?

And if that’s true, isn’t it time we recognized that helping nonprofits find good board members—rather than providing reading material or training for the board members they already have—might be one of the most important things we could do to strengthen board performance?

I should have known that someone in the audience would then ask a perfectly logical follow-up question: If we got rid of the current model, what would take its place?

Caught off-guard, I sputtered.

I eventually mentioned the author and consultant John Carver’s Policy Governance Model, which has been around for more than 20 years and is more a refinement and clarification of the current model than an alternative to it. Policy Governance encourages boards to focus on organizational purposes and goals and to give the chief executive greater clarity about boundaries and expectations.

I also cited Community-Engagement Governance, a framework that was developed through the Alliance for Nonprofit Management. The Community-Engagement approach seeks to expand governance beyond the board to include other constituents and stakeholders. This model also focuses on community impact, the concept of governance as a function rather than a specific structure, and the idea that decision making and power should be shared.

This approach also acknowledges that no one-size-fits-all model works for every group. Each organization will require structures and processes tailored to its needs, size, mission, and stage of development.

In a recent article, the author Judy Freiwirth reports that organizations that use this framework are showing encouraging results. These groups say they have more support for their missions, have improved their ability to collaborate with other organizations, and have increased fundraising capacity and sustainability. She also notes significant challenges inherent in sharing power and decision making.

Considering these two approaches together highlights a central difficulty in proposing a new model of governance: There’s no consensus on why many boards don’t currently work all that well. And without agreement on what problem we’re trying to solve, there’s even less agreement about how to make things better.

Mr. Carver’s approach attempts to distill and clarify the work of the board, both to help boards become more focused and to make it less likely that boards will interfere with their chief executives in unproductive and arbitrary ways.

That’s certainly a problem that bedevils many boards, but is it the main problem?

The Community-Engagement approach seeks to make governance more democratic and inclusive by engaging a much larger group of people in making decisions and setting direction.

At least theoretically, this should help organizations be more responsive to community needs and might also help them engage more people and raise more money.

But is lack of inclusiveness really the major factor that drags down board performance?

Neither approach changes the core of the current model. Both approaches address significant problems experienced by some boards but also add complexity and may create new problems of their own.

I’d be interested in hearing from the leaders of organizations currently implementing either of these models about the benefits and drawbacks. I’d also like to hear from everyone else about whether we need more audacious proposals for new models of governance.

My own two cents: The current model is complicated enough; greater complexity seems likely to produce even worse performance. And boards’ current problems may have as much to do with the people we bring onto boards and how we recruit them as it does with structures, models, and definitions.

The next time someone asks me about alternative models for boards, I’d like to have a more complete answer.

Is there a better model for boards?

Hull House was started by Nobel laureate Jane Addams in 1889 to help Chicago’s immigrants build “responsible, self-sufficient lives.” Until last month, Hull House had continued Addams’s legacy by offering foster-care services, job training, counseling, and literacy and other education programs at more than 40 sites throughout Chicago.

On January 27, its 300 employees received layoff notices and final paychecks, and Hull House shut its doors.

On the day the organization closed, a blogger for Crain’s Chicago Business asked a question she said she’d been hearing from many people in Chicago’s nonprofit community: How could a board that included prominent lawyers, management consultants, financial advisers, and corporate executives have allowed a 120-year-old community institution to collapse under its watch?

A good question, with no simple answer.

Hull House board chairman Steven Saunders, in an NPR interview, blamed the economic climate for the organization’s failure. Others experts quoted in the story described a scenario that has become familiar over the past four years: A challenging economy creates increased demand for social services but also causes government agencies and foundations to reduce their support.

While the economic climate certainly had an impact on Hull House, its collapse can’t be summed up as a simple case of increased demand and reduced resources. The organization’s Form 990 informational tax returns reveal that Hull House had serious financial problems even before the recession.

Its June 30, 2007, balance sheet showed that its unrestricted net assets were negative $2.3-million, meaning Hull House was millions in the red before the recession even began.

In an interview for a Chronicle of Philanthropy article, Mr. Saunders said that financial reports prepared by management had sugar-coated the situation and that because staff members had maintained a positive attitude, the board failed to understand the magnitude of the financial problems until they were too large to solve.

In the same article, Clarence Wood—a former chief executive of Hull House who retired last year—criticized the board for not understanding the idea of “living on the edge.” According to Mr. Wood, “the reason the staff members like me were staying positive in attitude was that we are very used to social-service agencies always being on the brink of destruction.”

Those contrasting views illustrate what may have gone wrong at Hull House. And the same dynamics are being played out in the board rooms of other organizations that face similar challenges.

As I pointed out in a previous blog, most board members are volunteers, and few are adept at reading financial statements. But that was not the case at Hull House, whose board included finance and management experts. Even a cursory review of the organization’s publicly available financial documents reveals deep financial problems. And one of the board’s jobs is to exercise independent judgment and ask reasonable questions about the information being presented by management.

In short, responsible governance requires a strong partnership between the board and the chief executive, and each party has to do its job for the system to work. Hull House is a sobering case study of governance failure in which neither the board nor the staff seems to have recognized the crisis while there was still time to turn things around.

Hull House’s situation was far from unusual. Thousands of nonprofit organizations are heavily dependent on government financial support, have no operating reserves or are in debt, and are seeing increased demand for services.

The executives and boards of these organizations need to recognize that being perpetually on the brink of destruction is not normal or sustainable, and it does a tremendous disservice to an organization’s mission and the people it serves.

Without more financial discernment on the part of boards, a more honest and candid partnership between boards and executives, and bolder actions while there’s still time, more organizations are going to fold.

As I prepared that presentation, I found myself wishing we had done more analysis of executives’ responses about their relationship with their board chairs and examined more closely how those responses correlated with executives’ happiness in their jobs and satisfaction with the performance of the entire board.

CompassPoint’s Marla Cornelius, one of my co-authors, came to my rescue with some additional analysis, and the correlations are striking.

Among the 3,000 executive directors surveyed, a majority (52 percent) characterized their relationship with their board chair as functional. A large minority (39 percent) described the relationship as exceptional, and just 9 percent called it dysfunctional.

Compared with executives who described their board-chair relationship as merely functional, those executives who reported an exceptional relationship were more positive about their jobs in several key areas: Ten percent less felt isolated, 8 percent less felt burned out, and 15 percent more experienced higher overall job satisfaction.

An exceptional relationship with the board chair also had a significant correlation with executive directors’ satisfaction with board performance. Seventeen percent more executives who felt they had an exceptional relationship with the chair were very satisfied with board performance over all.

While I’ve learned not to overclaim what the data prove, many years of experience with executives and boards have given me plenty of evidence that executive directors with strong working relationships with their board chairs are happier in their jobs, are less likely to be burned out, and believe that their boards work better because of the chair’s leadership.

Which suggests that we who believe that nonprofits need stronger boards, or are concerned about executive-director overextension and burnout, should view board chairs as key to supporting executives and strengthening boards.

And because board chairs matter so much, we need to create better systems and resources for training and supporting them.

What qualities and skills do board chairs need to be effective in their role, and how can we increase the number of executive directors who have exceptional partnerships with strong board chairs?

A majority of those who commented (11 of 19, or about 58 percent) said the executive was ultimately responsible for board performance. But it was hardly a ringing endorsement (even though I agree).

As I re-read the comments, two things stood out.

First, this is a complicated issue. Many comments acknowledged the murkiness and complexity of the question—so much so that in some comments, it was hard to tell which viewpoint the comment supported.

One reader wrote that the executive director had the responsibility for sustaining board performance but that the board must first step up and accept its responsibility to perform. Another noted that boards depend on executive directors to “guide them to leadership issues and the best way to advance the organization” but went on to characterize the executive’s role in doing this as “unspoken, stealth, and very complex.”

These acknowledgments of the nuance and inherent contradictions of the board-executive partnership made me feel guilty for attempting to force a simple, either-or answer to a really complicated question.

The other striking thing about the comments was the number of people who weren’t really happy with their answer. For example, one reader wrote that she would like to believe that the board chair is in charge of board performance but that unfortunately she had rarely seen board chairs step up.

These comments point to the significant discrepancies, not always acknowledged, between how boards ought to function and how they actually function in real life. Acknowledging these disconnects, rather than pretending that they are the exception rather than the rule, seems like a good first step toward a healthier and more realistic conversation about how we can strengthen nonprofit boards.

I’m looking forward to more of that conversation in the year ahead.

Rarely do these conflicting ideas get argued in public. But at the annual meeting of BoardSource, I had the opportunity to debate the point in front of an audience. Two-person teams argued opposing points of view on that and other controversial topics. At the conclusion of our comments, the audience voted.

I was teamed with the author and nonprofit management expert Jan Masoaka. We attempted to convince our audience that the executive director is ultimately accountable and responsible for board performance.

Our opponents, Karen Beavor of the Georgia Center for Nonprofits and Dave Sternberg, a fund-raising consultant from Indianapolis, made several compelling points.

Jan and I conceded that boards are accountable to the Internal Revenue Service and state charity officials for overseeing their organization’s affairs—ensuring fidelity to mission, financial integrity, and legal compliance. A board member facing scrutiny by a government agency would have difficulty arguing that any other party was responsible for the board’s performance.

Boards also answer to their donors, to those who receive services, and to their communities. Clients, donors, and volunteers can take some reassurance in the fact that an independent governing body is holding the executive director accountable.

Boards supervise the executive director and can fire a leader who isn’t working out. An executive, by contrast, can’t remove the board.

All those points are valid. But they are also primarily theoretical. When we view the board-executive partnership in practical terms, in light of how most boards function in real life, the issue is less clear-cut.

Boards do their work using information provided by the executive director. Executive directors plan the agenda for board meetings (sometimes in close consultation with the chair, but sometimes with little or no input).

Executive directors send out notices and reminders for meetings, produce materials for board review, and draft the minutes. The executive keeps track of board-member terms, supports the work of the nominating committee, and often plays a major role in recruiting new board members.

Given the importance of these tasks and the impact on board performance if they are done poorly, it seems illogical to argue that the executive director is not responsible for board performance. At a minimum, the executive has more impact on board performance than any other individual.

The executive director understands the organization’s field, its business model, and its major organizational challenges—and is therefore more likely than anyone else to notice when there is a disconnect between what the organization needs from the board and what the board is bringing to the table.

This is not to suggest that executives are able to address every board performance issue head-on. The board is definitely in charge, and an executive director’s efforts to improve board performance need to be grounded in a fundamental acknowledgment of and respect for the board’s role and authority, along with tact and diplomacy.

During the debate, Jan cited the influential author and management consultant Peter Drucker, who said that the executive is responsible for all aspects of organizational performance.

The board, while in charge of the organization, is also part of the organization. If poor board performance is damaging an organization, the executive director has an obligation to do everything possible to improve it. And no one else within the organization, including the board chair, has as much power to affect board performance.

Jan and I lost this debate (albeit by the narrowest of margins, 51 to 49 percent). But we’d like to hear from you.

Do you agree or disagree that the executive director is accountable and responsible for board performance? Please be clear which side you’re on, and I’ll tabulate and report on your comments.

And for more views about the topic, you’ll want to read an article Holly Hall, The Chronicle’s features editor, who wrote on this topic in the new issue.