CEO's Grade Trustees On Fund Raising, Diversity

WASHINGTON -- BoardSource, the premier voice in nonprofit governance, released the Nonprofit Governance Index 2010 at the annual BoardSource Leadership Forum in San Francisco. With funding by the W.K. Kellogg Foundation, the Index reports on data collected from surveys of 978 nonprofit chief executives and 780 nonprofit board members and board chairs.

The Index examines data on nonprofit board governance practices, roles and responsibilities, structures and dynamics, and composition and recruitment. It includes background on methodology, organizational participants, individual respondents, and comparative board intelligence. It updates the most recent, previous edition of the Index (2007).

"Every time we produce a new Index, we add questions about a particular topic," said Rosemary Tenuta, director of assessment services for BoardSource. "This time we focused on diversity and inclusion. Just as our recent work in this area informed the questions in the Index, the Index will help guide our work going forward."

Research in the area of diversity and inclusion focused on the three most visible types of nonprofit board diversity: race/ethnicity, age, and gender. Findings included data from chief executives on their perception and priority of racial/ethnic diversity on boards. According to the Index, 71 percent of chief executives believe racial/ethnic diversity on their board has value to their organization's mission, and 55 percent consider it to be a priority of their organization. However, just 28 percent of the chief executives surveyed reported being satisfied with the degree of racial/ethnic diversity on their board.

According to the Index, attention paid to governance policies and practices in the nonprofit sector has been on the rise, driven by two recent developments. The global recession has taken its toll on nonprofits, and the IRS has changed reporting requirements on the Form 990. In response to this scrutiny, nonprofit boards have increased personal giving and adopted accountability policies.

Nevertheless, the data suggest improvements are still needed. Nonprofit chief executives gave their boards D+ grades in both fundraising and increasing board diversity, and rated them just a C+ overall. Nonprofit chief executives and board members agreed that fundraising was the area in which boards most needed to improve. Strategic planning was second, and an increased focus on strategic priorities – over operational issues – was third.

The impact of the recession is clearly evident. Over the past two years, 41 percent of responding organizations cut or froze staff salaries. Twenty-nine percent cut staff, 28 percent dipped into reserves or endowments, and 26 percent downsized their operations or reduced services.

The 2010 Index is the sixth edition produced by BoardSource since 1994. It is the most comprehensive source available of census data on nonprofit board practices.
BoardSource acknowledges the support of the W.K. Kellogg Foundation, which funded the Nonprofit Governance Index 2010 as a part of a broader project to engage new and diverse board leaders and transform board service.

BoardSource was established in 1988 as the National Center for Nonprofit Boards by Independent Sector and the Association of Governing Boards of Universities & Colleges. It is dedicated to advancing the public good by building exceptional nonprofit boards and inspiring board service.