Read and answer 4 case question at the end
Case Exercise for Chapter 5
CASE: Homeless program
You are the first executive director of a program providing meals, medical care, and other services to the homeless. The board is a founding board, including people who work as volunteers in your programs. You were hired because the program had grown and the board members as volunteers were no longer able to manage the business operations and because the board was concerned about complying with new requirements for transparency. However, the board members remain deeply interested in the details of the organization and its programs.
You currently receive no government funds, so your income is completely from fund-raising events and a few gifts from local companies. The homeless population is growing and you realize that there will be a need to expand services. In addition, all the fundraising events are a drain on time and you notice that attendance at some events has been lower than in previous years. You worry that some may be losing their appeal and it concerns you that some might just disappear if the volunteers who run them were to lose interest.
You learn from a friend, who works for the city government, that under a new local program you may be able to apply for a capacity-building grant that would pay the salary of a new staff member. You think that this might be an opportunity to obtain funds to hire a director of development, who would start a more formal fund-raising program to increase giving from individuals and more companies, thus reducing your reliance on events.
At the next board meeting, you suggest applying for the grant and hiring a development director. One board member says the organization should never accept government funds. “That just leads to control and is inconsistent with the voluntary tradition of our organization.” He adds, “I know that a lot of my friends are not going to be interested in giving their time if we become just some city bureaucracy.”
A second board member says that she has no problem with accepting government funds, but she does not agree with hiring a development officer to raise money from individuals. She says, “I don’t want that person asking me to give — we do enough by giving our time. And, I don’t want that person asking me to go out and hit up my friends for money.”
A third board member agrees and says he would favor getting the grant if it were to be used to hire some other type of staff member, but not a fund raiser. He says, “Our clients have a lot of unmet needs. How can we justify adding to our administrative expense when people are without homes, jobs, or enough food and clothing? We should hire another case manager instead.”
A fourth member says she agrees with your recommendation for a development officer and adds, “I don’t think this is something the board should be discussing anyway. You are the Executive Director, so it is up to you how you go about accomplishing the goals we give you to accomplish. If you need a fund raiser, then you should be able to go ahead and hire one.”
A fifth board member says, “If we don’t have enough money, maybe we should think about working with some other organizations or even merging with a larger one.”
A sixth member of the board jumps from her seat and says, “Well, just who does this organization belong to anyway? I have been on the board for many years and we always made decisions about how we would raise and spend the money. And, I’m not interested in giving our organization to someone else to run.”
As you face the board around the table, you wonder where you went wrong and what to say next.
Possible questions for discussion:
1) What does this case suggest about the culture of the board and its understanding of its role?
2) What does the case suggest about your relationship with the board?
3) Think about the best practices for nonprofit CEOs discussed in Chapter 5 of the text. Are there some that you did not follow and, if so, could those errors explain the current situation?
4) What actions might you take now to improve the situation?
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