2012 National Board Governance Survey for not-for-profit organizations

Executive summary

The 2012 edition of the survey is based on responses received via an online questionnaire from 706 board members and senior management of higher education institutions; trade and professional associations; social and human service organizations; religious organizations; cultural organizations; health care organizations; and foundations.

Not-for-profit organizations are emerging from the recent economic downturn stronger than ever. Over the past four years, significant numbers of not-for-profit organizations have implemented new strategic plans, restructured their organizations and made their programs more efficient as they weathered the difficult economy. According to the results from this survey, approximately half of respondents are confident with their programs and brand. Fewer still are convinced they have achieved the right expense structure or that revenue is being maximized. Confidence in staffing, structure and communication is even lower, as the following chart illustrates.

Rating board effectiveness

There are a number of possible explanations for lagging confidence, including continued fallout from the nation’s financial meltdown, and recent staff reductions and structural changes that may need more time to settle in. In some organizations, further work is necessary to distinguish themselves in the new competitive landscape. Whatever the reasons, we should see a rise in industry confidence as financial, operational and strategic activities gain speed and direction.

Some nonprofits have maximized revenues, but there is still room for improvement. A majority of respondents believe their boards are effective at a high level, rating them a 4 or 5, with 5 being the highest rating. Only about one in three boards perform annual self-evaluations, though. Self-evaluations help to provide a continuous feedback loop into the effectiveness of the governance process. When the board and management team feel they are fulfilling their roles, confidence within the organization rises. Beyond self-evaluations, organizations also benefit when management, employees or other constituents are given the opportunity to rate the effectiveness of the board for upward feedback.

Confidence in organizational strategy

Commitment to mission is also high among respondents. The vast majority (80%) of the surveyed not-for-profit organizations are structured to optimally deliver on their mission, reflecting strong focus on execution throughout the industry. On the other hand, one in five organizations do not optimally deliver on their mission, suggesting they lack the leadership and administrative capabilities to build and support an institution capable of meeting its mission.

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