Funders should invest in leadership, report says

Grantmakers should play a bigger role in promoting good governance in nonprofit boards, says a report by BoardSource and FSG Social Impact Advisors.

Though U.S. foundations boosted support for capacity-building by 126 percent between 2000 and 2006, they still tend to overlook funding for boards, says “Advancing Good Governance: How Grantmakers Invest in the Governance of Nonprofit Organizations.”

As a result, many nonprofits still give their board members average or below-average marks in critical areas, say various studies.

The resulting leadership deficit can lead to employee burnout and poor decision-making, the report says.

Grantmakers surveyed in the report recognize the crucial role boards play in setting strategy, supporting staff and providing oversight, the report says.

Many referred to investments in boards as “risk mitigation,” helping to ensure that grants are used most effectively to support mission.

Some even argued that investing in governance is the best and most efficient use of limited grant dollars.

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