12 Days of Watchmas — Day Eight #WeSeeYou
WTF is a board?
Who are these powerful people supposedly puppeteering Artistic Directors, Managing Directors, Executive Directors, Chief Financial Officers and countless variations of artistic leaders?
Why is it so hard to understand where a Board of Directors’ role begins and ends?
Who decides who gets to be on the Board of a nonprofit theater?
Why is it usually filled with rich white people who don’t know a dang thing about making a play let alone stewarding a national narrative that honors the humanity of all people in that nation?
We referenced the 501c3 website, the business title for a non profit, for an answer. From 501c3.org:
“The Board of Directors is the governing body of a nonprofit. Board members meet periodically to discuss and vote on the affairs of the organization. At a minimum, an annual meeting must occur with all board members present. Board memberships are not set up to be permanent positions.”
Governance is high level strategy & accountability, ie Boards are not intended to MANAGE the day-to-day operations of a nonprofit, but they do GOVERN them...say, what???
OK...so WTF does governing mean?
“Just as for any corporation, the board of directors of a nonprofit has three primary legal duties known as the ‘duty of care,’ duty of loyalty,’ and ‘duty of obedience.’”
- Duty of Care: Caring for people employed and property owned by the nonprofit
- Duty of Loyalty: Making decisions in the best interest of the nonprofit and its mission, not in a board member’s self interest
- Duty of Obedience: Making sure the nonprofit is obedient to the law and files its taxes.
- Let’s examine the phrase: “Just as for any corporation.”
WTF is a corporation?
If you and your partner formed a company and got a legal license to offer a product or service to market for a profit, then you all would be owners of that company, and by virtue of being owners, you would be expected to manage the affairs of the company, and accept full responsibility for the actions you all take under the company’s auspices.
But a corporation is not just a company. A corporation is a company that legally exists separately from its owners.
And why, WHY, would the government go through the trouble of INVENTING a legal designation that said that the owners of a business were not the managers or governors of it? Because rich (largely white, and male) people wanted to INVEST, and receive PROFIT, but they didn’t want to WORK, or be LIABLE for what happens as a result of that work. They wanted to get access to passive income while avoiding as many of the risks of ruin naturally associated with making any investment. “Mo’ money, less problems,” is the corporation motto.
That’s some old monarchy bullshit.
That’s the equivalent of someone saying, “I only want reward, no risk! I only want victory, no defeat! I only want my wave to tangentially rise, never to fall!” It’s unnatural.
Nonprofits are also corporations that exist separate from their owners, only they exist for the public good, not to make a profit. A nonprofit identifies a collective need, establishes a mission to solve that need, and provides solutions to fill those needs. Unlike a for-profit corporation, any profit generated is folded back into serving the need, not paid out to shareholders in the form of dividends.
But who are the owners of a non-profit corporation? Who profits while being protected from the expectations of labor and liability?
The people who start the non-profit are not legally the owners of the non-profit. They likely identified the community need, built the mission and structure of the company, and even chose the first board members, but they are not owners. They are laborers.
The public served by the organization does not own the non-profit corporation either. They are the beneficiaries of it, often identified by the non-profit as the poor people who can’t fend for themselves, the poor people needing saving and assistance. They are the subjects.
So, who are the kings here, you ask? Who are the investors? The owners? The massa’s?
Donors. Funders. Foundations. Patrons. These people are the non-liable owners in the world of non-profit corporations. They “invest” in the non-profit corporation by “donating,” and instead of sharing in profits (‘cause its a NON-PROFIT!)...they get tax deductions. Yep, even charity and public good are transactional situations in a capitalist society.
So… to re-cap:
- What do for-profit corporations want and need? Money from investors/shareholders.
- Who benefits while being protected from labor and liability? Investors/Shareholders.
- What do nonprofit corporations want and need? Money from donors/funders/patrons.
- Who benefits while being protected from labor, liability and taxation? Donors/Funders/Patrons.
Notice a similarity here?
An interesting difference, however, between for-profit and nonprofit corporations is that non-profit owners - the donors, funders, foundations,and patrons - they aren’t entitled to choose who serves on a non-profit corporation’s board. And yet, indirectly, they influence who ends up on the board.
So, WTF is a board again?
Most non-profit boards start out scrappy. The institution’s founders beg their friends to be on the board, and the folks who agree to do so are Doers, ie folks who want to help with the nonprofit taxes, or pick out decor for the prom-themed fundraiser. As the ambitions of a nonprofit grow, the balance on the board starts to move from Doers to Donors and Door Openers. Most nonprofits ask their wealthiest donors to be on their boards, to keep them close, invested, and giving. Door Openers are board members who have amazing networks for the non-profit to tap into, so that they can get that well-placed press article, or meet that famous person, or meet more people with more money.
Nominating committees on boards are charged with finding folks to invite onto the board, but most of those lists of potential nominees are recommended by existing board members. That means nominating committees invite new board members from the old board members’ friend circles, and guess what? - most of those friends look and think like them!
Many people who come onto theatre boards are lovers of theatre with money and/or access to money, but not people who necessarily know much about the community, its need, or the theatrical means by which the need is being addressed and therefore have no business governing the work of a non-profit theatre. But many accept these appointments, not because they believe in the mission, but because board memberships are social currency, resume boosters, and tools for the kind of networking that can lead to a board member’s personal or professional advantage. Board members are legally liable overseers. Yes, overseers. Disciplinarians and protectors of their own investments; watchdogs for the private (and public!) funds donated to the institution by gatekeepers on high.
However, there’s no need for board members to “oversee” non-profits in this manner, as board members are often not even liable for their company’s financial losses. Most nonprofits take out an insurance policy against the company (“a risk”) in order to protect board members from owing money if a company goes under with debts or gets sued for some infraction. There is no financial risk for these board members in that way, they have protected themselves from any losses the company may suffer. The action of overseeing is not necessary given board members lack of accountability to organizational function.
Worse, it’s often the case that these overseers do not share the values that are critical to the laborers - the people meeting the needs of the community by doing the work to run the nonprofit corporation as stated in the mission. Is it any surprise, then, when board members - functioning as protectors of their own investments, and overseers of the investments of others - prioritize the protection of those investments over what the institution should do, needs to do, must do to meet the community need? Is it any wonder that board members, focused on protecting, overseeing and being in primary relationship with donors and funders, become disconnected from how the leadership and laborers working in the field want/need to change in order to continue to fulfill the mission?
It is often the case that new theatre leadership is hired by the board to transform the institution; to bring new audiences, new programs, and new ideas to the organization. A vision for the future is clearly articulated in the interview process, only to then be undermined the minute that new leader is appointed. In many ways, the board isn’t actually ready for the new vision; they don’t want to change the mission or acknowledge how community needs have shifted; they are not ready to center the work of anti-racism; and they are not ready to fully get behind the r/evolution.
Without the commitment to setting a new organization direction, or creating the conditions for the new leader to thrive, a broken cycle continues.
So, WTF should we do?
We have to de-center money from the conversation and work to refashion the board/leadership/community relationship in service of the mission, rather than maintaining the status quo of an all-knowing group of people, with deep pockets, who have too much influence.
As we work to build a just and equitable American theater, we urgently need to map out a vision for a new kind of board. One that centers partnership, collaboration, possibility, abundance, and joy; one that understands that stewardship is part and parcel to the evolution of our companies; one that centers values in the decision making, rather than egos and checkbooks; one that celebrates the risk taking, and believes “always a lesson, never a failure.” And one that turns its gaze away from Broadway, awards, and outside validation, and is instead fortified by the theaters relationship to its community and mission fulfillment.
The people governing the affairs of a nonprofit theatre - the people legally liable for the actions of the corporation, the people who oversee - these people should FIRST be a mix of members of the community being served, professionals who legally maintain the corporation’s fiduciary and legal responsibilities, experts who understand the need being addressed, and people proficient in what it takes to make theatre and deliver it to an audience. Board members should NEVER be people who see themselves as overseers or buffers for the gatekeepers and wealthy at all.
If we are to continue to function within this capitalist, classist corporate governance system the board needs to govern WITH the community and the people doing the work, not over them. The board finds its HEALTHIEST self as a fierce advocate and supporter of those communities receiving the services and of those laboring to meet community needs.
There is so much more to say… stay tuned. And for further reading, check out these links:
BLACK AMERICANS DONATE A HIGHER SHARE OF THEIR WEALTH THAN WHITES, by Michelle Singletary
THE DEFAULT NONPROFIT BOARD MODEL IS ARCHAIC AND TOXIC, by Vu Le
COMMUNITY-CENTRIC FUNDRAISING (CCF) is a movement reimagining fundraising grounded in racial and economic justice. CCF MEDIA KIT.
REIMAGINING GOVERNANCE from the Ontario Nonprofit Network & Ignite NPS in Canada
THE END OF THE LARK: The Role of Nonprofits in an Actually Just World