Case Study 2 .

Creating a Monster at the Office?

The NewFaith Housing Project of Kentucky was struggling to keep its own doors
open let alone the doors of the 500 units it managed from Lexington to Louisville.
Like many other nonprofits, NewFaith was hit hard by the economic downturn. The
funders it long relied upon suddenly had much more shallow pockets. Its expenses
seemed to be ever-increasing, while its income steadily dwindled.
Chief executive Jim Shindell was forced to make some hard decisions. In order to
keep the organization alive, he had to cut its $1.5 million budget by nearly a third.
That meant numerous long-term campaigns from improvements to basic shelters
to an ambitious expansion of rental and homeownership programs had to either be
put on hold or cancelled altogether. It also meant trimming his 18-person staff. It was
a painful process. Some of the laid-off staffers had been with the organization for a
decade. Many had college tuitions and mortgages to pay. And most played a vital role
in NewFaiths day-to-day operations. When the board recommended lay-offs, Shindell
openly wondered how NewFaith could continue its work with less manpower.
If NewFaith is going to survive, Shindell told the board, everyone will have to
pitch in. And that means you too.
Shindell noted that many board members were skilled in running social service
organizations. Indeed, thats why they were recruited for the board in the first
place. Board members would now have to contribute their expertise in helping the
organization function, he maintained.
Initially, the board was reluctant. The members held busy positions outside the
organization, noted Kristin Cosover, the board chair. Was it possible to devote more
time to NewFaith?
Still, the members were passionate believers in NewFaiths work and strong
supporters of Shindells management skills. They knew they were being asked to
take over some staff duties. But it was only temporary. And what choice did they
really have? They were willing to give Shindells idea a try, if it would save the
organization.
With a masters degree in social work, Cosover offered to assist in consulting
programs. Larry Arnold, the head of the finance committee, was an accountant who
could lend a hand with grant proposals and fundraising. And certainly board member
Andy Kanzer, a lawyer, could watch over the legal issues that NewFaith continually
faced. He was even anxious to try his hand at advocacy and lobbying efforts.

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At first, the increased board role seemed like a blessing. The harried staff appreciated
the boards help. Many had never met the board members before and were awed
by their expertise. For their part, the board enjoyed being more hands-on. Each
was given a key to the building. And board chair Cosover even occupied a small
office. She told the staff that her door was always open for any concerns they might
have or even just to chat. Arnold helped the fundraising team target new sources
of donations. And Kanzer used his personal contacts to arrange a private meeting
between the programming staff and the head of the Kentucky state legislature.
A year later, NewFaith seemed like a smoothly operating machine. But staff had
begun to grumble about the boards presence. It started when Arnold questioned the
groups inexperienced proposal writers. Maybe, he suggested, NewFaith could assign
the most important proposals to a veteran freelancer he knew. Meanwhile, Kanzer
vetoed a round of visits to Kentucky congressmen, suggesting that he should contact
them individually.
In both cases, staffers complained to Shindell. He sympathized with them. The
office atmosphere had changed. Memos were now passed through Cosover.
And board members frequently sat in on meetings or even gathered staff for
impromptu rap sessions.
Shindell approached Cosover about easing the board back into its old governance
role. I think you helped get this organization on the right track, he told her. Now
it might be time to back off a bit.
But he was stunned by Cosovers reaction. Why leave now? she asked. Things are
going great. The office has never been more efficient. And the boards expertise and
experience has been invaluable.
Shindell couldnt deny that NewFaith was more productive and more profitable in
the last few months. But the board presence had also become a distraction if not
a hindrance to the staff. He felt a sinking feeling in his stomach. He had invited
the board into the office to help save the organization. Now, he wasnt sure how to
get them out.

8 wrestling with board dilemmas 2011 BoardSource