Let’s unpack a case example to see how you think your board might respond to a challenge and how they may, or may not, get involved in management and operational decision making.  

At each of the last six board meetings your Executive Director (who has been in the job for a little more than a year and a half) reports a funding gap of $30,000. Stress within the very small staff team is rising as cash flow will become a problem before fiscal year end. Your organization does not have unrestricted money in reserve to cover the shortfall. You have restricted funds in reserve and 60% of grant funds are in place for next fiscal year thanks in part to new grant applications submitted by the Executive Director.

Consider the following options. What would you do, and what do you think your board is most likely to do in this instance?:

• Wait to see what happens – surely the Executive Director’s repeated report means that someone is doing something about the shortfall;
• Refer the Executive Director to existing policy and practice that outlines the options for the Executive Director or fundraising team;
• Participate in a limited number of shared management decisions with the Executive Director, approve budget and HR needs, and delegate the day-to-day activities connected with the fundraising initiative to a committee or group of volunteers;
• Beg board members to cover the deficit and engage in fundraising activities as committee members;
• Approve the fundraising initiative, manage the initiative, participate in the day-to-day implementation of the initiative, and evaluate the event, support banking and administration including volunteer management and writing and sending donor thank you cards etc.;
• Ignore the situation and deal with the consequences next year;
• Take out a line of credit and borrow money to cover the deficit; or
• Fire the Executive Director and hope that the next staff member will be better at fundraising

What are the most critical challenges in this scenario beyond the fact that the society needs more money to operate? (Hint: think internal communications, planning and budgeting, authority and responsibility, training and senior manager support, and reputation risk.)

How much responsibility does the Executive Director hold and how much responsibility does the board hold in this scenario?