by Fred Good

Of the ways that the three primary sectors of our society are organized, the organization of the non-profit sector remains the most misunderstood. Most of us interact with government and business on a daily basis and can describe more or less how they work.

That is not true of the non-profit sector. While most have an idea of what the Ford Foundation does, few have an idea of how it is internally organized. Over the past 40 years or so, the non-profit sector has become increasingly professionalized. Universities offer courses of study in non-profit management and operations, and a vast body of literature focused on this sector exists. Understanding how the non-profit sector functions can help us better address political and social realities that drive most non-profit organizations.

In 1990, I became chairman of the board of directors of the failing ArtsCenter in Carrboro. The ArtsCenter, a vibrant and successful multi-dimensional arts organization, had accumulated a debt of almost $1 million. Controversy surrounding it had erupted in the community. I had some 20 years of non-profit experience in New York's Lower East Side behind me, so I applied tested principles to a situation that many thought was hopeless.

The world of non-profit organizations is diverse and broad in scope. It includes churches, private and corporate foundations, dance companies, schools, think tanks and many other kinds of institutions. These organizations are formed primarily around a cause rather than around a primary goal of the manufacture and distribution of goods and services in order to make money. Hence, they are "non-profit."

The ArtsCenter in Carrboro was dedicated to connecting the arts with the community by providing opportunities for artists to exhibit, perform and teach. It was a unique organization because of its wide range of programs and because two-thirds of its income was earned, a feat achieved by few non-profit organizations. Many of us believed the ArtsCenter's problems were not due to its mission, but rather to poor management.

Probably the most obvious difference between government, business and the non-profit sectors is in their decision-making structures. In business and government, decision-makers are paid salaries and/or dividends for their involvement; in non-profit organizations, this is not true.

The board of non-profit organizations is made up of volunteers who serve because they believe in the cause for which the non-profit is organized. The implications of this important distinction is widely misunderstood not only by the public but much more problematically by the board members themselves. Consequently, non-profit organization board members who have a model of corporate board membership in mind often balk at what is a fundamentally central role of the non-profit organization board member, namely, obtaining the resources from the community for the organization to function.

To address the management problems of the ArtsCenter, I gathered together board members, staff and program directors of the ArtsCenter. Ida Friday, Phil Nelson, Jeff Matkins and I together with Eileen Helton, the paid executive director, formed the core of this group. We were clear about the role of the board. Its job was to make sure Eileen and her staff had the resources necessary to operate the ArtsCenter.

The ideal non-profit organization board sees itself as having two primary roles. The first is to design policy as distinguished from managing programs; the other is to obtain the resources through a development plan that enables the organization to operate effectively. The board hires a manager or director who hires a staff to implement policies. Fund raising should be a part of an overall development plan and should involve most board members.

Board members know about the programs and operations of the organization and play a vital role in soliciting money and other resources for the organization to operate. Larger non-profits usually hire a development director to work with the board and programs to create an overall program plan, usually on a yearly basis, which serves as the primary document for obtaining support from government, businesses and individuals.

Although it took us six years to eliminate most of the ArtsCenter's debt and to obtain a mortgage so that we had ownership of the facility, we succeeded because of how we viewed our role as board members. We believed in our cause and were able to convince others that it was a worthy one. We did not interfere with program operations. We simply did not allow expenditures to be greater than our income.

The business sector is the engine that generates economic activity that provides the fuel for government and the non-profit sectors to operate. Government regulates and provides security, while the non-profit sector focuses primarily on the acquisition and distribution of knowledge and on social change. Much of the implementation of government projects is done by the other two sectors.

A healthy society is one in which these sectors are mutually respectful of one another and relate well to each other. In communities where there is a lack of respect for non-profit organizations and the complexities that they seek to address, social change takes a back seat to a culture of opportunism and the status quo. The job of the non-profit organization board member becomes a thankless and discouraging task. One in which board members are unwilling to convince others that their cause is important and that the community ought to support it.

###

FESTIVAL + DINNER

The fifth annual Cultural Arts Festival and Community Dinner, which celebrates diversity and fosters a sense of community in Orange, Chatham and Durham counties, is seeking participants. To register an event with the festival, use the Web-based form that can be found at orangeculturalarts.org/dinner2002/addevent.html [eds. note - that form is no longer there]. For information call 932-1533.

###

CULTURAL ARTS GATHERINGS

The Cultural Arts Group (www.orangeculturalarts.org), open to anyone interested in culture and the arts, meets at noon on the first Tuesday of each month at the Chapel Hill Museum to identify and discuss critical topics such as volunteerism in the non-profit sector and to improve communication between the public and this sector.