NPQ: Growth Crises and Three Phases of Governance Response

Editors’ note: This article was adapted from “Board/Staff Relationships in a Growth Crisis: Implications for Nonprofit Governance,” originally published online, March 7, 2011, by the Nonprofit and Voluntary Sector Quarterly, and subsequently published in NVSQ’s print publication in 2012.1 The authors appreciate Peter Roberts’s extensive editing support for this article. 

This article looks at the ways in which board/staff relationships played out in four small cultural organizations—two museums and two performing arts companies—as each passed through three distinct phases of a growth/financial crisis. This research may inform nonprofit boards and managers in a couple of ways:

  1. It identifies patterns of board response around a crisis that may help in understanding and negotiating similar situations;
  2. It describes how trust and distrust play roles that are individually destructive but when combined are healthy and productive.

Our first contact with the four organizations occurred when we were contracted as consultants by government funding agencies that had been asked by all four for “bail-out” grants. This provided an opportunity to engage with the four organizations in this community-academic research project. The research included a questionnaire; organizational documents (grant applications, audited reports, strategic plans, and task descriptions); forty interviews—some open-ended and some focused—with key players; and participation in thirty-four meetings, all told. This research opportunity was quite exceptional considering that organizations in a sensitive crisis tend toward confidentiality, that we had access to a wide cross section of organizational players, and that the study continued over several years.

There were no government representatives on any of the four boards, and organizational membership in three of the four cases was limited to board members. While this may be common in nonprofits of this size, it constrains external monitoring of the board’s governance. For all of the organizations, federal, provincial, and municipal governments were significant providers of operating and infrastructure funding. The organizations were located in small communities in a region without a culture of philanthropy. Private philanthropic support was minimal, and non-governmental income was from corporate sponsorship or from earned income.


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