Boards of Trustees: a Blessing or a Curse in Modern Day Russia?
by Polina Philippova
Since the beginning of its work in Russia in 1993, CAF has been promoting internationally acknowledged practices, elements and principles in philanthropy and not-for-profit: equal access to funding, competitive distribution, transparency, etc. Many of them have taken deep roots and are widely applied. Some are not doing so well. There is only one that I recommend with caution, and sometimes even reluctance. It is the creation of boards.
According to Russian law, only one type of not-for-profit organization – the charitable foundation – is obliged to set up a western-type board with full authority to hire and fire executives, approve strategies and budgets, etc. The remaining legal entities can choose either to have no board, to have a board that just provides advice, or to delegate full authority to it. Should they choose to have a board?
For many years, the answer for me was obvious and straightforward – yes, they should. Firstly, it is an acknowledged element, which provides stability and transparency in any organization. Secondly, it increases the chances of the organization to attract funding from international foundations and agencies. Finally, board members will help the organization to raise its profile and attract funding locally.
Now I am not so sure. The theory and reality differ dramatically. The first problem is to find the right people. Actually, to find any people. I was told that there are about a million people in Britain who serve on charitable boards. Roughly, it means that every fourth or fifth adult person in the UK is a board member. I suspect that at least half of my co-citizens have never heard about the existence of the not-for-profit sector, and a big number of those who have do not trust it. It leaves a Russian NGO with a pretty limited choice.
Let’s assume that we are lucky and manage to identify the right people. They share our values; they are reputable and influential. How do we convince them to join the board? What are the incentives? For a western person membership on a board, along with any other kind of charitable activity, is a part of his/her social status recognized by society. This is not the case in Russia yet. Many of those who are engaged in different philanthropic endeavours believe that such work should be done anonymously, that it is immodest to publicize it. A well-known Russian banker and statesman asked a famous actress, who came to him representing a charitable fund, if she is not embarrassed to be using her fame as a sales point.
Another obvious incentive is an opportunity to make a difference. It is rather difficult to sell this argument to potential board members without giving them any real authority. Russian legislation stipulates for a very modest role of advisors, with very limited means of influence.
A board might become a place to meet people with similar interests, a social club to enrich one’s life. It can also give its members a chance to apply their skills and talents. It is a possible approach, which requires much effort from the charity’s staff. Entertaining the board becomes a full time job for a CEO, often without any significant outcomes.
Some NGOs follow a western example, and delegate much more authority to the board than the law requires. It might be a result of a sincere desire of the NGO founders to do everything by the book, or a requirement of certain donors. However, several examples I have seen were either bad or, frankly, disastrous. One successful organization ceased to exist because of board interference. Board members recruited mainly from business often mean well but behave like bulls in a china shop. Almost none of them have any knowledge or experience of the not-for-profit sector and they fully rely on their business background. A typical western board member starts his or her interaction with this sector as a child, putting pennies into a box for individual donations for a charity his family supports. This child would attend charitable events such as Christmas or Hannukah parties. As a student, he or she will have worked as a volunteer, perhaps running, cycling or walking to raise funds or supporting efforts of a friend in this field. An active business person will donate to a charity of either personal choice or responding to a request from a friend or a relative. Inevitably, such a person will learn more about a supported organization through thank you letters and reports, and at events and conversations with executives and beneficiaries.
Russian board members often try to introduce approaches and practices that proved effective in their business life. Some prove useful, some not so much. Efforts to make NGOs more effective and efficient often disappoint boards, as the desired results do not happen quickly enough. Social change does not occur overnight – some board members find it difficult to accept this fact. A project that aimed to involve young people into various volunteering activities was shut after just 6 months of operation because it ‘only’ attracted 400 young people. The number seemed too low.
One of the most popular measures such boards impose is hiring an executive from the commercial sector who is supposed ‘to stir an organization to life’. Usually such an executive has to be compensated in accordance with competitive commercial rates, which instantly creates a huge gap between this executive’s salary and the earnings of the rest of the NGO’s staff. And this is the least of the problems this appointment can cause.
I am afraid I can keep complaining about these things for a while but this will not solve the problem. I do not think that, in the long run, there is any real alternative for charitable organizations. They have to create their own boards by various ways and means. There might be some ‘lighter’ versions of prominent people’s involvement with NGOs, which will educate them about philanthropy and develop a feeling of ownership. Such formats as ‘supporters’ or ‘friends’ of an organization seem to be doing the trick – people do not seriously commit themselves, but by donating a little money or time get enough exposure to eventually understand if it is their cup of tea. A slow path of creating opportunities for participation and involvement for young people should not be ignored either. Learning from western extensive experience, which, I am sure, contains both positive and negative examples, is important as well.
All these and many other efforts have been taken by charitable organizations in Russia. Yet it will take some time for positive results to appear. In this situation it is important that international donors support these efforts and, while encouraging NGOs to set up boards, do not push too hard for immediate results at any cost. Even Rome took more than a day to build.
Polina Philippova is director of programmes and donor relations for CAF Russia.