Building The Nonprofit Board of Your Dreams: A Deep Dive Into Peter Drucker’s Insights

Building the nonprofit board of your dreams is a deliberate process that can significantly benefit from the wisdom of Peter Drucker, often heralded as the father of modern management. His extensive work on effective leadership and organizational success offers valuable lessons for structuring boards that not only meet but surpass organizational goals.

Building the nonprofit board of your dreams is a team effort. It involves everyone in the organization, from the CEO and the board’s executive committee to every staff member and volunteer. The goal is not to create a board that reflects just one person’s vision but to build one that embodies the collective vision of the entire organization. This collaborative process is about more than just assembling a group of people; it’s about creating a team that can steer the nonprofit toward its goals with dedication and strategic insight.

Creating a top-notch board that not only aligns with but also propels your nonprofit’s mission forward requires more than assembling a group of skilled individuals. It demands a foundation rooted in proven management principles. The legendary management consultant Peter Drucker left us with a blueprint for excellence in organizational leadership that is especially relevant for nonprofit boards.

Core principles for board development

1. Understand that culture trumps strategy

Drucker famously argued, “Culture eats strategy for breakfast,” underscoring the overpowering influence of culture over any strategic plan. A thriving organizational culture fosters a sense of unity, resilience, and motivation among its members, which is essential for the long-term success of any nonprofit. Drucker emphasized the role of leadership in shaping this culture, advocating for a spirit of greatness that starts at the top. Drucker noted, “The spirit of an organization is created from the top.” So, leadership must model the values and behaviors they’d like to see throughout the organization, setting a standard that promotes a positive and productive culture.

“If an organization is great in spirit, it is because the spirit of its top people is great. If it decays, it does so because the top rots … No one should ever be appointed to a senior position unless top management is willing to have his or her character serve as a model for subordinates.”

— Peter Drucker

Action item: Cultivate a robust culture

According to Drucker, a solid organizational culture is the secret sauce to bringing strategic plans to life. Work actively to shape and improve your organization’s culture by embodying and promoting the values you want to see.

Inspiration

Harlem United: Community AIDS Center has been a beacon of hope since 1988, when it began dedicating itself to serving communities of color in Upper Manhattan and the Bronx during the AIDS epidemic. By fostering a client-driven culture and integrating client representation on their board of directors, they’ve consistently adapted to changing circumstances while always adhering to their core organizational values. Their innovative and flexible approaches to change exemplify their commitment to their mission.

2. Create partnership, not hierarchy

Rejecting the notion of a hierarchy where either the board or the executive team dominates, Drucker championed a collegial governance model. This model views the board and executive leadership as equal partners working collaboratively towards shared goals. “The leaders who work most effectively, it seems to me, never say ‘I,’” Drucker observed. “And that’s not because they have trained themselves not to say ‘I.’ They don’t think ‘I.’ They think ‘we:’ they think ‘team.’” According to Drucker, effective governance results from this teamwork, where roles and expectations are clear and aligned with the organization’s objectives.

Hear about how one CEO and board chair fixed their collaboration issues.

“Instead of focusing on abstract policy discussions, effective nonprofits must define the work each organ (board, committees, staff) is expected to perform and the results they should achieve.”

— Peter Drucker

Action item: Enhance board-executive collaboration

To maintain accountability and ensure the effectiveness of both board members and executives, schedule regular performance reviews well in advance. Here’s a selection of resources on the subject to help you evaluate.

Inspiration

The Institute for Ethical Leadership (IEL) at Rutgers University in New Jersey, co-founded in 2003 by James Abruzzo and Alex Plinio, began with a focus on teaching and research in business ethics, mainly supporting the nonprofit sector. Over time, IEL’s ethics and leadership programs have significantly influenced nonprofit leadership across New Jersey and beyond. They’ve developed executive leadership programs that follow Peter Drucker’s advice on fostering effective collaborations between boards and executives.

3. Evolve beyond policy: Guardians of mission and vision

Drucker said, “The board is not just about making policy; it is the guardian of the organization’s mission and vision. Board membership is a responsibility, not just a recognition by the community.”

Beyond its traditional role in policy-making, Drucker saw the board as the steward of the organization’s mission and vision. He advocated for empowering board members to take an active role in governance, emphasizing the need for decentralization. This approach involves delegating authority and encouraging board members to leverage their unique skills and perspectives to benefit the organization. “Management is doing things right; leadership is doing the right things,” Drucker pointed out, suggesting that effective board governance combines both strategic oversight and operational excellence. Here’s guidance for recruiting and selecting new board members.

“Over the boardroom door, there should be an inscription: Membership on this board is not power; it is responsibility.”

— Peter Drucker

Action item: Clarify the board’s role

Assign specific roles and tasks to board members based on their strengths and professional backgrounds. This will involve the CEO, Board Chair, and the Executive Committee working closely with a governance committee that takes its role seriously. The legendary Simone P. Joyaux offers a stellar Board Self-Assessment tool you can use.

Inspiration

The nonprofit, BoardSource, sets a high standard with its “Leading with Intent: Index of Nonprofit Board Practices.” This comprehensive index provides insights into who serves on nonprofit boards today, their roles and responsibilities, their impact on organizational performance, how they operate, and their overall effectiveness and organization. It stands out as an exceptional resource in our sector, offering valuable guidance for any nonprofit aiming to enhance its board’s effectiveness.

4. Set objectives that drive action: MbO

Drucker’s Management by Objectives framework (MbO) advocates setting specific, measurable, achievable, relevant, and time-bound (SMART) objectives that align with the organization’s mission. This process starts with collectively setting goals and then delegating tasks according to individual strengths and capabilities. “What gets measured gets managed,” Drucker famously stated, underscoring the importance of concrete thought, clear objectives, and regular performance evaluation in driving organizational success.

“Time is the scarcest resource, and unless it is managed, nothing else can be managed.”

— Peter Drucker

Action item: Establish clear goals

Conduct a workshop with your board to identify key objectives for the year using SMART criteria. Before the meeting, meet one-on-one with each board member to share a draft of the goals, gather initial feedback, and build a partnership approach.

Inspiration

Food For The Poor, an interdenominational Christian ministry in 17 Caribbean and Latin American countries, has delivered more than $15.7 billion in aid and fed millions. To boost its operations, fundraising, and marketing through better technology use, the organization partnered with Heller Consulting. The firm assessed Food For The Poor’s challenges, developed a future-focused technology strategy, and outlined a clear action plan for digital transformation. This effort has equipped the organization with a strategic roadmap and organizational support for their digital advancements.

5. Embrace knowledge as power

Drucker coined the term “knowledge worker” to highlight the role of continuous learning and data-informed decision-making in organizational success. In the context of a nonprofit board, this means fostering an environment that encourages board members to stay informed about industry best practices, emerging trends, and the organization’s unique challenges. “Knowledge has to be improved, challenged, and increased constantly, or it vanishes¹,” Drucker warned, highlighting the need for a proactive approach to knowledge management and professional development within the board.

After 40 years in the nonprofit sector, I’ve observed that the professional development options offered to staff and board remain appallingly low. Nonprofit leaders must commit to better investing in staff and board training and continuing professional development.

“The most valuable asset of a 21st-century institution, whether business or non-business, will be its knowledge workers and their productivity.”

— Peter Drucker

Action item: Promote continuous learning

Implement impact evaluations and continuous feedback mechanisms in your programs and operations. Survey your donors, volunteers, and stakeholders continuously, and analyze the feedback into specific process improvements. Regularly train board members and encourage attendance at relevant workshops and conferences to stay informed on the latest trends in nonprofit management. Be sure to allocate sufficient budget for professional development.

Inspiration

Somos Mayfair in San José, CA, exemplifies a unique, culturally informed approach to transformation, combining popular theater, peer-to-peer case management, and community organizing. This innovative model is highlighted among five nonprofit case studies by The Building Movement Project, offering insights into the complex process of integrating social change models with social service efforts for nonprofits seeking practical examples.

The dream realized: Applying Drucker’s insights for board excellence

Integrating these principles into your board development efforts can transform your board into a dynamic, compelling force that drives your nonprofit toward its mission. Channeling Drucker’s wisdom into your board development planning will not only bring you closer to the board of your dreams but also ensure the long-term success and impact of your nonprofit.

Celebrating Drucker’s legacy

Peter Drucker’s influence on management thought and practice extends beyond his lifetime. His principles continue to guide leaders across sectors, offering a roadmap to organizational effectiveness that is as relevant today as decades ago. As we apply Drucker’s teachings to the unique challenges of nonprofit governance, we honor his legacy and contribute to the evolution of effective, mission-driven leadership.

Drucker saw great nonprofits as not only effective and impactful for those they serve but also as providing fulfillment for their volunteers. He stated, “Citizenship in and through the social sector is not a panacea for the ills of … society²,” but it “restores the civic responsibility that is the mark of community.” He worked with major organizations like the American Red Cross and the Salvation Army. In 1991, he founded the Peter F. Drucker Award for Nonprofit Innovation, continuing to influence the Drucker Institute today.

For more info about Drucker’s guidance on nonprofit management, check out these books:

• Lessons for Successful Nonprofit Governance
• Managing the Nonprofit Organization

We welcome your reflections on how Drucker’s principles have informed your board development and leadership approach. In the comments, tell us about your experiences and insights, and let’s continue the conversation on creating boards that genuinely make a difference.

^{1. Maxemow, S. (2015). Listen, Learn, and Pass It On. Concrete International, 35.}

^{2. About Peter Drucker * Drucker Institute.}