Use This Tool for Your Nonprofit’s Decision-Making System

Drafting a clear decision-making policy can seem like a low priority when you are starting a nonprofit organization, but that’s exactly the best time to do it. A good decision-making policy can be the difference between an organization that survives and one that fails in a time of crisis, but waiting until that happens would be a big mistake.

I worked with an organization that used an informal form of consensus decision-making in its board meetings. If they had been taking votes most decisions would have been unanimous, so with just a bit of discussion there was little controversy, and the formalities of consensus were never spelled out because the system seemed to be working.

But when a new member of the board was installed she began to block every decision, forcing the group to discuss even small issues in tedious detail, stretching out conversations for months. At a time when the board was recruiting new members this person prevented the approval of a well qualified candidate from taking a seat, and also stalled many other important decisions. The remaining board members grew frustrated with this “obstructionist,” and after one difficult meeting several were ready to quit. That would have led to a full on board meltdown.

After some cajoling, the board rallied and decided to remove the obstructionist. But how? If they operated by consensus, was the obstructionist allowed a say? What kind of notice did they need to give this person? Did the remaining members of the board need unanimity to do this? None of these answers were clear, and discussing this when the situation was “hot” began to polarize the organization.

Figure out your decision-making system before you need to use it to figure out how you make decisions. Click To Tweet

All this underscores the need for a clear and well-understood process for making decisions, but figuring out how to draft such a policy at the outset bewilders many a founder. First, there are different systems of decision making to choose from. Second, all sorts of decisions need to be made, and a system that’s appropriate for one may be wrong for another. Finally, there are many stakeholders that could be involved in any given decision, and their assumptions about who should vote and how much say they should have is all over the place.

Let’s start by looking at three common systems.

  • If you’ve ever worked in a large bureaucracy, you know that there’s a chain of command. The folks higher up make decisions that affect those below, and information is supposed to travel up the chain so the muckamucks will know what’s best for the whole organization. In practice, these higher-ups often delegate decisions down the chain or at least solicit some measure of input from people closer to the ground. Let’s call this style of decision making hierarchical.
  • Of course, many decisions are made in a group, for example your board of directors. Oten majority rule is used in this context. There’s usually a proposal, some discussion, and a vote. Very formal versions of this system can be based on Robert’s Rules of Order, but in many smaller organizations the process is simplified and substantially less rigid.
  • Another group-based system is call formal consensus. This system deemphasizes voting and focus instead on discussing and modifying proposals until everyone is happy enough to support a common “sense of the group.” When there’s conflict it’s worked out through a process designed to give everyone input and provide options for supporting, standing aside, or blocking a decision. This process can be long and drawn out, but properly used can also arrive at better decisions that have more support.

No one actually uses any of these systems in its purest form all the time and in all cases. Usually there are multiple decision-making process at play within an organization and most of them have elements of all the above jumbled together in some way. For example, the decision about where to hold a board meeting might have been made by the board chair (hierarchical), a vote may be taken about whether or not to accept the conditions of a grant (majority rule), and what goes on the pizza that will be eaten during the discussion might be made by an informal consensus. That is, decision-making systems are not a one-size-fits-all affair.

This is likely because some decisions don’t seem worth the bother while others are so crucial that the group wants everyone’s buy-in. In my experience, people have very different expectations around how much time should be spent in discussion versus in the decision making itself. In a new organization it’s crucial to understand what different stakeholders’ expectations are. Use this information to help determine what types of decision-making systems your organization will use.

In your nonprofit, there will be a board of directors, perhaps a staff, possibly volunteers, maybe some committees, and so forth. One part of a good decision-making system is identifying who these groups are. Make a list of them now since it will be useful shortly.

There are also several different roles that someone might play in any given decision. One model I like breaks this down into four roles with the acronym of DICE:

  • D refers to decider. Who is actually making the decision? That is, this person gets a vote in the decision.
  • E stands for executer. Who will be carrying out this results of this decision? Once it’s made, someone needs to do it or the decision is pointless.
  • C is for consulted. Who should be asked for input even if they don’t get a “vote.” That is, these are the people who are given a say in the decision. A decision will not be made until their voice is heard, but the decision itself will be made by others.
  • I refers to informed. Who needs to know about the decision? These are the people who should be aware but are given neither vote nor voice.

I know, that really spells DECI not DICE, but it’s easier to remember DICE, and I think there’s an implied order to DECI. (If you’re an executor then you should also be consulted. If you’re an consulted you also need to be informed.)

We can use this, along with your list of stakeholders and the types of decisions you’ll be making to create a grid that helps clarify decision-making in your nonprofit organization. This grid looks something like this:

  • D = Decider
  • C = Consulted
  • E = Executor
  • I = Informed
Decision Type Board ED Staff Volunteers
Approve new board member D C I I
Accept a grant D D I I
… add a line for each decision type
Hire new staff I D I I

Think about all the types of decisions you might need to make in your organization. Will you start or stop programs or tweak them? Will you rent office space? How do you expel a board member? A volunteer? Will you need to add policies to your HR manual? Brainstorm a lot of these and then fashion them into a series of types of decisions for first column in the grid.

Developing a tool like this can take some thoughtful work to complete, but  it’s worth spending the time early on to prevent situations like the one I mentioned above. Do this before any major hot button issues have come to the forefront, and make sure it works well when there’s a lot of controversy as well as when things are running smoothly.

It’s also important to actually follow your decision-making policy. It seems silly to have to say that, but it shouldn’t just exist on paper (or in your paperless archives). Review it annually, so it’s fresh in people’s minds whenever it might be needed.

As for that organization I started this post with, they sought legal advice which required some extra time and expense, and then they successfully removed the problem member from their board. This person’s obstructionism actually provided an important (but hard) lesson for the organization, because it helped the board nail down how they deal with difficult issues, and I’m pleased to report the board is not collapsing. Rather it’s larger and stronger than ever.

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