Ideal composition of a CDC board of directors

(USA)

Visitor Question: We are trying to start a new CDC to help us dig out of the urban mess in our neighborhood. The three of us who are working the hardest on this effort are disagreeing about who and what kind of person we need on our board. Is there an ideal number of people? What categories of people do you need on a board for a community development corporation to be successful? How can we recruit the right board members? Does everyone have to live in the neighborhood?

Editors Reply: That's a great question because often in my experience, organizers get stuck for a while and dissipate some of their energy debating the very questions you are asking.

Rest assured these are not unique struggles.

As for an ideal number of board members, the minimum should be the requirement of your state for a nonprofit corporation. (I should mention that a few CDCs are organized under state law as for-profit corporations, but those are not typical.)

Beyond that, you need to consider who the stakeholders in your neighborhood are and who can provide or connect you with resources you will need.

There are a few common suggestions to help you get started. You may need representatives who live in different parts of the neighborhood if your area contains some distinctive sub-districts. Many parts of organizing a CDC are interwoven, so my comment predisposes the idea that you have settled on the boundaries of the CDC, which might not be the case. If you don't know this, you will want to determine your geographic area before making a final decision about representation on the board.

In most "urban messes," as you styled your neighborhood, there are noticeable differences between people in relatively stable economic and personal circumstances, and those who are living on the margin in some way. Giving voice to those who are in less fortunate circumstances will be important to the future viability of the CDC.

If you have racial, ethnic, or religious tensions, try to include each group. You may have a division between long-time residents and newcomers. Many urban neighborhoods have difficulty in engaging renters in problem solving, so try to figure out how to include a renter.

Next, consider that if you have a business district, you may want to have a business or commercial building owner on the board, whether or not that person lives in your neighborhood.

Next, think of the skill sets needed for your CDC's success. If you have a developer actively interested in the neighborhood, think about that person's suitability. Many CDCs and other nonprofits place an attorney and an accountant on the board if no reason other than obtaining free services and especially free advice. You also may want a contractor who is actively working on homes in your area.

You might want to have a city government representative, although usually these persons are ex officio board members, meaning they are informed about the board's actions and meetings, participate in meetings, but do not vote.

Next you might want to have one board member who represents a citywide point of view. That person could be a real estate leader or developer, a member of an economic development board or a chamber of commerce executive in your city, a person who serves on several boards in the city or otherwise is active in philanthropy, or someone prominent in the city who once lived in your neighborhood.

Don't forget that the three of you might be the obvious first board members!

In sum, to think through the answer to your question about the size of the board, figure out what groups you might like to have represented.

I have addressed the question of whether everyone has to live in the neighborhood already. My answer is no. The only word of caution from my experience is to interview these prospective board members very carefully to make sure they can really muster enough commitment to your area to give you some assurance that they won't drop out within a few months when progress becomes difficult to see.
Just be sure to make it an odd number of board members.

Another pesky issue that will be raised, if it has not been already, is whether every board member is expected to make a financial contribution to the corporation, and if so, whether there is a dollar amount that people are thinking about. My bias on this is that yes, every board member should be expected to make a financial contribution, but that the contribution should be commensurate with means and could be as little as one dollar. You do want those lower-income people and viewpoints represented if you expect to make any headway in a troubled neighborhood.

I also am opposed to any kind of minimum suggested financial contribution for other board members who could afford it. These quotas may be common in some types of nonprofits, but for a neighborhood, I think they lead to friction and may lead to lack of participation by the people who are most passionate about the neighborhood. Do be forthright with board members about the tasks that the CDC will undertake and any wide brackets of expected costs for these tasks so that prospective board members can judge for themselves if they are motivated to make contributions as large as they can afford or if they will be expected to undertake an aggressive fundraising program.

Lastly I will address your question about how to recruit board members. The first thing you need is a concept paper that describes your vision for the CDC, what it will do, its timeless, whether there will be an office or a staff, expectations for governance, type of time commitment expected of board members, ways the CDC will raise money, and degree to which confidentiality will be expected or on the other hand, openness of meetings for all residents to attend.

When I say concept paper, that may be a scary term, but I mean something potentially as short as one page or as long as three or four pages. Try not to make the concept paper too "pie in the sky" because people smell insincerity. But also don't go on and on about how difficult the work will be.

Armed with your concept paper, the three of you should decide on a short list of people you would like to ask to serve. This may take a while but be sure to compile a good list. Then divide up the work of making the personal contact, based on acquaintances and other relationships. When you are turned down, be sure to ask the person who has declined for recommendations they may have about other people to ask. Then follow up on these referrals.

The last paragraph assumes that the interviews of prospective board members occur one-on-one, but that may not be the case. You may decide that two of you, or all three of you, should talk with each candidate. That is an excellent approach if you can all spare the time.

Another approach I have seen and used is inviting a group of possible board members to a recruitment event where you describe the vision and share some nibbles and beverages. The advantage of this plan is that sometimes enthusiasm is contagious and will encourage someone who would have said no in a one-on-one meeting to get excited about the cause and decide to say yes. This event could be as fancy as you like, and if you want to do something like prepare and present a slide show, that is all the better. Another possibility is asking a city manager, city planner, or prominent developer or land use attorney to talk about the potential of the neighborhood. Make sure the time and the refreshments create the impression you would like to leave. Try to hold this event in your neighborhood.

This is a long answer, so if you need more, be sure to consult our list of pages of this website that are relevant to CDCs.

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