Disclaimer: This is not an article sharing any opinions about OpenAI, anyone associated with OpenAI, it’s work, or any of its decisions.

When the news came out OpenAI fired its CEO, I was surprised to learn the organization is a nonprofit. Its founders had a mission of developing artificial intelligence that would be safe and beneficial for humanity and provide a counterweight to profit-driven corporations.

OpenAI, the not-for-profit organization, restructrured in 2019 in which it started a for-profit corporation. Essentially, a nonprofit starting a for-profit business to bring in more resources to support the mission.

This is fascinating. Two entities, at times, with competing interests trying to work together. A mission-focused nonprofit trying to work with a profit/investment return driven company.

The current drama is the result of the nonprofit board trying to protect the original mission by keeping the work of the for-profit in check. When they made the decision to fire the CEO, it was done with the reasoning the for-profit strategy had started to work against the original mission.

I could go deeper into the situation. However, this is where we can take a minute to reflect on a few things nonprofit board members and staff should understand.

1. The nature of a nonprofit board is different

The OpenAI situation gives us a clear distinction between the nature of a nonprofit board compared to a for-profit business. As my mentor Cristina Wineinger says, “Money is the end for businesses. Money is the means to an end for nonprofits.”

A nonprofit board can confusing and complex. As a result, working through that system can be cumbersome. That’s mostly a good thing! Working with any group of people who have to make decisions together will always be complicated. It’s also what helps protect the mission from getting off course and hijacked with a shiny new idea.

This is why practicing good board governance is critial.

I regularly see nonprofits restructuring to make the board “easier to work with” or “more efficient.” Be careful it’s not done at the cost of the critical checks and balances that help guide and protect the mission and vision.

2. Clarity and protection of the mission

If a nonprofit is working towards a mission… and the board is responsible for protecting and making big picture decisions that advance the mission… obviously its members should have a good understanding of the organization’s mission.

I realize that is an INCREDIBLY obvious point. However, because a thing is obvious doesn’t make it easy!

In fact, it can be very easy for a board to lose sight of the mission. It takes work and intentionality to keep the mission front and center.

Consider surveying your board to measure how well they understand the mission. Make sure you’re reinforcing the mission and building upon their understanding of the mission at every board meeting.

The process of recruiting and onboarding new members should also place a premium on establishing a firm foundational understanding of the mission.

3. The executive director balancing act

Nonprofit executive directors have an incredibly unique and difficult responsibility; balancing the advancement of a mission with an effective operational model.

While the primary goal for a nonprofit is not to make money, an effective nonprofit organization requires a sound business model for growth and sustainability.

It’s worth pointing out this is done in constructive partnership with the board. “This” meaning the advancement of the mission, big picture strategies, and subject matter advice. It’s not the job of the board to manage the day-to-day operations.

To the executive directors out there. you may think the struggle of juggling the partnership with the board and leading staff is a sign you’re doing something wrong. It’s not. It’s a tough job.

And we are all incredibly grateful for your leadership and determination in this sector. You are essential in making our world and our communities a better place.

Are you getting ready for a board retreat? Have you even started thinking about next year?

We can help you facilitate a session with your board that’s engaging, fun, and sets you and your board up for a great year.

All you have to do is schedule a free session to get started.

Here’s the link to schedule a FREE Strategy Session.

As always, THANK YOU for reading. Have a great day!

All the best,

Kenny Sigler, CFRE