How Often Do Nonprofit Board Members Need to Question Strategic Norms?

How Often Do Nonprofit Board Members Need to Question Strategic Norms?

By Eugene Fram

A new nonprofit director has a lot to learn. Considering that his/h term of service will be relatively short (typically four to six years), he/s must quickly learn the “ropes” to participate in a meaningful way. In this process, colleagues and leadership will acquaint him/h with prevailing board systems and culture—often ignoring the depth of expertise she/h can employ. Example: An expert in financial strategies may be asked to assist the CFO with accounting details, far below the person’s skill level. Oftentimes the new board member also is greeted with a mantra that says, “We’ve always done it this way.” As the director moves in his path from novice to retiree, during a short tenure, there is little opportunity to suggest innovations that differ from the accepted fundamentals and to successfully advocate for change. (more…)

Want To Avoid Nonprofit Fraud? Look To Your Board For Action

Want To Avoid Nonprofit Fraud? Look To Your Board For Action

Viewer Favorite: Updated & Revised
Original Publication: https://www.snpo.org/redir/articles.php?id=1752

By Eugene Fram with accounting professor Bruce Oliver

(The executive director acknowledged working with the insurance agent.) Under their scam, the council paid inflated insurance premiums and (the two) split the over-payments.
“I knowingly helped steal more than $1 million … as part of a scheme in which insurance premiums were inflated,” (The ED) told a judge in Supreme Court, the trial level court in New York State. (http://bit.ly/1QeakRt)

Here is what nonprofit board members can do to help reduce fraud in their organizations. (more…)

Can A Board Member Ever Wear Two Hats?

Can A Board Member Ever Wear Two Hats?

By Eugene Fram

Although this is not a good idea for nonprofit organizations, it is not an unusual occurrence, especially among start-ups. A director in a start-up nonprofit will need to assume some staff responsibilities as a volunteer. But he/s will need to organizationally report to the CEO. (more…)

Addendum to my third post on Millennials and Money – July 12, 2015

See National Public Broadcasting. Nightly Business News–Episodes 34136-37-38 July 13-14-15

Linked to Atlantic Article. http://www.theatlantic.com/business/archive/2015/07/millennials-with-rich-parents/398501/?utm_source=SFTwitter

Will Millennials Be Conservative Funding Prospects for Nonprofits?

Will Millennials Be Conservative Funding Prospects for Nonprofits?
(3rd in a post series on millennial impacts on nonprofits)

By: Eugene Fram

The Millennials have arrived! Over the past five years, increasing numbers of the new cohort have become engaged in nonprofit activities. It is expected that their nonprofit participation will further increase– and by 2025 will be 75% of the total workforce! Millennials are looking for a different kind of volunteer experience. They respond to the human aspect of social issues and appear willing to invest both hands-on effort and financial resources to make a recognizable impact.

A recent post (http://huff.to/1Fa6eEx) describes in detail how millennials are handling their financial affairs. This information can be useful to nonprofits in approaching that group for fund development purposes.

Following in italics are some highlights from the post that I regard as possible opportunities to harness the unique millennial style and energy.

Technology is well integrated into the lives of millennials.
There are various technologies that can be used for fundraising, (e.g., Facebook, LinkedIn, etc.), and nonprofits have to identify those that meet the needs of their potential donors. One nonprofit has already concluded, from experimentation, that Facebook has little resonance for its millennial prospects. On the other hand, crowd-sourcing, based on the experiences of similar nonprofits, appears to be a viable technological tool for fundraising. Not all social media are appropriate for all millennial segments.

There is a wide-ranging mistrust of people.
Only 19% of millennials think, “… most people can be trusted.” Nonprofits will need to be highly transparent in approaching the cohort and be willing to build strong communication links long before they can become donors. Nonprofit media will have to be well timed and have interesting emotional story lines to build trust. Client success stories presented in a lively and succinct manner should have great appeal. Those nonprofits concerned with client privacy will be challenged to be very creative.

They are far more prudent and sensible financially than their predecessors, possibly because many still have student loans to repay and have viewed parents and friends impacted by the recent recession. When relating to finances, they value craft, authenticity and strong values. Surprisingly Wal-Mart is favored by the under 24 group and is second to Target with the 25-34 cohort.(http://read.bi/1LjtsXZ)
Clearly these attributes and values will need to be incorporated into continuing communications targeted to millennials. They will probably want to be assured and reassured that their donations or even their volunteer efforts are being used efficiently and effectively. Most in the group have time–compressed lifestyles, and I have noted, in interviews, they view their donated time as an asset equivalent to income.

In terms of investment, the group presents an anomaly.
Many millennials, raised by helicopter parents, simply don’t comprehend delayed gratification. But they are very cautious and steady in making investment decisions. Consequently, nonprofits will need to develop large pools of millennial prospects to their donation targets.

Millennials are long-term optimists.
As optimists they will want to be certain that donations of money or volunteer time are meaningful. This is very important in today’s open environment where the press frequently reports on nonprofits that have been subjected to fraud due to a board laxity with financial oversight and control.

Summary: The conservative manner in which millennials are handling their finances may remind one of the cohorts raised in the depression era of the 1930s. As nonprofit boards build three and five year funding and board recruitment projections, they will need to reflect on these findings from the study cited above. Might these be harbingers of more nonprofit development challenges?

The Nonprofit Dream Team: a Board/CEO Partnership that Works!

The Nonprofit Dream Team: a Board/CEO Partnership that Works!

By: Eugene H. Fram

Re-balancing and maintaining important relationships in a nonprofit organization can be important to its success. Do various players fully understand and accept their specific roles. Is there mutual trust between players? Are communications open and civil?

I recently encountered an association CEO who complained that his board wanted to judge him without establishing mutually agreeable goals, outcomes or impacts. He felt what is needed is a partnership arrangement where the board does not judgethe CEO and organization based on political or personal biases but overviews the two in terms of mutually accepted achievements. This, he contended, forms a substantial partnership between board and CEO and staff. If the board thinks it can judge management, he stated, it gives it a personal political type of power, unrelated to performance. As an example he pointed to an unfortunately common nonprofit situation where a CEO is given an excellent review and fired six months later because there had been a change in the internal board dynamics. (more…)

How Do Nonprofits Determine CEOs’ Productivity?

How Do Nonprofits Determine CEOs’ Productivity?

By: Eugene Fram

Nonprofit organizations can’t have bottom line profits. If they did, CEO productivity determination could be less complicated. Determining a fair CEO benefit, based on productivity, can be a complex issue for a nonprofit board. Providing too little or too much can be dangerous for the organization and possibly the board members. Although the spadework for benefits needs to be done by a small committee, the entire board needs to fully agree on the rationale for the final decision. (more…)