The Nonprofit Strategic Plan Is Finished—Tools to Move Forward!

The Nonprofit Strategic Plan Is Finished—Tools to Move Forward!

By Eugene Fram

The nonprofit’s 3 or 5-year strategic plan has been completed with the entire board management and staff reading from the same document. But what about the shoals that must be bridged before its benefits can be implemented? For example:

• How can the plan be kept in the forefront of board and management thinking as other problems, and crises must be resolved, opportunities addressed?
• The major of the committee that helped develop it will have rotated off the board in several years. What provision needs to be developed to fill the gap?
• Who will be the plan’s advocate should the CEO leave abruptly and the current board chair terms-out?

Following are my suggestions:
Endow Ownership: Hopefully the same CEO will be in place for the plan’s duration and can work with a series of board chairs to implement it But with varying nonprofit board rotation policies, some only allow the chair to hold office for a year, the plan’s institutional memory can be fragile. In addition, the CEO may be a person who is operationally satisfactory but just doesn’t do well strategically. Placing ownership can be a challenge. Example: I have encountered several boards with a total absence of directors with any serious strategic planning background.

Consider Appointing a Lead Director: Given how time consuming it is to serve as a nonprofit board chair, especially of a complicated organization like a university or hospital, it seems logical to empower another volunteer to formally fulfill some of the responsibilities expected of a board chair, especially relating to strategic development and implementation processes that seems to challenge both for-profit and nonprofit boards.
The use of such directors became a popular way to deal with the public concern about the for-profit boards after the Enron and other problems early in the century The New York Stock Exchange enshrined the idea of lead directors as a way to show that a company must give the independent directors a central voice.

A lead director can assist the chair in the day-to-day needs of leading a board (while not micromanaging) and assist in rehabilitating a dysfunctional board. ( This is especially important when the chair has little management or board experience. (Example: a concert pianist chairs a social-services board.) It is also not unusual for a volunteer board chair to discover that the duties are more time consuming than they expected. Typically, they muddle along. Even the most tactful CEO would hesitate to address the gap.
At first glance, adding a lead director to the structure of a nonprofit board seems to formalize a new position in a way that could impede the relationship among the chair, the vice chair, CEO and other board members.

The lead director should be viewed as just the opposite, as the business world has demonstrated. H/s can help the CEO work more effectively and efficiently with board committees, especially in driving the work of the strategic-planning groups and assessing outcomes and impacts.

What’s more, the lead director can be an additional consultant or mentor to the CEO, especially when the board chair is unavailable. Because the lead director would help the board operate better, this move could also do much to build morale in nonprofit groups.

Agenda Time: Make certain most every board meeting agenda has time for updates of outcomes and impacts of the plan. Strategic planning and implementation usually do not have the appeal of more immediate challenges, unless the organization has serious problems. Unfortunately, the plan is not given priority location on the agenda.

Board Retreats: Retreats are frequently used to get all groups together, many who have not been involved with the work of the strategic planning committee. I recently observed one retreat that brought the board, management and staff together to develop a significant consensus about the need to “reinvent” the nonprofit. In my opinion, a similar small-scale retreat needs to take place after about six months to help keep the board’s focus on strategy.

Summary: Strategic plans are only of value if the board, on a consistent basis, carefully overviews their implementations and visionary directors and managers take ownership of it. Tools to accomplish this goal are readily available if a board wants a robust implementation.

The Nonprofit CEO Exceeds His/Her Authority–What Happens Then?

The Nonprofit CEO Exceeds His/Her Authority–What Happens Then?

By: Eugene Fram

Viewer favorite updated and revised

It happens! When it does, it’s the board’s job to inform the CEO that he or she has taken on too much authority. As a board chair of a human service nonprofit, I encountered such a situation. The CEO signed a long-term lease contract on his own that should first have been approved by the board. The financial obligations involved weren’t significant. (more…)

Can Nonprofit Boards Suffer From Agenda Deficits?

Can Nonprofit Boards Suffer From Agenda Deficits?

By Eugene Fram

Revised & Updated Viewer Favorite

In a recent study of 772 for-profit and nonprofit directors from around the world, McKinsey & Company found that 25% of the sample assessed their board impact as moderate or low, “… while others reported having a high impact across board functions. “

Following, in italics, are brief abstracts from the study, followed by my analysis of the importance of the information to nonprofit boards.

Directors who report having a low or moderate impact said that their boards undertake “the basics” of ensuring compliance, reviewing financial reports and assessing portfolio diversification, depending on the function. … Directors reporting that their boards have a higher impact undertake these activities as well but add other practices in every function.

In a 2015 study of nonprofit boards by BoardSource, nonprofit CEOs gave their boards C, D or F academic grades in the following portions: 35% for strategy, 38% for monitoring performance, 65% for board recruitment, 54% for community relations, and 65% for fundraising. ( Taken at face value, these data, although they show improvement from 2012, still indicate that nonprofit boards have a long way to go in moving beyond basic tasks. They need to offer much more leadership in assessing change in the nonprofit’s environment, discussing alternative strategies, allocating resources and reviewing board processes. For example, see this link for a potential to add a Lead Director to assist over-stressed chairs and their boards. ( (more…)

Why Are Some Nonprofit Boards Missing the Mark? What to Do?

Why Are Some Nonprofit Boards Missing the Mark? What to Do?

By Eugene Fram

Viewer favorite, expanded and updated.

Stephen Miles of the Miles group ( recognizes that many business boards are coming up short in performance. As founder and CEO of a strategy and talent development agency, Miles has identified five areas of potential improvement for commercial boards. I believe these categories are also quite relevant to nonprofit board operations in the following ways:

Knowledge Gaps

Many new board directors are in the dark about some of the operating issues facing their organizations. Such information gaps are less prevalent in trade and professional associations because most directors are in associated fields or are in practitioner positions. However, new directors of community based charitable organizations and human services focused nonprofits should be much more attuned to discussions at initial board meetings. Current methods of orienting new directors don’t seem to be doing the job. This is critical for those boards with rapid turnover. For example, one board with which I am acquainted has 80% of its membership with no more than 18 months tenure.

Orientations can take a variety of forms, ranging from brief pre-board session to pre-meeting phone calls from the CEO or Board Chair. These updates will provide the new board member with information that should make his/her participation in the board meeting more meaningful.

Lack of Self-Assessment

“When it comes to the (business) boards (assessing their) own performance, this is often done by using the check-in-the box exercise, (along) with some form of gentle peer review,” reports Miles. In the nonprofit environment, board self-assessments are not usually a priority because nonprofit directors often have time constraints. In addition, nonprofits need to more broadly examine qualitative outcomes, such as community impacts. But business boards are also beginning to move in the same direction, and at this time seem to be behind nonprofits!.*

The media, Internal Revenue Service, foundations and accreditation organizations are asking for more information and transparency to ensure that nonprofits have quality processes to overview management outcomes. Few nonprofit boards can afford rigorous third party directed board self-assessment, the gold standard. However a self-review deficit might leave some board members with significant personal liabilities.** Consequently, it is my personal opinion that nonprofit boards need to make good faith efforts to have reasonable self-reviews, understanding that management and board members may hesitate to negatively reflect on volunteer directors who have adopted poor decisions.


“Management Capture” occurs when a board too readily accepts a delusional view from management that organizational performance is significantly better than reality. As a result, some board self-examinations may take place only after a crisis has been resolved. So it is mandatory that the boards develop rigorous outcome measures, both quantitative and qualitative by which to judge organizational and board performance. Models for self- board assessments are available from professional groups and consultants.

Recruitment Shortcomings & Board Inexperience

Miles maintains that most for-profit directors lack real experience in succession planning: this is also true of nonprofit directors. Even in for-profit boards where a chief executive is temporarily incapacitated, there often is no plan for interim succession. Plus there is always the possibility that a CEO will leave quickly for a variety of reasons. Planning for his/her unanticipated exit should be an ongoing board concern.

One root cause for having a nonprofit culture of board inexperience is that often there are too few directors who have served on other for-profit or nonprofit boards and know how to be role models for newer recruits. Also, normally serving one or two terms, lasting three years, some experienced nonprofit directors may not be motivated to serve in this role because there are no financial incentives offered. However, as demonstrated in the 2012 Penn State debacle, a director’s reputational risks can be substantial. How a board evaluates and improves its organizational talent pool is critical to performance. Miles characterizes the optimal board as composed of ” … directors who are active in their roles engaging individually and collectively (to engage with) other directors and (overview) management.” It is a tall order in today’s nonprofit environment.

For-profit organizations or nonprofit organizations, in my opinion, have five identical basic board guidelines. For Deloitte Partners, a worldwide accounting and financial advisory firm, these constitute board responsibilities that can’t be delegated to management. The board has responsibilities to have: a viable governance structure, annual assessments of (board and) organizational performance, driven strategic planning, improved management talent and assured organizational integrity.

A relentless pursuit of these lofty goals will enable nonprofits to be “on the mark.”

*For nonprofit qualitative outcomes, see: Jerry Talley & Eugene Fram (2010) “Using Imperfect Metrics Well: Tracking Progress & Driving Change,” Leader to Leader, winter, 52-58. For commercial boards see: Emily Chasan, (2012), “New Benchmarks Crop Up in Companies’ Financial Reports,” CFO Journal Section, Wall Street Journal, November 11th,

** For examples, see the Intermediate Sanctions Act, Section 4958 of the Internal Revenue Service Code. Also see the Expanded IRS 990 form guidelines for board structure and performance–38 new questions related to nonprofit governance.
Posted in Uncategorized and tagged board inexperience, board knowledge gaps., Management capture, management self-delusions, non-profit governance, non-profit management, Nonprofit board communications, Nonprofit board structure, nonprofit boards. nonprofit directors. nonprofit director term limits, nonprofit executive director, Nonprofit Interpersonal communications, Recruitment shortcomings, Trustee Boards, Trustees, volunteers on March 24, 2013. Leave a comment Edit

The Nonprofit President/CEO–How Much Board-CEO Trust Is Involved?

The Nonprofit President/CEO–How Much Board-CEO Trust Is Involved?

By; Eugene Fram

Viewer Favorite–Revised & Updated

The title, president/CEO for the operating head of a nonprofit, clearly signals to the public who has the final authority in all operating matters and can speak for the organization.* It is not an ambiguous set of titles. However, the terms “manager” or “executive director” can be quite ambiguous and do not generate the same external understanding or respect. An executive director can be the administrator in a small church or the operational head of a large arts organization. The public and some corporate directors often view managers and executive directors (because of the organizational history of nonprofit) as “hired hands,” not as professionals who, with strategic vision, are able to manage all operational activities. (more…)

The Enron Debacle, 14 years Ago—2015 Lessons for Nonprofit Boards?

The Enron Debacle, 14 years Ago—2015 Lessons for Nonprofit Boards?

By: Eugene Fram

In 2001 Enron Energy collapsed due to financial manipulations and a moribund board. It was the seventh-largest company in the United States. Andrew Fastow, the former CFO and architect of the manipulations served more than five years in prison for securities fraud. He recently offered the following comments to business board members that, in my opinion, are currently relevant to nonprofit boards. ( Quotations from the article are italicized. (more…)

How Can Nonprofits Accommodate To External Influences? Some Field Observations

How Can Nonprofits Accommodate To External Influences? Some Field Observations

By: Eugene H. Fram

Ruth McCambridge, editor of Nonprofit Quarterly, points out “Our organizational management, (board) styles and structures are affected by the four external influences.” See bolded items below. ( Following are some specific field observations I have encountered that, over several decades, support her model relating to external influences.

The fields in which we work: McCambridge points out that arts organizations have dual have leadership models—artistic and business. However, unless specified which has final authority, the system can lead to continual conflict between the two; the artistic leader wanting the most authentic productions and the business leader concerned with budget realities. The final authority is often determined by which leader has the CEO title.

Human services boards and staffs often operate at a much higher emotional level than other types of nonprofits. Examples: Some of these board members consider themselves “families,” frequently fail to make the hard choices when board members are ineffective directors. Even the least productive board chair is venerated. Staff members similarly can be emotionally bonded, failing to realistically acknowledge the strengths and weaknesses of others.

On the other hand, board members of trade or professional associations often look to the staff as “servants” who should closely follow board directions. Example: One association CEO I encountered creativity developed a million dollar reserve for the group. Yet he was only allowed to spend up to $5K of a multimillion-dollar budget without formal board approval.

The regulatory environment in which we function: It can be argued that nonprofit organizations are much more regulated than their for-profit counterparts. In addition to traditional state and Federal corporation laws, all nonprofits must abide by the Federal Intermediate Sanctions Act that prohibits them from providing excess benefits to anybody in a position to influence actions—internally a management or staff person and externally a vendor, donor or volunteer, etc. Charitable and public benefit nonprofits must annually file an IRS Form 990 that has, in addition to financial data, 38 questions related to corporate governance. Health care nonprofits face a multitude of regulations related to staff certification and relationships with patients. Example: A psychiatrist employed by a counseling agency resigned and took patient records with him. The employing organization had to sue for return of the records because agency, not the psychiatrist, was responsible for confidentiality.

Our communities’ spoken belief systems: Having worked with nonprofits on both US coasts, I have generally observed that CEOs on the east coast are given much more managerial latitude once a nonprofit start-up moves beyond its early stages. Example: I have consulted with two west coast nonprofits both well beyond the startup stage—one with a budget of $6 million and he other with a budget of $10 million. A community model that required significant number of board interventions covered both. If they were on the east coast, both would likely have had CEOs with the title “President /CEO” with much more operating flexibility than the CEOs I observed on the west coast.

Our communities’ cultural norms and dynamics: Peter Drucker, the noted management expert, is said to have remarked, “Culture eats strategy for breakfast every morning.” He meant that strategy needs to be in line with culture to succeed. Nonprofit boards frequently align with this comments. Example: If a nonprofit board is a conservative one and content with a “mind the store CEO culture,” one or two board members can’t do much to drive change, until the CEO retires or leaves.

Suggestion for action

With the assistance of an independent moderator, many boards could benefit from an in-depth discussion of these four issues ever couple of years. It may open discussion on some internal issues that need corrective action.