Going For Impact: A Non-Profit Blueprint For the Second Half of the Year

Going For Impact: A Non-Profit Blueprint For the Second Half of the Year

By Eugene Fram Free Digiatl Image

For organizations and individuals, the end of the calendar year is the traditional planning period – the time used for self-assessment, strategizing and putting in place “game plan” for improvement and growth for the 12 months to come.

For many nonprofits, June 30^th is the end of the fiscal and planning year. Yet the blueprint also offers the same opportunities to focus on improvement and growth.

But in today’s volatile, hyper-competitive and uncertain environment, this one-a-year exercise isn’t enough.

It just isn’t. Especially for nonprofits. And their boards of directors.

Here’s the good news: The year’s midpoint – upon us now – is a great point for an interim review. It’s a good time to review your game plan. Develop a vision goes beyond reviewing current budget projections against actuals and other compliance requirements.

I have identified five areas of focus – the last being a kind of “action plan” you can use to implement what’s of interest. Adopting just one of the many suggestions can yield a substantial return on investment. They are:

Your Leadership
Your Talent Pool
Your Fundraising
Your Impact Data
Your “Fix-It” Points

A Good Place to Start

The board member for a nonprofit wants to make sure the nonprofit has the right kind of CEO for the current turbulent environment.

And in this milieu, the organization needs a true leader – and not what I refer to as a “Mind-the-Store-CEO.”

The definition: A CEO with a nice personality who achieves modest growth each year – and not much else. He or she manages the finances, balances the budget each year, and manifests a “steady-as-she-goes” mindset.

Unfortunately, this “comfortable” demeanor is accompanied by minimal creativity and an inherent lack of risk-taking.

Nonprofits can go along for years with a CEO of this type – it’s an easy trap for boards to fall into: It’s quite a comfortable situation.

Trouble is, the nonprofit is probably not “all it can be” in terms of service to clients.

Mid-Year-Review Objective: Determine whether or not the nonprofit is employing a “Mind-the-Store CEO.” If so, see what can be done to change his/her attitudes to become less risk-averse and more creative. This might involve more-aggressive goals and objectives, training or education or – in the most egregious of cases – a leadership change.

Creating and Keeping a Winning Culture

Leaders lead but it’s the “talent” below – the staff – who must then execute. Pay greater attention to recruiting, training, nurturing and retaining the very best talent.

With unemployment at a 50-year low – and predicted to drop even more – I’m talking about a “seller’s market” for talent. Job-seekers can call the shots. And that means nonprofits are competing for talent with businesses and the most-affluent nonprofits. That’s especially true of the current demand for such abilities like accounting, data analysis, social work and folks with an IT expertise.

Nonprofits can try to level the playing field by creating the proverbial “great-place-to-work” employee environments. Some of those moves include:

Creating a “Gen Z Culture” – We’re talking here about creating a workplace that’s inviting to the Gen Z crowd (those born after 1995). These are employees who have been technologically current since birth, but who have been impacted by the 2008-09 recession. For this group, “saving the world” may not be as great a synonym for “career success” as it was for the Millennials.
Be Alluring by Being Flexible – A great salary is, well, great. But today’s employees also value flexibility – which includes the ability to work at the times, on days and in places that they desire. That may mean letting some employees work at home, or in off hours, or on weekends to get their time in and get their tasks done in order to balance time with family or other personal obligations.
Creating a Clear “Professional Development Track” – Create an internal-management structure that leads to multiple career paths for employees. For those who wish to be managers, or even leaders, create internal advancement experiences. Offer access to workshops and seminars, and help with those who wish to take additional classes, advance degrees or even executive MBA programs. Do the same for employees who wish to develop a specialization.
Develop Future Leaders – Need to employ executive directors (EDs) and other senior executives who are capable managers and who can work in an organization whose vision is to achieve a mission, often within a set of altruistic values. That’s the big difference between a for-profit company and a charitable nonprofit organization.

Mid-Year-Review Objective: Do an overview of then nonprofit’s internal culture, looking at employment policies, career tracks and leadership qualities. Develop future leadership.

Feeling the Squeeze

When signed into law in December 2017, the Tax Cuts and Jobs Act was the biggest overhaul of the U.S. tax code in 30 years. And we can’t underscore enough the huge impact the $1.5-plus trillion overhaul of the U.S. tax code will continue to have on nonprofits.

Indeed, a report in The Journal of Philanthropy concluded that the impact of the tax code overhaul “will linger for decades.

And that’s not the only big-picture-economy change that will continue to put the squeeze on giving.

The tax code overhaul doubled the standard deduction for individuals and imposed a $10,000 cap on the amount they can deduct for the state and local taxes they’ve paid. As a result, 28.5 million fewer Americans will itemize, says a congressional Joint Committee on Taxation.

The bottom line: Americans suddenly had much less of a tax incentive to donate.

The “Annual Report of Philanthropy For the Year 2018” found that inflation-adjusted giving by individuals dropped 3.4% – a decline experts attributed to the tax-code change. And donations left to charities after the giver died dropped 2.3%.

So the average nonprofit has had a big reduction in the number of donors. There’s also a drop-off in the amount of small- to midsize donations, says the Journal of Philanthropy.

At the same time, we’re seeing a huge mergers-and-acquisitions boom in Corporate America – a wave of deal making that’s reducing the number of independent companies. And firms are doing a lot of the buyouts with headquarters in countries overseas.

Long-term, this, too, could squeeze the corporate donor stream – meaning it’s something to watch carefully.

A smart nonprofit can fight back with some simple strategies, including:

Staying in close contact with major donors, within the boundaries of communications permitted by the donor. A few only my want a thank-you note
Involving creative internal/external communications people who can design and execute new fundraising approaches (one great example is the “Alzheimer’s Ice Bucket Campaign”).
Selecting CEOs and board members who are comfortable with fundraising and who are able to organize and drive that fundraising as a partnership.
And encourage donors to support important work in their own communities.

Mid-Year-Review Objective: Donations are the fuel that allows nonprofits to function. So a careful-and-ongoing review of any catalysts for change is paramount. There are moves the nonprofit can make to develop a competitive advantage. Be sure to capitalize on all those available.

A Yardstick For Success

To this point the focus has been on how (internally) to approach board’s work.

The following focus is on the impact those efforts are having.

To do that, continue to examine:

What it takes for your board to set real strategic goals and to measure achievement in a meaningful way.
The actual benefits of the programs being offered. Increasingly, donors and foundations want to see the impact of the money they’re giving – indeed, understanding how the programs are actually benefiting the end-clients. Such measurements aren’t easy to get. For instance, the nonprofit can track the number of clients trained, but assessing how that training improves their lives, increases their employability, boosts their income, improves their health, increases their longevity – isn’t as easy to calculate. But even with imperfect metrics, it can be done. Doing this over time can yield data that help refine programs, satisfy funders and even help with fundraising going forward and drive change.
With any strategic plan, board and management need to keep client impacts front-and-center.

Mid-Year-Review Objective: You really need to understand the impact of your efforts. And that means measuring results. Review measurement efforts and look for ways to improve them. Such improvements can serve as a competitive advantage in the challenge for donations.

A Planner’s “To Do” List

Once self-assessment is concluded, the nonprofit can use the insights acquired to fine-tune, upgrade or overhaul the processes involved. To do that the board will want to:

To have a rigorous-but-fair CEO evaluation – preferably on a yearly basis.
Focus on internal succession – from the CEO at the top all the way down through the staff organization.
To prepare for financial crises and “Black Swan” events that can impact the nonprofit.
To be sure there’s an ongoing understanding between board responsibilities and operational responsibilities.
To continually nurture trust between the board, management and staff.
And to eliminate inequality anywhere it’s present within the organization.

Taking time at the year’s midpoint/endpoint to conduct this review exercise, and acting on its findings, one thing is very clear …