advocacy

When Nonprofit Missions Get Muddled

 

By: Eugene Fram  

It happens over time. A passionately conceived mission starts to drift from its original intentions. Stakeholders begin to view a nonprofit’s purposes from a different angle. There is a discrepancy between how the organization is committed to act and external perceptions of its current actions. Nonprofit boards need to be on the alert to such misalignments that can go unnoticed in the perceptual “fog” of daily challenges. It can limp along for years without acknowledging the impact of the client reality by which the nonprofit is being judged.   

A good start would be a five year review of how others see the organization, i.e. volunteers, funders, clients, members, etc. The study can be conducted by an outside firm or developed internally by analyzing imperfect metrics. (See this article: http://bit.ly/OvF4ri). Based on those findings, nonprofits can either be assured that the perceptual status quo is congruent with the mission as stated– or, if there are material inside/outside differences, take steps to begin to rectify the discrepancies. These can range from mission modifications to a complete mission overhaul. Here are some considerations:

• Is the name of your organization confusing? Take the Family Service organization, for example, multipurpose human services agencies that, in some cases, were being perceived as resources for family planning. A few organizations’ first move to reinforce their stated mission was to change their names to Families First.

• Is your mission statement clear and concise? Does the wording represent your core objectives? Is it targeted to the right clients? Has it been highlighted in both written and digital output? A university’s mission may be to develop its students’ intellectual growth over a college time period. Conversely, the student/parent perception may see a degree as a conduit to a good job. The school, in this instance, is obliged to better represent its mission statement to convey its rationale—or modify its mission to redirect its academic trajectory.

• Societal and demographic needs are constantly evolving. The former Elderhostel changed its direction significantly when it sought to attract a younger population and renamed itself “Road Scholar.” Although it’s important to accommodate a variety of new initiatives, the question is– do they fit within the organization’s framework? It’s obvious that a nonprofit can’t be all things to all people. It may be difficult to accept a new perceptual reality, but growth and survival may be dependent on accommodating it.

Is Your Nonprofit Forward-Focused or a Prisoner of the Past?

Is Your Nonprofit Forward-Focused or a Prisoner of the Past?

By: Eugene Fram           

Governance arguably suffers most … when boards spend too much time looking in the rear view mirror and not enough scanning the road ahead. *

It has been my experience that nonprofits rarely address the possibilities and perils of “…the road ahead.” An endless stream of current and pressing issues can cause both Board and CEO to take a myopic view of their nonprofit responsibilities — either totally ignoring strategic issues or procrastinating a discussion of the subject. The results can be damaging to the organization. Here are some “prompts” that might guide nonprofit board members and CEOs as they attempt to provide leadership in this important but neglected area:

Balanced Agendas — Include and highlight strategic issues on every board meeting agenda (not just when a committee report is presented) until they are resolved with action plans, policy development or thoroughly discussed and removed. This constant emphasis on planning can go a long way towards achieving concrete actions on topics of future concern. A discussion of immediate issues juxtaposed with ongoing strategic concerns will provide a balanced meeting format that may possibly discourage board member’s attempts to micromanage, a very common tendency in nonprofit boards!

Short Term Focus — In a BoardSource report,  “…only 33 percent of nonprofits report that their board members are actively involved in advocating for their missions, and many organizations aren’t advocating at all.”** To inspire and challenge board leaders to actively serve as ambassadors.  The explanation for weak performance in this area is often attributed to the fact that the directors’ terms of service on the board are usually three to six years during which time people’s interest in the long-term future of the organization may be compromised. Some boards may be disproportionately represented by “millennials” whose participation comes with heavy time constraints. Problems of this type can be mitigated by seeking board members who are partially or fully retired. They are likely to be better equipped to focus on the important governance functions and the fundamentals in which the nonprofit operates. Boards need to look to look further out than anyone else in the organization… There are times when CEOs (those operationally concerned with strategy) are the last ones to see (environmental) changes coming.

Board Recruiting — Nonprofit recruiting can be a hit-or-miss process, often producing candidates who are readily available and familiar to the current board. Rarely will the committee seek out people who have strong track records as strategists and/or competent visionaries. This is a real challenge, but a forward focused board should make every effort to identify potential directors who have these types of experience and skills. The topic of recruitment is a challenging one and the process should have continual annual evaluation.

Can Nonprofit Boards Work Smarter Not Harder?
As noted earlier, nonprofit board people are often limited in the amount of time they can devote to board participation. Given these constraints, the board chair and CEO can choose from a range of options that will help orient directors to better understand the external landscape in which the organization operates. These initiatives can include visits to comparable facilities, opportunities to attend field related conferences or inviting experts in the same or similar organizations to interact with board members. The purpose is to infuse each member of the board with an informed view of the organization’s long-term future and prepare them to take the appropriate action. The CEO and board chair must address this question with a viable plan: What actually helps… (to develop) a board environment that encourages participation and allows board members to derive meaning, inspiration and satisfaction from their (board) work?

Talent: The Key to Nonprofit Success — A nonprofit board has one hiring decision to make: the engagement of the CEO. But it also has a significant responsibility to overview long-term talent development in the staff and management. The board of a family service agency needs to assure that its counselors are up to date on current modalities of counseling. A recreational organization must be operating in the context of accepted fitness practices. Annual talent reviews need to be scheduled with CEOs and the appropriate staff. In addition, individual board members, with the concurrence of the CEO, may want to have occasional professional contact with key people below the senior management.

Make strategy part of the board’s DNA — (Many nonprofit) … CEOs present their strategic vision once a year, the directors discuss and tweak it at a single board meeting (or a short retreat), and the plan is then adopted. The board’s input is minimal and there’s not enough in-depth information to underpin proper consideration of the alternatives.

An educated nonprofit board will have the depth of understanding to be alert to the future needs and problems of its organization. Typically there is usually an unanticipated “fork” in the road ahead. Status quo, “minding the store,” participation by rote are all too easy mindsets that will only hobble the progress of an organization. Board chairs and CEOs are key actors in turning an existing board environment into one that is focused on moving forward.

*Christian Casa and Christian Caspar (2014) “Building a forward-looking board,” McKinsey Quarterly, February. Note: Quotations from this article are presented in italics.

**https://boardsource.org/research-critical-issues/

 

How Seriously Does Your Nonprofit Board Take the Matter of Ethics?

How Seriously Does Your Nonprofit Board Take the Matter of Ethics?

By Eugene Fram                          

Most board members are aware of their obligation to ensure their nonprofit’s compliance with certain standard regulations e.g. making tax payments, submitting IRS Form 990s and/or avoiding potential fraud. But what I have found missing in the nonprofit environment is a sense of board member responsibility to provide for and sustain a viable ethics program.

Board members, as representatives of a community, profession or industry, have a significant responsibility to mitigate risks for their supporting constituencies. To ensure their integrity and prevent tainting the organization’s reputation, an internal ethical culture must prevail. An emphasis on ethical conduct should cover everyone from board members to the lowest ranking employee, and address issues that range from personal use of facilities to various types of harassment.

Following are some thoughts on putting ethics in their rightful place:

• The Audit Committee in responsible-business organizations often have a full-time corporate counsel or compliance officer who are charged with seeking evidence of unethical behavior. On the other hand, nonprofits must vest significant ethics responsibilities in the audit committee. As a base approach, the audit committee should have the CEO investigate installing a hotline system that can surface questionable behaviors and issues. 

• Ethical Behaviors Start with the Board – A review of existing ethical standards should be included in the orientation process of every new board member or employee– and reinforced briefly each year. Potential conflict of interest in board members can skew decision-making and jeopardize outcomes. Engaging in “sleight of hand” decisions can reverberate throughout the organization. For example: it is not unusual for nonprofit boards to seek grant dollars that support programs that are not directly related to the organization’s mission. Similar relaxation of standards can propel an organization down the slippery slopes of ethical boundaries. This also applies to senior managers whose behavior or actions are perceived to be inappropriate.

• Seeking Information – Although the Sarbanes-Oxley act suggests that board directors are obliged to seek information from persons below top management, this can sometimes become controversial in the nonprofit environment.

The bottom line is that (ethics) compliance must be pervasive, ongoing and actively tested, experts say, in order to maintain a healthy culture throughout the organization. By rewarding ethical behavior and mitigating risk, nonprofit board members will be doing all they can to protect themselves and preserve values for shareholders (and help to assure ethical actions in a mission-centrist nonprofit.)*

* Boardmember.com (2014), “Compliance Oversights Starts and Ends with the Board,” May 14th.

Board Members Need to Review Unwritten Protocols to Boost Nonprofits’ Effectiveness

Board Members Need to Review Unwritten Protocols to Boost Nonprofits’ Effectiveness

By:  Eugene Fram                                       

Nonprofit boards are governed by a series of obligations —some are clearly defined as legal responsibilities such as financial actions. Others, however, are less clearly defined and relate to people who are, in some way, associated with the organization. Guidelines to these diverse interactions are not typically archived in policies but are important to the overall professionalism of the board. They include consideration of its: board structure, internal operations, recruitment methods and leadership style.

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The Art of the “Ask”: Six tactics frequently ignored by nonprofit board members, CEOs and fund Developers

By: Eugene Fram      

Nonprofit board members and managers have acquired a measured of savvy when it comes to raising funds for their organizations. They have learned that building trust with current and prospective donors is the key to maintaining meaningful support. Here are some overlooked tactics to further strengthen relationships. *

  1. Show the donors “what’s in it for them:” Some development officers still lead by focusing on what is of interest to them—the construction of a new building, providing funds for the nonprofit’s strategic development plan, etc.   But they often lack certain perspectives. These are the skills to effectively interact with business executives like those holding C-Suite positions. These senior managers value evidence that the nonprofit representatives have “done their homework.” Pre-meeting preparation must include generating information on the executive (s’) professional and career background(s) that is readily available from LinkedIn. Also it is necessary to have some information about the challenges the firm or its industry are encountering. This level of preparation helps set a basis for better communications and managerial discussions that C-Suite personnel value.
  1. Consistency: Be ready to clearly indicate that the nonprofit has a well-developed mission that is future oriented. A nonprofit with a record of financial results that consistently meets budget requirements is one example. Low turnover at the management and/or staff level is another. But also be ready to answer such visionary questions as, “How do you expect your organization to change in the next five years?”
  2. Reputation: Every nonprofit, large of small, has a reputation among its peers and the general public.   Be certain that the donor has a clear idea of what it is and is not a wish list of what it might be. Emphasize the impact data available, supported by impact information.   For example, Family Service nonprofits are actually multi-purpose human service organizations. But the chapter names can deliver a different message—organizations devoted to family planning. As a result of this potential interpretation, the names of some chapters have been changed to e.g. Family and Children’s Service or Families First.
  3. Building Personal Relationships: Personal connections are the basic building blocks of donor relationships. Some professional development officers suggest that major donors should be thanked seven times. ** But thanking is only the beginning of a continuing process. Nonprofit CEOs and board chairs need to be proactive in visiting major donors on an annual basis, or more often if the donor wants more contact. The purpose here is not to seek additional funding but rather to reinforce a message related to mission impact. An invitation to a social event is another way of maintaining these connections. Sometimes a follow-up to a major donor can yield unusual results. I recently observed a situation where a board member made an effort to follow through  on a social event invitation to a long-term donor. It yielded a substantial contribution within 10 days of the event.   Every nonprofit board needs a proactive donor response program. These responsibilities should be noted in the CEO’s and Board Chair’s responsibilities.
  4. Be honest, even if that means saying “No”: When a gift involves undesirable mission creep or an unfunded charge to current assets, be prepared to say “No.” Universities, for example, have been known to accept buildings as gifts that can quickly become maintenance liabilities. Cash grants may have unfavorable strings attached tot them. Donor intent must clearly be understood. Princeton University had to return a large endowment when the donor’s heirs proved the university did not use it in a manner that confirmed the donor’s wishes.
  5. Open your Doors to Donors: Where possible, invite current and potential donors to the nonprofit’s offices or operational facilities. Even when the office is a series of enclosures or open offices, the visit gives the donors a feel for the culture and a chance to know the people dedicated to the mission.   A visit is even more helpful when the facility is an active one, such as a food distribution pantry, sheltered workshop or a call center.

The fog of the nonprofit board overviewing processes often obscures the importance of cultivating donor relationships that may, in time, fuel a nonprofit’s progress. The above review is a reminder to board members and management of their responsibilities to the artful pursuit of asking.

*https://www.forbes.com/sites/forbesnonprofitcouncil/2018/04/04/seven-ways-nonprofits-can-build-trust-with-donors/#4d6836067d26

** For more details, see: https://michaelrosensays.wordpress.com/2014/03/18/ensuring-repeat-gifts-the-rule-of-7-thank-yous/

Stay on That Nonprofit Board!

By: Eugene Fram

Gene Takagi, noted San Francisco attorney, who specializes in nonprofit organizations published an article listing 12 reasons for resigning from a nonprofit board. It is worth reading.*

BUT

Nonprofit board members often become impatient with the slow pace of progress toward positive change. Here are some actions that may change the situation, improve service to clients and prepare the organization for any long-term mission disruptions.

• Talk With The CEO: He/s may feel the same frustrations and be delighted to find a board member who shares his goals. In fact, she/h may be thinking of leaving or be wedded to the current area only because of a family situation. As a result, your conversation may give a chief executive new hope and energy. On the other hand, if the CEO is too aligned with the past, it will be unlikely that the board will terminate the current CEO, unless there are some performance malfeasances involved. Then, estimate the CEO’s remaining tenure and use remaining time to find opportunities to make modest increments in change.

• Talk With Other Directors: Between board meetings, have informal coffee sessions with other directors to determine their views on the areas in which you feel change is necessary. Three or four board opinion leaders can garner positive movement, assuming there are no strong objections from the CEO.

• Outside Validation. If sufficient budget is available, ask the board to engage a consultant to examine the potentials for change. The rationale for the request might be: “We are doing well, let’s determine how we can better serve our clients.” If budget isn’t available or the CEO is against the expenditure, try to have the board arrange, for an outside speaker or two who might validate the need for change. This might be a person from the field or a local professor who has some insights aligned with change-focused board members .

• Seek Outside Financing: Personally seek sources for capacity grants that, if awarded, might be developed to further help clients. Ask the board to take leadership in applying for several of these grants. A single successful grant might be the linchpin to promote the type of change desired by the group having similar views.

• Chair The Nominations Committee: As chair, the director can be in a position to search for candidates who are forward looking. In addition, the committee, under the urging of the chair, can seek candidates who have served on other nonprofit boards and who have proven their meddle to bring about change.

Summary
For any single board member of a status quo nonprofit to lead a change on organizational culture will require tenacity, time and patience. The person will need to be extremely dedicated to the organization’s mission and want to improve the services to its clients. Very few board members have the grit to lead such a change. However, a small-motivated group can be an advanced guard to initiate some actions in the right direction. But the group will have to keep Peter Drucker’s insight in mind when the going gets tough, “Culture eats strategy change for breakfast.”

An unusual case of an ED accused of serious malfeasance, but the board refused to fire him. http://bit.ly/1om6XUw

*https://nonprofitquarterly.org/12-reasons-resign-nonprofit-board/

Once Again!! Dysfunctional Levels in Nonprofit Boards & Organizations.

 

 

By: Eugene Fram.       Free Digital Image

Articles and studies from a Google search on “Dysfunctions in Nonprofit Boards & Organizations,” yields nearly two million items in less than a minute. These items show dysfunctions on charter school boards, church boards, healthcare boards, trade associations, human services boards etc.

Rick Moyers, a well-known nonprofit commentator and nonprofit researcher, concluded:

“A decade’s worth of research suggests that board performance is at best uneven and at worst highly dysfunctional. ….. The experiences of serving on a board — unless it is high functioning, superbly led, supported by a skilled staff and working in a true partnership with the executive – is quite the opposite of engaging.”

These data and comments can lead one to conclude that all nonprofit boards are dysfunctional. I suggest that nonprofit boards can generate a range of dysfunctional behavioral outcomes, but the staff can muddle through and continue to adequately serve clients.

Mildly Dysfunctional: Board meeting attendance can be a problem, left unattended by the board chair and CEO. Agendas are not completed within the meeting time frame. Strategic planning discussions takes place once a year with little reference to it between annual meeting retreats. Goals are established without measured outcomes, or more importantly–Impacts.
On the other hand, budgets and finances are reasonably well handled. Incremental growth each year is modest. Board recruitment takes place largely based on board contacts and friendships, with a few recommendations by the CEO. Most everyone on the board is mildly or fully dedicated to the organization’s mission.

Moderately Dysfunctional: Many of the above dysfunctions, plus one or more of the following ones:

• The board chair and/or the CEO receive heightened deference in board discussions.
• Important decisions are made without full participation by all board members. One of two directors set the tone for the discussions and the outcomes.
• Either the board chair or CEO has inadequate backgrounds to develop a robust board. Nearly all agenda topics center on operational issues.
• The board does not trust the CEO but is unwilling to take action to remove him or her.
• The mission is not clearly defined and “mission creep” can be a problem. In this instance, the staff can be productive, if some managers are able to isolate staff from the board dysfunctions.

Highly Dysfunctional: Many of the following board behaviors are exhibited:

• The board is divided into unyielding factions, a la the current US congress.
• Board discussions go beyond civil discourse into personal barbs, often disguised as humor.
• Board committees are not functioning properly. Important decisions are often delayed for a year or more.
• Rumors about the board conflicts are reaching funders, who are asking questions about the rumors.
• It is becoming difficult to recruit talented board members or professional personnel.
• The board chair and other board directors refuse to acknowledge the problems.

There is little that the staff can do in this situation, except to hope for a funding angel to cover the financial problems that will develop. However, I did observe one organization that recovered from such highly dysfunctional board behaviors and finally succeeded in recruiting more talented board members. It also adopted a new governance format. The change led to some board members to resign. (One was insisting that the board members should evaluate individual staff personnel!) However the mistrust between the board and staff, as a result of the dysfunctional board behaviors, continued for decades.

Associations, Board agendas, Board meetings, Board Recuitment, Building Trust, CEO Evaluations, Charity, Consistency, Crisis Management, Dysfunctional nonprofits, foundation boards, Good governance, Ineffective directors, Long-term Sustainability, Non-profit board of directors, Nonprofit board barriers, Nonprofit governance, Nonprofit impacts, Nonprofit mangement, Trustees, Trustees, 

 

     

     

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    Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: An Evergreen Board Problem?

    Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: An Evergreen Board Problem?

    By: Eugene Fram    Free Digital Image

    At coffee a friend serving on a nonprofit board reported plans to resign from the board shortly. His complaints centered on the board’s unwillingness to take critical actions necessary to help the organization grow.

    In specific, the board failed to take any action to remove a board member who wasn’t attending meetings, but he refused to resign. His three-year term had another 18 months to go, and the board had a bylaws obligation to summarily remove him from the board. However, a majority of directors decided such action would hurt the board member’s feelings. They were unwittingly accepting the “nice-guy” approach in place of taking professional action.

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    Measuring Nonprofits’ Impacts: A Necessary Process for the 21st Century

     

    Measuring Nonprofits’ Impacts: A Necessary Process for the 21st Century

    By Eugene Fram      Free Digital Image

    Unfortunately, outcomes and impact are often unrelated, which is why a program that seems to produce better outcomes may create no impact at all. Worse, sometimes they point in opposite directions, as can happen when a program works with harder-to- service populations resulting in seemingly worse conditions, but (has) higher value-added impact. … Rigorous evaluations can measure impact (to a level of statistical accuracy), but they are usually costly (a non starter for many nonprofit), difficult and slow. * But how do the medium and small size nonprofits measure actual results in the outside world such as enhanced quality of life, elevated artistic sensitivity and community commitment?

    A Compromise Solution:

    To close the gap, funders and recipients would need to agree to apply imperfect metrics over time. These are metrics that can be anecdotal, subjective or interpretative. Also they may rely on small samples, uncontrolled situational factors, or they cannot be precisely replicated. ** This would require agreement and trust between funders and recipients as to what level of imprecision can be accepted and perhaps be improved, to assess impacts. It is an experimental approach

    How To Get to Impact Assessment:

    1. Agree on relevant impacts: Metrics should be used to reflect organizational related impacts, not activities or efforts. Impacts should focus on a desired change in the nonprofit’s universe, rather than a set of process activities.
    2. Agree on measurement approaches: These can range from personal interviews to comparisons of local results with national data.
    3. Agree on specific indicators: Outside of available data, such as financial results, and membership numbers, nonprofits should designate behavioral impacts for clients should achieve. Do not add other indicators because they are easily developed or “would be interesting to examine.” Keep the focus on the agreed-upon behavioral outcomes.
    4. Agree on judgment rules: Board and management need to agree at the outset upon the metric numbers for each specific indicator that contributes to the desired strategic objective. The rules can also specify values that are “too high” as well as “too low.”
    5. Compare measurement outcomes with judgment rules to determine organizational impact: Determine how may specific program objectives have reached impact levels to assess whether or not the organization’s strategic impacts have been achieved.

    Lean Experimentation

    The five-point process described above closely follows the philosophy of lean experimentation, ** now suggested for profit making and nonprofit organizations.

    Lean allows nonprofits to use imperfect metrics to obtain impact data from constituents/ stakeholders over time. Under a lean approach, as long as the organizations garners some positive insights after each iteration, it continues to improve the measurement venues and becomes more comfortable with the advantages and limitations of using these metrics.

    Organizationally the nonprofit can use this process to drive change over time by better understanding what is behind the imperfect metrics, especially when a small sample can yield substantial insights, and actually improve the use of the metrics.


    * https://nonprofitquarterly.org/2012/07/24/using-imperfect-metrics-well-tracking-progress-and-driving-change/
    ** http://ssir.org/articles/entry/the_promise_of_lean_experimentation

    Establishing Effective Nonprofit Board Committees–What to Do

    Establishing Effective Nonprofit Board Committees–What to Do

    By: Eugene Fram          Free Digital Image

    Based on my board and consulting experiences, following are ways that effective nonprofit boards have established  board committees.

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