CEO Evaluations

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

Nonprofit boards and CEOs in the United States are being overwhelmed with requests from foundations and governmental agencies to move from providing outcome data to providing impact data. One nonprofit with which I am well acquainted has been required to reform its IT program to meet the requirements of a local governmental IT program, so that impacts can be assessed. It will be interesting to see how this scenario plays out.

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 nonstarter 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? (more…)

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

 

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

By; Eugene Fram   Free Digital Image

The title, 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.*  .

The CEO designation calls for an unwritten trusting contact with the board based on mutual respect, drawing from the symbolism that he or she is the manager of the operating link between board and staff. It is a partnership culture. However, a solid partnership does not allow the board to vacate its fiduciary and overview obligations. The board has moral and legal obligations to “trust but verify” and to conduct a rigorous annual evaluation of outcomes and impacts CEO has generated for the organization.

While the trust the board has in its chief operating officer can’t be described in exact quantitative terms, viewing it through the lens of a set of CEO and/or Board behaviors can give an idea that a significant level of trust is involved in the relationship.

Following are some of the behaviors that signify a trusting partnership is in place: (more…)

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

 

 

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

By; Eugene Fram   Free Digital Image

The title, 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.*  .

The CEO designation calls for an unwritten trusting contact with the board based on mutual respect, drawing from the symbolism that he or she is the manager of the operating link between board and staff. It is a partnership culture. However, a solid partnership does not allow the board to vacate its fiduciary and overview obligations. The board has moral and legal obligations to “trust but verify” and to conduct a rigorous annual evaluation of outcomes and impacts CEO has generated for the organization.

While the trust the board has in its chief operating officer can’t be described in exact quantitative terms, viewing it through the lens of a set of behaviors can give an idea of whether it is excellent, good or nonexistent.

Following are some of the behaviors that signify a trusting partnership is in place: (more…)

The Fantasy Nonprofit—Who Works There?

The Fantasy Nonprofit—Who Works There?

By: Eugene Fram                               Free Digital Photo

After three decades of immersion in the nonprofit culture, I occasionally allow myself to imagine what it would be like to start all over again. Assuming I were in the process of founding a new nonprofit I would have the authority to choose my own team! In this hypothetical, I could shape the mode of governance and select the participants I think would interface most effectively!

Here are some of the decisions I might make based on current realities:  (more…)

Once Again! Should a Nonprofit CEO Be a Voting Member of the Board of Directors?   

Once Again! Should a Nonprofit CEO Be a Voting Member of the Board of Directors?

BoardSource, a professional governance organization, reports that this question is one of the most asked. Google reports about eight million citations, in a brief .52 second search, related to the issue or related issues. The question continues to be debated, and the need for comment and opinion seems insatiable.

But here are the issues as I see them:

State Legislation: Most nonprofit charters are issued by states, and it appears that the vast majority of American nonprofits are governed by these regulations. California permits the CEO to be a voting member. Until a recent change, New York did allow the CEO to become a board member. The motivations behind the legislation center on preventing a CEO developing conflicts-of interest, especially as they relate to salary decisions. Also, there is a feeling among some nonprofit directors that the board must be the “boss.” This attitude can even go as far as one nonprofit board member’s comment: “We have a real board, we tell the CEO exactly what to do.”

It appears that the restriction is considered a “best practice.” Some nonprofits move around it by naming the CEO an ex-official member of the board, a member without a vote. However, there is a “better practice,” available where permitted by legislation.

Developing An Even Better Practice in a Nonprofit

Start At The Top: Allow the CEO to hold the title of President/CEO and allow the senior volunteer to become Board Chair. This signals to staff and public that the board has full faith in the CEO as a professional manager. In addition, the change absolves the senior volunteer of potential financial liability, not unlike the volunteer who unwittingly received a $200,000 bill from the IRS because it appeared he had strong control of a bankrupt nonprofit’s finances and operations.

Ask The CEO: Make certain the CEO is willing and able to accept full responsibility for operations. Not all CEOs, designated as Executive Directors, want the increased responsibilities attached to such a title and to become a board member. These managers frequently feel comfortable with having the board micromanage operations and often openly discuss their reservations.

The CEO Becomes A Communications Nexus: Under the CEO’s guidance, board-staff contact takes place on task forces, strategic planning projects, at board orientations and at organization celebrations. It openly discourages the staff making “end runs” to board members, not a small problem in community-focused nonprofits

Brand Image: As a board director, the CEO can be more active in fund development. The board position and the title can easily help the CEO to build the organization’s public brand image through the clear public perceptions of the board’s choice to lead the organization. This provides leverage to make greater use of the board-CEO relationship required to develop funds. It can allow the CEO to be the spokesperson for the organization’s mission and to quickly become the center for public statements when a crisis develops.

Peer Not Powerhouse: Probably descending from early religious nonprofits, its personnel may be seen by part of the public as not being “worldly.” They must be over-viewed by a group of laypersons that encounters the real world daily. The CEO, as a voting member and a board team peer, takes on increasing importance to reducing these attitudes. As long as the CEO works successfully as a peer not a powerhouse, there should be substantial benefits to the organization.

 

 

 

 

Does the Nonprofit CEO Need to Go?

Does the Nonprofit CEO Need to Go?

By: Eugene Fram   Free Digital Image

Recognizing and acknowledging that the current CEO is no longer helpful to the nonprofit organization is never easy to come by. Beyond malfeasance and under-performance, obvious reasons for initiating such a discussion, there are often other indicators: his/her modest leadership skills, ineffective discussions between the CEO and the board chair, criticism from external stakeholders, overemphasis on tactics unbalanced by a focus on strategies, etc.

Volunteer directors are loathe to be confrontational when a CEO has been marginally satisfactory for a number of years, preferring to avoid the “drama” that inevitably accompanies the “changing of the guard.” Directors know such a change may be confrontational and the action of the majority may even split the board. They also inherently know that a termination will require more board meeting time and negotiations, something that can interfere with job and personal commitments.

Yet this type of change can’t be accomplished in a clear and pristine manner — a textbook change is usually not the case. The board first needs to take three major steps.

Work with the CEO – In the best of all scenarios, the CEO’s contract may be expiring and/or she/h may be ready for a transition. The two parties can then arrive at an amicable agreement and timetable for change. Even in this less painful circumstance, there is the possibility that there may be resistance from some board members and staff. If the best scenario is not realistic, arrangements need to be made for the CEO’s termination, hopefully in a mutually satisfactory process.

Board to have its “boots on the ground” — The board needs to make an initial assessment of the qualities necessary for a successor and then move forward and decide to identify potential candidates internally or start to contact employment sources. This requires the board to have comprehensive knowledge of strengths and weaknesses of all managers now reporting to the CEO. It also assumes that the board, in succession planning, knows the capabilities of all personnel who may become successor candidates.

Board consensus – Volunteer directors, not having a financial stake at risk, may be swayed by a jumble of emotion and loyalties. Even though there is a respectable consensus as the process begins, it is not unusual to have some fallout among the directors who may change their minds prior to taking action. In addition, be prepared with a backup plan to address the outbursts of protest from staff, outside community and possibly industry.

The change at best will be disruptive, but the board must remain resolute, never losing sight of the overall rationale. The CEO position needs to evolve as the board reviews opportunities to grow and increase the level of the organization’s services. If the CEO is a “C” Level player, the board has an obligation to seek a “B” level candidate who will be comfortable with the nonprofit’s expanded scope. And if a strategic goal requires a merger or acquisition along with a mission modification, the board would need an “A” level player. A realistic vision of the organization’s growth direction will dictate the strengths required to effectively recruit a new executive leader.

Calming the waters associated with CEO change:

Keep the board resolute! – As stated earlier, volunteer directors can become emotional and succumb to outside pressures and protest. Be sure that they stay “on message” whether or not the vote was unanimous. Pay special attention to the relatively new board members who may not have internalized the organizational history as deeply as others.

Keep the CEO informed — Once the decision is firmly approved, inform the CEO as soon as possible and in person. Do not notify by letter or email. Be mindful of the contributions he/s has made to the organization and provide reasonable incentives (bonus, references, etc.) to help during the transition. Determine if it is politically and staffing wise to keep the outgoing CEO in a subordinate position, should some specific skills are needed.

Treat outgoing CEO with respect – She/h has made contributions and needs to be credited for them.

Move quickly – Even if the outgoing CEO stays in place for a while or an interim CEO is appointed, set a goal for finding the replacement in a matter of a few months.

Avoid litigation – Legal counsel may be needed to review the termination process to be certain all legal bases are covered.

A change of CEOs is a complex and emotional process. But when the board has identified a significant deficit in the CEO’s intellectual and/or managerial skills that may impede stability and/or further growth, it is of paramount importance that a new CEO be engaged. And it is the right time to make that happen.

 

 

How Prepared Are Board Members for the Challenges of the Nonprofit Culture?

How Prepared Are Board Members for the Challenges of the Nonprofit Culture?

By: Eugene Fram     Free Digital Image

Given that the typical tenure of a new board member is six years. And assuming that a new director’s intention is to make his/her unique contribution to the organization’s progress before he/S rotates off the board and is supplanted by another “new” director. With these factors in mind, I estimate that many volunteers enter the boardroom with little understanding of nonprofit culture. Even those who have served previously on business boards may initially spend valuable time in accommodating to the nuances of nonprofit practices and priorities before being poised to make contributions to the “greater good” that nonprofit create. Following are some areas that are endemic to nonprofits: (more…)

Applying Fundamentals of a Nonprofit’s DNA To Enhance Planning

Applying Fundamentals of a Nonprofit’s DNA To Enhance Planning

By: Eugene Fram

No two nonprofit organizations are identical. Each may reflect similar missions visions and values but—because of basic differences in their DNAs * —are clearly impacted by distinct characteristics that may have developed over a long time period.

Bob Harris, CAE, suggests a nonprofit’s DNA consists of five elements. * * Following are my thoughts on how they can be applied, if a nonprofit board wants to develop an understanding of the “real world” applications of the Harris DNA elements. This needs to take place prior to the planning efforts. (more…)

NONPROFIT BOARDS HIRE AND CEOs MUST ACT!

NONPROFIT BOARDS HIRE AND CEOs MUST ACT!

By: Eugene Fram

Whenever the time is ripe to select a new nonprofit CEO, I think of the old joke that says “…every person looks for the perfect spouse… meanwhile, they get married.” By the same token, nonprofit directors seek perfection in a new ED/CEO– and find that they must “settle” for less. But there are certain definitive attributes that are essential to his/her success in running the organization. With the pressures of increasingly slim budgets, fund development challenges and the difficulty of recruiting high quality employees, the 21st century ED/CEO must be action oriented and come equipped with at least a modicum of the following abilities: * (more…)

Is An Agile Approach Appropriate for Nonprofits?

Is An Agile Approach Appropriate for Nonprofits?

By: Eugene Fram             Free Digital Image

Many nonprofit organizations are going to have to transform themselves. They are required to adapt to shrinking donor funding sources related to the new tax law, shrinking state and local revenue sources and increased costs, often to serve larger groups of clients. One new potential approach to meet these challenges can be adapted from Agile Project Delivery Approaches. * Nonprofits may find they are venues for making faster decisions to seizing opportunities and reducing costs. Agile Project Delivery (APD) helps address these challenges by disciplined proven practices and through continuous stakeholder feedback.

Agile projects are based on four basic concepts: * (more…)