A vital concern to the future of any nonprofit organization is frequently neglected. Responsibility for the lack of strategic planning must reside with the chief executive, board members and the tactical challenges that inevitably flow to the board.
Before a nonprofit board can begin successful strategic planning, it must: • fully understand the difference between strategic and tactical planning.* • have a fully engaged chief executive involved with the board in the leadership of the strategic planning process. • have a proportion of board directors with some specific types of strategic oriented experiences.
For example, one faith based organization recreational facility I know built a modern new building. However, the leadership was unaware of the quietly growing demand for preschool education in the area. As soon as the new building was opened, several parts of the structure had to be remodeled to accommodate a growing preschool population.
While I admit that planning for coming societal and behavioral, changes is difficult, like the one in the example, I suggest that any nonprofit board needs to take “inventory” of the following backgrounds of the current chief executive and board members.
How strategically capable is the organization’s chief executive? Does he or she stay at the leading edge of the field? Has the board recruited the chief executive for a strategic acumen or for just keeping the organization on a stable course?
How successful has an organization been in recruiting some of the following types of board members? 1. Those with enough time to become thoroughly acquainted with field related to the mission, visions, values of the organization’s operations. After all, many nonprofit board members serve on boards whose fields of focus are quite different from those in which they have working experience. 2. Those who can distinguish between a strategic plan and a tactical plan? 3. Those capable of critical thinking, questioning past assumptions as they relate to the future assumptions. 4. Those who have had successful strategic planning experiences at a high (not tactical) levels on other FP or NFP boards. 5. Those who have innate visionary abilities to assess future opportunities or roadblocks. 6. Those who have failed with past unsuccessful strategic plans but learned from their mistakes. 7. Those who can realistically project the financial challenges a strategic plan will develop. 8. Those with significant prior NFP or FP experience who can be models for younger directors with time restrictions who contribute via time limited task force assignments. But they need much more seasoning with understanding governance functions because they often rubber stamp board chair or CEO suggestions.
Addressing these recruitment issues in a forthright manner should enable nonprofit organizations to determine if they are strategically deprived. This move also might improve nonprofits’ records for strategic planning.
* “strategy is the action plan that takes you where you want to go, the tactics are the individual steps and actions that will get you there,
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 or CEO– and find that they must “settle” for less. But there are certain defined attributes that are essential to his/her success in managing the organization.
With the 21st century pressures of increasingly slim budgets, fund development challenges and the difficulty of recruiting high quality employees the ED/CEO must be action oriented and come equipped with at least a modicum of the following abilities:
Visionary: It’s all about the organization’s future.
The ED/elect should bring or at least begin tocultivate a deep concept of where the nonprofit is, should be and what the trajectory should looklike. He/she can do that by immersing himself in the mission field—reading widely and remainingin contact with regional and national leaders in the field. A state-of-the-art CEO should beavailable for consultation with colleagues with similar issues. Included in his span of vision arepotential disruptions that might affect the organization– and how to help the board focus on andimplement appropriate change.
Board Enabler:
The new chief understands the limits of his/h operational responsibilities and the governance overview role required by the board. To build trusting relationships with the board, she/h realizes that transparency is key.
Fundraiser:
The optimal fundraising relationship is a partnership between the CEO and theboard. Board members must be alert to outside funding opportunities and the CEO, alert tofunding opportunities from sources related to the mission field. Once an opportunity is identified, the CEO and the board work closely together to develop a proposal and to meet with the donor(s).If the organization has a development director, the person filling the position must be brought intothe discussion at an early stage.
Communicator:
To be organizationally successful, the Board and CEO must be in a position to interact with a variety of stakeholders: government officials, donors, vendors, clients and theirs surrogates, foundations, etc. One area in which many nonprofit CEOs need improvement in communications is with the business community. It goes beyond simply joining the Rotary or Chamber of Commerce groups. Nonprofit CEOs must have rudimentary knowledge of many businesses so they can interact intelligently with business leaders they encounter in development efforts. This information can be about specific organizations they are approaching or general knowledge acquired from perusing publications like Business Week or The Wall Street Journal.
Spokesperson:
Although some suggest that the volunteer president must be the spokesperson for the nonprofit, I suggest that the Executive Director/CEO must hold this position for several reasons
1. If a volunteer becomes a president/CEO, he/s may acquire some liabilities that other board directors don’t have. Some nonprofits have given the chief operating the title of president/ceo and the senior board person, board chair. This eliminates confusion that often surrounds the ED title when contacting business or government officials.
2.The volunteer president typically does not work in the organization daily and does not understand its nuances as well as the CEO.
3.In a crisis situation, the media may contact board members. It should be clearly understood that the CEO is the only person to comment to the media.
4. In ceremonial situations, it may be appropriate for the president to be a spokesperson.
5. The CEO needs to become the “face” of the organization because volunteer presidents come and go, some annually.
Team Builder:
She/h needs to build a strong management team, some of whom, over time, may become capable of becoming an Executive Director. The CEO, as head of the management team, needs to be sure all staff are performing well with some being bench strength to move to higher positions.
Tone Setter:
The CEO needs to set an ethical tone where everybody feels free to express their suggestions for improving the organization. This tone, in various ways, must also be communicated to all stakeholders by the Executive Director.
Performance Monitor:
Hopefully the board has a rigorous and fair system for evaluating the CEO and the organization, and the values of this system that are embedded in staff evaluations.
Frequently, I encounter nonprofit case stories surface related to inadequate oversight by nonprofit boards of directors. Some of the cases result in substantial dollar losses to the nonprofits. Following is my personal list of what reasonable board oversight means to attempt to help nonprofit boards of directors to avoid such losses.
At least half the board should be able to analyze the monthly or quarterly financial statements. Have voluntary information sessions available for those who do not have the skills.
Make certain that an external audit is conducted at least every two years, and the board is involved in the selection of the external auditor from a list of two or three suggested by board members and/or management. [i]
Be alert to the system used for developing new programs. Be wary when new programs are described such as “mindboggling.”
Be certain the organization has either a comprehensive assessment committee, finance committee, and/or audit committee. (Some states require nonprofits to have an audit committee once the organization has a certain annual revenue.)
Be alert to the development process for filing critical reports –Examples: 990s, employee tax withholdings and both state and federal tax reports.[ii]
Make certain the board has developed or is developing a current strategic plan.
Make certain that the organization has a knowledgeable CFO. No board member should have to worry about the safety of the organization’s assets.
Be especially alert when financial reports are frequently late or one or more directors perceive financial personnel are inadequately skilled.
If you don’t understand something, be ready to raise questions, even if the question appears to be innocuous
Nonprofit transparency is critical in the 21st century. “Trust But Verify.”
[i] For guidance in this process see: Eugene Fram & Bruce Oliver, (2010)“Want to Avoid Fraud? Look to Your Board,” Nonprofit World, pp.18-19.
Identify Nonprofit Staff Groups To Help Drive Organizational Change.
By Eugene Fram
Nonprofit executive directors Board Members tend to think of the staff professionals as individual contributors. These individuals are persons who mainly work on their own and increasingly also have to contribute as team players – for instance, counselors, health care professionals, curators and university faculty. However, many executive directors fail to recognize that these individual contributors can be grouped according to identifiable types, with differing work-value outlooks. Each group needs to be motivated differently to drive change in today’s fast moving social, political and technological environments. Nonprofit board members can use these groupings in their responsibilities for overseeing promotable staff members.
From years of observation of a variety of nonprofits the late Robert Pearse, a psychologist, and I have identified four major groups that have been labeled “Nostalgics,” “Maintainers,” “Producers’ and “Builders.” Executive directors and board directors who do not recognize the existence of such groups and the special needs to motivate and evaluate them differently may not achieve the forward motion or the performance goals that are required in the 21st century.
An identifiable group may dominate a department or it may have members in different departments. In many cases, a single group may include professionals with disparate personalities but whose work-value systems are similar.
Meet, for example, Sarah Thomas, a congenial department head who has spent the past decade in a nonprofit trade association, and Jack Engels, a brusque cost accountant in the association’s financial division. Sarah is well liked by the members of her department, while Jack is largely left alone in his work.
On the surface, Sarah and Jack appear to have little in common. Closer observation, however, shows that they are alike in one important aspect. Sarah’s department, which she has headed for the past six years, performs at a satisfactory level. Over the years, Sarah has tended to hire staff professionals who have work-values like her own. They are good – but not outstanding – performers. The group gets regular work done but rarely exhibits creative efforts or critical thinking. A recurring complaint from Sarah and her people is, “The department has too much to do.”
Jack Engels, the brusque accountant, also gets his work done, even though he shows little enthusiasm for his work. It is just a job, and he is averse to any change, except that mandated by accounting requirements.
Both Sarah and Jack are Maintainers, for both are comfortable with the status quo. If the executive director and/or board members were to allow the Maintainers standards to pervade the entire organization’s performance, it would likely stagnate and eventually decline.
Nostalgics are generally easy to recognize because they identify so strongly with the organization’s past history and culture. Many of them tend to be long tenured professionals whose performance has leveled off over time. They tend to take pride in being dedicated to the nonprofit but are uncomfortable with changes they perceive as breaking sharply with tradition.
The following strategies are helpful in working with Nostalgics: • Respond to their need to revere and emotionally relive the past. • Encourage the “willing worker” value system of group members. • Show how proposed changes will perpetuate past glory by contributing to organizational longevity and prominence. • Recognize that Nostalgics lack vision and prefer to avoid direct confrontation about the future direction of the organization.
Maintainers constitute the largest group in virtually all organizations, as illustrated by Jack and Sarah, they are average performers who typically have less tenure but also possess more currently useful skills than Nostalgics. They do only what is required by a job description or implied contract. Although they appreciate having a professional position, they have not internally accepted the self-directed performance behavior one typically associates with being a professional.
Several guidelines are helpful in working with Maintainers. • Be alert to the strong “legacy” value system at work in this professional group-all established processes can be successful in the future. • Depend on group members for low to average productivity but be aware that requests for increased productivity or increased self-management are likely to generate resentment and hostility. • Emphasize the pressures in the organization’s external environment that require professional performance improvement. Indicate how such improvements are important to long-term job security. • Set modest but attainable performance improvement goals on an annual basis. (Note: If a complete turnaround is essential, for the organizational survival, this slow improvement will not be adequate.) • Expect some continuing hostility whenever Maintainers feel new standards put pressure on them for sustained higher performance and commitment.
Producers are a varied collection of highly individual “type-A” workaholics who are motivated by their own goals. They tend to work on their own, but can be useful as team leaders if required for time limited projects. Because work output is the core of their existence, they see few differences between their personal and professional lives, sometimes leading to an unhealthy work-life balance. This can be a larger challenge if work forces are increasingly working from home. Producers will support changes initiated by the executive director that they perceive will enable them to produce more efficiently as individuals.
The executive director can try to motivate Producers’ effectiveness in the following ways:
Channel Producers’ vigorous efforts into organizational priorities by linking Producers’ special interests to the mission and goals of the nonprofit. • To the extent possible, provide Producers with the resources needed to be self-managing and productive. • Wherever possible, remove bureaucratic roadblocks to their productivity. • Agree annually on goals, and let Producers achieve them with a minimum of supervision and with appropriate rewards .
Builders, unlike Producers, are committed to furthering the goals of the organization, even at the expense of his or own personal goals. A senior nurse, who agrees to become an administrator, even though he or she prefers to care for patients, is an example of a Builder. Builders fall into two categories: vague visionaries and organized progressives. The former group’s attention span shifts rapidly from one detail of a proposed change to another. They lack sustained capacity for completing long-term performance improvement. The members of the latter group, organized progressives, are systematic thinkers who think quickly. Once they have a picture in mind, they can provide the executive director with knowledgeable and strong support.
An executive director can motivate the Builder group in the following ways: • Use the vague visionary Builders to help sell others when launching new performance programs. • Explain to organized progressives how their Builder values can contribute to a long-term systematic improvement plan. • Give organized progressives strategic follow-up assignments to ensure the new program will move forward. • Provide Builders with superior performance rewards..
If nonprofits are to continue to serve the nation in the current turbulent difficult time, executive directors and volunteer board members will need to provide strong support to their Builders and Producers and their work-value systems. In addition, they must also motivate the Nostalgic and Maintainer groups, using the suggestions cited above.
We hope this blog will spur board members, executive directors and president/CEOs to identify these four groups in their own organizations. Sources Eugene Fram & Robert Pearse (1991) “The High Performance Nonprofit: A Management Guide for Boards and Executives,” Families International, Milwaukee, Wisconsin. Judith Gordon (1991), “Organizational Behavior: A Diagnostic Approach,” Allyn & Bacon, Boston, pp. 205-207, 742.
Over decades of nonprofit board membership and consulting, I have rarely observed volunteer board members effectively networking with their peers to develop best board practices. Also rarely do I see them accompany management to regional or national conferences related to the nonprofit’s mission. These types of exposures are necessary to have groups of board members capable of making generative suggestions.
For board members who are willing and able to network, I suggest the following:
Many people believe as I do that a nonprofit board’s job is to find the best possible person to act as CEO of the organization, then stand back and let that person manage. If your board is in agreement, here are guidelines for action:
• Recruit Widely: Develop a rigorous vetting process. Well before the search begins, make certain that potential internal candidates have had an opportunity to demonstrate management acumen. If an internal candidate is somewhat less qualified than an external one, don’t let the decision be swayed by the fact that the internal candidate would be less costly to employ. • Understanding The Partnership: The need for the CEO and Board to operate within a partnership framework is well documented and accepted. However, the CEO is both the senior staff manager and a de facto representative of the board-staff relationship. Normal communications to the staff must be through the CEO. The CEO can’t be an insecure manager by withholding negative information from the board. • A Nonprofit Board Has An Overview Responsibility: Sometimes, this responsibility can devolve into micromanagement of the management and staff. If the overview, policy or strategy functions of the board are not being adequately executed, a lead director may need to be appointed to help focus on them.* • In terms of organization and CEO measurement, the board must seek data and information on outcomes and impacts, not become overly involved with process details. • Nobody Does His/Her Job Perfectly: The board needs to be highly tolerant of inconsequential CEO mistakes. However, if these mistakes persist over time, the board needs to assess reasons for their continuing. Major errors need immediate investigation, and the board members also must be honest with itself about their own culpability in its due diligence process. • The CEO And Staff Must Be Evaluated Fairly: In a nonprofit situation, this must be done in partnership, not hierarchically. Everybody must understand the “rules of the game.” Outcomes and impacts need to be related to the mission of the organization. • The Board and CEO Must Partner On Fundraising: An effective CEO must, in the 21st century, be the face of the organization to accomplish its mission. Nonprofit board members are part-time stewards. Consequently the CEO must accept a significant responsibility for fundraising.
These guidelines can be useful to nonprofit boards in self-evaluation projects. They can determine whether or not the board is facing the realities of standing back and letting the CEO manage. The CEO should have full operational authority, and the staff should function without an atmosphere of board micromanagement.
*International Journal of Not-for-Profit Law / vol. 14, nos. 1-2, April 2012 / p.57.
I have conducted nonprofit board recruitment projects. The boards with which I worked had rather similar challenges
.• They had concerns recruiting sufficient numbers of board members to fill their needs.
• Current board members, largely composed of younger people, in the 30-40-age range, had significant problems balancing work and family obligations and attending board and committee meetings.
• Attendance was sporadic. Although the boards were small, members really did not know each other. Another board member sent a work subordinate to attend board meetings. In anopther case, a nationally known board member never attended meeting and only occasionally met with the ED to offer advice. One one board member with decades of board experience admitted she did not know other members. The EDs and board chairs had significant power. One ED complained she was doing the work of operating the organization and operating the board, and She had too much potential liability.
• Although these organizations, with budgets in the $8-$10 million range were operating successfully, the EDs involved realized that they were in line for long-term problems if board recruiting didn’t change.
What to Do
• Consider establishing two boards, a board for governance and a consulting board. For the governance board, make certain the typical directors in the 30-40 year age range they have a good understanding of their work-family obligation to be able to devote time for the organization
.• For the consulting board, ask volunteers to work on projects that have a defined time limit. They will not be asked to be involved in more than one or two projects per year, an ideal inducement for millennials who are used to short bursts of activities. It may be necessary to recruit several persons with the same skills to provide coverage for several projects.
• Keep communications flowing to the consulting board like one would to the governing board. Have occasional social and educational events that allow the groups to meet informally. If the organization has a volunteer manager, this person should be charged to keep the communications flowing. Members of the consultingboard will only have occasional contact with the organizatio
• Overlay the traditional nonprofit skills grid with several time dimensions to recruit for both types of boards:
1. Recently retired people, both those traditionally retired and those who retired early, who may have time to be candidates for both the governing and consulting boards.
2. Seek individual contributors who may have more control of their time, such as doctors, lawyers, professors and small business owners.
3. Seek successful entrepreneurs who can schedule their own time, can resonate with the organization’s mission, vision and values and who want to give back to the community.
4.Beyond the time requirement, seek persons with experience on profit or nonprofit boards so they can share their board knowledge and become models for those having their first board experience. Their questions and behaviors can teach as much or more than formal new board seminars.
Summary:The traditional nonprofit board skills grid can still be helpful in the 21st century. However it needs to be extended to lifestyle and behavioral information for each board candidate, such as experiences with strategy development and critical thinking abilities. A more time consuming practice.
Every nonprofit needs a business plan to implement marketing, financial, human resources, etc. activities. The goal of the nonprofit business plan is to maximize the achievement of the organization’s mission within existing resources.
Strong service and business practices should be the hallmarks of any nonprofit board that effectively focuses on four business factors:
Be well acquainted with mission arena of the organization — This can range from current or previous employment in the arena or being a board member of an allied organization. The change agent must be able to “walk the talk.” Example: Ask the CEO of a counseling organization whether or not the treatment modalities used by the staff are current.
Must have a proactive style — Uninterrupted attendance at most board and committee meetings; asks questions that his/her board colleagues recognize as being perceptive ones; be well respected by peers internally and externally; responds well to the “give or get” policy of the organization and has a professionally cordial relationship with the CEO.
Needs to be patient and flexible — The frequent rotation of board personnel may mean that a process of convincing new board members that the change is in the best interest of the nonprofit’s clients. Be ready to change when outside circumstances require a modification of the shape of the effort.
Has excellent people skills — He/she will need to understand the various reactions to the change(s) being driven. These can range from board colleagues to management personnel, staff and even external stakeholders like funders.
Will “stay on message” in comments related to the change — Will be required to present arguments in a concise and understandable manner. Will be seen as a strong, but not overbearing, champion for the change.
The time issue — Most nonprofit board members are volunteers with full-time occupations and family responsibilities that must take time precedents. Becoming a nonprofit board change agent often requires these additional time commitments:
• Chairing a major board committee for a substantial time period. • Possibly taking personal responsibility for research/ background efforts. • Specialized training efforts may be required for other board members. • A continual process of updating colleagues and seeking allies to whom some of the work can be delegated. • Constantly being alert to legacy minded people who may impede forward moment toward the change goal.
How Nonprofit Boards Can Support Management & Staff and Refrain From Micromanaging!
By: Eugene Fram
The dilemma is common to nonprofit organizations. As start-ups, everyone aspires to do everything. Passion for the mission and determination to “get it right” imbue board members with the desire to do it all. But once the organization starts to mature, board roles shift to focus more broadly on policy and strategy issues. With the advent of qualified personnel to handle operations, there are many overview activities, sans micromanaging, available to board members. Following are some ways that boards can assist and demonstrate support for operations, CEOs and staffs without interfering.
Nonprofit Management 