Dysfunctional nonprofits

Lifestyle & Behavioral Information – Some New Ways To Seek High Performance Nonprofit Board Members

Lifestyle & Behavioral Information – Some New Ways To Seek High Performance Nonprofit Board Members

By: Eugene Fram            Free  Digital Image

Over several years, I have conducted nonprofit board recruitment projects. Two 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, board members really did not know each other, and, in another situation, a board member sent a  work subordinate to attend board meetings. A well-regarded board member never attended meetings and only occasionally met with the ED to offer advice. One experienced board member admitted she did not know others involved. In both instances EDs and board chairs had significant power. One of the EDs 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 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 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 consulting board will only have occasional contact with the organization.
• Overlay the traditional nonprofit skills grid with several time dimensions to recruit:
1. Recently retired people, both those traditionally retired and those who retried 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.
• Beyond the time requirement, seek persons with experience on for-profitt 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 seminars.

Summary
The traditional nonprofit board skills grid can still be helpful in the 21st century. However it needs to incorporated lifestyle and behavioral information for each board candidate. These are important candidate attributes that must be thoroughly vetted.

 

 

Too Much Information Can Cloud Nonprofit Board’s Decision Making–Tread With Care

Too Much Information Can Cloud Nonprofit Board’s Decision Making–Tread With Care

By Eugene Fram            Free Digital Image

In this age of information overload, nonprofits need to continually scrutinize the quality and source of the material received in preparation for major decisions. Since directors often come without broad enough experience in the nonprofit’s mission arena, they may not be prepared to properly assess its progress in moving forward–and not equipped to make relevant comparisons with similar nonprofits.  In addition, naive or unscrupulous CEOs and highly influential directors may inundate their boards with information and data as a  distraction tactic to keep them busy in the “weeds,” reviewing what has been presented.  Board members need to avoid donning “rose-colored glasses” when assessing proposals from these sources.

I once encountered a nonprofit whose board was about to acquire a for-profit organization, headed by its founder.  Pushing for the “deal” were the nonprofit CEO and an influential board member who were not, it turned out, capable of the due diligence needed for a project of this complexity. But the board accepted their work without question.  When the acquisition was consummated, the founding CEO of the subsidiary refused to take directions from the CEO of the nonprofit. In addition, although the normal financial settlement of the project requires that a portion of the price be withheld pending adequate performance, the nonprofit had paid cash for the acquisition.  Based on  a lack of performance, the operation was finally closed with a substantial loss. (more…)

Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: A Complex Problem

Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: A Complex 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 director 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 director’s feelings. They were unwittingly accepting the “nice-guy” approach in place of taking professional action. (more…)

Nonprofit Managers: Be Careful Who to Invite to a Meeting!

Nonprofit Managers: Be Careful Who to Invite to a Meeting!

By: Eugene Fram         Free Digital Image

Most nonprofit CEOs would agree with the findings of a recent McKinsey survey that attempts to gauge the productivity of business organizations’ meetings. * The results of the probe showed that 61% of the respondents thought that at least half of the time spent around the table was non-productive.

Nonprofits can benefit from the study by considering the various roles played by the participants while attending operational (not board) meetings. They advise the committee nonprofit chair to think twice before inviting people to attend. Following in italics are the roles recommended in the survey. After each, I project how these can be useful in identifying who should be present at nonprofit meetings. (more…)

Eliminating the Nonprofit Board’s Addiction to Micromanaging

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Eliminating the Nonprofit Board’s Addiction to Micromanaging

By: Eugene Fram

Micromanaging is the DNA of many nonprofit boards. It all starts with the community model culture of start-up periods. Board members have to assume staff roles to drive the nonprofit operations. But it often continues long after an adequate staff is in place. By habit, the board still focuses on operational details—also known as “reviewing the weeds.”  I recently observed a board that was making a policy decision about the change in timing of an annual development event.   Once the decision was made, the directors continued a “weed type” discussion about about table locations, invitations and other issues that were in the job of management to implement. The nonprofit is about 50 years old and has a budget of $10 Million with a 100 person staff. (more…)

How Can Nonprofit Boards Overcome the Inertia of Certain Directors?

How Can Nonprofit Boards Overcome the Inertia of Certain Directors?

By: Eugene Fram

Making major changes in mission, board structure, management or other significant matters are difficult. The typical nonprofit board will be divided into several groups on the issue: 1) directors who want change, 2) directors opposed to change, some strongly opposed and 3) what I call “process directors,” persons uncomfortable with major decisions who always want more data or information before voting. (more…)

Big Data Are Great—But Imperfect Metrics Work for Nonprofit Boards!

 

Big Data Are Great—But Imperfect Metrics Work for Nonprofit Boards!

By Eugene Fram

Nonprofit boards need to expand their evaluations of nonprofit managers and their organizations adding more behavioral impacts * to their evaluations.

For example, a nonprofit might count the number of volunteers that have been trained. But boards must go to the next level in the 21st century.
In the case of volunteers, they must seek to understand the impacts on those trained. They need, for instance, to understand how well these volunteers are assisting clients and how they are representing the nonprofit to the clients. The training is a process, but it determines their relationships with clients and yields impact data.

Qualitative data must be developed to the next level, and the average nonprofit CEO will argue that he/she doesn’t have the staff or expertise to develop impact data. Engaging an outside organization to complete a simple project can cost thousands of dollars. (more…)

How Often Do Nonprofit Board Members Need to Question Strategic Norms?

 

How Often Do Nonprofit Board Members Need to Question Strategic Norms?

By Eugene Fram                Free Digital Image

A new nonprofit director has a lot to learn. Considering that his/h term of service will be relatively short (typically four to six years), he/s must quickly learn the “ropes” to participate in a meaningful way. In this process, colleagues and leadership will acquaint him/h with prevailing board systems and culture—often ignoring the depth of expertise she/h can employ. Example: An expert in financial strategies may be asked to assist the CFO with accounting details, far below the person’s skill level. Oftentimes the new board member also is greeted with a mantra that says, “We’ve always done it this way.” As the director moves in his path from novice to retiree, during a short tenure, there is little opportunity to suggest innovations that differ from the accepted fundamentals and to successfully advocate for change. (more…)

Can A Board Member Ever Wear Two Hats?

Can A Board Member Ever Wear Two Hats?

By Eugene Fram

Although this is not a good idea for nonprofit organizations, it is not an unusual occurrence, especially among start-ups. A director in a start-up nonprofit will need to assume some staff responsibilities as a volunteer. But he/s will need to organizationally report to the CEO. (more…)

Can Nonprofit Boards Strategically Reinvent Themselves?

Can Nonprofit Boards Strategically Reinvent Themselves?

By: Eugene Fram      Free Digital Image

Not many nonprofit boards look to strategic renewal/reinventing as viable options. Dedicated to a specific mission, boards may merge with related organizations as their prospects decline or simply declare victory. March Of Dimes has been a classic case of redefining its mission when The Salk Vaccine limited widespread polio epidemics. Today, the nonprofit’s programs serve people with disabilities: children, adults, seniors, military personnel and veterans.

Basic Motivation Problems

Board Turnover & Leadership – According to the 2015 BoardSource report, Leading with Intent, “ Board leadership is not a lifetime commitment, with boards chairs and other officers being subject to term limits.” In the study, sixty-nine percent of board chairs only had terms of one or two years, not a great deal of time to lead strategic changes.

Numbers of clients are declining and/or the opportunities for growth are limited — Those offering psychological counseling services have faced declining client populations for a number of years, as new medications have become more useful. Some have combined with other nonprofits offering a wide range of human services while others have closed. A few of the nonprofits might have survived if they had anticipated the potential impact and had developed viable services, for example, offering counseling services to private or public school systems.

Need But No Market – In the human services arenas, there are always fundamental needs on which to base a mission. Working within a structure where the clients for the nonprofit’s service are not the funders, these needs are often unmet. Example: Early childhood education is a well-known need, but securing sufficient funding remains a significant barrier to delivering the services.

Guide to Nonprofit Strategic Renewal – An Underused Option http://bit.ly/1mQKMGi

1. Select growth applications that connect with people emotionally. – The Easter Seals renewal focused on people with physical disabilities and special needs, a natural outgrowth of working with polo victims. The nonprofit organization was well aware of the emotional reactions and public appeals that resonated with the mission focused staff and volunteers.

Anticipated success can also be a motivator for staff and volunteers. The ALS Ice Bucket campaign in 2014 is an example of drawing attention to a challenge through a gimmick with a substantial emotional appeal. It provided significant additional funding that enabled the organization to rethink its research prowess. Whether or not the appeal can continue to be utilized in coming years remains to be seen. At the least, it is added evidence to the power of emotional appeals to generate the potential for strategic renewal.

2. Treat strategy as a dialogue as opposed to a ritualistic, documented-based planning process. – Strategic renewal in the nonprofit environment often occurs under crisis conditions. Consequently, starting with a ritualistic strengths and weakness analysis is not the way to begin strategic planning at these times – complete decline is probably at hand. The issue has to be what resources can be salvaged from the current mission to enhance the new one.

If the strategic process is one that is reviewed every three to five years, every nonprofit organization should be honest about answering this generic question or similar ones: Who would miss our organization if we ceased to exist? Broad considerations of the responses and subsequently investigation can lead to open discussions to consider future opportunities for strategic renewal. As noted before, there are many new missions to address unmet human needs.

3. Use experiments to explore future possibilities. – Nonprofit organizations often shy away from using financial and human resource assets for experimentation. A field ethic that prevents a nonprofit from experimenting is an unrelenting focus on directing resources to current client services. Where strategic renewal is required, or seen as an opportunity, outside funding needs to be developed, except when the organization has unusual reserves available for experimentation.

4. Engage (external and internal) leadership (communities) in the work of renewal. – “Successful strategic renewals … need to be broadly based so they can engage managers (and staffs) … in the organization. Creating (internal and external) leadership communities around the renewal project allows (board) leaders to learn about the future by doing and win over potential resisters.” The support of the chief operating officer is critical. If he/s is not behind the renewal, the board will have to make a forced change or wait until a planned succession takes place.