Non-profit board of directors

How Can Nonprofits Accommodate To External Influences? Some Field Observations

 

How Can Nonprofits Accommodate To External Influences? Some Field Observations

By Eugene Fram       Free Digital Image

Ruth McCambridge, former editor of Nonprofit Quarterly, points out “Our organizational management, (board) styles and structures are affected by the four external influences.” See paraphrased bolded items below. (http://bit.ly/1HSwrZY) Following are some specific field observations I have encountered that, over several decades, support her model relating to external influences.

The nonprofit’s mission field: McCambridge points out that arts organizations have dual have leadership models—artistic and business. However, unless specified which has final authority, the system can lead to continual conflict between the two; the artistic leader wanting the most authentic productions and the business leader concerned with budget realities. The final authority is often determined by which leader has the CEO title.

(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 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 board members decided such action would hurt the board member’s feelings. They were unwittingly accepting the “nice-guy” approach in place of taking professional action. (more…)

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? (more…)

Should Nonprofit Boards Be A Boot Camp for Corporate Executives?

id-100264513

Should Nonprofit Boards Be A Boot Camp for Corporate Executives?

By: Eugene Fram.       Free Digital Image

Alice Korngold, President of Korngold Consulting, suggests, “Nonprofit board service is the ultimate leadership opportunity, giving business executives the personal and professional skills they need… .“ * She suggests that the following abilities can be developed from such experiences. But will the neophyte board member become attuned to some inappropriate nonprofit practices, such as micromanagement,  and promote them on subsequent nonprofit board assignments?  Following are some of the different experiences the business executive might encounter on a nonprofit board.

(more…)

NONPROFIT BOARDS HIRE AND CEOs MUST ACT!

NONPROFIT BOARDS HIRE AND CEOs MUST ACT!

By: Eugene Fram               Free Digital Image

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 board members 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: *

  • Visionary: It’s all about the organization’s future. The ED/elect should bring or at least begin to cultivate a deep concept of where the nonprofit is, should be and what the trajectory should look like. He/she can do that by immersing himself in the mission field—reading widely and remaining in contact with regional and national leaders in the field. A state-of-the-art CEO should be available for consultation with colleagues with similar issues. Included in his span of vision are potential disruptions that might affect the organization– and how to help the board focus on and implement 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 the board. Board members must be alert to outside funding opportunities and the CEO, alert to funding 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 into the 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 their surrogates, foundations, etc. One area in which many nonprofit CEOs need improvement is communications with the business community. It goes beyond simply joining the Rotary or Chamber 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 directors don’t have. The executive director must be the CEO. Some nonprofits have given the chief operating person 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 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 are embedded in staff evaluations.

* http://nynmedia.com/news/lucky-13-what-should-we-expect-from-a-nonprofit-ceo

Unwritten Protocols for Directors Can Boost Nonprofits’ Effectiveness
id-100214085
Unwritten Protocols for Directors Can Boost Nonprofits’ Effectiveness

By:  Eugene Fram                                        Free Digital Photo

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.

(more…)

Director Independence: a Nonprofit Board Issue?

 

Director Independence: a Nonprofit Board Issue?

By: Eugene Fram       Free Digital Photo

In the best of all nonprofit worlds, every board member is an independent agent whose ability to make critical decisions on behalf of the organization is regularly uncompromised by outside pressures. This, unfortunately, is not always the case. Based on field observation I have concluded that questionable practices can plague nonprofit boards when social or political pressures are brought to bear on a board member. In governance terms nonprofit decision-makers should be “outside directors,” not overtly or covertly susceptible to management or board colleague personal pressures.

Discerning recruitment committees can screen candidates to be certain they are not subject to influences that might impair their judgment as board members. Lack of independence could easily divide and perhaps polarize the board as has happened in our country’s Congress. A candidate who is “sponsored” by a major donor and maintains personal ties with the donor can create a “hornet’s nest” for the recruitment group. There are no easy solutions to these problems.

Some typical examples of the apparent loss of independence:

• The legacy challenge. A board member is appointed to the board largely because his family has served on the board for generations, not because of his talent and/or commitment to the mission. If there are too many “legacies” on board, the optimal range of perspectives is narrowed resulting in inadequate discussion of potential actions.
• The chief executive does not keep a professional social distance from the board chair and/or other board members. For example, their families are frequently engaged socially.
• In “prestige boards,” a business or professional person persuades the board to accept a candidate who is business associate because he/she is a “good person” who needs board experience for networking purposes.
• A candidate for a directorship has significantly caused problems on another nonprofit board, but a current active board member, a friend of the candidate, wants him to be elected so that he/she can be given a second chance.

What Can Be Done? Sometimes Nothing: But:

• Clearly acknowledge the challenges where they exist and then seek new candidates without such encumbering ties.
• If possible, try to confront the situation directly, if it does not cause a schism within your board. Develop a policy, not a rule, which allows someone to open discussion if one of these issues arises.
• Make independence one of the characteristics desired for board candidates and clearly acknowledge what is meant by the term.
• A nonprofit board member can serve only one master—the organization’s mission. On the other hand, no nonprofit board that I have encountered is totally independent.
 As long as a board has enough members who are not beholden to other interests there should be no impairment in achieving the organization’s goals.

This type of subtle influence is rarely discussed, and to my knowledge, has never been researched. But, if left unattended by nonprofit recruitment committees, it can lead to political board schisms that seriously impact the organization.

Can A Nonprofit Organization Have An Operational President/CEO & An Executive Director?

Can A Nonprofit Organization Have An Operational President/CEO & An Executive Director?

By: Eugene H. Fram.      Free Digital Image

Yes, if the organization has the following structure:

Board With A Volunteer Chairperson
Full-time President/CEO With Full Authority for Operations
Executive Director for Division A
Executive Director for Division B

However this structure can be confusing to persons in the nonprofit arena. The executive director should have final authority for all operational matters related to the organization, except those designated for the board in the bylaws. For example, pensions plan changes.

The big question is who carries the CEO title. Some nonprofits, in their early stages, have a volunteer, part-time, President/CEO and an operational Executive Director. This signifies the volunteer, representing the will of the board, can have final authority in implementing board operational policies/strategies. This is not a good structure because the CEO title might lead to the volunteer having liabilities that other board members don’t have.

(more…)

How Do Nonprofit Boards Keep Stakeholders Engaged?
id-10062949

How Do Nonprofit Boards Keep Stakeholders Engaged?

By: Eugene Fram                       Free Digital Photo

First, exactly who are the “stakeholders” in the nonprofit environment? Most board members would readily define the term as clients, staff, donors and board members. But what about other participants such as external auditors and significant vendors? Surely a nonprofit that depends on a vendor to supply groceries can be hobbled if the food is not delivered properly. And, last but not least, the backbone of the organization — the volunteers! Many cogs in the wheel make the nonprofit world go around and need consistent and careful attention. Following are some guidelines for engaging all types of stakeholders:

  • Don’t marginalize, dismiss, or ignore a stakeholder: Unfortunately, for example, termed-out board members * are often dismissed in more than one sense of the word. After serving the typical tenure of four to six years, the retired board members may only receive boilerplate materials or fund solicitations. Any residual interest or enthusiasm for the nonprofit is not encouraged unless the retiree initiates a desire to remain connected. The assumption is that the past board members are content with the disconnect.

For those board members who have been active participants during their term, this tactic may actually be counterproductive from many points of view—talent, expertise and development possibilities. I have observed several cases in which this unintended marginalization has resulted in losing substantial financial support and needed talent. In each case,  the retirees have declined to help, using the excuse that they have been too far away from the activities of the organization. Boards must be creative in finding ways of reigniting the former directors’ commitment to the organization’s mission. This can be accomplished in a variety of ways—in an advisory capacity, forming “alumni” groups and/or by including them in social events and other occasions.

  • Recognize who may be a true partner: Such a partner can range from a vendor that has supplied the organization or a volunteer whose interests have moved to another nonprofit to a legacy board member who has developed new insights.  “It is generally easier to build consensus, request help and engender trust when those who support you are well-informed, candidly and truthfully.” **
  • Stakeholders must know about the nonprofit’s challenges and needs: Even the best-managed nonprofits have their ups and downs. During the latter periods, educating stakeholders about the issues can help to dissuade some to avoid posting job cuts and other actions.
  • Self–perpetuating boards can became insular and lose touch with other stakeholders: “These boards tend to retreat into a silo-or bunker-mentality that only serves to intensify bad habits and practices, as well as preclude consideration of other perspectives.” ** At difficult times, the board can tend to lose trust in the ED even when the problem is beyond the EDs control. If the board is at fault, it may look for a scapegoat on which to hang the root cause of the problem, often people in senior management.

* http://www.huffingtonpost.com/eugene-fram/how-does-your-nonprofit-r_b_5393736.html

** https://www.linkedin.com/pulse/what-sweet-briar-reminded-us-alumni-engagement-mark-w-jones

How Do Nonprofit Leaders Manage Unsolicited “Great Ideas?”

How Do Nonprofit Leaders Manage Unsolicited “Great Ideas?”

 

By: Eugene Fram                                                                                  Free  Digital Photo

What does a board member or CEO do when a donor or valued volunteer approaches him/h with a great idea that needs to be implemented at once? Since most of these ideas are what a Stanford professor terms bad ideas, the board chair and CEO are often between a hypothetical rock and a hard place!  To agree to a proposed project that is impractical or irrelevant to the mission will put the nonprofit at risk. But to reject an eager volunteer or potential donor could have serious donor related financial or interpersonal consequences.

When bad ideas are suggested, nonprofit directors and CEOs traditionally have hastily reviewed them—then prolonged the evaluation process hoping the presenter will lose interest in it. When an immediate reply is called for, a full review of the project will involve board and management time and effort to provide a fair assessment. If the verdict is negative, everyone hopes for the best!

Professor Jonathan Bendor of Stanford University, who studies tech organizations, proposes a solution that can be effectively used by nonprofit directors to address this “wicked” type of problem. *  (Persons in tech organizations are constantly generating new ideas, only a handful of which meet customer requirements.)

Example of such a “wicked” problem

The CEO of an association received the following e-mail, with a cc, to the board chair from a major donor. In addition, the donor immediately left a voicemail for the CEO, “Did you get my important e-mail?”

As you know, we are trying to get more people to our association’s evening lecture series on aging. I have noted that we have very few people attending who appear to be in the above the 65+ age cohort.   Obviously these persons could benefit from participating. The group is our most important tool to meeting the association’s mission.   I suggest we hire a bus to bring them to the meetings and to return them home.   To avoid having the bus going to each of their homes, we could establish easily accessible locations in various neighborhoods where they could meet and depart the bus.

The CEO then sent the following targeted rubric to his three senior managers and to four senior board directors, asking for their evaluations of the suggestion. Along with the board chair he wanted to be ready for a hostile response, if the suggestion is rejected.

Using A Rubric

A rubric is a format that uses established criteria for evaluating ideas and hopefully highlights innovative ones.   Following is one that has been formatted for the hypothetical situation described above in italics.

On a scale of 1 to 10, with one being low and ten being high, judge the above idea against all these criteria. Place a number value in the space after each item.

Example: Potential levels for each of the of the ten criteria: Little- one through four; moderately-five and six, and substantially-seven through 10.

  1. Supports the organization’s mission ______
  2. Is consistent with our vision and cultural values._____
  3. Can be implemented with no more than XXX in direct costs _____
  4. Can be implemented with no more than XXX in indirect costs ______
  5. Can require additional capital expenditures _____
  6. Can be implemented within the current staffing or board structure_______
  7. Can require a long trial period before it can be validated as having impact_____
  8. Can be supported by the CEO and/or a majority of the board_______
  9. Can be viewed by others in our field as being innovative______
  10. Will have significant positive impact for our clients.______

Comments: (Please express a summary opinion briefly.)

The form is then compiled anonymously. The CEO reviews the results with the board chair, and then reports to the donor or valued volunteer. If the idea is rejected but presented with sensitivity, it allows the originator to feel his/h idea has had a fair hearing. If accepted, the Chair and CEO can suggest plans for further study and challenges (perhaps additional financial support?) for implementation.

Bendor’s approach* can be well applied in both the tech and nonprofit environments. Most importantly, it provides a venue to help identify innovative ideas with the greatest potential for nonprofit mission success.

* https://www.gsb.stanford.edu/insights/jonathan-bendor-why-criticism-good-innovation