Nonprofit governance

Identify Nonprofit Staff Groups To Help Drive Organizational Change

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.

Board Member Networking Pays Off for Nonprofits

By Eugene Fram    

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: 

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Once Again!! A Nonprofit Board’s Most Important Job!

By: Eugene Fram

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.

Can Using Imperfect Data Assist Nonprofits in Defining Impacts?

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.

Yet funders are asking for these types of data because they know in the nonprofit environment that good program outcomes do not necessarily mean that the organization is creating impacts related to its mission. As one analyst reported: ** Clear measure of performance and impact will be required by donors (in the coming years). Over and over donors are looking for performance metrics. They want proof that you are doing a good job with their money. …. They want efficiency and effectiveness. Some nonprofits are:
• Talking about their accomplishments in meaningful and measurable ways.
• Demonstrating clear results for the people and causes they serve.
• Turning their annual reports into “impact reports.”

Are Nonprofits In a “No Win” Situation?

They are not in such a situation if they are willing to use imperfect metrics to track progress and drive change. Most funders will accept such measurement if the organization shows it is trying to develop impact data and learning from their experiences over time. With the data, nonprofits can assess impacts on such honorable but vague goals such as “enhance quality of life,” “elevate artistic sensitivity,” or “community commitment.”

The following five-step process can be utilized: ***

• Agree on relevant outcomes: The board and management should agree that the metrics reflect organizational impacts, not activities or efforts. Impacts should focus on a desired change in the nonprofit’s universe rather than a set of process activities.
• Agree on approaches to evaluation: Many way to measure—personal interview, mail questionnaires, sampling client records, comparisons with other agencies, comparing imperfect data with similar types of national data.
• Agree on specific indicators: Develop behavioral outcomes desired. Example: Mentions in the local newspapers can be used as an indication of public presence.
• Agree on judgment rules: Board and management need to agree at the outset upon the impact metrics the organization would like to achieve for each specific indicator that contributes to the desired mission related objective.
• Compare measurement outcome with judgment rule: Assess impacts and then compare results to mission related objectives to determine contributions to strategic objectives.

Who implements the process?

Few nonprofits will have the person-power or budget to implement the process, but there are other ways to accomplish it to develop impact results.

• Seek a local university class that will assist under the close direction of a professor or a knowledgeable volunteer professional.
• Engage a recently retired professional volunteer, provide him/her with an organizational title (e.g., Director of Measurement Projects) and seek funds from local foundation to cover costs.
• Ask a local service organization, like Rotary, to fund the project, as a demonstration for X number of years. A business organization might also agree to such funding.
• Seek a doctoral or masters student who might conduct the project in exchange for the ability to publish an article about it. Submit a funding grant to cover costs.

Without some ways of measuring their impact on clients, nonprofits can easily degenerate into monitoring staff activities, mistaking outcomes for impacts. That danger is much greater than the danger of using imperfect metrics. Efforts involving process can easily be measured, but an imperfect metric can be improved with experience over time to reveal impact.

* See– http://amzn.to/1OUV8J9  

**http://boardassist.org/blog/top-10-fundraising-trends-and-predictions-for-2016/

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

How Do Boards Develop Successful Business Practices In Nonprofit Organizations?

By: Eugene Fram    

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: 

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What attributes does a nonprofit board member need to be a Change Agent?

By Eugene Fram

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.

Not every nonprofit board change agent will have all the qualifications cited above and all the time necessary to devote to marketing the change. But from those who have succeeded, others need to know what is potentially involved.

* https://www.linkedin.com/pulse/champions-change-agents-advocates-dr-jack-jacoby/

A Nonprofit Board Has A Problem With A Recently Hired CEO – What To Do?

A Nonprofit Board Has A Problem With A Recently Hired CEO – What To Do?
By: Eugene Fram.         

With some possible variations, is the following scenario one that is frequently repeated elsewhere?

• The nonprofit board had engaged, Joe, an experienced ED.  The prior ED had been in place for 25 years, and was evidently unwilling to move to meet changing client needs. For example, the agency only offered counseling services five days a week, 9 am to 5pm, with hours extended to 8 pm on Thursday night. There were no client options for emergency calls during nights or during weekends.


• Joe had been in place for about 6 months making some changes, evidently in an authoritarian manner. The board heard about the staff’s dissatisfaction with Joe’s management style, met with Joe and the staff together and decided to leave Joe in place. It was assumed that he and the staff were capable of healing the rift.
• However, three outside forces then came in to play. First, a trade union heard about the staff’s dissatisfaction and assigned a recruiter to enroll the professional staff as a chapter of the union to bargain for wages, benefits and working conditions. (The union already had a local governmentally supported human services unit as a member chapter.) Second, the agency was a very old one, and a group of community leaders, fearing this problem would cause the demise of the agency formed an unrequested advisory group called, “Friends of ABC.” Third, the United Way gave the agency 6 months to provide evidence that the problems were subsiding, or it was going to substantially reduce, the large portion of the agency’s budget it provided.
• Joe’s management style did not change. He was terminated with a six-month pay package in order to avoid a legal suit.
 A ED/CEO then was fortunately hired, who was well known in the community, was an experienced social worker, and had union negotiating experience.
• The professional staff decided to join the union.
• The new ED/CEO remained at the helm of the agency for 25 year, bringing innovation and change. However, the professional staff remained in a union chapter. Mistrust was hard to breach.

This is a case with which I was involved as a board member. Based on your nonprofit board experiences, to what extent have you noted a similar pattern?

• A nonprofit board misjudges the requirements for filling the chief executive position.
• Organizational discord becomes a problem.
• The board is slow in taking action, by trying to give the new ED time to resolve the problem.
• The board then terminates the chief executive for failing to meet objectives or because there is still substantial organizational discord.
• Groups in the community become involved in the organization’s internal problems.
• The ED/CEO is fired.
• A ED brings change, but there is still a feeling of mistrust that permeates the communications of the agency for decades.  The union continues to be the bargaining spokesperson for the professional staff, long after most staff members involved with the situation have retired  or taken other positions

Nonprofit Board Members Must Be Vigilant

By: Eugene Fram

Based on the outcome of the Lemington Homes case precedent cited below, not being rigorous about their due care evaluation responsibilities can be peronally costly to nonprofit board mmbers.

The personal cost of director inattentiveness is made painfully clear in an important federal appeals court decision. The U.S. Court of Appeals decided the decision, in re Lemington Homes, on January 26, 2015 for the Third Circuit. … [T]hese difficult facts arose from a small, nonprofit organization. … Yet the standards for board members applied by the appeals court are quite clear.* (The case results) also addresses the appropriateness of punitive damages against officers and board members…).

The court determined that (15 of 17) board members took no action, despite clear evidence of deficient care to the institution’s residents. …[T]his breach of care, (led to) $2,250,000 in joint and several compensatory damages. As such, the decision offers a particularly valuable — and practical — board education opportunity.

The lack of nonprofit director and officer care is not unusual, possibly because board members are part-time volunteers, sometimes not understanding their potential liabilities.

Following are some examples of board laxity that I have encountered over the decades that I have been involved with nonprofits that might lead to personal liabilikty.

• Failure to assess staff realities – A social work staff became concerned with the authoritarian style of a newly appointed ED. The community style board felt that to avoid negatively publicity about the agency it needed to give the ED a second chance to improve relations. In the meantime a local electrical workers union heard about the problem and, without the board’s knowledge, began to take steps to unionize the agency’s social work staff. At the end of six difficult months, the staff voted to be unionized, and the ED was fired for failing to develop positive staff relationships. The organization’s United Way funding was temporarily placed in jeopardy — a reputation loss to the board members and management.

• Lacks an effective audit committee — I have encountered many nonprofit boards that don’t have an audit committee, even when it is a state requirement. This is especially prevalent when nonprofit boards feel too rigorous an examination indicates that the board does not trust management and staff. The other extreme that has been reported in the press is where the ED is clearly guilty of an offense, but the board refuses to take proper action and state authorities have to replace the board members.

• Board members don’t protect each other — I have encountered situations where the board has refused to purchase D&O insurance for its directors and managers. The faulty rationale was that the board is very close to the finances, and “(fraud) can’t happen here.” At the time, the board had responsibilities for a $400K annual budget, a $700K reserve fund and $24 million in real estate assets. Note, if a $1 million D&O policy only covered theboard member fines in the Lemington Homes case, the 15 directors together would be personally responsible for the balance, an aver each plus a reputation loss.

• Boards are not attentive to compliance basics such as: —
1. Making certain that all directors are thoroughly familiar with duties of due care; their responsibilities related to the IRS Form 990, the Intermediate Sanctions Act and the basics of fund accounting for financial reports
2. Requiring all persons involved with finances take two weeks vacation each year.
3. Making certain that the board and top management are serious about punishing those who use organizational resources for themselves.
4. Requiring board members to sign a conflict of interest statement each year.
5. Making certain that all non-routine expenditures over XX have signatures of two board members.
6. Making certain all persons with access to cash are covered by a surety bond policy.
7. Changing auditing firms or the partner in charge of the account every three to five years.

Positioning Sustainable Nonprofit Organizations for 2026 & Beyond

Positioning Sustainable Nonprofit Organizations for 2026 & Beyond

By Eugene Fram        

Many nonprofits boards have entered their 2025-2026 fiscal years. From a “35,000 foot viewpoint,” following are three integrated nonprofit board functions that should have special focus to assure stakeholders that the nonprofit has long-term organization sustainability.

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Reversing Traditional Nonprofit Board Barriers

Reversing Traditional Nonprofit Board Barriers

By: Eugene Fram         

Clearly the purpose of a nonprofit board is to serve the constituency that establishes it—be it community, industry, governmental unit and the like. That said, the “how” to best deliver that service is often not so clear. An executive committee, for example, can overstep its authority by assuming powers beyond its scope of responsibility. I encountered this in one executive committee when the group developed a strategic plan in an interim period where there was no permanent ED. The board then refused to share it with the incoming executive. In another instance, an executive committee took it upon itself to appoint members of the audit committee—including outsiders who were unknown to the majority on the board.

The fuzziness of boundaries and lack of defined authority call for an active nonprofit system of checks and balances. For a variety of reasons this is difficult for nonprofits to achieve:

  • A typical nonprofit board member is often recruited from a pool of friends, relatives and colleagues, and will serve, on a median average, for four to six years.   This makes it difficult to achieve rigorous debate at meetings (why risk conflicts with board colleagues?). Directors also are not as eager to thoughtfully plan for change beyond the limits of their terms. Besides discussing day-to-day issues, the board needs to make sure that immediate gains do not hamper long-term sustainability.
  • The culture of micromanagement is frequently a remnant from the early startup years when board members may have performed operational duties. In some boards it becomes embedded in the culture and continues to pervade the governmental environment, allowing the board and executive committee to involve themselves in areas that should be delegated to management.
  • The executive team is a broad partnership of peers –board members, those appointed to the executive committee and the CEO. The executive committee is legally responsible to act for the board between meetings–the board must ratify its decisions. But unchecked, the executive committee can assume dictatorial powers whose conclusions must be rubber-stamped by the board.

Mitigating Oversight Barriers: There is often little individual board members can do to change the course when the DNA has become embedded in the organization. The tradition of micromanagement, for example, is hard to reverse, especially when the culture is continually supported by a succession of like-minded board chairs and CEOs. No single board member can move these barriers given the brevity of the board terms. But there are a few initiatives that three or four directors, working in tandem, can take to move the organization into a high-performance category.

  • Meetings: At the top of every meeting agenda there needs to be listed at least one policy or strategy topic. When the board discussion begins to wander, the chair should remind the group that they are encroaching on an area that is management’s responsibility. One board I observed wasted an hour’s time because the chair had failed to intercept the conversation in this manner. Another board agreed to change its timing of a major development event, then spent valuable meeting time suggesting formats for the new event—clearly a management responsibility to develop.
  • “New Age” Board Members: While millennial directors may be causing consternation in some legacy-bound nonprofit and business organizations, certain changes in nonprofits are noteworthy. Those board members in the 43- and- under age bracket need some targeted nurturing. I encountered a new young person who energized the board with her eagerness to try to innovative development approaches. She was subsequently appointed to the executive committee, deepening her view of the organization and primed her for board chair leadership.

Board members who understand the robust responsibilities of a 21st century board need to accept responsibilities for mentoring these new age board people, despite their addictions to electronic devices.

  • Experienced Board Members: Board members who have served on other high-performance boards have the advantage of being familiar with modern governance processes and are comfortable in supporting change. They are needed to help boards, executive committees and CEOs to move beyond the comfortable bounds of the past. They will be difficult to recruit, but they are required ingredients for successful boards.
  • NEW Projects: Boards and the CEO must be bold and try new approaches to meet client needs. For example instead of going through a complete planning process for a new program the board must ask management to complete a series of small experiments to test the program. When a series of results are positive, the nonprofit can work on a plan to implement the program.

Conclusion: Individual board members working alone will probably become frustrated in trying to contend with the three overview barriers discussed. But working with three or four colleagues, over time, on a tandem basis, they can make inroads on the barriers. Meetings can become more focused on policies/strategies, new age board members can become more quickly productive, experienced board members can become role models and new programs and other projects can be more quickly imitated via the use of small scale experiments.