Nonprofit mangement

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.

 

 

Is An Agile Approach Appropriate for Nonprofits?

Is An Agile Approach Appropriate for Nonprofits?

By: Eugene Fram             Free Digital Image

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

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

What Makes A Great Nonprofit Board Member?  Some Unique Suggestions!!!

 

What Makes A Great Nonprofit Board Member?  Some Unique Suggestions!!!

By: Eugene Fram          Free Digital Photo

Viewers may question my taking time to develop this post when a Google search, using the above title, shows about 22 million listings recorded in 0.96 of second! The answer is that I located a board article with a few interesting insights, relating to for-profit boards, that also can be useful to the selection of nonprofit directors. * Following are some of the unusual ideas. (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…)

CEOs Need To Develop Partnering Relationships With Board Members

 

 

CEOs Need To Develop Partnering Relationships With Board Members

By Eugene Fram               Free Digital Image

When a CEO publicly introduces a board member as “my boss,” (as I have overheard more than once) there is a problem. It’s true that both parties—CEO and board member—have specific roles in the success of a nonprofit organization. But the hierarchy of authority should be deemphasized when it comes to interpersonal connections. The most effective mindset for CEO and directors is to view each other as partners in working to achieve the organization’s mission and their impacts.

The CEO’s efforts to cultivate such relationships are key. The following are some initiatives that he/she can utilize: * (more…)

Mismanagement Causes Huge Agency Failure—A Word To The Wise Nonprofit?

Mismanagement Causes Huge Agency Failure—A Word To The Wise Nonprofit?

By Eugene Fram

Rarely do failed for-profit or nonprofit organizations get a posthumous review of what actually went wrong. The collapse of one of the largest nonprofits in the US, the Federal Employment Guidance Service (FEGS) of New York City, is a noteworthy exception. Details of the causes that led to the human service’s demise were aired widely throughout NY media. * This organization had a $250 million budget, with 1900 employees who served 120,000 households covering a range of mental health and disability services, housing, home care and employment services.

Following are my interpretations of what its board should have done to avoid such a tragedy.

Failure of nonprofits: Failure of small nonprofits is rampant for a wide variety of known reasons. For example, “Nonprofits tend to be more trusting of their employees and have less stringent financial controls than their for-profit counterparts.” **

Outside of fraud being involved, the FEGS failure demonstrates that no nonprofit is too big to fail, probably because of a lack of board due care. Boards have to be acutely aware of the professional financial competencies of their CFO and CEO or well-meaning people who naively believed that loans could be easily repaid. There should have been a well-documented financial l strategy. The nonprofit closed with $47 million in loans/liabilities/debts.

Symptoms of impending collapse: Clearly with $47 million being owed, common financial ratios should have alerted knowledgeable board members to the coming catastrophe. But in the nonprofit environment, it is not unusual to that find directors, even business executives, are unfamiliar with the fund accounting approach used by nonprofit organizations.

In addition, contracting city and state agencies failed in their reviews of the organization’s finances. However, some nonprofits, either intentionally on unintentionally, can saddle contract reviewers and directors with so much information that even the most conscientious can’t spot problems. (Humorously, directors in this category are referred to as “mushroom directors” because like growing mushrooms, they are kept in the dark an covered with excrement. But this type of tactic was successfully used against IRS auditors in the Madoff debacle.)

Government or Foundation Contracts: In accepting these contracts, nonprofits must be realistic about whether or not there is enough money to cover full costs. They can’t be blinded by what the contract can do for the organization’s client. If adequate overhead funding is not attached to one or more of these agreements, they eventually can cause bankruptcy, because the nonprofit eventually will have to borrow or seek additional donations to cover them.

How Nonprofit Boards Can Avoid Problems

Review Financials: Current financials need to be given to directors monthly, or at least quarterly if the board meets less often. The very detailed budget data can often be difficult for those without budget experience. At the least, everybody on the finance committee needs to be able to intelligently review the income statement and balance sheet. Also they need to be aware that funding accounting permits some unusual twists—food donations, for example, can be included in revenues, based on an estimate of their value. Consequently, cash revenues and expenditures need to be a focus for directors’ analysis.

Make certain that financials are delivered on timely and complete bases. Problem Example: One CFO didn’t submit accounts receivable reports for nine months because he said he was too busy to compile it. Neither the board nor the CEO demanded issuance of the report. When finally delivered, it was clear that the CFO was listing a substantial number of noncollectable accounts as active ones. Both the CFO and CEO were fired, and the nonprofit had to hired expensive forensic accountants to review the impact.

Gaps Between Revenues and Expenditures: This is the ultimate red flag, if not followed carefully. It may vary from period-to-period in a predictable pattern that everybody understands, but if the gap continues, say for four to six months, strong board action is necessary.

Adopt written financial policies: These are necessary to make sure all concerned with finances are on the same page. Since interpretation is often required in financial decisions, nothing should be left open to broad interpretation.

Contracts with governments, foundations and others: Make certain that reimbursements for indirect costs are included. If not included, have a benefactor ready to step in to cover the costs.

An old Chinese proverb, “A wise man (or woman) learns from his/h own experience. The wiser man (or woman) learns from the experiences of others.” One hundred twenty thousands households and individuals lost services from an 80 year old human service nonprofit. There is much to learn from the collapse of FEGS.

* https://www.councilofnonprofits.org/thought-leadership/what-we-learn-when-nonprofit-closes-its-doors

**https://www.blog.abila.com/nonprofit-fraud-facts-2016-global-fraud-study/

Going For Impact: A Non-Profit Blueprint For the Second Half of the Year  

 

Going For Impact: A Non-Profit Blueprint For the Second Half of the Year

By Eugene Fram     Free  Digiatl Image

For organizations and individuals, the end of the calendar year is the traditional planning period – the time used for self-assessment, strategizing and putting in place “game plan” for improvement and growth for the 12 months to come.

For many nonprofits, June 30th is the end of the fiscal and planning year. Yet the blueprint also offers the same opportunities to focus on improvement and growth.

But in today’s volatile, hyper-competitive and uncertain environment, this one-a-year exercise isn’t enough.

It just isn’t. Especially for nonprofits. And their boards of directors.

Here’s the good news: The year’s midpoint – upon us now – is a great point for an interim review. It’s a good time to review your game plan. Develop a vision goes beyond reviewing current budget projections against actuals and other compliance requirements.

I have identified five areas of focus – the last being a kind of “action plan” you can use to implement what’s of interest. Adopting just one of the many suggestions can yield a substantial return on investment.   They are: 

  • Your Leadership
  • Your Talent Pool
  • Your Fundraising
  • Your Impact Data
  • Your “Fix-It” Points

(more…)