Trustees

Do Nonprofit Directors Face Cyber Security Risk?

Do Nonprofit Directors Face Cyber Security Risk?

By: Eugene Fram      Free Digital Image

Solarwinds and Target and others may seem far afield from the concerns of nonprofit directors, except for the giants in the area, like AARP. However, think about this hypothetical scenario.

A group of high school students hacked into the computer system of a local nonprofit offering mental health services and gain access to records of clients, perhaps even placing some of the records of other teenagers on the internet.

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The “Compliant” Nonprofit Board—A CEO Takes Charge Like a Founder!

The “Compliant” Nonprofit Board—A CEO Takes Charge Like a Founder!

By Eugene Fram              Free Digital Image

According to BoardSource, “ Founderitis’ and ‘founder’s syndrome’ are terms often used to describe a founder’s resistance to change. When founderitis surfaces, the source of the dilemma often is a founder’s misunderstanding of his or her role in an evolving organization.” * I would like to suggest that a nonprofit CEO also might suffer from the “founderitis illness,” sometimes with the board only being mildly or completely unaware of it. (more…)

How A Nonprofit Board Member Can Initiate Positive Change

How A Nonprofit Board Member Can Initiate Positive Change 

By: Eugene Fram              Free Digital Image

A nonprofit board member comes up with an idea that he thinks will do wonders for the organization. He is convinced that establishing a for-profit subsidiary will not only be compatible with the group’s mission but may even bring in new sources of revenue. It’s his ball–now what’s the best route to run with it? All too often in the nonprofit environment, initiating change can be as daunting as trying to get consensus in the US Congress! There are, however, certain interpersonal levers, which, if pushed, can accelerate the process–although one hopes that not all the levers will be needed in any specific situation.

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Good News for Nonprofit Board Members & CEOs—Examples From The Behvorial Sciences

Good News for Nonprofit Board Members & CEOs—Examples From The Behvorial Sciences

By Eugene Fram             Fee Digital Image

Behavioral economics, finance and marketing apparently are making significant strides in helping nonprofits to understand how to maximize their development efforts. Following are three studies that appear to have significant nonprofit interest.

(http://www.behaviouralinsights.co.uk/bx2015/rounding-up-the-latest-insights-from-behavioural-exchange-2016/(more…)

Is there truth in the statement that ALL nonprofits are actually businesses, and they need to be run like businesses?

Is there truth in the statement that ALL nonprofits are actually businesses, and they need to be run like businesses?

By Eugene Fram                Free Digital Image 

In my opinion, too many board and staff members in the nonprofit environment:

Do not realize that a nonprofit can focus even more effectively on “caring” missions, visions and values while operating under a business model. Many functions of a business and are the same for both types of organizations — financial operations, human resources, marketing, board governance, etc.

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Reversing Traditional Nonprofit Board Barriers

Reversing Traditional Nonprofit Board Barriers

By: Eugene Fram          Free Digital Photo

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 40- 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.

More Than Passion Needed in Prospective Nonprofit Directors

 

More Than Passion Needed in Prospective Nonprofit Directors

By: Eugene Fram         Free Digital Image

What nonprofit selection committee would reject a candidate who demonstrates passion for the organization’s mission?   I can attest to the fact that in many recruitment processes, an interviewee who shows strong empathy for the cause is a “shoe-in” for a board position regardless of any obvious weakness in other skill areas. By contrast, one who appears less than passionate about the organization’s mission can be overlooked or even eliminated from the list. (more…)

How Do Nonprofit Boards Keep Stakeholders Engaged?

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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.
  • Selfperpetuating 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

Once Again: Who Should Be Involved in Fund Development and How?

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Once Again: Who Should Be Involved in Fund Development and How?

 

By Eugene Fram                            Free Digital Photo

This is a perennial issue. Following are suggestions that can clarify questions related  to it.

The Board of Directors
• Board members should provide an annual donation, be able to generate contributions from other sources or donate time. (“give or get” policy).
• Even if cash donations are modest, 100% of board members should make a financial and/or support contribution each year. Funders look at this percentage as a surrogate measure of board interest and involvement in the organization.
• Two type of of board members should be directly involved in development. One is the talented person who is highly comfortable with the development process. The other is the person who may lead other board members to unknown sources. For example: relatives, neighbors, college friends, etc. who can contribute. At least three or four board members need to be in  the former category.  All board members are obligated to alert the CEO to other leads they may encounter and assist with introductions, if appropriate.

The CEO and the Board
•  There needs to be a robust partnership between the board and CEO if there is to be effective and efficient fund-raising. The CEO should act as a  lookout  for fund development potentials and then alert board chair  to support his/her activities, after the board has approved the project and is prepared to make a proposal.
• If the CEO is going to assume the lead role in approaching prospects, it may important that the person have the president/CEO title.

A Foundation
• With the aid of legal counsel, establish a development foundation. It needs to have its own small board and a volunteer as its leader.  The board needs to have full understanding that the parent board is responsible for fund expenditures.  Otherwise conflicts can arise between the two boards on fund deployments.  A foundation can also be helpful current traumatic conditions because its total focus is on fund development.

Nonprofit Board Recruitment: Can Google’s Process Apply to NFPs?

Nonprofit Board Recruitment: Can Google’s Process Apply to NFPs?

By: Eugene Fram                Free Digital Image

Following are Google’s hiring attributes that might be helpful to consider, if applied to nonprofit board recruitment as well as employee recruitment. * Nonprofits should especially consider them for board recruitment. Although nonprofits traditionally use an attribute matrix emphasizing skills such as finance, marketing and accounting, here are some others to consider.

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