Trustees

Once Again: Who Should Be Involved in Fund Development and How?
id-100213583

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.

(more…)

Director Independence: a Nonprofit Board Issue?

 

Director Independence: a Nonprofit Board Issue?

By: Eugene Fram.        Free Digital Image

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. (more…)

How Does Cultural Intelligence (CQ) Impact A Nonprofit Board?
id-100334753

How Does Cultural Intelligence (CQ) Impact A Nonprofit Board?

By: Eugene Fram                   Free Digital Photo

There are many ways to assess the balance of capabilities on nonprofit board board members. EDs and board chairs are generally familiar with the implications of terms like IQ (cognitive ability) and EQ (emotional intelligence). New research has added a third characteristic— cultural intelligence or CQ. * Obviously, CQ comes into focus when boards are dealing with global or international issues. But its usefulness is still germane to community-based and/or domestically focused professional/trade associations. Making a change in board strategy is at best a challenging process. But when that plan collides with cultural differences, board culture will trump change. To paraphrase Peter Drucker’s well-known pronouncement—“Culture Eats Strategy for Breakfast Daily.” (more…)

Errors That Can Cloud Nonprofit Board’s Decision Making–Tread With Care

Errors That 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’s 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 approved the acquisition without sufficient review.  When the acquisition was consummated, the founding CEO of the subsidiary refused to take directions from the CEO of the nonprofit. In addition, the normal financial settlement of the project requires that a portion of the price be withheld, in escrow, pending adequate performance.  In this instance, the nonprofit 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: An Evergreen Board Problem?

Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: An Evergreen Board Problem?

By: Eugene Fram    Free Digital Image

Reposting a Viewer Favorite–Best Holiday Wishes to All My Subscribers

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 directors 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…)

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…)

When Nonprofit Missions Get Muddled

 

 

When Nonprofit Missions Get Muddled

By: Eugene Fram   Free Digital Image

It happens over time. A passionately conceived mission starts to drift from its original intentions. Stakeholders begin to view a nonprofit’s purposes from a different angle. There is a discrepancy between how the organization is committed to act and external perceptions of its current actions. Nonprofit boards need to be on the alert to such misalignments that can go unnoticed in the perceptual “fog” of daily challenges. It can limp along for years without acknowledging the impact of the client reality by which the nonprofit is being judged.   

(more…)

People Problems Can Put Nonprofits at Risk

 

People Problems Can Put Nonprofits at Risk

By: Eugene Fram   Free Digital Image

Like the Streisand song lyric, nonprofit people who need people must first have the know-how to choose and cultivate those people! If not, the risks to a board can range from modest to substantial. It all begins with making the right choices and vetting board and CEO candidates.  Most nonprofit board members know that they are only required to make one hiring decision—the engagement of the CEO. This is a process that always involves some risk factors. Take the case of the university that has expended substantial amounts to engage a CEO. After a brief “honeymoon period” it was determined that the candidate lacked the requisite background to move the organization forward. His resignation was forthcoming, and with it, a disruption that was costly not only in dollars but in board/faculty morale and public confidence.

A nonprofit board is usually confronted with several people risks. Following are some that should be noted by board members. (more…)

Business Governance Principles Make Sense For Nonprofits?

 

 

Business Governance Principles Make Sense for Nonprofits? 

By: Eugene Fram            Free Digital Image

Both for-profit and nonprofit boards can learn for the practices of the other. For decades,as an example, nonprofits have separated the duties of the board chair from those of the CEO.  This is still a major discussion for a large portion of business boards.*

A blue-ribbon group of public directors, including Warren Buffett, has developed a nine page “manifesto” that presents  their commonsense operating principles for boards of publicly traded companies.  (No group of national nonprofits has the financial resources or prestige to be able to issue a “manifesto.”)   

Their objective is, “To provide a basic framework for sound, long-term oriented governance.” ** My immediate response to the document was that about half of the guidelines can be easily translated into useful advice and/or caveats for nonprofit boards. The benefits as suggested by a Chinese proverb are, “A wise man learns from his own experiences, a wiser man learns from the experiences of others.”

(more…)