Strategic planning

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!

(more…)

What Role Should Board Members Play in Overviewing Nonprofit Management/Staff Talent?

NonprofitWhat Role Should Board Members Play in Overviewing Management /Staff Talent?

By: Eugene Fram Free Digital Image

Nonprofit boards rarely develop an in-depth strategy for assessing its organization’s human capital. Some will keep informal tabs on the CEO’s direct reports to prepare for the possibility of his/her sudden departure or is incapacitated. Others –smaller organizations with fewer than 20 employees—need only a basic plan for such an occurrence.

Need for Strategy: In my view, maintaining a viable talent strategy to assess staff and management personnel is a board responsibility, albeit one that is often ignored. The latter stems from the constant turnover of nonprofit directors whose median term of service is 4-6 years—hardly a lifetime commitment. Like for-profit board members whose focus is on quarterly earning results, their nonprofit counterparts are likely more interested in resolving current problems than in building sufficient bench strength for the organization’s long-term sustainability.

(more…)

How Can Nonprofits Accommodate To External Influences? Some Field Observations

By Eugene Fram Free Digital Image

Ruth McCambridge, 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…)

Are Your Nonprofit’s CEO Succession Plans COVID Updated?

By:Eugene Fram Free Digital Image

“CEO succession planning is one of the most important responsibilities of a (nonprofit) board…” * Yet others and I find it to be a neglected responsibly. In the for-profit arena, a mistake in choosing the wrong CEO, “leads to a loss of $1.7 billion in shareholder value in addition to a loss of organizational confidence and momentum.“ * Choosing the wrong nonprofit CEO in a situation when I was a board member set in motion a year of staff turmoil, lost growth potentials, decline in the nonprofits reputation and an uncalculated financial loss. After a post-turmoil CEO took the helm, the agency prospered for more than twenty-five years.

Based on a national study of for-profit boards, following are some COVID-19 CEO succession questions that nonprofit board members should consider now. *

Is our emergency successor still right for this environment? Is the internal successor capable of managing under turmoil conditions? If not, a new external person needs to be contacted. Often this turns out to be a consultant in the mission field. It’s important to reevaluate all external options now for the CEO’s ability to manage under unprecedented conditions.

Is our CEO role specification still right? Over several decades, I have encountered a number of what I would call, “mind-the-store” CEOs. These persons have: nice personalities, keep expenses within budgeted incomes, but are not proactive in seeking innovation and change. Unfortunately, these types of CEOs can satisfy their boards for decades under what might have been considered normal circumstances.

Because CEOs have a better grasp of current mission-related trends, boards and CEOs should be planning for the Post-COVID 19 period, even while addressing unusual operational challenges.

Do we have the right people in our near-term succession pipeline– are they prepared? The selection of the CEO is the only employment decision that nonprofit boards make. But they are also required to overview the near-term staff succession pipeline for those with very special talents. For many nonprofit boards, this involves an uncomfortable discussion of who might be in line to succeed the CEO or other senior managers should any become temporarily incapacitated.

Is your board ready and able to have these discussions? Under current tenure requirements, the average tenure for nonprofit board members centers around six years—two six-year terms or three two-year terms. As a result of this brief tenure, many board members may feel that simply raising the question of CEO succession suggests a lack of the CEO’s abilities to manage It also may cause board conflict, if suggested. However, it is simply the members’ due diligence responsibility and, if ignored, can cause strategic problems for the organization.

First Steps: *

· Review your leadership/experiential criteria. The abilities a nonprofit CEO will need may change substantially. Working with the CEO, nonprofit boards need to take the lead in surfacing these criteria, for example, better understanding of IT requirements.

· Ensure that your emergency (succession) plan is more than just a single name on an envelope. It’s a good idea to have a process ready for an unplanned exit by the CEO. But CEO experience criteria should be reviewed in depth every two years to be current.

· Do now what you normally would put off for later. Start listing the criteria that a CEO will need to operate successfully Post COVID -19. It will enable the board to consider the changes taking place. Also the CEO can have some guideposts on how his/h abilities need to be enhanced.

* https://corpgov.law.harvard.edu/2020/07/26/ceo-succession-plans-in-a-crisis-era/

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

By: Eugene H. Fram

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…)

Questions For Nonprofit Board Meetings—And Why They Are Needed

Questions For Nonprofit Board Meetings—And Why They Are Needed

My greatest strength as a consultant is to be ignorant and ask a few questions. – Peter Drucker

By: Eugene Fram

Knowing the right questions to ask at a nonprofit board meeting is a critical part of a board member’s responsibility. Following is a list that, as a nonprofit director, I want to keep handy at meetings. * I also will suggest why I think each is important in the nonprofit environment. Compliance and overviewing management alone do not guarantee success. (more…)

Developing A Sustainable Nonprofit–Post Covid-19

By: Eugene Fram Free Digital Image

An analysis of the current pandemic environment should be a clarion call for nonprofit board members. It can be summarized in a couple of sentences:

Great crises tend to bring profound social changes, …. . We seem to be at another point when society will make adjustment for good or ill. *

As nonprofit board members or managers, are you ready to identify and confront these adjustments as they already have developed or will challenge your nonprofit within the next 10 years? Hopefully, a large portion of nonprofit boards will accept the challenge and begin strategic planning for the post Covid 19 period now! (more…)

Nonprofit Board Discourse: a Meeting of the Minds??

By: Eugene Fram Free Digital Image

Several years ago, a nonprofit board member complained to me that there was too little “conflict” at board meetings. Too few hands were raised to challenge or simply question the efficacy of certain important agenda items. Having participated in hundreds of nonprofit meetings, I have observed that this laissez-faire response still typifies a significant number of board member’s attitudes, especially for items that deserve vigorous discussion. Why is that? And why can the term conflict be perceived as an asset to an organization that is determined to move forward?

Below are some answers based on my own experienced in the nonprofit environment. (more…)

What Nonprofits Can Do To Maintain Liquidity

By: Eugene Fram Free Digital Image

It doesn’t take a pandemic to make a nonprofit question its capacity to survive. Events such as a loss of major funding, a damaged reputation, huge unpredicted expenses could swiftly reduce the lifeblood of the organization, plunging the nonprofit into deep concern for its long-term survival.

Any nonprofit CEO has the data to predict how long the organization can stay afloat without income. This, however, would be only one rough measure of the nonprofit’s liquidity. Board members need to take the discussion further. They need to realistically appraise total liquidly from fixed/variable expenses and income venues as they relate to mission accomplishment. (more…)

Business Board Experts Offer Nonprofit Board Gems!!

By: Eugene Fram Free Digital Image

The wise person learns from his/h own experiences. The wiser person learns from the experiences of others

The CEO Forum published an article covering the governance views of five business board members, known for their wisdom and vision. Following are some of topics in the article that relate to nonprofit boards. *

Good governance is dependent upon well-curated boards. This means that nonprofit boards must look beyond the functional competencies (e.g. accounting, marketing, law, etc.) for candidates. Within these groupings, they need to seek candidates who have strategic outlooks, are comfortable with critical thinking and have documented leadership skills. This requires recruiting and vetting efforts that go well beyond the friends, neighbors and colleagues who traditionally have been the sources for board positions. Also related is the issue of board succession, since that many will leave the board after a four to six year period. The current board(s) has an obligation to make rigorous recruiting and vetting become part of the nonprofit’s culture.

Assessing long-term sustainability. In the past, nonprofits have projected longevity because there will always be a need for the services or products they provide. This is no longer an assured proposition. Nonprofit day care centers now must compete with those that are for-profit. Improvements in medication have decreased the need for individual counseling and many new technologies can quickly solve problems that are embedded in the nonprofit’s mission.

Review governance best practices carefully! Know who is suggesting them and make certain they are appropriate for a specific organization. For example, some experts suggest that executive committees should be eliminated. However an executive committee that is responsible for a slim board committee structure can be effective in driving change and promoting better communications throughout the organization. **

Changing public accounting firms. Nonprofit accounting practice suggests changing public accounting firms about every five years. However one expert suggests, “It is important to ensure that judgment areas such as nonGAAP disclosures are well-defined, supporting calculations are well-documented and that the definitions and calculations are consistent across reporting periods.” At times of accounting firm change, nonprofit board members need to be able to add these issues to their question that they pose to management.

Ethics & Compliance. Like business organizations, nonprofits are subject to significant lapses in ethics and compliance. One study of nonprofit fraud found that it 46% involved multiple perpetrators. *** As shown in the recent Wells Fargo debacle, establishing the tone for rigorous applications of a standard needs to start with the board and flow through all management levels. In the current environment, audit committees have to be especially alert and take immediate actions when red flags arise in either the ethics and/or compliance areas. In my opinion, a nonprofit audit committee that meets only once or twice a year is not doing the necessary job.

Strategy. The nonprofit board has an obligation to help management see “around the next corner.” This involves board members assessing coming trends and sparking civil and meaningful board and committee discussions.

Board member comfort zones. Like their business counterparts, few nonprofit board members are “comfortable testing how to rock the norms.” It is easier to acculturate new directors to the current norms, a process that is inward bound and self-defeating. But a start can be initiated with questions such as, “If we were to start a new nonprofit across the street, what would it look like and who of the present board and a staff members would we ask to join us?

*https://www.forbes.com/sites/robertreiss/2017/05/22/americas-five-governance-experts-share-perspective-on-boards/#2a2ee326659a

**For documentation see: https://goo.gl/QEL8x3

***https://nonprofitquarterly.org/nonprofit-fraud-its-a-people-problem-so-combat-it-with-governance/