Nonprofits:”What 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 members 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.
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 adjustments 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!
Board Challenges – Post Covid-19
As I view the situation, the pandemic has already brought about changes in four areas that can impact the long-term sustainability of a nonprofit. There are others that can be added to my four, for example Fund Development—but this topic has been well covered elsewhere.
Advocacy for Post Covid 19 needs to be more than an occasional Tweet or two. Some nonprofits will continue to advocate for issues that relate to its mission, vision and values. But they may have to take substantial stands on broader topics.
With 5G communications expanding the connections in the world, the post Covid-19 period will present opportunities for nonprofits to advocate, where appropriate, on social topics that may not be strictly germane to their mission—e.g., health care, social justice and “Me Too” issues.
At the least, each nonprofit should have reviewed policies that enable management and boards to respond quickly to pandemic generated movements that are not currently on the horizon.
Board members have an obligation to make certain critical information is secure. It requires more specific policies than the requirement to have an insurance policy in the event a hacker steals a membership list.
Developing these policies requires some basic IT knowledge. If some board members need a “review” of these basics, the board should offer an educational opportunity to upgrade their knowledge.
Generation Z (Gen Z)
Gen Z, born between 1995 and 2015 (2020 in some reports) has already started to impact the workforce. The Gen Z population is currently 86 million and is expected to grow to 88 million in the next 20 years due to migration. **
In comparison with the millennial cohort, Gen Z:
Wants more autonomy and independence. A Gen Z staff will readily accept positions that allow them to work from home, especially if it yields a healthy work-life balance. This will cause nonprofit boards to review policies related to office space requirements while evaluating “at home” productivity. Some staff may choose to be located elsewhere in the United States or internationally.
Are less team-oriented than millennials. Being more competitive than the previous generation, financial compensation is more important. They have been raised in some difficult economic times, and their Covid-19 experiences will no doubt heighten their motivations to seek higher financial compensation. To engage the best and the brightest of the Gen Z cohort at nonprofit salary scales, organizations will have one other major attraction. Nonprofits are mission (or purpose) driven, “Showing the positive impact their work will have on society can be (an attraction) for Gen Z when it comes to choosing a job.” ***
Cultural or Technical Vulnerabilities
These are the challenges that may be in an infant stage but can have significant impact on the organizations polices. The March of Dimes movement changed its focus to healthy moms and strong babies after the development of a polio vaccine. As psychiatric drugs improved, the boards and managements of a number of face-to-face counseling nonprofits declined or they broadened their missions. After simmering for years, the “Me Too” movement has caused colleges and universities to be modify their policies, sometimes in a rapid manner.
Many of these vulnerabilities can emerge quickly and affect a nonprofit’s sustainability. CEOs should lead with a visionary manner and boards need members who can think broadly to respond with financial or intellectual support. This process has been described by a Harvard Law publication as future-proofing.**** “This involves thinking though the impact of today’s changes on future outcomes andfuture needs.” The authors admit asking management to take on this planning effort within unprecedented uncertainty may hinder its ability to react short term. But they feel it is worth the risk to provide the challenge to management’s long-term thinking.
The Bridgespan Group, supported by The Rockefeller Foundation, completed an exciting research study. The results identified “six elements common to nonprofits with a high capacity to innovate” * Following are some suggestion how to implement these elements.
Developing Meaningful Relationships Within Nonprofit Boards
By: Eugene Fram. Free Digital Image
For several decades, I have suggested that nonprofit Board Chairs and CEOs have a responsibility to be sure that each board member perceives his/h continuing relationship as being meaningful. Following are some organizational guidelines that can assist Board Chairs and CEOs in this effort.*
Developing or hiring strong executive leadership: Obviously when hiring externally it is necessary to engage a person with a managerial background. But many nonprofit CEOs can be appointed after years of being an individual contributor or leading a small department. These experiences condition them to do too much themselves, rather than to assume a strong management posture. This involves focusing more on strategy, on talent development, interacting more with the board/community and creating a long-term vision.
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 Free Digital Image
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.
What is our one sentence strategy?: It needs be short to convey the essence of the impact the organization is creating—a brief abstract of your mission that is easy to understand. Example from my experiences: “We serve the homeless and seniors by helping them to sustain their lives with healthy food, housing and other support services.”
What is our organization’s 10-to-15 year dream?: Not a question frequently asked, but needed to fashion strategies in the intervening period. Traditionally board and management feel that such dreams don’t have practical applications. They do if passed to future generations of boards and managers. To foster continuing discussion, a good idea is to initiate a simple process, which is implemented every few years, to determine whether or not these “dreams” are still relevant and being accepted by board and staff.
What are the non-negotiable core values that dictatehow we behave?: Something that needs to be reviewed annually by a group of more visionary board people and management. In rapidly growing nonprofits these may not have been communicated to new managers and employees
What are the key priorities we need to focus on in the next three to five years?: Needed as a motivation to asses the impact of strategic planning. Too often operational issues instead of strategic items dominate meeting agendas.
What are the key metrics or key performance indicators we will use to measure our progress? Both quantitative (e.g., financial, clients served) and qualitative (e.g., advocacy, community impact) need to be addressed. Qualitative impacts are much move difficult to access, and often they are not developed for the annual review. **
What kind of cash flow do we need to sustain and grow our organization?: A key indicator for both for-profit and nonprofit organizations. The importance of strong cash flow is encompassed in the adage “cash is king.” Having cash puts the nonprofit in a more stable position with better buying power. While the nonprofit can borrow money at times, cash affords the organization greater protection against loan defaults or foreclosures. Cash flow is distinct from cash position. Having cash on hand is critical, but cash flow indicates an ongoing ability to generate and use cash. Nonprofits that include in-kind donations in their revenue streams have an obligation to separate cash vs. in-kind income for financial analysis. and annual reports to stakeholders.
All of these questions need to be reviewed annually, but in my experiences they rarely surface in board discussions.
Identify Nonprofit Staff Groups To Help Drive Organizational Change
By Eugene Fram Free Digital Image
Nonprofit executive directors tend to think of the staff professionals as individual contributors. These individuals are persons who mainly work on their own and but 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, working with the ED, can use these groupings in their oversight responsibilities to better understand the bench strength of promotable staff.
Once Again! Should Nonprofit Chief Executives Should Have Title: President/CEO?
By Eugene Fram Free Digital Image
This post, over several years, has developed a record of continued viewing or comment interest. Rarely a day passes in which the data doesn’t include several views. Perhaps the controversial nature of topic causes the longevity of interest?
When nonprofit organizations reach a budget level of over $1 million and have about 10 full-time staff members it is time to offer the chief operating officer the title of PRESIDENT/CEO. In addition, the title of the senior board volunteer should become CHAIRPERSON OF THE BOARD, and the title of EXECUTIVE DIRECTOR needs to be eliminated. Experience has shown that with a reasonably talented PRESIDENT/CEO at the helm, he/she can provide the following benefits:
Must Nonprofits Develop Employee Benefits That Substitute For Annual Raises?
By: Eugene Fram Free Digital Image
An analysis in the Washington Post reports that a tsunami-style change has been taking place in the manner in which United States employees are being paid—benefits are being offered in place of annual salary increases. (http://wapo.st/1MwoIBZ) Driving the change are the needs of a substantial portion of millennials who appreciate immediate gratifications in terms of bonuses and perks, such as extra time off and tuition reimbursement. Employers like the arrangement because they can immediately reward their best performers without increasing compensation costs. Example: One sales employee spent weeks reviewing dull paperwork, was very diligent in the process and was given three extra days of paid leave. She said, “I think everybody would like to make more, but what I liked about it was the flexibility.”
Measuring Nonprofits’ Impacts: A Necessary Process for the 21st Century
By Eugene Fram Free Digital Image
Unfortunately, outcomes and impact are often unrelated, which is why a program that seems to produce better outcomes may create no impact at all. Worse, sometimes they point in opposite directions, as can happen when a program works with harder-to- service populations resulting in seemingly worse conditions, but (has) higher value-added impact. … Rigorous evaluations can measure impact (to a level of statistical accuracy), but they are usually costly (a non starter for many nonprofit), difficult and slow. *But how do the medium and small size nonprofits measure actual results in the outside world such as enhanced quality of life, elevated artistic sensitivity and community commitment? (more…)
Micromanaging is the DNA of many nonprofit boards. It all starts with the community model culture of start-up periods. Board members have to assume staff roles to drive the nonprofit operations. But it often continues long after an adequate staff is in place. By habit, the board still focuses on operational details—also known as “reviewing the weeds.” I recently observed a board that was making a policy decision about the change in timing of an annual development event. Once the decision was made, the directors continued a “weed type” discussion about about table locations, invitations and other issues that were in the job of management to implement. The nonprofit is about 50 years old and has a budget of $10 Million with a 100 person staff.