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.
Does A New Nonprofit Board Member Really Understand Your Organization? The New Board Member Nurturing Challenge!
By: Eugene Fram Free Digital Image
The careful nurturing of a new board member, whether for-profit or nonprofit, is critical. The pay-off of a robust orientation process is an informed and fully participating board director. The following are very similar occurrences in both for-profit and nonprofit boards:
The CEO of a transportation firm agrees to become a board director of a firm developing computer programs. He has risen through the transportation ranks with a financial background, but he knows little about the dynamics of the computer industry.
A finance professor is asked to serve on the board of a nonprofit school serving handicapped children. She has no children of her own and has never had any contact with handicapped children, social workers or teachers serving handicapped children.
In these similar cases, the new board member needs to become reasonably conversant with a new industry or a new human service field in order to be able to better apply policy development skills, strategic planning skills and to allow generative thinking.
On nonprofit boards, the problem is exacerbated when the new director often is asked to immediately join a specific board committee without being able to understand the board perspectives and the organization’s mission vision and values. Following are ways in which the nonprofit board can resolve this problem:
Don’t appoint the new board member to a committee until she/h has completed a board orientation program including a review of board procedures, attending several board meetings, has had visits with the staff, as they normally operate, and becomes alert to the major trends in the field. This ideally should take about six months assuming the board member is employed full-time elsewhere.
During this time, the chief executive and board president should be available to visit with the new director as frequently as she/h wants in order to respond to questions.
Hopefully, the chief executive would informally meet the new director (and each established director) quarterly to review current issues and opportunities. In addition to the information presented at the board meetings, this will provide a better perspective of the board’s mission, vision and values.
Ideally, the board volunteer should attend one staff meeting and one outside professional meeting to acquire a feeling for the topics reviewed at these gatherings and the field terminology.
During the first year, a senior board member needs be seated next to the new person at meetings to act as a “host” for the new director
If most of these actions can be accomplished within a six-month period, major blind spots are removed, and the new board member can then join a standing board committee. Now, reasonably understanding the organization and her/h own participation on the board, she/h has a background to make a substantial contribution for years to come.
Do Today’s Business Leaders Make Effective Nonprofit Directors?
By: Eugene H. Fram Free Digital Image
The names of the new board nominees have been announced. They include several outstanding recruits from the business community. Will these new formidable board members perform well in the nonprofit environment? William G. Bowen, a veteran director in both the for-profit and nonprofit environments, raised the following questions about such beginnings in a 1994 article:* Is it true that well-regarded representatives of the business world are often surprisingly ineffective as members of nonprofit boards? Do they seem to have checked their analytical skills and their “toughness” at the door? If this is true in some considerable number of cases, what is the explanation?
Although this is not a good idea for nonprofit organizations, it is not an unusual occurrence, especially among start-ups. A director in a start-up nonprofit will need to assume some staff responsibilities as a volunteer. But he/s will need to organizationally report to the CEO. In the event the position ceases to be a volunteer one, i.e.,the person wearing the two hats is compensated for the staff work. he/s should resign the board position. With two hats, a director would be in conflict-of-interest on important matters like salaries. Although some state statutes specifically forbids a director to hold multiple roles, enforcement of the statues is haphazard, especially among smaller nonprofits that are short of people to carry out staff functions.
