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Policy vs. Paper Clips

Nonprofit Organization Mergers: What to Do.

Nonprofit Organization Mergers: What to Do.

By Eugene Fram

A Fast Company article by Alice Korngold about nonprofit mergers lists seven steps for a successful nonprofit merger. * Korngold used these steps to describe nonprofit merger activity with which she had been involved.

In October 1998, Family Service America (FSA) merged with the National Associations of Homes and Services to Children (NAHSC) to form the Alliance for Children & Families. I chaired the FSA investigating committee in the merger process and later served as co-chair of the Alliance board during a two-year transition period. This article adds another experience example to the model described by Alice Korngold. (more…)

Attn: Nonprofit Directors, Trustees & Mangers – New Reviews of “Policy vs. Paper Clips: Applying the Corporate Model to Nonprofit Boards”

Positive reviews continue to arrive for my recently updated & expanded nonprofit governance book. Click on this link for a story about the book.
Policy vs. Paper Clips See the latest reviews below.

Must Read for Nonprofit Boards, December 9, 2012
By: Casey Wheeler

This review is from: POLICY vs. PAPER CLIPS – THIRD EDITION: How Using the Corporate Model Makes a Nonprofit Board More Efficient & Effective (Paperback)
This book was an informative and entertaining read. The author uses the techniques of a series of emails between two individuals to explain how using the corporate model for nonprofit boards is beneficial to the organization. The exchange of emails takes the reader through the process from needs assessment to implementation.

What I enjoyed most about the book is that it was written so that the concepts are easily understood through the question and answers presented in each set of emails. In addition, the concept has been successfully implemented in a number of nonprofits around the country that are mentioned in the introductory section of the book and examples in the emails exchanges.

At the end of the book an additional series of questions and answers with suggestions on how to successfully implement the corporate model. An added benefit is that a Leader’s Guide is available for use to facilitate a discussion of the corporate model process.

I must admit that nonprofits that are totally volunteer operated or with a limited staff may find the overall process unachievable, but there are many useful ideas within the email exchanges from which small organizations can benefit.

I strongly recommend this book to any nonprofit CEOs or Board Members who feel that too much time is spent on operational issues and not enough spent on planning and policy.
Help other customers find the most helpful reviews

Fram Nails It! November 16,2012
By Philip G. Bookman (Los Gatos, CA)

This review is from: POLICY vs. PAPER CLIPS – THIRD EDITION: How Using the Corporate Model Makes a Nonprofit Board More Efficient & Effective (Paperback)
When I joined the not-for-profit board that I now have the honor of chairing, I struggled with how to apply my business experience to a non-profit. I was often heard saying, in frustration, “We should be discussing policy and strategy, not counting paper clips!” Then I came across this book with a title that I obviously could not resist, and found that Fram has formalized what I was struggling to figure out. And his approach works.

As with any model, you need to pick and choose which parts of it your organization needs to adopt, and in what order. But he sure gets you to think about the important things the board needs to address. This is a must read for any non-profit board leader who wants to make the organization more effective in meeting community needs.

A Little Book that Yields Big Results, November 18,2012
By: A. Hopf (Geneseo, New York United States)

This review is from: POLICY vs. PAPER CLIPS – THIRD EDITION: How Using the Corporate Model Makes a Nonprofit Board More Efficient & Effective (Paperback)
Our Board applied the principles in Policy Vs. Paper Clips after the first edition came out many years ago. We were fortunate to have the author himself consult with us. I can unequivocally state that the Corporate model spelled out in this book works and is responsible for the incredible growth and success my not for profit has experienced over the last 15 years. More importantly the Board members love it because they are engaged at a strategic level that allows them to use their brains and contribute in a meaningful way. Every not for profit CEO and Board member should read this book regardless of size or scope of the organization. Its how Boards need to work in the 21st century.

What To Do About Weak Nonprofit Board Practices – Reissued based on viewer interrest.

What To Do About Weak Nonprofit Board Practices

By Eugene Fram

Peter Rinn, Breakthrough Solutions Group, recently published a list of weak nonprofit board practice. * Following are some of the items listed and my estimation of what can be done about them, based on my experiences as a nonprofit board director, board chair and consultant. (more…)

Once Again: How to Keep a Nonprofit Board Informed – Reissued based on viewer interest.

Once Again: How to Keep a Nonprofit Board Informed.

By: Eugene Fram

At high-performing nonprofit boards, members of the board will rarely be invited by the CEO to participate in operational decisions. Yet the board still needs to know that is going on in operations.

The name of the game is for the CEO to communicate the important information to board members and to keep them informed of significant developments. Still, there’s no need to clutter regular board meetings by reporting endless details about operations. (more…)

Critiquing My Blog: “All Nonprofit’s are a Business – Need to be Run Like a Business”

Critiquing My Blog: “All Nonprofit’s are a Business – Need to be Run Like a Business”

By: Eugene Fram

I encountered a torrent of comments from consultants, chief executives and staffers replying to the blog listed above. Following are some abstracts of support and questioning I received:

One could say this is true, if we know what is truth, but one should avoid ALL. … We are called to be faithful, not to be successful. Why do we… avoid all ethical questions? … Granted, one should hope to wind up with excess revenues at year-end but to affirm who you suggest doesn’t appear to be worked through.” Philip S. Wood, CPA.

Sorry I disagree. Many/most nonprofits are aimed at creating social good. To be run like a business means risk – (taking) decisions for the short/near term, based on financial tradeoffs. While I agree nonprofits benefit from excellent leadership, discipline, solid strategy and financial planning, they should be run as nonprofits. Linda Williams

If businesses exist to create and retain customers, then nonprofits exist to create and retain members. I think this could be a good learning for many of the nonprofits I have (encountered). This is terrific, but they cannot do this without capital. The more those inside the nonprofit are motivated by their own sprite of “contribution to the world,” the more they could undermine their ultimate survival. (Companies that focus) inside-out rather than outside in will run into trouble.
Elliott Schreiber

I work for an organization … that (has a) mind-set to a for-profit business, … keeping in mind our core values, mission and vision. …

• A research department … regularly checks to make our programs are successful. We follow clients for two years after receiving services.
• Though measuring programs, … our donors have confidence is what we do and we have expanded contacts in the community.
• Our strategy department ensures that expansion will not drain resources from other areas.
• Our direct service employees are results oriented and goal focused.
• Also we take our employees very seriously. We would hate to expand, hire people or have our staff relocate and then havet o close up shop one year later.
• We are more mission focused – we are fiscally solvent, jobs are not in danger and have the numbers to prove that what we do works. Catherine Hayley

My Reactions

Philip: You hit the nail on the head with you comments about “ALL.” I concede the adjective was not well placed. However, some businesses also have a mission or creed to generate social good, like Ben & Jerry’s Ice Cream. However, if you examine the product that emanates from the firm, one can easily view it as creating obesity. Businesses and nonprofits must be judged on their missions and how they execute them.
I would take Ben & Jerry’s over a commercial call center that says its mission is to help charities, but then takes, as fees, 75% of the money donated. Or it might be a nonprofit that gives excess benefits to its management. (The IRS now has become a watchdog over these giveaways.)

Linda: Some businesses also have a double bottom line. For example utility companies have to please their stakeholders and meet utility commission regulations. Unfortunately, the term “being run like a nonprofit has become a negative term and only a high senior nonprofit mangers, who execute the functions you listed at a effective and efficient levels, will contribute to improving the situation.

Elliott: In my opinion you are correct. Nonprofit strategic plans should always have a section showing the estimated economic impact of what is projected. For an example, according to Cynthia Montgomery, a Harvard business professor, a nonprofit hospital whose mission is to “save lives” will not succeed long term if it does not “save lives efficiently and effectively.”

Catherine: I just want to join the chorus of people who commented how fortunate you are to work with an organization with a structure that makes such impacts.
It really shows that many nonprofits need to move towards a business model.

As one other respondent stated, nonprofits in the 21st century need to be “SMART i.e., Sympathetic, Malleable, Active, Realistic and Timely.

Nonprofit Board Responsibilty for Social Media – What Needs To Be Done?

Nonprofit Board Responsibility Social Media – What Needs To Be Done?

By: Eugene Fram

Nonprofit boards, for several years, have been struggling to find proper uses for social media. Many of the decisions on this issue will become strategic board decisions because they will require using alternative promotional strategies, experimental trials and infusion of capital and human resources. The December 8, 2012 issue of the NACD Directorship* cites a Stanford study concludes for-profit boards should develop a better understanding of this new phenomenon. Following are how I think the steps should be applied to smaller and medium sized nonprofit board decisions: (more…)

Nonprofits: To Which Group Do You Belong – The 5% Having Successful Strategies or the 70% Who Do Not?

Nonprofits: To Which Group Do You Belong – The 5% Having Successful Strategies or the 70% Who Do Not?

By: Eugene Fram

According to a recent Deloitte report, two Harvard Professors issued a recent study* that highlighted the above statistics, also showing the remaining 25% having “middling success.”
I recently attended a presentation by Cynthia Montgomery, also a Harvard strategy professor. Following are some major strategy guidelines she presented, with examples mainly relating to the business community, and how I see them applying to nonprofit and trustee boards. (more…)

A Nonprofit Board Has A Problem With A Recently Hired CEO – What To Do?

A Nonprofit Board Has A Problem With A Recently Hired CEO – What To Do?
By: Eugene Fram

With some possible variations, is the following scenario one that is frequently repeated elsewhere?

• The nonprofit board had engaged, Joe, an experienced ED, as President/CEO of human services counseling agency. The prior ED had been in place for 25 years, and was evidently unwilling to move to meet changing client
needs. For example, the agency only offered counseling services five days a week, 9 am to 5pm, with hours extended to 8 pm on Thursday night. There were no client options for emergency calls during nights or during
weekends. (more…)

Nonprofit Innovation: What Can Barbers Teach Nonprofits?

Nonprofit Innovation: What Can Barbers Teach Nonprofits?

By: Eugene H. Fram

Reading several different blogs comments on nonprofit innovation reminded me of a story I tell my marketing. Here is a brief abstract: When men started to wear their hair longer in the 1980s, two classes oh barbers responded. One class cursed the change, while they became innovative stylists. In the area in which I was living, during the 80s, the number of barbers dropped from 1,000 to 300.

Seth Godin, the famous marketer, thinks that nonprofits have a charter to be innovators. But they aren’t he states in a recent blog. “The thing about most cause/welfare non-profits is that they haven’t figured out how to solve the problem they’re working on (yet). … Too many don’t have a method for getting to the root cause of the problem and creating permanent change.” He than suggests that some nonprofits should, “Go fail. And then fail again. Nonprofit failure is rare, which means that non-profit innovation is too rare as well. Innovators understand that their job is to fail, repeatedly, until they don’t. ”

Comments to a recent BoardSource exchange on innovation had the following reactions:
• Nonprofit founders are focused on specific goals and never go beyond them.
• Decision makers in nonprofits follow the “not invented here” viewpoint and fresh ideas are threatening.
• Many executive directors do not see the “potentially positive role board-level committees (including of non–board members & staff) can play in generating new ides.”

My reaction is that Godin is off base, although I strongly suggest that nonprofits can prosper by adopting the better business practices and vice versa. Few foundations would play “venture capitalist” to nonprofit leaders who have a record of failure. For example, Geoffrey Canada has successfully led the development of the Harlem Children’s Zone. Although the HCZ model is well know, it has yet to be duplicated elsewhere.

The comments from the BoardSource blog have been developed from field experience and remind us that nonprofit innovative leaders are in short supply. The barbers of the 1980s teach us that we must be prepared to innovate when change impacts our field, whether it be style or technological innovation.

But be prepared to think outside of the box. I still go to one barber who cuts my hair, less often, but he still doesn’t work on two heads at a time. Similarly, it is unlikely that marriage counselors will soon be mediating two warring couples at a time, unless some drug company comes up with a pill that enables the counselors to be more innovative.

Nonprofit innovation, as shown by the HCZ project, is very difficult, but it is still very possible in the nonprofit governance arena. For some practical examples, see my blog (http://bit.ly/yfRZpz) & book (http://amzn.to/eu7nQl )
What do others on this exchange see as the state of nonprofit innovation? Is it as dire as indicated by the comments cited above?

Nonprofit Directors/Trustees Alert: Volunteer Chairman Held Liable for Nonprofit’s Unpaid Payroll Taxes

 

Following is part of a  blog that I strongly suggest that you, your colleagues and friends associated  with nonprofit or trustee organizations read carefully.  As you read it, pleas keep the following  in mind:

  • I think the situation presented here is more common than most directors/trustees think.   As a layperson, I am surprised that the court did not spread the fine among all the directors.
  • The chairman was clearly trying to support a nonprofit in trouble. Perhaps he was so dedicated  to the mission that he was trying to do everything possible to save it?
  • Not Shown here is the fact that, “[T]he chairman is burdened with proving that they (the IRS) are not correct.  … The law does not require the individual to have complete control over the finances, only what the court calls significant control.”  

For more insights in how to avoid such situations, review these items on my blog site. Other items also may be of interest  http://bit.ly/yfRZpz  .

Nonprofit Directors & Trustees: Are You Aware of the IRS 990 Form?
Attn: Crisis Planners – A Leadership Plan For a Nonprofit Organization in Trouble
What To Do About Weak Nonprofit Board Practices
Your Dysfunctional Nonprofit Board – What to Do
Nonprofit Management/Governance – Avoiding Fraud – Internal Controls

For the full blog see: http://www.mercadien.com/index.html

Nonprofit Directors/Trustees Alert: Volunteer Chairman Held Liable  for  Nonprofit’s  Unpaid Payroll Taxes   

by Sherise D. Ritter, CPA, CGFM, PSA

A recent tax court case held that a volunteer chairman of the Board of Trustees is personally liable for a nonprofit organization’s unpaid payroll taxes. This is a scary development (more…)