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Policy vs. Paper Clips

Trustee’s Lament: “We are accountable for what’s happened… We are deeply ashamed.”*

Trustee’s Lament: “We are accountable for what’s happened…  We are deeply ashamed.”*

Like the Penn State trustee, who bemoaned the board’s inaction, other nonprofit trustees, directors and managers easily can find themselves in similar situations, if they fail to impartially investigate negative news or even rumors.  In fact, those who serve on small and midsized nonprofit organization’s boards may even be in more perilous situations than larger nonprofits for four reasons.  Small & midsized companies may be affected for some of the same reasons. (more…)

Attn: Nonprofit Directors & Trustee Directors – Some History to Ponder

Although this article may focus on for-profit boards, there is a great deal in it for nonprofits to ponder. It again shows that although the mission vision and values differ between the two types of boards, operationally there is much that can be learned from each other

http://www.rbj.net/article.asp?aID=191537

How successful Nonprofit Chief Executives Should Operate

How successful Nonprofit Chief Executives Should Operate

By: Eugene Fram

Successful nonprofit chief executives, like those in the commercial positions, should  share similar perspectives and beliefs.  Author Jeff Haden  writing in the June 25th issue of INC Magazine. about for-profit executives suggests, “9 Beliefs of Remarkably Successful People.”  Following is his list and how I see how his ideas may apply to  chief executives of nonprofit organizations

(more…)

Nonprofit & Trustee Boards: Any Side Effects From Health Care Act?

Nonprofit & Trustee Boards: Any Side Effects From Health Care Act?

By: Eugene Fram

Obviously the Supreme Court’s health care decision will have significant impacts on nonprofit and trustee boards of health related organizations.  However, like any large dose of medicine, the dose from the health care act will have kinetic effects on the cultures and operations of other types of nonprofit and trustee boards.  They can range from Animal shelters to Zoos.  Here are some, which I think are the most obvious. (more…)

The 21st Century Nonprofit President/CEO

The 21st Century Nonprofit President/CEO

Nonprofit presidents/CEOs in the 21st century should have much more responsibility for their organizations than do executive directors in traditional nonprofit groups. (more…)

Nonprofit Evidence Based Evaluations: Using Imperfects Metrics Well

Nonprofit Evidence Based Evaluations: Using Imperfects Metrics Well

By: Eugene Fram

The Office of Management and Budget has issued a call for more rigorous program evaluations.  According to Jeffery Zients, acting OMB director,  “Where evidence is strong, we should act on it. Where evidence is suggestive, we should consider it. Where evidence is weak, we should build the knowledge to support better decisions in the future.”[i]  Assuming this directive will trickle down to many nonprofits using federal dollars, using imperfect metrics for evaluations are becoming accepted, especially for smaller nonprofits, which can’t afford statistically significant studies. These resources are needed to deliver services.  In addition, evidence based imperfect metrics can help track progress and drive change. (more…)

How Long Should A Nonprofit Director Serve?

How Long Should A Nonprofit Director Serve?

By: Eugene Fram

Nonprofit board terms are like clothing sizes.  They come in all shapes and sizes!

Some terms are as short as two years, with the charter specifying the person remain off the board for one year.  Other charters have systems that allow a director to remain for decades.  The most common format allows the director a two three-year terms, with some exceptions relating to whether the person is originally filing an interim year or chairs the board in his/or her final year. (more…)

Nonprofit CEOs & Board Directors: How Expert Is Your CFO?

Nonprofit CEOs & Board Directors:  How Expert Is Your CFO?

By: Eugene Fram

When hiring a chief financial officer (CFO), nonprofit organizations often find themselves with a major challenge, since many financial and accounting functions are identical.  To compete, the organization may need to offer higher salaries that are somewhat competitive with for-profit organizations.  Consequently, some trim the level of expertise required to fill the position. This is a dangerous move, especially if the organization is growing.  Also the current CFO, if hired five or ten years ago, may not be up to date and make a major error that will harm the organization’s reputation, leading to a board restructuring and/or firing the CEO. (more…)

Attn. Nonprofit Board Recruiters: Marketing & Sales Are Not The Same!

Attn. Nonprofit Board Recruiters: Marketing & Sales Are Not The Same!

By: Eugene Fram

What are the differences and what do these background differences mean when a nonprofit board concludes that a person with a “marketing background” needs to be added to a board. ! 

If the nonprofit board needs a person help define and/or segment a market, a director with a strong marketing resume is needed.  For example, if a teen social center finds that its clientele is shifting from one ethnic group to another, a marketing person can help with the research to determine the overall differences between the two groups.  Then a marketing plan can be established to show how the organization can help solve the problems being faced by the new ethnic group.

Assume the board has a good knowledge of its market but has a critical need for action in the fund development function, and then the need is for a director with a strong sales background.  This person can help with planning fund raising events, provide techniques for “making the ask,” educate senior management and directors on the fine points of presentations to senior business executives and, in general, help spark the fund development effort.  However, some of the suggestions might seem to be “outlandish” to a conservative nonprofit board.  For example, it took me two years to establish a highly successful annual fund raising dinner for a human service nonprofit.

Another background to consider is a person with a marketing communications (often called Marcom) person who can assist with the website, developing print promotions and advise on communications to stakeholders and staff. 

In nonprofit board recruiting, a person with “marketing” background can vary greatly.  Be sure to define specifications. 

 

   

A 2012 Agenda for Nonprofit Audit Committees

A 2012 Agenda for Nonprofit Audit Committees

By: Eugene Fram

Nonprofit audit committee members might want to view a video presentation at the Corporate Board Member Website (June 9th) for a list of top issues being faced by for-profit audit committees.  Catherine Bromillow, PwC Center for Board Governance, presents the list. 

Following, in her order of importance (high to low), are those that I feel can apply to nonprofit organizations.

RISK MANAGEMENT – Focusing on the known risks and estimating the unknown ones.  For example, how will the greater use of psychiatric drugs impact nonprofit counseling organizations?

INCREASED USE BY REGULATORS – What use will the IRS make of the governance information now being collected annually via the expanded 990 Forms?  Do volunteer directors know the potential impact of the Intermediate Sanctions Act?

CHANGES IN REGULATIONS & ACCOUNTING STANDARDS – What impact, if any, will Dodd-Frank have on nonprofits?   (Although not directed to nonprofits, Sarbanes-Oxley has had some indirect impacts.)  What changes in accounting standards need to be reviewed by a nonprofit audit committee?

TURBULENT ECONOMIC CONDITIONS – What plans are in place to survive more turbulence in the world economy? 

INTERNAL CONTROL STRUCTURE – How does the internal control structure need to be changed after a merger or acquisition transaction between two nonprofits?

TAX COMPLEXITY- How do changes in state or federal tax regulations impact a nonprofit organization’s business plan?

OPERATION COMPLEXITY – For those nonprofits that operate from multiple sites, the audit committee needs to understand key issues for each site.  Visits to all sites by the committee or individual directors are important.

COMMITTEE EFFECTIVENESS – With frequent rotating membership, how do nonprofit audit committees go about improving their operations?

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