An Important Guide to Creating High Performing Boards

                                                                                                                                                                                               Free Digital Image
The nonprofit governance model outlined in “Policy vs. Paper Clips”  has served my organization extremely well for more than two and a half decades. The proof of the model’s value is the growth and performance of our organization, our respected stature in the community (and beyond), and our ongoing ability to recruit top talent to our Board. Our Board governance structure has made possible several bold decisions over the last 30 years that have changed the trajectory of our organization.

Thirty years ago I was a brand new leader of a not for profit agency in Rochester NY with an annual budget of $5M and 160 employees who served 800 clients a year throughout 5 counties. Today, I am still the CEO; however it is a very different agency, having expanded its services significantly, broadening the populations we serve throughout 35 counties with a budget of 37M and 800 employees with a much bigger impact of 150,000 clients served annually. I feel very fortunate that early in my agency career that the book’s author (then a respected professor at a major university in my city) accepted my invitation to come talk to my Board about the model and its advantages for our nonprofit.

We adopted the model soon after and ever since it has defined our governance structure. We’ve only made one modification (creating a separate audit committee) because it was required by state regulations. Here’s why I think the model has been so powerful for us:

• The basic premise that the Board and CEO are partners who mutually respect each other’s roles is paramount to our success.
• The Executive Committee serves as the “steering committee” and sets the Board’s annual agenda and priorities, and fulfills the key role of being the CEO’s “sounding board.”
• Our lean committee structure (Assessment/Planning and Resources) allows for substantive discussion on important issues. Board members who aren’t officers have only one commitment and can devote both time and attention to their committee’s mission.
• As CEO, I work very closely with the Executive Committee to ensure the right leadership is selected to serve in officer roles. The Executive Committee also provides “succession” for senior Board leadership. Typically committee heads are groomed for Board Chair, though this position can also be filled from other officer roles.

I’ve lived the model for a very long time and happily attest that it works!

Gidget Hopf, Ed.D, President/CEO at Association for the Blind and Visually Impaired-Goodwill of Greater Rochester

Save

Save

Save

Save

Save

Dysfunctional Levels in Nonprofit Boards & Organizations.

 

id-100145240By: Eugene Fram        Free Digital Image

Viewer Favorite Updated and Revised

Article and studies from a Google search on “ Dysfunctions in Nonprofit Boards & Organizations,” yields 478,000 items in .69 of a second. These items show dysfunctions on charter school boards, church boards, healthcare boards, trade associations, etc.

These data can lead one to conclude that all nonprofit boards are dysfunctional. I suggest that nonprofit boards can generate a range of dysfunctional behavioral outcomes, but the staff can muddle through and continue to adequately serve clients. (more…)

How Does a Nonprofit Board Know When a CEO Is “Just Minding The Store?”

id-100383605

How Does a Nonprofit Board Know When a CEO is “Just Minding The Store?”

By Eugene Fram

Viewer Favorite Revised & Updated.       Free Digital Image

David Director (DD) has been the chief executive of a nonprofit for about 15 years. Currently, the organization has a budget of $1.5 million, mainly from governmental contracts and a sprinkling of donations. The nonprofit employs about 20 people full and part-time, and annually serves about 500 people in dire need.

Following is an abstract of the board’s evaluation of DD as the CEO.

High Job Satisfaction: * DD enjoys his work and his position as a chief executive. Staff turnover is very low, and last year, DD led a board-staff committee to configure the new sign in front of the building. An engaging personality, he is liked by both board and staff. He has good press relationships and frequently uses press releases to call attention to client success stories.

A Healthy Organization: During DD’s tenure, revenue growth has averaged about 2% annually. Client growth has been in the same proportion. Organizational finances are is good shape with a balanced budget plus a modest yearly surplus. He has a dashboard to monitor finances.

A Fully Engaged Board: Board members enjoy working on committees such as the new sign campaign (see above), the annual dinner-dance and selecting endowment investments. The audit committee only meets once a year after the completion of the financial audit and its accompanying management letter has been received.

Positive Community Impact: DD keeps records of clients who exit the programs each year, but has been unable to track their long-term impact on the community.

The big question is whether or not DD is just minding the store? I argue that he is.
This hypothetical organization is typical of the types of nonprofits I have encountered over a long time period. The basic fault is that the board is composed of well meaning people attracted to the mission as well as the personality of the chief executive. As a result, the operations of the organization are kept at a steady state with the active minutiae  support of the board. Their rationale for this support is the need to focus on the mission. There also might be a mistaken view that the board must protect staff positions.

Some directors come to the conclusion that there is little one can do to drive change, but stay on to enjoy the networking relationships that can develop. Others who join the board resign quickly, citing work pressures. Still others decline board invitations.

A number of other hints are contained in the case:
• Low staff turnover and DD’s interest in the sign committee. The committee can spend hours talking about its color and lettering!
• Revenue and client growth percentages are very low, probably supported by certainty, to date, that government dollars will continue to be available.
• The committees cited don’t contribute much to clients.  These are management not  boards tasks.
* Many directors who don’t have financial responsibilities seem to get some satisfactions out of making decisions about moving endowment assets around. A robust audit committee meets more than once a year. It is not unusual for fraud to occur in such a situation.
• There is no strategic planning indicated. Nonprofits, like these, also can confuse a SWAT analysis with a strategic plan. Where financial or behavioral objectives are established, measurement outcome data are not included to more rigorously assess outcomes and impacts.
• DD evidently does have the ability to become an effective development person but prefers to spend his time on smaller operational items, such as the new sign committee.
• DD does not provide any strategic insights or vision on trends in his service field. This gap needs to be closed, especially where most of the board members’ experiences are outside those of the nonprofit’s mission.

Summary
In my opinion, there are thousands of nonprofits like the one described. Making changes in their governance or operations is difficult; culturally changes can only take place after a long tenured CEO leaves. Since they never measure up to what they could be, are those organizations with “store minding” leadership limiting the financial and human (board and management) resources needed to serve more clients in dire need?

*Categories described by Molly Polidoroff, Executive Director, Center for Excellence in Nonprofits, Redwood City,

 

Save

Save

Save

Sustainability: Hot Nonprofit Governance Issue

 

 

 

Sustainability:  Hot Nonprofit Governance Issue

By: Eugene Fram                  Free Digital Imageid-10098886

In the next four years, nonprofit boards will face exceptional challenges affecting long-term financial and operational sustainability. It is likely that governmental grants will substantially decline. Business/individual donor gifts can be reduced should the economy teeter towards recession or the tax code changes in an unfriendly way. But, as usual, demand for nonprofit services will increase substantially.

Based on national survey data, Alice Korngold, highly regarded nonprofit consultant, concludes that these issues are driving the problems.

  • Demand for services has increased every year since 2008.
  • 50% of nonprofit survey respondents are unable to satisfy demand.
  • Half of the organizations surveyed only have three months of cash readily available.
  • Government contracts don’t provide full costs for programs. *

(more…)

Nonprofit Directors/Trustees/ CEOs/ Senior Managers–Improve Board Operations

  •  Have a way to effectively measure “client impact.”
  •  Build CEO/board fundraising capacity.
  • Develop a motivating/friendly process for on-boarding new directors.
  • Reduce # directors/trustees who “micromanage” management.
  •  Develop strategic discussions at meetings.
  •  Develop a broad framework that separates policy & strategy development from operational activities.
  • Have a board/staff relationship that is built on trust.
  • Have task forces that deliver more effective, timely results.

These books can help!    Please share with others who can benefit!

both-books

http://amzn.to/2eVDbxY      http://amzn.to/2fSNW0J

Order Multiple Copies from Createspace Book Store:

https://www.createspace.com/5748081 $4.00 Discount with code 6DLGFAGQ

https://www.createspace.com/3506243 $9.00 Discount with code WXEHFQ7W

Eugene Fram, EdD, Professor Emeritus
Saunders College of Business
Rochester Institute of Technology

frameugene@gmail.com

Save

Save

Save

Save

Save

Can A Nonprofit Find Strategic Ways To Grow in Unsettled Times?

id-100146411

Can A Nonprofit Find Strategic Ways To Grow in Unsettled Times?

By: Eugene Fram                                Free Digital Image

Viewer Favorite: Undated and Revised for Current Conditions

Nonprofits have always had to struggle to meet their client needs, even when economic conditions and social turmoil were much less constraining than today  and they have dim prospects for the next four years.  How can mid-level nonprofits uncover growth opportunities in the present environment? (more…)

Nonprofit Board Discourse: a Meeting of the Minds??

id-100147926Free Digital Photo

Nonprofit Board Discourse: a Meeting of the Minds??

By: Eugene Fram

Several years ago, a nonprofit director 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 can vehemently report that this laissez-faire response still typifies the majority of director attitudes, especially for items that deserve vigorous discussion. Why is that? And why is the term conflict perceived as an asset to an organization that is determined to move forward? Below are some answers based on my own experience in the nonprofit environment. (more…)