Developing nonpofit management trust

Does the Nonprofit CEO Need to Go?

Does the Nonprofit CEO Need to Go?

By: Eugene Fram

Viewer Favorite– Revised & Updated

Recognizing and acknowledging that the current CEO is no longer helpful to the nonprofit organization is never easy to come by. Beyond malfeasance and under-performance, obvious reasons for initiating such a discussion, there are often other indicators: his/her modest leadership skills, ineffective discussions between the CEO and the board chair, criticism from external stakeholders, overemphasis on tactics unbalanced by a focus on strategies, etc. (more…)

Must Nonprofits Develop Employee Benefits That Substitute For Annual Raises?

Must Nonprofits Develop Employee Benefits That Substitute For Annual Raises?

By: Eugene Fram

A recent analysis in the Washington Post reports that a tsunami-style change is talking 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 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 paper work, 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.” (more…)

Can Nonprofits Boards Build Peer-To-Peer Relationships?

Can Nonprofits Boards Build Peer-To-Peer Relationships?

By: Eugene H. Fram

There have not been any nonprofit authoritarian-visionary leaders like Apple’s Steve Jobs. Successful nonprofits are built by developing peer-to-peer relationships between the board and management, with the latter group representing operational leadership of the staff.

But building peer-to-peer relationships continue to be an Achilles heel for nonprofits for the following reasons.

Internally Boards Have
• Agendas that tend to be packed with operational reports and items.
• A continual parade of new board members entering the board scene to meet rotation requirements.
• Responsibilities that are secondary to directors’ primary vocations interests.
• Officers who are constantly changing. Many volunteer presidents and board chairs only have one-year terms.
• Many directors who live time-compressed lifestyles, and may face significant challenges in fulfilling their board obligations. (more…)

The Outside Advisory Board: Boon or Bother to Nonprofit CEOs?

The Outside Advisory Board: Boon or Bother to Nonprofit CEOs?

By: Eugene Fram

I have established or served on a number of nonprofit outside advisory boards. As a result I strongly recommend their usefulness to nonprofit CEOs. The counsel provided by a group of unaffiliated members of the community or industry will, in my opinion, complement the existing board, helping to deliver services or products to clients with greater effect. The objective of assembling such a body would be to seek advice and expertise regarding a current major project or issue and/or to provide ongoing support and guidance to the CEO. Advisory board members have no legal responsibilities, nor have authority to require the elected board or staff to act on its advice. However, when advice is not followed, the CEO has a professional responsibility to show how the suggestions were seriously considered and to carefully report on what had transpired in making the decision process. Too many useful volunteers become disillusioned with advisory committees when this step is omitted. (more…)

How Often Do Nonprofit Board Members Need to Question Strategic Norms?

How Often Do Nonprofit Board Members Need to Question Strategic Norms?

By Eugene Fram

A new nonprofit director has a lot to learn. Considering that his/h term of service will be relatively short (typically four to six years), he/s must quickly learn the “ropes” to participate in a meaningful way. In this process, colleagues and leadership will acquaint him/h with prevailing board systems and culture—often ignoring the depth of expertise she/h can employ. Example: An expert in financial strategies may be asked to assist the CFO with accounting details, far below the person’s skill level. Oftentimes the new board member also is greeted with a mantra that says, “We’ve always done it this way.” As the director moves in his path from novice to retiree, during a short tenure, there is little opportunity to suggest innovations that differ from the accepted fundamentals and to successfully advocate for change. (more…)

Want To Avoid Nonprofit Fraud? Look To Your Board For Action

Want To Avoid Nonprofit Fraud? Look To Your Board For Action

Viewer Favorite: Updated & Revised
Original Publication: https://www.snpo.org/redir/articles.php?id=1752

By Eugene Fram with accounting professor Bruce Oliver

(The executive director acknowledged working with the insurance agent.) Under their scam, the council paid inflated insurance premiums and (the two) split the over-payments.
“I knowingly helped steal more than $1 million … as part of a scheme in which insurance premiums were inflated,” (The ED) told a judge in Supreme Court, the trial level court in New York State. (http://bit.ly/1QeakRt)

Here is what nonprofit board members can do to help reduce fraud in their organizations. (more…)

Will Millennials Be Conservative Funding Prospects for Nonprofits?

Will Millennials Be Conservative Funding Prospects for Nonprofits?
(3rd in a post series on millennial impacts on nonprofits)

By: Eugene Fram

The Millennials have arrived! Over the past five years, increasing numbers of the new cohort have become engaged in nonprofit activities. It is expected that their nonprofit participation will further increase– and by 2025 will be 75% of the total workforce! Millennials are looking for a different kind of volunteer experience. They respond to the human aspect of social issues and appear willing to invest both hands-on effort and financial resources to make a recognizable impact.

A recent post (http://huff.to/1Fa6eEx) describes in detail how millennials are handling their financial affairs. This information can be useful to nonprofits in approaching that group for fund development purposes.

Following in italics are some highlights from the post that I regard as possible opportunities to harness the unique millennial style and energy.

• Technology is well integrated into the lives of millennials.
There are various technologies that can be used for fundraising, (e.g., Facebook, LinkedIn, etc.), and nonprofits have to identify those that meet the needs of their potential donors. One nonprofit has already concluded, from experimentation, that Facebook has little resonance for its millennial prospects. On the other hand, crowd-sourcing, based on the experiences of similar nonprofits, appears to be a viable technological tool for fundraising. Not all social media are appropriate for all millennial segments.

• There is a wide-ranging mistrust of people.
Only 19% of millennials think, “… most people can be trusted.” Nonprofits will need to be highly transparent in approaching the cohort and be willing to build strong communication links long before they can become donors. Nonprofit media will have to be well timed and have interesting emotional story lines to build trust. Client success stories presented in a lively and succinct manner should have great appeal. Those nonprofits concerned with client privacy will be challenged to be very creative.

• They are far more prudent and sensible financially than their predecessors, possibly because many still have student loans to repay and have viewed parents and friends impacted by the recent recession. When relating to finances, they value craft, authenticity and strong values. Surprisingly Wal-Mart is favored by the under 24 group and is second to Target with the 25-34 cohort.(http://read.bi/1LjtsXZ)
Clearly these attributes and values will need to be incorporated into continuing communications targeted to millennials. They will probably want to be assured and reassured that their donations or even their volunteer efforts are being used efficiently and effectively. Most in the group have time–compressed lifestyles, and I have noted, in interviews, they view their donated time as an asset equivalent to income.

• In terms of investment, the group presents an anomaly.
Many millennials, raised by helicopter parents, simply don’t comprehend delayed gratification. But they are very cautious and steady in making investment decisions. Consequently, nonprofits will need to develop large pools of millennial prospects to their donation targets.

• Millennials are long-term optimists.
As optimists they will want to be certain that donations of money or volunteer time are meaningful. This is very important in today’s open environment where the press frequently reports on nonprofits that have been subjected to fraud due to a board laxity with financial oversight and control.

Summary: The conservative manner in which millennials are handling their finances may remind one of the cohorts raised in the depression era of the 1930s. As nonprofit boards build three and five year funding and board recruitment projections, they will need to reflect on these findings from the study cited above. Might these be harbingers of more nonprofit development challenges?

The Nonprofit Dream Team: a Board/CEO Partnership that Works!

The Nonprofit Dream Team: a Board/CEO Partnership that Works!

By: Eugene H. Fram

Re-balancing and maintaining important relationships in a nonprofit organization can be important to its success. Do various players fully understand and accept their specific roles. Is there mutual trust between players? Are communications open and civil?

I recently encountered an association CEO who complained that his board wanted to judge him without establishing mutually agreeable goals, outcomes or impacts. He felt what is needed is a partnership arrangement where the board does not judge the CEO and organization based on political or personal biases but overviews the two in terms of mutually accepted achievements. This, he contended, forms a substantial partnership between board and CEO and staff. If the board thinks it can judge management, he stated, it gives it a personal political type of power, unrelated to performance. As an example he pointed to an unfortunately common nonprofit situation where a CEO is given an excellent review and fired six months later because there had been a change in the internal board dynamics. (more…)

How Do Nonprofits Determine CEOs’ Productivity?

How Do Nonprofits Determine CEOs’ Productivity?

By: Eugene Fram

Nonprofit organizations can’t have bottom line profits. If they did, CEO productivity determination could be less complicated. Determining a fair CEO benefit, based on productivity, can be a complex issue for a nonprofit board. Providing too little or too much can be dangerous for the organization and possibly the board members. Although the spadework for benefits needs to be done by a small committee, the entire board needs to fully agree on the rationale for the final decision. (more…)

Once Again: How to Keep a Nonprofit Board Informed

Once Again: How to Keep a Nonprofit Board Informed.

By: Eugene Fram

Viewers’ Favorite—Updated & Revised

With high performing nonprofit boards, directors will rarely be invited by the CEO to participate in operational decisions. As a result, management will always have more information than the board. Yet the board still needs to know that is happening in operations to be able to overview them.
The name of the game is for the CEO to communicate the important information and to keep directors informed of significant developments. Still, there’s no need to clutter regular board meetings by reporting endless details about operations. (more…)