foundation boards

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!

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

frameugene@gmail.com

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Pressure Test Your Nonprofit’s Fund Development Efforts

280h

Pressure Test Your Nonprofit’s Fund Development Efforts

By: Eugene Fram

It’s no secret that nonprofits do not excel in the craft of fundraising. A 2015 study reported that 65% of CEOs gave their boards academic grades of “C” or below for efficacy on this front. Yet most will agree that without the continuous influx of financial support, the mission to which the directors have committed themselves will fail!

I clearly remember examples of this deficit from my own board experience—one in which I served on the fund development committee for a small nonprofit which met monthly for about a year. A sincere and hardworking board chair headed it, but the meetings took place without the presence of the CEO.   Many ideas with merit were exchanged such as developing a reserve fund, “get or give” board requirements etc. There was a lot of talk but no implementation, and after a year of pure discussion, a new president, who convened a new committee, disbanded the group.

A review of the pressure points in key fundraising activities would have taken the group from talk to action and further implementation. Here are three activities and their variations that I consider most critical to nonprofit development processes:
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Once Again! Nonprofit CEO: Board Peer – Not A Powerhouse

Once Again! Nonprofit CEO: Board Peer – Not A Powerhouse

By: Eugene Fram

Some nonprofit CEOs make a fetish out of describing their boards and/or board chairs as their “bosses.” Others, for example, can see the description, as a parent-child relationship by funders. The parent, the board, may be strong, but can the child, the CEO, implement a grant or donation? Some CEOs openly like to perpetuate this type of relationship because when bad decisions come to roost, they can use the old refrain: the board made me do it.

My preference is that the board-CEO relationship be a partnership among peers focusing on achieving desired outcomes and impacts for the nonprofit. (I, with others, would make and have made CEOs, who deserve the position, voting members of their boards!)

There are many precedents for a nonprofit CEO to become a peer board member, some without voting rights, some with full voting rights. One nonprofit group is university presidents, where shared governance with faculty bodies can be the norm. For example, when General Eisenhower became president of Columbia, he referred to the faculty in an initial presentation as “Columbia employees.” Later a senior faculty member informed him “With all due respect, the faculty is the university.”

Another nonprofit group is hospitals where the CEO may also be or has been the chief medical officer. The level of medical expertise needed to lead requires that a peer relationship be developed. Also if the hospital CEO is a management person, he and the chief medical officer must have a peer relationship, which extends to the board.

Hallmarks of a Peer Relationship
• The CEO values the board trust assigned him/her, and carefully guards against the board receiving surprise announcements.
• The board avoids any attempts to micromanage, a natural tendency for many nonprofit boards.
• When a board member works on a specific operating project, it is clearly understood that he is accountable to the CEO for results.
• The CEO has board authority to borrow money for short term emergency needs
• The CEO understands need for executive sessions without his/her presence.
• The CEO understands the need for robust assessment processes to allow the board to meet its overview duties.
• Both board and CEO are alert to potential conflicts of interest which may occurs.
• Both value civil discussion when disagreements occur.
• The board realizes that nobody does his/her job perfectly, and it does not react to occasional CEO modest misjudgments.

Summary
Elevating a nonprofit CEO to a status of board peer does not automatically make the CEO a powerhouse. The board legally can terminate the CEO at will. However, in my opinion, the following benefits can accrue to the organization.

The peer relationship help will:

• Help the organization to build a desirable public brand.
• Allow a capable person to interface with the media.
• Define a role for the CEO to lead in fundraising.
• Allow the organization to hire better qualified personnel.
• Allow the organization to present a strong management environment to funders. After all, top people readily communicate with people in similar positions.

Can A Nonprofit Organization Have A President/CEO & An Executive Director?

Can A Nonprofit Organization Have A President/CEO & An Executive Director?

By: Eugene H. Fram

Yes, if the organization has the following structure:

Board With A Volunteer Chairperson
President/CEO With Full Authority for Operations
Executive Director for Division A
Executive Director for Division B

However this structure (more…)

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?

My Blog Site:  http://bit.ly/yfRZpz

 

  

 

 

 

 

 

Executing A Nonprofit Organization’s Planning Function With Radar & Traffic Cops

Executing A Nonprofit Organization’s Planning Function With Radar & Traffic Cops 

By Eugene Fram

A nonprofit board has the primary responsibility for ensuring that proposed programs and services that the organization can offer are in the best interest of the clients it serves and the community or membership it represents.

Specifically the board’s board planning and resource committee provides the “radar” for the nonprofit board and also acts as its “traffic Cop.”  <–more–> It provides the radar by evaluating whether the organization is being correctly positioned to meet the current and future needs of clients.  As a traffic cop, it helps make certain that new board projects align with the mission, are completed in a timely manner and that wise use is made of volunteers’ efforts and time.

The committee has an obligation to seek the best sources of information for policy changes and to review and filter proposed changes that come before it, as suggested by the staff, board, volunteers and community members.

The entire nonprofit board is responsible for monitoring the implementation of adopted changes, which should be those that best fit the organization’s mission, vision, values and resources.

Source: Policy vs. Paper Clips, Third Edition (2011), p. 102. 

My blog site: http://bit.ly/yfRZpz

 

 

 

 

How to know when a nonprofit board has achieved a positive culture?

How to know when a nonprofit board has achieved a positive culture?

Nonprofit board culture is really about having chemistry that works.  Is there transparency and openness?  It is an intangible, but it is critical.  Is there a spirit of inquiry?  That means, for example, that one director can disagree with another director or with the CEO without being hostile or being viewed as hostile for having an opposing opinion. (more…)