non-profit management

A Nonprofit’s Reputation Rests on the Quality of its Directors

A Nonprofit’s Reputation Rests on the Quality of its Directors

By: Eugene Fram

Reputations are universally seen as valuable, but reputation risk is poorly understood. As a result, reputations are left unnecessarily at risk.*

Reputation matters in the nonprofit world. Few nonprofit boards exist today that don’t worry about how they are perceived in the communities or associations they serve. And to make sure their images remain pristine, many turn to crisis consultants and other forms of expert assistance. A tarnished reputation can have a huge impact on a vast network of stakeholders as confidence in the organization ebbs and support starts to dwindle. Nonprofit board members must be sensitive to signals of impending reputation risk and immediately roll up their sleeves in an attempt to rebuild confidence. (more…)

What’s Needed To Become a Nonprofit Board Change Agent?

What’s Needed To Become a Nonprofit Board Change Agent?

By Eugene Fram

Nonprofit board members with business backgrounds often become frustrated with the moderate pace for change that is characteristic of nonprofit boards. Most resign or remain on the board as passive directors, not wanting to create internal conflict in organizations that are dedicated to developing positive social programs. Here are some qualifications for unusual board members that want to become change agents and lead boards and/or organizations to making substantial positive changes. * (more…)

Once Again! Can A Mission-Driven Nonprofit Be Blindsided?

Once Again!! Can A Mission-Driven Nonprofit Be Blindsided?

By: Eugene Fram

Strange to say, a nonprofit organization and Board can become too dedicated to its mission! Such over-zealousness can cause them to overlook opportunities for strategic change. For example:

Nonprofit boards and their organizations offering mental heath counseling services are aware that new pharmaceutical therapies will certainly reduce the need for face-to-face counseling. They need to balance their current and long-term efforts to accommodate the progress that is being made in the pharmaceutical field. (more…)

Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: A Complex Problem

Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: A Complex Problem

By: Eugene Fram

An updated and revised viewer favorite post

At coffee recently a friend serving on a nonprofit board reported plans to resign from the board shortly. His complaints centered on the board’s unwillingness to take critical actions necessary to help the organization grow.

In specific, the board failed to take any action to remove a director who wasn’t attending meetings, but he refused to resign. His term had another year to go, and the board had a bylaws obligation to summarily remove him from the board. However, a majority of directors decided such action would hurt the director’s feelings. They were unwittingly accepting the “nice-guy” approach in place of taking professional action. (more…)

The Nonprofit President/CEO – How Much Board & CEO Trust Is Involved?

The Nonprofit President/CEO – How Much Board & CEO Trust Is Involved?

By; Eugene Fram

The title, president/CEO for the operating head of a nonprofit, clearly signals to the public who has the final authority in all operating matters and can speak for the organization.* It is not an ambiguous set of titles. However, the terms “manager” or “executive director” can be quite ambiguous and do not generate the same external understanding or respect. An executive director can be the administrator in a small church or the operational head of a large arts organization. The public and some corporate directors often view managers and executive directors (because of the organizational history of nonprofit) as “hired hands,” not as professionals who are able to manage all operational activities. (more…)

Dysfunction in the Nonprofit Sector—Reality or Myth?

Dysfunction in the Nonprofit Sector—Reality or Myth?

By: Eugene Fram

Judging from the vast literature on dysfunctional nonprofit boards and organizations (my own posts included!) one might conclude that the majority of nonprofits are struggling, incompetent and/or in crisis. I argue that this is not the case. Decades of experience lead me to believe that nonprofits have the same functional variables as profit making organizations—dysfunctional at times like Target or GM; efficient like Apple or Whole Foods; adaptable like Del Monte and Cisco. Everybody doesn’t get it right all the time. (more…)

Can Nonprofit Boards Afford To Underinvest In Management Leadership Development?

Can Nonprofit Boards Afford To Underinvest In Management Leadership Development?

By: Eugene Fram:

McKinsey & Company has just issued the results of a substantial study: To better understand the state of (nonprofit) leadership in the US social sector… The findings suggest that chronic underinvestment in (management) leadership development…(may risk) the sector’s capabilities to fulfill emerging missions effectively and to adapt to fast-changing demands.
(http://www.mckinsey.com/insights/social_sector/what_social_sector_leaders_need_to_succeed) (more…)

Once Again! What Does Nonprofit Board Oversight Mean?

Once Again! What Does Nonprofit Board Oversight Mean?

By: Eugene Fram

I have a daily subscription to Google Alerts on “Nonprofit Management” and “Nonprofit Governance.” Every week, several nonprofit case stories surface, related to inadequate oversight by nonprofit boards of directors. Many of the cases result in huge losses to the nonprofits. Following is my personal list of what I consider to be reasonable board oversight responsibilities, to attempt to help nonprofit boards of directors to avoid such losses.
Financial Related Actions
• At least half the board should be able to analyze the monthly or quarterly financial statements. Have voluntary information sessions available for those who do not have the skills.
• The board chair needs to be alert to “teachable moments” during board meetings. When a complex financial or board related legal issue arises, the chair needs to make certain that all have a basic understanding of what is involved. Otherwise some directors will sit quietly and nod their heads in agreement!
• Make certain that an external audit is conducted at least every two years, and the board is involved in the selection of the external auditor from a list of two or three suggested by board members and/or management.
• Be certain the organization has either a comprehensive assessment committee, finance committee, and/or audit committee. (Some states require nonprofits to have an audit committee once the organization has specific annual revenues.)
• Be alert to the development process for filing critical reports –Examples: IRS 990s, employee tax withholdings and both state and federal tax reports. With the recent expansion of the 990 Form, the board and/or audit committee needs to be involved with the development of the form and responding to the 28 new questions related to nonprofit governance.
• Make certain the board has developed or is developing a current strategic plan and that it becomes a useful document.
• Be especially alert when financial reports are frequently late or one or more directors perceive financial personnel are inadequately skilled.

Other Governance Actions

• Be alert to the system used for developing new programs. Be wary when new programs are described such as “mind-boggling.” However, be certain that all reasonable opportunities are examined in a robust manner. Otherwise the organization may be a candidate for long-term disruption, like Eastman Kodak.
• Although engaging the CEO is the only hiring decision the board makes, it still has a responsibility to understand the strengths and weaknesses of promotable internal staff. This will require some board interactions with these staff persons
• Make certain that the organization has a knowledgeable CFO. No board member should have to worry about the safety of the organization’s financial assets.
• Directors need to be ready to raise questions, even if they fear the questions may appear to be inadequate ones.
• Nonprofit operational transparency is critical in the 21st century. Malfeasance, in any format, must not be covered–up for the “sake of the organization’s reputation.”

“Trust But Overview &Verify.”

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

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

By: Eugene Fram

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

Stay on That Nonprofit Board!

Stay on That Nonprofit Board!

By: Eugene Fram

Gene Takagi, noted San Francisco attorney, who specializes in nonprofit organizations recently published an article listing 12 reasons for resigning from a nonprofit board. It is worth reading. (http://bit.ly1r2M5Hi)

BUT

Nonprofit directors often become impatient with the slow pace of progress toward positive change. Here are some actions that may change the situation, improve service to clients and prepare the organization for any long-term mission disruptions. (more…)