How Prepared Are Board Members for the Challenges of the Nonprofit Culture?
By: Eugene Fram Free Digital Image
Viewer Favorite–Updated & Revised
Given that the typical tenure of a new board member is six years. And assuming that a new director’s intention is to make his/her unique contribution to the organization’s progress before he rotates off the board and is supplanted by another “new” director. With these factors in mind, I estimate that many volunteers enter the boardroom with little understanding of nonprofit culture. Even those who have served previously on business boards may initially spend valuable time in accommodating to the nuances of nonprofit practices and priorities before being poised to make contributions to the “greater good” that nonprofit create. Nonprofits have a way of acculturating new board members to current culture in steady of allowing the new board member to insert his/h culture into the flow of nonprofit’s stream of ideas. For example, a financial executive familiar with financial strategy may be asked to assist the CFO with accounting questions, instead of being asked to develop a financial strategy for the organization. Following are some areas that are endemic to nonprofits: (more…)
Resolution for 2017—Focus on Long-Term Nonprofit Sustainability
By: Eugene Fram Free Digital Photo
Nonprofit boards, like their business counter-parts, can become complacent and lose their vitality. This sets the stage for nonprofit disruptions by the social and technical environments that surround them. Following are some crucial priority questions (listed in bold) that have been raised for business boards. * They easily can be modified to drive the thinking of nonprofit directors and help them keep nonprofits sustainableand productive.(more…)
As the nation is reeling from the jolt of the 2016 election results, I happened to read a recent report from Deliotte Consulting suggesting ways that for-profit organizations can improve their performance in uncertain times. The report centers on key drivers of board effectiveness that, in my opinion, resonate with similar nonprofit situations. Most nonprofit boards typically live with uncertainty and are perennially “on the edge.” Here are some ideas from the Deloitte * report that, when adapted early, can bolster their operation in times of disruption.
Bold, decisive leadership: Nonprofit boards are responsible for donor and charitable types of revenues that place directors in a public trust position. In addition board members typically will only be active for a median tenure period of four to six years. As a result they often become overly conservative in their strategic views and may accept CEOs that “mind-the-store” with modest incremental growth annually.
To prevent the organizational boat from capsizing in the perpetual seas of uncertain times, the board needs rely on the best forward looking information about strategy, culture, people and clients. All of this must be in solid alignment with a substantial mission, or a modified one if the external environment requires it. This allows the nonprofit to cut through the cultural barriers that impede strategy development. As Peter Drucker has noted, “Culture eats strategy for breakfast every morning.”
Opportunity mind-set: Even when the organization is prospering, the board has a responsibility to press for innovations and to support small-scale experiments as called for in a “Lean Management” structure. Within this structure, the staff can test the waters via experiments to move more boldly, as long as the experiments yield positive results. **
Stakeholders: Nonprofits have a multitude of stakeholders, complicated by the fact that often those who receive the service are not the ones who support or pay for it. This requires management to balance the needs of the various groups and that can call for heart-breaking decisions. For example, should revenues be allocated to marketing or used for needed client programs? To solve the dilemmas Deliotte suggests, “Building valuable, open relationships across multiple stakeholder groups is key to building trust and organizational resilience”
Match fit: Boards have a responsibility to motivate the nonprofit to realistically evaluate the tensions between new models and existing ones. Two examples show contrasting results. Easter Seals boards perceived the market changes involved with polio vaccines and modified their missions. Nonprofit counseling agencies failed to assess the positive impacts of new pharmaceuticals and the need for face-to face counseling declined. To develop a fit, Deliotte suggests, “the board and the organization need to be agile and open.”
Culture, culture, and culture: Nonprofit boards’ cultures play a key role in determining the level of risk the board is willing to take. With key drivers, nonprofit boards have to take reasonable risks to survive and even encourage management to take it. Small scale, yet bold, experimentations that are jointly reviewed by board and management provide a “Lean Management” approach that has been used by venture supported business firms.
Cracking the diversity Code: Instead of recruiting new board members and maximizing the best they have to offer, nonprofit boards try to orient new board members to the current culture. A new member with a financial planning background, for example, will be asked to work with the CFO on accounting related problems. Instead, he/s should be asked to develop a long term-term financial plan. Board background (such as strategic planning abilities, critical thinking) diversity, as well as demographic (such as gender, ethnicity) ones, must be carefully crafted and utilized as well as demographics.
Curiosity is Key: Deliotte Consulting concludes, “Directors should get out of the ‘same old’ board room, and should even look across borders to learn from approaches in (different nonprofits) and companies… . Developing news skills and insights are essential for innovation and should be sought to create the questioning and challenging environment needed to imagine, inspire and deliver better outcomes (and impacts). Complacency (in uncertain times) can be a killer.”
How Do Nonprofit Boards Keep Stakeholders Engaged?
By: Eugene Fram Free Digital Photo
Viewer Favorite Revised and Updated
First, exactly who are the “stakeholders” in the nonprofit environment? Most directors would readily define the term as clients and board members. But what about other participants such as external auditors and significant vendors? Surely a charity that depends on a vendor to supply groceries can be hobbled if the food is not delivered properly. And, last but not least, the backbone of the organization — the volunteers! Many cogs in the wheel make the nonprofit world go around and need consistent and careful attention. Following are some guidelines for engaging all types of stakeholders:
Improve Your Nonprofit Director Onboarding Process using Going For Impact
New guidebook covers
What to Know, Do and Not Do
As a veteran director with extensive experience on 12 nonprofit boards I have been “treated” to a wide variety of on-boarding sessions for new directors.
They’ve ranged from asking:
Every new director to read a 2.5 inch policy manual. (I checked the size!)
Having experienced board members sit next to new ones at meetings.
Listening to the CEO review the entire policy manual.
Going For Impact: The Nonprofit Director’s Essential Guidebook lets you improve such sessions by making on-boarding governance material more meaningful and interesting. For example:
Use the book’s 150-item Index Strategically: Ask new directors to read specific topics (e.g., micromanaging; outcome vs. impact data; responsibilities of the board) and relate the readings to their new board.
Select Key Chapters in the Book: Choices include topics such as Nonprofit Culture Presents Challenges or There’s a Boundary Line That Shouldn’t Be Crossed. Then later – in either formal or informal sessions – have the CEO and/or board panels discuss the topics with the new directors.
Give All New Directors a Copy of the Book: Ask them to skim or read the book’s content, which encompasses 112 pages, and list topics of greatest interest. Then hold three or four informal on-boarding sessions, led by experienced directors that relate to the selected topics.
Going for Impact can also be utilized by creative boards and CEOs to develop retreat agendas that can help enhance their board’s governance perspectives!
Nonprofit Board/Staff Relationships: An Uncomfortable Partnership?
By: Eugene Fram
I have always been of the opinion that nonprofit directors don’t give sufficient consideration to the relationships between the board and staff. The following passage reasserts the complexity of such relationships and why misunderstandings might occur on either side of the fence.(more…)
Mismanagement Causes Huge Agency Failure—A Word To The Wise Nonprofit?
By Eugene Fram
Rarely do failed for-profit or nonprofit organizations get a posthumous review of what actually went wrong. The collapse of one of the largest nonprofits in the US, the Federal Employment Guidance Service (FEGS) of New York City, is a noteworthy exception. Details of the causes that led to the human service’s demise were aired widely throughout NY media. * This organization had a $250 million budget, with 1900 employees who served 120,000 households covering a range of mental health and disability services, housing, home care and employment services.
Following are my interpretations of what its board should have done to avoid such a tragedy. (more…)