Nonprofit CEO-Board Relationships

Stay on That Nonprofit Board

Stay on That Nonprofit Board!

By: Eugene Fram

Viewer Favorite Appropriate For The End Of The Year!

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://nonprofitquarterly.org/2014/07/10/12-reasons-why-you-should-gracefully-resign-from-a-nonprofit-board/

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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…)

The Enron Debacle, 14 years Ago—2015 Lessons for Nonprofit Boards?

The Enron Debacle, 14 years Ago—2015 Lessons for Nonprofit Boards?

By: Eugene Fram

In 2001 Enron Energy collapsed due to financial manipulations and a moribund board. It was the seventh-largest company in the United States. Andrew Fastow, the former CFO and architect of the manipulations served more than five years in prison for securities fraud. He recently offered the following comments to business board members that, in my opinion, are currently relevant to nonprofit boards. (http://bit.ly/1JFGQ6T) Quotations from the article are italicized. (more…)

When Will Nonprofit Boards Learn to Plan for Succession?

When Will Nonprofit Boards Learn to Plan for Succession?

By: Eugene Fram

Revised & Updated Viewer Favorite

The CEO has resigned with two weeks notice. Whatever the scenario, the pace of the organization will likely slow. Some senior managers may vie for the position or, in self-interest begin to look for new positions, as insurance. Staff members begin to speculate about the future of their department and their positions.

A search committee is cobbled together to explore possibilities for a replacement. According to a recent study, such turmoil is not unusual among nonprofits in transition periods. (more…)

Carnegie Hall Board Dissonance–What Lessons For Nonprofits?

Carnegie Hall Board Dissonance–What Lessons For Nonprofits?

By: Eugene H. Fram

Ronald O. Perelman (Carnegie Hall Board Chair) …was critical of trustees for placing “a premium on avoiding tensions and disagreement” and said he will leave (the board) in a month. The Problem: Clive Gillinson (Executive Director & Artistic Director) signed a $100,000 contract that might include a conflict of interest…to which Perelman (and two other directors) objected. The board agreed to engage an independent lawyer to investigate the situation, but Perelman, in apparent anger, reported progress has been too slow. *

Ronald Perelman’s abrupt resignation sounds a “clarion call” for all nonprofit board members. When an executive director appears to overstep his/h authority and/or when the board has not vetted a significant contract, nonprofit board members need to take proactive stands. Although the Carnegie Hall board is about 78 strong and tends to glitter with “star quality,” there are obvious parallels with nonprofit reactions to similar disruptions. How should directors of smaller nonprofits react to morale crises of this nature? (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.

In another instance the board refused to sue a local contractor who did not perform as agreed. The “elephant” was that the board didn’t think that legally challenging a local person was appropriate, an issue raised by an influential director. However, nobody informed the group that in being “nice guys,” they could become legally liable, if somebody became injured as a result of their inaction.

Over the years, I have observed many boards with elephants around that have caused significant problems to a nonprofit organization. (more…)

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…)

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…)

Can A Board Member Ever Wear Two Hats?

Can A Board Member Ever Wear Two Hats?

By Eugene Fram

Although this is not a good idea for nonprofit organizations, it is not an unusual occurrence, especially among start-ups. A director in a start-up nonprofit will need to assume some staff responsibilities as a volunteer. But he/s will need to organizationally report to the CEO. (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?

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…)