Board governance – Page 2 – The Healthy Non-Profit

Illinois budget crisis impacting non-profit organizations — Part 3

March 24, 2016 erik Board governance, Fundraising, leadership, organizational development, philanthropy

illinois budget Earlier this week and last week, I started writing about the State of Illinois’ budget crisis and how it is impacting non-profit organizations. In Part 1 of this series, I shared survey results provided by United Way of Illinois along with other insights and perspectives . In Part 2, I talked to a non-profit executive director whose organization lost significant funding as a result of Illinois’ budget impasse and shared some surprising developments. Today, I have a suggestion for Illinois non-profit leaders to mull over as the crisis deepens (and there is lots here for non-profit leaders from other states to chew on, too).
Frog in boiling water
We’ve all heard the story about frogs and boiling pots of water. Right?
Assuming that some of you haven’t any clue of what I’m talking about, here is a nice summary from Wikipedia:

“The boiling frog is an anecdote describing a frog slowly being boiled alive. The premise is that if a frog is placed in boiling water, it will jump out, but if it is placed in cold water that is slowly heated, it will not perceive the danger and will be cooked to death. The story is often used as a metaphor for the inability or unwillingness of people to react to or be aware of threats that occur gradually.”

I have no clue what the origins of this old story are, but I do know this . . .

IT IS A MYTH!

boiling frog1 Don’t want to take my word for it because you might have heard it from your grandfather or another beloved family member. No problem … I completely understand. Let me provide you with scientific proof. Simply click here, click here for more, and click here if you are in deep denial. If you clicked all three links, I’m guessing you probably also believe a number of other grossly inaccurate things about other animals and suggest you the Snopes.com article titled “Critter Country: Wild Inaccuracies”
So, what does any of this silliness have to do with non-profits and the Illinois budget impasse?

Your organization is like a frog!

In other words, your non-profit should (and likely will) jump out of the boiling waters of government funding if things get too hot. It is a simple matter of survival.
Question #1: When?
I’ve lamented too often — right here on this blog — that too many non-profit boards operate poorly. They don’t understand (and sometimes reject) their legally defined fiduciary responsibilities, focus their meetings obsessively on monitoring rather than governance, micromanage the organization and its staff, rubber stamp things (oftentimes very important things) that staff put in front of them, and my list can go on and on.
If anything in the last paragraph describes your organization’s board of directors, please hear me clearly . . .

You’re at risk!

In other words, you might just be on the road to proving all of the scientists, who said in the last section that “the boiling frog story is an urban legend,” are liars.
boiling frog2 Your board is likely made up of smart people. If they aren’t being used (at a minimum) as a “sounding board” on the issue of government funding and what to do about it, then my suggestions are:

Stop business as usual in your boardroom
Start adding a 45 minute “generative discussion” agenda item to every one of your monthly meetings for the foreseeable future
Focus your discussions around various aspects of your government funding situation
Bring in guest speakers who know more than you do about state funding and your grants
Pose open ended questions and facilitate an engaging dialog where everyone is encouraged to share their thoughts and feelings
Don’t just have theoretical conversations … also pose action oriented questions (e.g. what are our options? what should we be doing?)

If you and your board can make this adjustment in non-profit governance, I guarantee you that . . .

It will be clear when it is time to jump out of the boiling pot!

Question #2: What?
boiling frog3 Of course, the more difficult question for most non-profit organizations is “What to do about it?”
If your organization isn’t reliant on government funding, the answer is easy . . . carry on and try not to gloat too much around your non-profit friends. For those of you who rely on modest (or perhaps significant) government money, then you want to keep reading.
If you and your board have decided the water is getting a little too hot, then here are a few suggestions:

Re-exam your non-profit revenue model
Explore other models (refer to previous section about generative discussions in the boardroom)
Make a group decision about which model (or hybrid model) is best for your organization at this time
Don’t try to turn the battleship all at once … choose one (or a few) things to “try on for size” and experiment with small aspects of your new revenue model (e.g. write a private sector foundation grant, engage a corporate partner, identify prospective individual donors and start a conversation with them; write a business plan for a potential social enterprise, etc)
Invest time, energy and effort in evaluation of every new thing you undertake and commit to nurturing a culture of improvement and excellence
Celebrate every success from top-to-bottom and side-to-side of your organization (no matter how big or small it may be)

If you got this far and still find yourself scratching your head over the idea of different non-profit revenue models, then you need to click-through and read a Bridgespan white paper titled “Ten Nonprofit Funding Models“. I also highly suggest clicking on and reading every hyperlink embedded in the white paper.
If you don’t believe your organization can do this without help, then I have some good news. There are countless non-profit consultants (myself included) who are available for hire.
Stop listening to stupid people
I’ve heard state funders (e.g. foundations, United Ways, etc) say loudly and clearly, “The state cannot expect funders to fill the gap created by the State“.
I do NOT believe foundation leaders and United Way professionals are “stupid people“. However . . .
I have heard some people (in fact some are even dear friends of mine), amplify the cautionary words of foundations and United Ways and then twist them by concluding “private sector philanthropy” cannot fill the gap. It is these folks to whom I urge you to please stop listening.
The reality is that foundations, corporations and United Ways only account for 20% of the $358 billion of charitable giving. The remainder of the pie (a huge whopping 80%) comes from individuals either directly or through bequests.
Moreover, charitable giving is only 2% of our country’s GDP.
The pie can be increased. There is room to expand and grow. Foundation leaders and United Way professionals never said private sector philanthropy couldn’t be the solution (or at least a big part of the solution). They were simply say that politicians need to stop telling voters their organizations will fill the gap.
Are you a doubting Thomas? If so, then I have a proposition for you . . .
Add this topic to your board agenda. I think it makes for an awesome generative discussion. If you’re an Illinois non-profit organization and you’re looking for someone to speak in your boardroom on this subject and facilitate a generative discussion, then please contact me because I would be willing to consider it.
Next up in this blog series?
I’ve sent emails to a handful of politicians and policymakers who I trust and respect. I’ve invited them to share their thoughts on this subject. If any of them respond, then I’ll publish those next week.
In the meantime, please use the comment box to share your thoughts and experiences on the Illinois budget impasse, the impact you’re seeing on the non-profit sector, your thoughts on what organizations should be doing about it, or anything else that is top of mind regarding the state of government funding (federal, state or local) and those trends. We can all learn from each other.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Dealing with your non-profit organization's cash flow crisis

March 10, 2016 erik Board governance, Fundraising

A few times every year I get a phone call from a non-profit friend who is experiencing a cash flow issue. The conversation always starts off with a tinge of embarrassment and then quickly morphs into finger pointing and finally ends with a sense of resignation and desperation. I received another one of these phone calls the other day, which reminded me that I’ve been meaning to blog about this subject for quiet some time. The following are a few quick tips on how to handle your non-profit organization’s cash flow crisis.
Remain calm and confident
One of my favorite movie scenes is at the end of Animal House when Kevin Bacon’s character is trying to keep the peace in the middle of the parade-turned-riot when he is shouting, “Remain calm! All is well.”
During a cash flow crunch, it is important for you to remain calm and encourage everyone else in the organization (e.g. board volunteers, staff, donors, etc) to do the same.
Why? Simply because . . .

People don’t follow leaders who aren’t confident and composed
Panic and fear spread quicker than the flu
People don’t typically make good decisions when they are panicked and fearful

Develop a 90 day plan
planning You have lots of short-term options that will help bridge your organization through a cash flow crisis. The following is a short list of some of those options:

Secure a loan (this can be a traditional short-term loan from the bank or a promissory note from a donor)
Search your donor database for LYBUNTs (e.g. lapsed, former donors) and ask them to renew their support
Meet with your largest donors and ask them to make another contribution
Look at your accounts receivable list and ask those donors if they would consider making a pledge payment sooner than they had indicated on their pledge card
Ask board members to make another contribution
Prioritize which outstanding invoices need to be paid now and which ones can wait
Work with your Finance Committee (or key board volunteers) to develop a new budget plan for your new realities (or develop multiple budgets for a variety of revenue scenarios)
Use unpaid furlough days with some staff to temporarily reduce payroll expenses (be cognizant of what this will do to morale and possible employee turnover)

I wrote a blog post titled “So, your non-profit cannot make its payroll obligation” a few years ago about some of these options. You might want to click-through to read more.
Understand what caused the problem
assessment If I’ve seen it once, I’ve seen it a number of times . . . board volunteers want to hold someone accountable after the crisis passes. In my opinion, the best way to survive this dynamic is to be able to point to:

Your calm leadership during the crisis
Your role in developing the short-term plan
Your understanding of what caused the problem
Your commitment to fixing the things that cause the problem

There is a fine line between assessment and finger pointing in these situations. Whatever you do, avoid finger pointing because your board of directors will interpret it as “not taking responsibility“.
There isn’t a right or wrong way to undertake an assessment, but my suggestion is that you do it with many people sitting around the table. The more eyes you have looking at this situation, the more likely you will be to see all sides of the problem. Consider involving staff who play some role in financial management, board volunteers with a background in finance, and possibly even an external consultant who can come at this with fresh eyes.
Develop a long-term plan
planning Now that you’ve made it through the crisis and have a firm understanding of what caused it, it is important have a new long-term plan that keeps you from ending up back from where you just came.
As with the last section, I strongly suggest you don’t do this alone. Your plan will have more credibility if many participated in its creation. Remember, the board will look skeptically at any plan that is developed by the same people who they perceive as having played a role in creating the original crisis. Involving fresh faces with lots of credibility helps address this dynamic.
Your plan will be unique to your organization and your situation; however, the following are just a few “fixes” I’ve personally seen embraced more often than not:

Making revisions to the resource development plan (e.g. adding more to the fundraising plan)
Making process changes to the budget construction process
Making process changes to billing/invoicing donors and grant providers
Changing how the board monitors/oversees the finances
Undertaking a re-organization of the company focused on staff/payroll reduction

Well, good luck with your cash flow crisis. Hopefully, these big picture suggestions are helpful and get you pointed in the right direction. If you have any ideas or experiences that you wish to share, please do so in the comment box below. We can all learn from each other.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Making the case for periodic assessment of your non-profit organization

January 28, 2016 erik Board governance, organizational development, Planning

A few weeks ago I received a call from a friend who asked me (aka The Healthy Non-Profit LLC) to submit a proposal to conduct an organizational assessment for a regional non-profit organization. He recently joined the board of directors of this organization, and during his first few meetings he concluded that his fellow board members might need a little “perspective”. As we spent a little time on the phone framing the proposal, he made a very specific request of me . . .

“Please go into great detail about why it is a best practice for non-profit organizations to invest in an organizational assessment facilitated by an external consultant.”

In the space below, I attempt to elaborate on this question by sharing two personal non-organizational stories that I consider analogies for non-profit organizations. I also end this post by sharing the actual one-page of text I included in my proposal and ask DonorDreams readers to please use the comment box to help me add/subtract to this case for support (for the benefit of future proposals).
Story #1: Mom & Dad aren’t on the same page
Mom_Dad I am a lucky son because both my Mom and Dad are still married and living in the same community and same subdivision where I grew up (except they moved across the street when I went away to college). A few years ago, both of my parents retired and have been trying to figure out what to do with their new found time.
Just the other day while visiting Mom and Dad, the conversation turned to the subject of “To Infinity and Beyond“. To clarify what I mean by this, here are a list of questions that were being asked and not really answered:

How long do you plan on staying in your current house?
Have you given any thought to what you want to do when staying where you’re at doesn’t make any more sense?
Oh? You want to move to Florida? When were you thinking you might do that?
Where in Florida do you see yourself living?
Are you keeping the house in Illinois and planning to live like “snowbird retirees“? Or are you selling the house? And when are you planning to do that? And when do you plan on thinning out all of your STUFF?

UGH!
If you’ve ever gone down this road with your parents, you know how frustrating this discussion can become.
In my instance, it became clear that these two people, who spend approximately 75% of their lives no more than 100 feet from each other, were NOT on the same page. I’ll spare you the details (and protect their privacy), but suffice it to say one of my parents has a two-year plan in mind and the other was taking the long view with a 10-year plan. And this was just the beginning of their differences.
So, what does this have anything to do with your non-profit organization and the best practice of periodic organizational assessment?
Simple . . .
Next time you are in your boardroom, I encourage you to stop whatever you’re doing, look around the room at each of your board volunteers and imagine how each one of them would answer the following questions:

Who are we as an organization? Why do we exist?
Where are we going as an organization?
Where should we be going as an organization?
What is currently working well for us?
What are we challenged by?
What opportunities exist outside of our four walls that we should be trying to take advantage of?
What storms are brewing on the horizon that we need to better position the organization for?

I guarantee that if you do this exercise honestly, you will probably find the same thing I found with my parents which is . . .
You will see awesome people, who are engaged around shared values and a mission, BUT who all have a slightly different view on things that are very important to your organization.
It is for this reason that periodic assessments are necessary. If done by someone external to your organization (possessing a fresh set of eyes and ears), then you can learn a lot about what isn’t being said and then incorporate it into the next step — a planning process (of some sort).
Story #2: My trip to the doctor
doctor I’ll keep this story short and sweet since this post is getting too long. Yesterday, I went to my doctor for my annual physical.
Why did I go?

A bump recently appeared on my finger
I’ve been fatigued more than usual lately
I’ve had the same cold virus going on five weeks now
And a variety of other little reasons that I shouldn’t go into on the internet LOL

You’ve probably heard that an annual physical examination by your doctor is a best practice. In fact, it is strongly encouraged by most insurance companies that typically don’t even charge you a co-pay for such a visit.
Why is this form of annual assessment of your health considered so important by health practitioners?
Simple . . . there are things you cannot see and do not have knowledge of that this assessment will help diagnose and lead you to act upon. The same logic holds true for your non-profit organization.
Asking a small favor of you . . .
As I explained at the beginning of this post, the following is approximately one page of text that I included in my recent proposal. Would you please do me the small favor of reading it and provide your two cents on what you would add or subtract from this written case for support? You can also simply tell me what is missing (or what you really like) in the comment box below. My plan is to incorporate your feedback into the next proposal I’m asked to write like this one. Thank you in advance for your help. 🙂

Why is periodic assessment a best practice?
In layman’s terms, periodic organizational assessment is akin to a physical exam that people periodically engage in with their physicians.
While assessments take many different shapes, almost all attempt to answer the following questions:

Who are we?

Where are we now?

Where do we want to go?

Answers to these questions typically become a precursor to board activities such as creating an organizational:

Long term plan

Strategic Plan

Business Plan

Short-term tactical plan

While looking carefully at the question of “Who are we” might seem silly to some people, it is important because organizations morph and change over time. Moreover, the “need(s)” that an organization was initially created to address may no longer exist or may have evolved.
The question of “Where are we now” is oftentimes difficult to ascertain without the help of an external consultant. The reason for this is the same reason people pay therapists / counselors to help assess what is going on inside of ourselves. The simple truth is that it is hard to get outside of our own bodies to see what is really going on. What makes this even more difficult with non-profit organizations is the fact that there are many different people sitting around the boardroom table oftentimes with various opinions and perspectives.
The question of “Where do we want to go” is more of a planning discussion than it is an assessment question. However, good organizational assessments have the ability to access what various stakeholders are thinking about the future. Being able to see all of these different viewpoints can help the board frame productive discussions at the start of a planning process focused on vision and goal setting.
As it is illustrated on the previous page, organizations go through a predictable lifecycle, and an organizational assessment can help board volunteers see where they are at in that cycle and have productive discussions about what to do about it.

Thanks for indulging me today. I appreciate being able to share a few stories and a portion of a business proposal with the smart readers of the DonorDreams blog. I truly believe that we can all learn from each other (as I’ve stated hundreds of times over the last five years of blog posts). Today, I am doubling down on this believe by asking for your feedback. I appreciate your willingness to participate in such an exercise.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Words of wisdom from GE television commercial and our friends at Disney

November 24, 2015 erik Board governance, Fundraising, Planning

ideas_general electric As most of you know, I’ve been traveling A LOT lately and I haven’t had the opportunity to watch a lot of television. However, it seems like every time I have the TV turned on, I’m seeing a television commercial from General Electric (GE) that talks about “ideas”.
Have you ever experienced a commercial that grabs you in such a way that you can’t get it out of your head? If so, then you know what I’ve been experiencing for the last month. There is something about this commercial that just speaks truth to me.
If you receive this blog via an email subscription, then click this link to view the “Ideas Are Scary” commercial. If you are viewing this in your browser, then you can click the video image below:
https://www.youtube.com/watch?v=sfmQvc6tB1o
I think this television commercial speaks to me because I routinely see this play out live and in-person as a non-profit consultant. The following are just a few examples:

Strategic planning discussions where ideas are shot down for any number of reasons ranging from lack of resources to lack of leadership
Annual campaign planning meetings where volunteers express resistance to sitting down with donors in-person to talk about making a pledge to the campaign (typically rooted in fear)
Boardroom discussions where investing in organizational capacity building efforts is met with resistance because it means getting outside of an organizational comfort zone

And if this is a common theme in my life, then I know it something with which many non-profit CEOs and fundraising professionals constantly are confronted.
So, today’s post begs the question . . .

What should non-profit leaders do differently to make ideas less scary and improve their ability to lead change?

There has been a fair amount of writing over the last five years on the DonorDreams blog platform by me and number of guest bloggers on the subject of leading change, and the following are a few of my favorites:

However, I am left with two questions:

How can non-profit leaders build an organizational culture that embraces new ideas, creativity and innovation?
How can non-profit leaders build shared vision among all stakeholders (e.g. staff, board, donors, etc)?

I know the answer to both of these questions includes parts and pieces of the following:

writing and refining a powerful “case for support” document
getting the right people sitting around the table
engaging everyone in the process, hearing their concerns and incorporating their thoughts until everyone has an ownership stake in the idea

However, there is much, much more to leading change than the simple six step model that some organizational development consulting/training companies teach, and I suspect it has something to do with your organization’s culture. This is where I think all of us can learn from The Walt Disney Company, home of “Imagineering”. (Note: this term is trademarked by Disney)
I always thought Imagineering was a just an idea the folks at Disney embraced and knit into their corporate culture. However, after a little wiki research, I’ve learned this is a full-blown organizational development concept rooted in:

org structure
processes-procedures-systems
people
direction setting

If you are a frustrated non-profit leader (either paid staff or volunteer) and want to figure out how to make ideas less scary and more likely to be embraced, my suggestion is to research what works for General Electric (aka the people who “Bring Good Things to Life” and espouse “Imagination at Work”) and The Walt Disney Company (aka home of the imagineer).
You might be surprised by the number of best practices you find and how many you are able to implement at your non-profit organization.
In the meantime, please use the comment box below to share your thoughts and experiences on how you’ve tried to change organizational culture or build shared/common vision. We can all learn from each other.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Building consensus is part of everyday hard work at non-profits

September 1, 2015 erik Board governance

It seems like one common theme in my work with non-profit organizations is that “building consensus” is difficult. Getting everyone on the same page can be like herding cats. It was this reality that had me all tied in knots a few months ago as I was sitting down for the first time with my Philanthropy Day planning committee. We had lots of things to decide (e.g. event location, registration fees, training sessions, discussion panels, etc), and there was very little time to do so.
I decided to reach into my magic bag of consulting tricks and pulled out a tool that I’d never used before . . .

Idea Rating Sheets

The tool is simple:

One idea is written at the top of each sheet
The sheets are passed around the group
Individuals rate the idea
Individuals provide some feed back on the idea’s strengths and challenges
Each person “signs off” on the sheet confirming that they weighed in with their feedback

At the end of the day, it is easy to see which ideas have traction and which ones don’t. Those ideas that have support rise to the top, and the group can focus its discussions and not waste time talking about ideas that are non-starters.
In my experience, I can see Idea Rating Sheets being used very effectively in various facilitated planning processes. This tool might also be very effective for standing committees of your board that are trying to make direction setting decisions.
Want to learn more? Simply visit their webpage by clicking here or their library of resources by clicking here.
Kudos to Jason Diceman and his team for creating a simple yet awesome consensus building tool!
How does your organization build consensus? Please share your thoughts and experiences in the comment box below. We can all learn from each other.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

What skills and experiences are critical to your board volunteers' success?

March 24, 2015 erik Board development, Board governance, Fundraising, organizational development

boarddev1 Do you know which skills and experiences are most important for a new board volunteer to possess in order to succeed on your board? Knowing this could help your organization conduct better prospecting exercises and result in better prospect recruitment lists. Today’s post is the third in a three part non-profit board development series that started last week. During this time, we focused on a recent survey released by our friends at non-profit technology research firm Software Advice of 1,545 board volunteers and people tasked with recruiting new board members. The survey’s key findings probably won’t surprise you, but the implications might change the way you think about your organization’s future board development efforts.
The final two findings of SoftwareAdvice.com’s survey that caught my eye related to skills and experiences. The first finding was:

“Basic computer skills (e.g. email, Excel, etc) are the most important technology skill for service (44 percent).“

The remaining 66% of responses were as follows:
nonprofit-board-tech-skills
The other finding was:

“Fundraising experience was the most cited (24 percent) skill set and experience that has the greatest impact on a board member’s success.“

The other responses included:
nonprofit-board-professional-skills
As I digested these final two findings, I immediately had two visceral reactions.
Was Carol Weisman wrong?
weisman1 If you haven’t heard Carol speak or read her books, then you need to figure out how to check those things off of your non-profit bucket list. She is amazing!
When I read the study’s finding about “basic tech skills,” my mind immediately wandered back to a Boys & Girls Clubs of America conference hosted somewhere in the Midwest more than 10 years ago. Carol was one of the keynote speakers, and she was talking about building an amazing board of directors.
I remember her sitting on a stool on a large stage with a wireless lapel mic telling fun stories about non-profit boards and individual board volunteers. She was also likely promoting one of her many books. I was a relatively new and young non-profit executive director, and everything she said sounded right on target.
During Carol’s presentation, one of the things she talked about was how technology is changing non-profit boardroom dynamics. She shared a story about a board she had worked with that had embraced technology. If my memory serves me correctly, the following were just a few examples:

Every board member was provided a laptop computer by the organization
Board members received their board meeting agenda and info packet electronically
Volunteer who were out of town for meetings would use their webcam and remotely attend and participate

weisman2 I am a member of GenX, and this news made my heart sing. I was so excited to hear that my Baby Boomer board could be transformed into that type of board. I came home from that conference with renewed focus and determination to figure out how tech can help my board become more engaged and efficient in governance.
I started digitally scanning my board packets. I created an intranet site for the board. I uploaded board packets and other materials (e.g. policies, procedures, etc) to the intranet. Needless to say, no one followed me, and I abandon my tech efforts a year later.
The lesson learned was:

“You get the board you recruit!”

We had not recruited the board that Carol described in her conference keynote speech. My board development committee had not included “better-than-basic tech skills” as a skill set criteria. The result was that my board possessed basic tech skills related to the Microsoft Office productivity suite and email. They were light years away from going paperless and using Skype.
So, I guess Carol wasn’t “wrong” because tech will obviously change the boardroom experience, but . .

change will likely take much longer than we thought (and will likely happen when GenX and Millennial board volunteers make up the majority on most boards)
change will occur faster only if board development and board governance committees include tech skills in their search criteria when assembling their prospect lists

If you are looking for additional board development tools to add to your organization’s board development toolbox, then you should read a wonderful blog post by the National Council of Nonprofits and check out their hyperlinks to additional online resources. The post was titled “Finding the Right Board Members for Your Nonprofit“.
Fundraising experience is underrated
scared When I read that only 25% of survey respondents identified “fundraising skills and experiences” as having a great impact on a board member’s success, I literally groaned and rolled by eyes.
Sure, it was the number one response, but it was still only one-quarter of respondents. As my 10-year-old niece would say . . .

“Really? Seriously?”

I suspect that fundraising might not be as important for non-profits that rely on fees and government money to buoy their business model, but the vast majority of non-profits with which I’ve worked aren’t hospitals and universities. Many non-profits have fundraising at the core of their business model, and it is one of the most difficult things I’ve seen board volunteers struggle with.
More oftentimes than not, when I’ve seen a board volunteer frustrated and on the verge of resigning, it usually has something to do with fundraising.
Of course, the solution is the same as I mentioned in the last section . . . “You get the board you recruit, and the board development committee needs to include fundraising skills and experiences in their search criteria.”
The tougher question is “what are fundraising skill and what should we be looking for?” My suggestion is to look for the following when going through prospect identification and evaluation exercises:

people who donate to other charities and appear to have an appreciation for philanthropy
people who are social and appear to have larger than average social networks
people who have served on other non-profit board with a business model rooted in fundraising
people who belong to service clubs that organize fundraising activities
people who are passionate about your mission (e.g. are willing to walk across hot coals to achieve success for your organization)
people who are well-versed at “closing the deal” in their professional lives (e.g. people who work in sales, banking, self-employed, etc)
people who are assertive, persuasive, good communicators, relationship builders, etc.

Gail Perry speaks much more eloquently than I do on this subject. You might want to read her blog post titled “Mastering the ‘Soft Skills’ of Fundraising” and figure out if you can add any of those qualities to your board development prospect identification and evaluation process.
If you missed the earlier blog posts in this board development series, I encourage you to investigate the previous two posts from last week. You might also want to click-through and read SoftwareAdvice.com’s full survey report titled “Tech Skills and Other Considerations for Joining a Nonprofit Board IndustryView“.
What are your thoughts and experiences regarding tech and fundraising skills and experiences and your board of directors? Are you doing anything different now as part of your board development process that might help other non-profit professionals and volunteers re-think their approach? Please use the comment box below to share.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
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How much time will it take to serve on your non-profit board?

March 19, 2015 erik Board development, Board governance, organizational development, volunteers

thoughts Do you know what is rattling around someone’s head during your non-profit board recruitment process? Knowing this could help you design a better process with better tools. This week and part of next week, we are focusing on a recent survey released by our friends at nonprofit technology research firm Software Advice of 1,545 board volunteers and people tasked with recruiting new board members.The survey’s key findings probably won’t surprise you, but the implications might change the way you think about your organization’s future board development efforts.
The second key finding of SoftwareAdvice.com’s survey was:

“The most important consideration before joining a board is level of expected involvement (50 percent).”

The remaining 50% of responses were as follows:
nonprofit-board-considerations
There are many different board development tools that organizations develop and use during the recruitment process to help answer a prospect’s question about involvement. The following are just a few examples:

All of these are great resources that you hopefully have in your board development toolbox.
Perhaps, one of the most unique tools I ever saw was a document titled “120 Hours That Will Make A Difference“. I’ve changed the names to protect the innocent, but I’m pasting the content of that document in the space below:

120 HOURS THAT WILL MAKE A DIFFERENCE

Of the 8,760 hours that make up a calendar year, our organization and the clients it serves needs 120 of those hours. When properly allocated, these hours have a huge impact on our organization and the kids that we serve.
Meeting Attendance

12 hours at board meetings.

10 hours at special events and fundraisers.

10 hours in committee work.

Advocacy/Raising Awareness

10 hours talking about our organizaiton with family, friends, associates, business vendors, religious groups, civic organizations and prospective donors.

Influencing

18 hours convincing foundations, United Way trustees, local government officials, state legislators, business and community leaders that contributing to our organization is a wise investment.

Reading and Responding

6 hours reading and responding to information sent to you from our organization.

Planning

8 hours attending and participating in annual board retreats and strategic planning workshops.

Fundraising

18 hours placing calls, writing letters and making asks in support of the organization. This time is best used assisting with one or more of our major fundraising events. Remember, in order to ask for donations you must be willing to first give yourself.

Becoming Educated

28 hours attending trainings and orientations, conferences and spending time in the organization’s facilities with clients and staff. It is important for you to be engaged in the mission to better understand the urgency of the work we do.

120 hours per year equates to 10 hours per month, or about 2 ½ hours per week in support of an organization that is making a difference in our community. The commitment is modest, but it is time well spent.

ARE YOU WILLING TO MAKE A DIFFERENCE?

So, what do you think about the document?

informative
specific
eye opening
daunting

I know some of you are likely thinking that a tool like this will likely scare off some people . Well, my response is:

You are not looking for warm bodies to sit around your boardroom table. You have serious work that needs to be accomplished, and that work will take a commitment of time from a group of very talented people.
Think of it another way. How upset would you be if someone lied to you in order to gain your commitment of time?
This question is top of mind for the majority of board volunteer prospects with whom you are talking. So, what are you doing to clearly communicate the answer to this critical question? Additionally, what else are you sharing with prospects during the recruitment process? Please scroll down and use the comment box below to share your answers to this questions. You are also more than welcome to share links to other documents and resources you find helpful in answering this question.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
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Do you know what your board volunteers need from you?

March 17, 2015 erik Board development, Board governance, volunteers

boardroles1 Most non-profit organizations have a very clear understanding of what they need from their board members, but there is a better question that needs to be asked. “Do you know what your board volunteers need from you?” This week and part of next week, we are focusing on board development questions at DonorDreams blog. Our next three posts look at a recent survey released by our friends at nonprofit technology research firm Software Advice of 1,545 board volunteers and people tasked with recruiting new board members. The survey’s key findings probably won’t surprise you, but the implications might change the way you think about your organization’s future board development efforts.
The first key finding of SoftwareAdvice.com’s survey was:

“Personal fulfillment is the most commonly cited benefit of serving on a board of directors (50 percent).”

The remaining 50% of responses were as follows:
nonprofit-board-benefits
Some of you might be wondering why these results matter. Simply stated, your board members need to get what they want out of their volunteer experience. If they don’t, then they won’t likely hang around your boardroom for very long.
Personal fulfillment
While most people will tell you they understand this concept, the reality is many of us struggle with this for the duration of our life on this planet.
Achieving a sense of personal fulfillment is a complicated success equation and is different for each us. The following factors are just a few things connected with this idea:

setting and achieving personal and professional goals
establishing a connection to something greater than yourself (e.g. community, God, volunteer board, etc)
experiencing failure
venturing into the unknown
being recognized and appreciated

oprah I think Oprah wrapped all of this up best when she said:

“Real success means creating a life of meaning through service that fulfills your reason for being here.”

The reality is that many people have agreed to join your non-profit board of directors because they think it will add meaning to their lives. When you stop to think about this, it is mind-blowing at first and then it quickly turns into a daunting challenge.
Hopefully, this survey finding has you thinking about how your organization approaches board development and governance.
The following are just a few suggestions you might want to consider.
Be thoughtful on the front end
We’ve all been there . . . you have a few (or many) vacancies on your board, and you need to get them filled quickly. You ask for suggestions from the board. You set-up appointments with prospects. You put on your best smile and charm those people into saying ‘YES’ before they know what hit them.
Well, you got what you wanted. But will they get what they want? Have they even had an opportunity to think through what they want?
fulfillment Structure your board development process in a manner that allows the following to occur:

They get a chance to learn what you are all about
They learn exactly what’s being asked of them
You get a chance to learn what they are all about
You have time to figure out what experiences will give them a sense of fulfillment

The reality is these objectives cannot be accomplished in one meeting. Consider including the following in your board development process:

a tour of your programs and facilities
a written volunteer position description
time with other board volunteers (e.g. invitation to committee meetings and/or board meetings and meet-n-greets)
sharing key governance documents (e.g. strategic plan, financial audit, resource development plan, budget, conflict of interest policy, commitment pledge, etc)
Q&A opportunities

You’re asking an individual to join your non-profit family. You might consider doing this in a mindful manner.
Speaking of family . . . you might want to find a way to include your board prospect’s spouse and family in your board development process.
Recruitment and on-boarding future board prospects in this manner might help you make their board experience more fulfilling, which will increase the likelihood of keeping them around for a little while.
Why is ‘keeping them around‘ important?
Simply stated, “turnover” — regardless of whether it is staff turnover, donor turnover or volunteer turnover — is a damaging and expensive prospect. Looking at it through a relationship lens, how many donors and prospects do your board volunteers bring to the table? And how are those relationships damaged when a board member walks away from your organization unfulfilled and potentially frustrated with their experience.
Be thoughtful on the back-end
partnership I cannot tell you how many boards I’ve worked with on board development and governance projects push back on the idea of year-end board member evaluations.
I suspect the push back centers on the word “evaluation“. So, my advice is stop calling it that. I just sat through a wonderful board development presentation last week and the organization simply calls their board evaluations the “year-end sit-down” during which time the following questions are explored:

How did the individual board volunteer contribute in the last year? (Note: this is all about thanking them profusely for those contributions)
How did those contributions help the organization? (Note: this is all about showing them how their contributions support the bigger picture)
How did those contributions align with board member roles/responsibilities expectations? (Note: this is all about acknowledging that you see them doing what they said they’d do when they first signed up)
Were those contributions rewarding (aka fulfilling) to the board volunteer? (Note: This is about you listening and partnering with them on mindfully finding a sense of fulfillment and happiness in life)
Where does the board member see him/herself contributing in the upcoming year? (Note: This is all about you meeting them where they are at and aligning the organizations needs to what they can contribute rather than vice versa)

These year-end conversations are a firewall for you. They provide an opportunity to thoughtfully check-in on whether or not the board member’s needs are being met. And if they aren’t, then you have time to make adjustments.
If you want to get a peek at what the next few blog posts will be about, you are welcome to check out SoftwareAdvice.com’s full survey report titled “Tech Skills and Other Considerations for Joining a Nonprofit Board IndustryView“.
Does your non-profit organization have a well-defined board development process? If so, please use the comment box below to share.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
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How many year-end plates are you spinning at your non-profit?

November 18, 2014 erik Board development, Board governance, Fundraising, Planning

spinning plates A few weeks ago I facilitated a training session titled “2014 Finish Strong: Year-End Strategies” for a group of non-profit professionals in New Mexico. Long story short . . . there were LOTS of things that non-profits try to do in the fourth quarter. Participants shared with each other what they were doing back home at their agency and we collectively talked about best practices.
The following is the laundry list of fourth quarter activities that we discussed:

Budget development
Resource Development Plan (aka fundraising plan)
Strategic Plan (or any other flavor of planning like tactical plans, business plans, program plans, etc)
Board Development & Board Governance activities (e.g. officers slate, expiring terms, new recruitment, orientation, year-end evaluation, etc)
Board Retreat
Thank-a-Thons (stewardship phone calls to donors)
Holiday Cards (holiday greetings and stewardship messaging to donors)
Starting to prep for creation of annual report (e.g. content creation, pics, theme selection, etc)
Financial Audit prep (e.g. RFP, hiring auditor, closing year-end books, etc)
Focused solicitation strategies with LYBUNT/SYBUNT donors
Targeted/Segmented year-end holiday mail solicitations
Phone-a-Thons (solicitation phone calls typically following up on mailing)
Online fundraising strategies (e.g. #GivingTuesday, etc)

Lots and lots going on in non-profit shops right now all across the country. The fourth quarter is exhausting!
What are you currently working on at your agency? Are some of those things the same as what you see on the aforementioned laundry list of projects? Please scroll down to the comment box below and either add to our list or share a best practice related to one of the items on the list. We can all learn from each other.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
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http://www.linkedin.com/in/erikanderson847

Non-profit unicorns . . . have you seen one lately?

November 6, 2014 erik Board governance, Fundraising, organizational development

unicorn As you know, there is no such thing as a unicorn. It is a mythical creature and the inspiration for this morning’s post about various fundraising policies and procedures documents that everyone says are important but rarely exists on the front line of many (especially smaller) social services non-profit agencies. I thought it might be a good idea to name these “unicorns” and explain what they are and why they’re important.
Before I begin, I want to give a shout out to my BFF — Michael Johnson — who is a planned giving consultant at H. Freeman Associates. He is the real motivation for this morning’s post because he posted the following comment on one of my blogs from last week titled “Your agency’s fundraising program is like an iceberg“:

“Great post, Erik! This speech underscores the importance of having good gift acceptance policies and an operating plan in place to back up our brilliant marketing. We always need to “Begin with the end in mind” and ask ourselves what we will do when our marketing campaign is successful and the prospective donor responds. Otherwise our donors may become frustrated.”

It was Mike’s reference to Gift Acceptance Policies that got my mind whirling and thinking about today’s topic. THANKS, MIKE! 🙂
Gift Acceptance Policies
Sometimes donors like to support your mission with things other than cash. In fact, I just sat through a training a few months ago where my friend Mike talked about how donors give more “stuff” than they do “cash“.
It is for this reason that gift acceptance policies are important. They spell out in advance “what you do and how you do it” with regards to gifts of stuff. In a sample policy that I recently reviewed, an agency included policies and procedures for the following types of donated “stuff“:

publicly traded securities
securities that aren’t publicly traded
real estate
tangible personal property like art, jewelry, etc
insurnace
in-kind gifts and pro bono services
deferred gifts (e.g. charitable gift annuities, irrevocable charitable remainder trusts, etc)
revocable gifts like bequests

I refer to this policy and procedures document as a “non-profit unicorn” because I very rarely see it, and when I do it is typically larger non-profits (e.g. universities and hospitals) who have taken the time to develop them.
If you are interested in more info on gift acceptance policies, the National Council of Nonprofits has done a nice job uploading resources and samples to their site. However, please remember that policy making is a a responsibility of the board of directors. So, make sure to include them in the discussion and development of your agencies policies and procedures before asking the board to approve them.
Named Gifts Policy
Sometimes donors like to put their names on stuff, and a Named Gift Policy helps non-profit organizations with the following:

identifying what can be and can’t be named (e.g. buildings, rooms, endowments, scholarships, events, etc)
identifying the process and rules associated with naming something
identifying the process and rules associated with unnaming something

Our friends at the Association of Fundraising Professionals have done a very nice job making the case for why this type of policy is important and providing a number of samples and links to resources. This online article is definitely worth the click!
Again, I consider this a “non-profit unicorn” because I can count on one hand how many times I’ve seen a policy like this.
Donor database policy and procedures manual
Many non-profit organizations have donor databases, and very few of them have put into writing things such as:

how to input a pledge
how to input a gift
how to run solicitor reports
protect donor privacy (g. what can be shared and with whom)
how to enter donor’s names (g. Mr & Mrs, etc)
what information to collect and where to put it
how to track soft gifts
how to enter a new donor
how to track volunteers and prospects

The biggest reason this policy and procedures manual is critical is because your agency won’t always have the same person entering donor information into the database. With turnover comes inconsistency and lost institutional knowledge. Long story short . . . the lack of a policy and procedures manual for your donor database typically results in a G.I.G.O. situation (garbage in, garbage out).
Want to avoid the feeling of wanting to throw your database out the window? I suggest developing your policy and procedures manual.
I know that I sound like a broken record, but I’ve only seen a few of these in all my years of working with non-profit organizations, which is why it is a “unicorn” in my book.
Our friends at Metafile (ResultsPlus donor database) published an awesome nine page white paper that speaks to this issue. Click here to view their sample template.
Does your organization have one of these policies? If so, what was your motivation for creating it? What samples/templates did you use to get started? Are there other “unicorn documents” that you’ve heard about but never seen? Please use the comment box below to share your thoughts and experiences.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
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Category: Board governance