Non-profit governance: The work of the board, part 4

Dani Robbins is the Founder & Principal Strategist at Non Profit Evolution located in Columbus, Ohio. I’ve invited my good friend and fellow non-profit consultant to the first Wednesday of each month about board development related topics. Dani also recently co-authored a book titled “Innovative Leadership Workbook for Nonprofit Executives” that you can find on Amazon.com. 

Governance: The Work of the Board, part 4

Raising Money

By Dani Robbins

board fundraisingWelcome to part four of our five part series on Governance. We have already discussed the Board’s role in Hiring, Supporting and Evaluating the Executive, Acting as the Fiduciary Responsible Agent, and Setting Policy. Today, let’s discuss the Board’s role in raising money.

As previously mentioned, Boards are made up of appointed community leaders who are collectively responsible for governing an organization. As outlined in my favorite Board book Governance as Leadership and summarized in The Role of the Board, the Fiduciary Mode is where governance begins for all boards and ends for too many. I encourage you to also explore the Strategic and Generative Modes of Governance, which will greatly improve your board’s engagement, and also their enjoyment.

At a minimum, governance includes:

  • Setting the Mission, Vision and Strategic Plan
  • Hiring, Supporting and Evaluating the Executive Director
  • Acting as the Fiduciary Responsible Agent
  • Raising Money and
  • Setting Policy

One of my goals for this blog is to rectify the common practice in the field of people telling nonprofit executives and boards how things should be done without any instruction as to what that actually means or how to accomplish it.

What “Board members being responsible for raising money” means is:

The Board sets the fund raising (also called resource development) goal; embarks on the campaign; opens doors; introduces staff; “makes the ask” when they’re the most likely person to get a yes (regardless of title or ranking, you always send the person who is most likely to get a yes to a gift request); picks up the tab for lunch when possible; and thanks the donor. The Board is also responsible for setting the strategic plan which may include a goal to increase contributed income. Each Board member should be expected to make a significant gift, reflective of their personal circumstances, as well as raise additional money.

I do not recommend give or get policies.

Give or get policies allow Board members to avoid personally giving; and 100% Board giving is critical for a successful campaign. Potential donors will ask if there is 100% Board giving, and the answer must be “yes“. Why should anyone else support an organization whose Board members do not? Moreover, how can you ask for someone else to financially support an organization you do not financially support? I can hear someone out there saying “I give of my time,” and that is wonderful, but it’s not enough. Board members should also financially support the organizations they serve.

I also don’t recommend set giving requirements.

Set giving policies, intended to be minimum gifts, actually end up being the entire gift. Such policies alienate potential board members who may bring a lot to the table but cannot personally give at the set level. It also leaves money on the table for people who can give more. Finally, it eliminates the Resource Development Committee’s opportunity to seek out and personally ask each Board member for a specific (to their circumstances and level of engagement) gift. It takes away the chance to say thank you for your engagement, removes the possibility to steward Board members as donors and minimizes the chance of a larger gift. Any policy that works against your goals is not a good policy.

The Board cannot and is not expected to raise money alone.

The staff is responsible for training the Board; coordinating the assignments; preparing the askers with relevant donor information; drafting and supplying whatever written information will be left with the donor, including a case statement (also called case for support) and a letter asking for a specific dollar amount; attending the ask meetings as appropriate; documenting the meeting in the database; writing the formal thank you note; and creating a plan to steward (or circle back to) the donor going forward.

The executive director cannot raise money alone. The development director cannot raise money alone. Fundraising works best in a culture of philanthropy when both the staff and the Board are working together to increase contributed income.

What’s been your experience? As always, I welcome your insight and experience.
dani sig

Engaging your non-profit board volunteers more effectively

engagementBoard member engagement is a common thread running through many of my blog posts. This isn’t because I’m a broken record. The fact of the matter is that so many of the things that plague non-profits are simply “symptoms” of a bigger problem. Yep, you guessed it . . . the root cause of many of our challenges in the can be traced back to our boards.

So, a few days ago I received an email from Suzanne Culhane. I don’t know Suzanne, but she is a fundraising consultant for Bob Carter Companies. Apparently, one of my posts hit her just right, and she took to heart my frequent rally cry at the end of many of my posts to “. . . please share your thoughts . . . we can all learn from each other . . .”

So, in the spirit of complying with my own point of view, I’m going to use my bully pulpit this morning to share Suzanne’s tips on “How to get your board members to be more effective advocates for your cause“.

Here is what she recommends:

  • Only elect board members who are passionate about the mission and rank the organization as number one or two in terms of their own volunteer and philanthropic priorities.
  • Implement an annual give/get requirement end enforce it!  This is best done through an annual commitment form which includes personal fundraising goals and volunteer responsibilities (e.g. committee and event involvement).  This keeps board members focused on giving personally and asking others to do so.
  • Conduct an annual commitment review session should be conducted with each board member.  In addition to personal giving and fundraising, this individual meeting should also offer the opportunity to discuss the board member’s experience of serving, any unfulfilled interests, challenges and concerns.  That is, the organization must regularly invite individual feedback from leaders.
  • For empowerment, periodic interactive workshops should be conducted and all board members should be fully support by the staff in their undertakings on behalf of the organization.
  • Celebrate all accomplishments and victories as a team!  Organizational impact and fundraising results should be regularly shared with the board.

For the record, I love all of these ideas (except I waffle on the give/get policy and only suggest it when a board’s culture is devoid of philanthropy). I’ve personally used all of these suggestions when I was on the front line and as a consultant. They are best practices, and they work!

So, let’s keep this going. Sharing is fun. What else do you do at your agency to engage your board volunteers? Please use the comment box below to share your thoughts and experiences. Why? Yep, you guessed it . . . because 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 does the non-profit leader of tomorrow look like?

sleepless1Last week a dear non-profit friend of mine from California couldn’t sleep. She tossed and she turned. Ultimately, she got out of bed, turned on her computer and started talking into a microphone. When I woke up in the morning in my bed in Elgin, Illinois, there was an email sitting in my inbox with a voice file attachment. Her words have tumbled around in my head for a week, and I’ve decided to enlist your support in dissecting them.

The gist of her recording pertained to non-profit boards. Here is a synopsis of what she said:

  • There are too many non-profit boards that just don’t work.
  • Too many board members either don’t understand their roles/responsibilities or turn a blind eye to certain roles that make them feel uncomfortable (e.g fundraising and resource acquisition).
  • Are there occupations that are better suited for non-profit board leadership (e.g. finance people compared to artists)?
  • Should non-profit agencies incorporate personality testing into their board development process because certain personalities are better suited to serving on a non-profit board?

After a week of contemplative thought, I honestly don’t know how I feel about anything she said. I am looking forward to you weighing in with your thoughts using the comment box at the bottom of this blog.

Here is what I have concluded:

  • Boardroom diversity is important. We don’t need all of the same types of people sitting around a table in a simulated echo chamber. (I am not implying that was what she was saying, but I do worry that it could be an unintended consequence.)
  • Understanding roles/responsibilities and executing them are vital to non-profit health. The non-profit sector needs to get better at recruitment, management and evaluation or suffer the consequences.
  • The characteristics and traits of an effective non-profit executive director (aka CEO) are changing with the times, and hiring the right person might make all the difference in the world when it comes to board development, board governance and team cohesiveness from the front line to the boardroom.

sleepless2After listening to my friend’s recording, I started Googling around and searching for anything that anyone might have written about characteristics and traits of effective boards. I was especially intrigued by her question about incorporating personality testing into the board development process. After all, many workplaces are incorporating this type of assessment into their employee hiring process.

I didn’t really find much of anything that resonated, but there was some interesting stuff on Myers-Briggs personality testing that pertained to the non-profit sector. Here are some of the better links:

While I suspect you may find these links interesting, they still didn’t help me process what my sleepy California friend had ignited in my head. And then I came across an online post at Ivey Business Journal titled “Profiling the Non-Profit Leader of Tomorrow“.

This article focused on the executive director as the linchpin to what my friend had identified. They identified 15 “must-have” attributes that a non-profit leader must possess in order to be successful. Those attributes are as follows:

sleepless3Competencies

  • Strategic thinker
  • Relationship builder
  • Collaborative decision-maker
  • Entrepreneurial achiever
  • Effective communicator
  • Change leader
  • Inspiring motivator

Personality Traits

  • High integrity
  • Adaptable/Agile
  • Perseverant/Patient
  • Interpersonal sensitivity
  • Passionate about the mission

Knowledge/Expertise

  • Financial acumen
  • Deep sector-specific knowledge
  • Understanding & valuing diversity

I suspect a number of these competencies and skill sets also can be applied to your board development process.

If I’ve piqued your curiosity — and I suspect that I have — then I encourage you to click-through to the Ivey Business Journal article and keep reading. Enjoy!

Take a good hard look in the mirror this morning. How many of these attributes do you possess? How do you know you possess them? Do you conduct 360 assessments asking for your employees’ feedback? If so, what do they say about you and these attributes? Does your board development process look for volunteers with these attributes? If so, what tools do you use to help identify these attributes?

In addition to sharing your thoughts about these questions in the comment box below, I welcome your thoughts about the question I asked earlier in this post about my friend’s online recording.

We can all learn from each other. Please take a minute out of your busy day to share with your fellow non-profit friends.

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

Revisiting LinkedIn’s Board Member Connect service

linkedin5When I engage non-profit organizations in board development related issues, it can be like simultaneously operating in two parallel and polar opposite universes. One universe exists where everyone is talking about how things are “supposed to be” done. This is described in the agency’s written board development plan. In the other universe, there are board members and staff sitting around a table talking about “some guy” they know without any discussion about board composition gap assessment, prospect lists, prospect evaluation or anything that sounds like process.

Growing the capacity of your non-profit board is a complicated formula that includes you doing the following:

  • Understanding the holes you need to fill.
  • Successfully identifying prospects who fill those gaps.
  • Thoughtfully evaluating and factoring in a prospect’s skill sets/talents and experiences so a smart determination can be made about moving forward with recruitment.
  • Developing and using a recruitment process that sets expectations and helps a potential prospect see what they are potentially say ‘YES‘ to doing before making that commitment.
  • Employing a thorough new board member orientation program and ongoing boardroom training calendar.
  • Developing and using tools (e.g. performance plans, dashboards, scorecards, etc) to show board members where they’re at and what they still need to do.
  • Engaging in year-end evaluation discussions focused on recognition and deeper engagement.

Your board governance and board development program will be “top shelf” if you do ALL of these things. Just having it in writing doesn’t count. You need to practice what you preach.

Not doing even one or two of these things is akin to skipping ingredients in a recipe. Following this analogy through to its logical conclusion, I ask you to imagine what a bread recipe looks like if you forget to add the yeast or the flour.

I often hear board development committee volunteers and staff openly complain about how hard it is to:

  • identify good prospects
  • ascertain skill sets and experiences
  • complete prospect evaluation exercises in a satisfying manner

linkedin4With this in mind, I am reminded of an old “Mondays with Marissa” post from a year ago titled “How Nonprofits Can Maximize LinkedIn to Grow Their Community“. In that post, Marissa talked briefly about LinkedIn’s new Board Member Connect connect service. This was a new service launched in 2012, and it was just getting off the ground.

In the last few days, I was poked by LinkedIn about this fee-based service for non-profit organizations. They’re organizing another informational webinar on Wednesday, September 4, 2013 at 1:00 pm (Central Time). Click here to learn more and register.

In the meantime, I thought I would take a look around the blogosphere to see what others were saying about LinkedIn’s Board Member Connect service. The following are just a few of the more interesting articles I decided to share with DonorDreams blog readers who might be interested in learning more:

What I found most interesting is that I didn’t come across any web reviews from non-profit leaders who’ve used LinkedIn’s Board Member Connect service. It makes me wonder if . . . a) no one is really using this service or b) everyone is so happy that there isn’t even one random web review complaint?

I suppose the only way for your agency to find out is to attend the webinar and ask around.

Have you used LinkedIn’s Board Member Connect service? What was your experience? If not, how else is your board development committee identifying good prospects for your board? Please scroll down and share your thought, ideas and practices 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

Non-profit Governance: The Work of the Board, part 3

Dani Robbins is the Founder & Principal Strategist at Non Profit Evolution located in Columbus, Ohio. I’ve invited my good friend and fellow non-profit consultant to the first Wednesday of each month about board development related topics. Dani also recently co-authored a book titled “Innovative Leadership Workbook for Nonprofit Executives” that you can find on Amazon.com. 

Governance: The Work of the Board, part 3

Setting policy

By Dani Robbins

policies1Welcome to part three of our five-part series on Governance. We have already discussed the Board’s role in Hiring, Supporting and Evaluating the Executive and Acting as the Fiduciary Responsible Agent. Today, let’s discuss the Board’s role in setting policy.

As previously mentioned, Boards are made up of appointed community leaders who are collectively responsible for governing an organization. As outlined in my favorite Board book Governance as Leadership and summarized in The Role of the Board, the Fiduciary Mode is where governance begins for all boards and ends for too many. I encourage you to also explore the Strategic and Generative Modes of Governance, which will greatly improve your board’s engagement, and also their enjoyment.

At a minimum, governance includes:

  • Setting the Mission, Vision and Strategic Plan,
  • Hiring, Supporting and Evaluating the Executive Director,
  • Acting as the Fiduciary Responsible Agent,
  • Setting Policy, and
  • Raising Money.

One of my goals for this post is to rectify the common practice in the field of people telling nonprofit executives and boards how things should be done without any instruction as to what that actually means or how to accomplish it.

What setting policy means is:

The board discusses and votes to approve (or not) all policies and plans. Policies are usually recommended by (and often written by) the CEO, also called the Executive Director. Plans are usually drafted by committee. Both must be approved by the Board.

Procedures, on the other hand, are set by the CEO, often in consultation with the staff. The difference is the difference between the rules and the law. You can get fired for violating a policy (law), but not usually a procedure (rule).

Policies, plans, and procedures set the boundaries for people to act.

policies2I recommend organizations have the following policies:

  • Personnel
  • Financial
  • Crisis Management and Communication
  • Conflict of Interest
  • Confidentiality
  • Whistle Blowing/Ethics

Policies dictate what happens in defined set of circumstances. I occasionally get calls from people who want to create a policy they don’t really need because they are trying to avoid addressing an issue directly. Do not create a policy to avoid having a conversation. Have the conversation, and then decide if you need a policy.

That said there are policies you definitely need.

For example (and among other things), the personnel policy determines what benefits staff get; the financial policy sets who can sign checks and for what amount; the crisis communication policy determines who speaks for the organization; the crisis management plan dictates what to do if there is an intruder; the conflict of interest policy states how conflicts are managed; the confidentially policy requires a process to protect information; and a whistle blower policy provides a path to report violations.

A reporter sticking a camera in the face of your most disengaged staff member is not the time to decide who speaks for your organization. Having a crisis communication policy will make all the difference in the organization’s ability to continue to provide services after a crisis, and the community’s ability to be confident in your ability to do so. The absence of a single point of contact allows for a variety of messages from a multitude of people — who may or may not be affiliated with your organization — to be shared with the community, which at a best will dilute your ability to control the story and at worst will open the door to a new set of issues for people to judge you by. As all of our moms taught us, a reputation takes a lifetime to build and just a few minutes to destroy.

plans1Policies address today. Plans take you into the future.

I recommend organizations have the following plans:

  • Board Development
  • Marketing
  • Resource Development
  • Strategic Plan
  • Succession Plan

Plans determine what path you will follow in what circumstances.

For example (and among other things), a Board Development plan dictates what process will be followed to bring on new Board members; a marketing plan determines what materials you will create and how they will be disseminated; a resource development plan lays out how you will raise contributed income; a strategic plan states where you are going as an organization and how you plan to get there; and a succession plan ensures continuity by outlining how leadership will be perpetuated.

Plans, policies and procedures can address or eliminate many of the issues that come up on a day-to-day basis that distract from your mission and moving the needle for your community.

What’s been your experience? As always, I welcome your insight and experience.
dani sig

Non-profit Governance: The Work of the Board, part 2

Dani Robbins is the Founder & Principal Strategist at Non Profit Evolution located in Columbus, Ohio. I’ve invited my good friend and fellow non-profit consultant to the first Wednesday of each month about board development related topics. Dani also recently co-authored a book titled “Innovative Leadership Workbook for Nonprofit Executives” that you can find on Amazon.com. 

Governance: The Work of the Board, part 2

Acting as the Fiduciary Responsible Agent

By Dani Robbins

fiduciary2Welcome to part two of our five-part series on Governance. The first post reviewed the Board’s role in Hiring, Supporting and Evaluating the Executive. Today, let’s discuss the Board’s role as the fiduciary responsible agent, which is quite different from the fiduciary mode outlined in my favorite Board book Governance as Leadership and summarized in The Role of the Board. Fiduciary responsibility is one of the 5 pieces of the fiduciary mode, which is where governance begins for all boards and ends for too many.

As previously mentioned, Boards are made up of appointed community leaders who are collectively responsible for governing an organization. That includes:

  • Setting the Mission, Vision and Strategic Plan,
  • Hiring, Supporting and Evaluating the Executive Director,
  • Acting as the Fiduciary Responsible Agent,
  • Setting Policy, and
  • Raising Money.

One of my goals for this post is to rectify the common practice in the field of people telling nonprofit executives and boards how things should be done without any instruction as to what that actually means or how to accomplish it.

What it means to meet your fiduciary responsibility is:

It is the Board’s role to:

  • Read, understand and approve the financials
  • Review, understand and approve the audit, as appropriate
  • Review and sign the 990
  • Understand how the programs tie to the mission and the number of people served in those programs as well as the program’s impact

What that means is:

Financial statements should be prepared by the assigned staff or volunteer and reviewed by Finance Committee, often Chaired by the Treasurer, and then presented, by that Treasurer, to the full Board every time the full Board meets. Members of the Board should receive and review the information in advance and come to meetings prepared to ask questions and continue to ask questions until they understand and are willing to have their name listed as having approved the financials. Once questions have been answered and all members are satisfied, the financial statements should be voted upon and either approved or sent back to committee with instructions to be addressed.

Please do not vote for something you do not understand. When I do this training with Boards, I often say, the Exec will just get fired; Board members will go to jail. I’m only mostly kidding. The Exec will likely go to jail too. Either way, the community and the law will hold you as a Board member responsible.

audit4The audit is prepared by an independent accounting firm in an effort to assess if the organization is operating in accordance with Generally Accepted Accounting Principles (GAAP) and also within their commitments. Different audits are required based on the amount of government funding that is received. The costs of such audits vary depending on the budget size, revenue streams, and also the quality of the financial systems and the need to for the auditor to clean up those systems.

Audits should be bid out, in conjunction with organizational policy, every few years. The auditor that is selected should conduct the audit and also come to the Board meeting to present their findings and answers any questions that Board members may have.

Auditors also prepare and should explain a management letter which includes suggestions on improvements that could be made. Such letters didn’t used to be, but are now regularly requested by funders so it is imperative the Board is aware of what’s included within and have discussed the ramifications of accepting, and also not accepting the recommendations.

Most agencies pay for an audit to be done every year; some less often but still on a specific schedule driven by policy. The audit is submitted with most grant requests, to the national office of most affiliated organizations, as applicable and is given out frequently to anyone who requests a copy. Some organizations post a copy on their website.

The firm that prepares the audit is usually also the firm that prepares the 990, which is the tax return that non profits file each year. The 990 should be reviewed by the Board, prior to being submitted, and should be signed by the Treasurer. It is often signed by the CEO, but it should be signed by the Treasurer or another member of the Executive Committee.

missionFinally, as part of meeting their fiduciary responsibility, the Board should understand how the programs tie to the mission, the number of people served in those programs as well as the impact of that program.

This does not mean the Board needs to be –- or even should be — in the weeds of programming.

It is the CEO’s responsibility to ensure the program’s creation, implementation, management and evaluation. It is the Board’s responsibility to understand how such programs are aligned with the mission and the vision of the organization, the impact of that program on the clients your serve as well as the number of people served by those programs.

Fiduciary responsibility means that the Board –- and not just the Treasurer but the whole Board — is responsible for safeguarding the community’s resources and ensuring accountability and transparency.

What’s been your experience? As always, I welcome your insight and experience.
dani sig

Non-Profit Governance: The Work of the Board, part 1

Dani Robbins is the Founder & Principal Strategist at Non Profit Evolution located in Columbus, Ohio. I’ve invited my good friend and fellow non-profit consultant to the first Wednesday of each month about board development related topics. Dani also recently co-authored a book titled “Innovative Leadership Workbook for Nonprofit Executives” that you can find on Amazon.com. 

Governance: The Work of the Board, part 1

Hiring, Supporting and Evaluating the Executive

By Dani Robbins

board of directors3

As mentioned in Board Basics and reposted on this very siteBoards are made up of appointed community leaders who are collectively responsible for governing an organization.” That includes:

  • Setting the Mission, Vision and Strategic Plan,
  • Hiring, Supporting and Evaluating the Executive Director,
  • Acting as the Fiduciary Responsible Agent,
  • Setting Policy, and
  • Raising Money.

As you know, one of my goals is to rectify the common practice in the field of people telling non-profit executives and boards how things should be without any instruction as to what that actually means or how to accomplish it.

Since I wrote a recent post on Strategic Planning, I’m going to circle back to that one and start with Hiring, Supporting and Evaluating the Executive Director.

What that means is:

It is the Board’s role to hire the Executive Director, also called CEO. Prior to hiring, interviewing or even posting the job, it is imperative the Board discus what they want and need in an Executive Director. This conversation cannot be farmed out to a committee primarily consisting of non board members, or to a consultant or hiring firm. That will only get you what they want and think you need – not what you want and actually need.

What skill sets and experience do you need in a leader?

Growing, turning around or maintaining an organization require very different skill sets. Which trait do you want your new leader to have? Does your leader need to be a subject matter expert? Does she need to be local? Does he need to be a fund raiser, an operations person or both?

I recommend a search, REGARDLESS OF . . .

  • if there is a good internal person,
  • if someone on the board wants the job, or
  • if there is an obvious heir apparent.

Do a search, let everyone apply and see who best matches your needs. For more information on conducting a search, please click here.

exec searchOnce your hire an Executive Director, s/he needs to be supported. Supporting an Executive Director is where the rubber meets the road.

I once had a colleague tell her board to “Support her or fire her, but to choose.”  While I was shocked, I was also in agreement. The job of the Executive Director is very difficult and energy spent on worrying is not spent on moving the organization forward. (To the Executive Director’s out there: Worrying about keeping your job precludes you from doing your job. You have to do what you believe is best, based on your experience, information and training, within the boundaries of your role and the law. We all know that any day could be the day you quit or get fired. That can’t stop you from leading.)

Communication is key: the Board needs to know (and approve of) what the Executive Director is doing and the Executive Director needs to know (and be willing to do) what the Board wants.

It is the Board Chair’s job to be the direct supervisor of the Executive Director and the entire Board’s job is to support him/her, set goals and hold her accountable to those goals. This means the Board has to let the Executive Director fulfill the bounds of his/her role. There should also be a strategic plan that is being implemented, board approved policies that are being followed and an annual evaluation process for the Executive Director (and the rest of the staff).

The vast majority of Executive Directors rarely get evaluated, and when they do it’s often because they asked for an evaluation. (To the Board Presidents out there: Executive Directors, just like Board members and most other people, when left to their own devices will do that they think is right. What they think is right will not necessarily be aligned with what the Board wants, especially if what the Board wants has not been discussed or communicated. It also may not be aligned with anything anyone else is doing. See the Strategic Plan link above to create alignment.)

Executive Directors should be given expectations and goals (just like all other staff) and should be evaluated against those expectations and goals every year. There should be a staff (including executive) compensation plan that has a range for salaries for each position and reflect comparable positions in your community; raises should be given within the confines of that plan, or the plan should be revised. (More on that in the Setting Policies blog to come in the next few days.)

Hiring, Supporting and Evaluating the Executive Director has to happen – in full- for your executive to be an effective leader, for your board to fulfill its responsibilities and for your organization to fulfill its mission.

When an Executive Director is hired right, supported appropriately and evaluated effectively there’s no end to the impact it can make on an organization and a community.

What’s been your experience? As always, I welcome your insight and experience.
dani sig

Audit committee or no audit committee? That is the question.

auditWhen it comes to financial management, I’ve run into two types of non-profit organizations. There are those organizations who struggle with financial management and don’t have a strong and independent Finance committee in place. Then there are agencies whose Finance committee is the strongest voice in the boardroom. For the latter type of organization, the question about whether or not to form an audit committee always seems to linger in the air with a diversity of opinions spinning around it.

In my experience, strong finance committees have had a difficult time accepting the case for support for forming another standing committee focused on finance. After all, it is hard to argue with the “Why fix something that isn’t broken?” argument. Moreover, the “Our agency should stay ahead of Sarbanes-Oxley legislation” also seems to fall flat.

I fought these battles a decade ago when I was on the front line leading a local non-profit organization. I was successful in my quest to form an audit committee, and it allowed us to relieve the Finance Committee of the following roles and responsibilities:

  • Selecting the audit and periodically putting the audit work out for bid.
  • Reviewing the work of the auditor and making recommendations to the board based on this work.
  • Providing board oversight of the auditor so that management hasn’t his/her only point of contact.
  • Review and assessment of the agencies internal controls.

In hindsight, I loved this move for two big reasons:

  1. It got some stuff off of the Finance Committee’s plate and allowed them to focus on important stuff.
  2. It gave me another committee opportunity to engage board volunteers and recruit influential finance-minded non-board volunteers.

I must admit that in the beginning many people (including myself) still had a difficult time with the blurry line between these two committees. This issue recently reared its head at an agency where I am doing some work, and I really like the clarity that came out of the conversation. So, I thought I’d share it with you this morning.

  • Finance Committee – develops and monitors financial practice
  • Audit Committee – monitors the process in which financial practices are carried out

Are you still not feeling it? OK, the following is a list of resources that I really like and hopefully provide you with the answers for which you’re looking:

I hope you find these links helpful.

Has your organization formed an audit committee? What was your experience? Did you develop two different committee charters with two different committee work plans? If so, how did you divide things up? How have things worked since you made the change? Does your audit committee feel like a superficial after-thought that you only did because people were telling you it was a best practice?

Please scroll down and share your thoughts and experiences in the comment box below. This is an important board governance question that always seems to fly under the radar. Let’s talk about it.

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

Is your non-profit good at the Why-How-What?

TED TalksA few days ago I bumped into a non-profit friend who had recently viewed a TED Talks video on YouTube featuring Simon Sinek titled “How great leaders inspire action“. It was obvious to me that this was a TED Talks video that I needed to view because it had inspired her to take action. Not only was she talking to everyone about what Simon calls the “Golden Circle,” but she had also shared the video with board volunteers as a precursor to a strategic discussion.

I think there are three things that make this video so contagious and easy to watch:

  1. The idea of the “golden circle” is easy . . . What-How-Why.
  2. These ideas are woven into many non-profit professionals’ DNA.
  3. The speaker does a nice job of relating What-How-Why to other companies and their successes (e.g Apple)

Early in the video Simon says,

Every single organization on the planet knows WHAT they do . . . Some know HOW they do it. Whether you call it your differentiating value proposition, you proprietary process or your USP . . . But very, very few people or organizations know WHY they do what they do.  And by WHY, I don’t mean ‘to make a profit’. That is a result. It is always a result. By WHY I mean what is your purpose? What’s your cause? What’s your belief? Why does your organization exist?

I’ve done a lot of strategic planning over the years. I’ve also done lots of tactical planning. And Simon hits on a super powerful idea with his What-How-Why.

what how whyThose organizations that excel at strategic planning have a very clear understanding of what they do, how they do it, and why they exist. However, those organizations that are little fuzzy on these ideas do a lot of wrestling with themselves. Sometimes countless hours are spent at the 50,000 foot view talking about these issues . . . and for good reason! Without clarity on What-How-Why, there is no way you can set goals, develop objectives and write action plans that are meaningful in any way, shape or form.

Some of you might be scoffing right now and asking, “How in the world can a non-profit agency not know ‘WHY’ they exist? It is as simple as revisiting their mission statement!

Well, not so fast, my friend. There are at least two situations that come to mind where this simple idea starts to get blurry.

  1. Some organizations have LONG histories and over the course of time their mission changes. For example, the March of Dimes was founded to address polio and today it exists to improve the health of mothers and babies. When this happens, sometimes the shift isn’t as clear as it was for March of Dimes . . . the ‘WHY’ gets fuzzy . . . and the challenges ensue.
  2. Some organizations experience mission creep because their resource development strategy wasn’t well-defined and board members let staff chase all sorts of funding opportunities regardless of what it was for or what they do. The end result kind of looks like a McDonald’s restaurant that also sells electronics and chiropractic adjustments. In short, the ‘WHY’ gets fuzzy.

I believe that good non-profits revisit the questions of What-How-Why on a somewhat regular basis. I applaud my non-profit friend for using this YouTube video to frame and stage an engaging boardroom discussion. If you have a little time today, I suggest you click-through to YouTube and view the video. If you like it, then forward it to your board president and have a discussion with them about its value. If you’re both excited and engaged, then share it with your board and talk about it as a group.

[youtube=http://www.youtube.com/watch?v=qp0HIF3SfI4]

If you end up doing any of what I just suggested, please circle back around to this blog post and share your experience 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
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Has your non-profit discovered Quora yet?

questionsWhen I used to work at Boys & Girls Clubs of America (BGCA), my colleagues were responsible for the existence of something called theFUNDRAI$INGbank, which is a special webpage embedded inside of the intranet accessible to local affiliates. We outsourced maintenance of this page to FundRaisingInfo.com. There were many different resources located on “The Bank” including a free service called “Ask The Expert“.

Whenever I talk to agencies who aren’t Boys & Girls Clubs about “Ask The Expert,” I’m typically told how lucky local Boys & Girls Clubs are to have such a service (and to have access to it for free). Usually, somewhere in those conversations, the person with whom I’m speaking says they wish they had access to such a thing.

For those of you who don’t have a national organization behind them offering such resources and services, I’ve always told them not to fret because we now live in the 21st Century and answers are mostly just a click away. I’ve encouraged non-profit friends to open their minds to the full potential that Google search offers them. I’ve also reminded them about how many non-profit bloggers are out there begging for comments, questions and engagement (this blogger not withstanding).

Now I am adding another suggestion to those non-profit staff and board volunteers who are in search of answers for free . . .

QUORA

Have you checked out this new online Q&A webpage yet? If not, I suggest you do so because it looks like a great resource for non-profit folks with questions. Here is what Wikipedia says about Quora:

quoraQuora is a question-and-answer website created, edited and organized by its community of users. The company was founded in June 2009, and the website was made available to the public on June 21, 2010.[3]

Quora aggregates questions and answers to topics. Users can collaborate by editing questions and suggesting edits to other users’ answers.[4] Quora’s main competitors are social bookmarking sites like redditsocial networking sites like ChaCha, and numerous question and answer websites.

Unlike BGCA’s “Ask The Expert” service, the answers and advice you get from Quora might not necessarily be from an amazing expert like the folks at FundRaisingInfo.com. However, if you go into it with the right mindset and an understanding that the answers you receive might just be from your peers, then this could be a great resource for you. At the very least, it represents a good starting point for finding answers.

Here are just some of the non-profit and fundraising questions that I see being asked on Quora:

  • What are some good platforms for online fundraising?
  • How do you manage memberships and donation drives in a small or medium size non-profit?
  • What cutting edge fundraising techniques are charities using?
  • What are the characteristics of high-performing non-profits?
  • How much power does a non-profit board have?

Interesting questions!

Of course, there is the obvious question, “What are some of the best ways non-profits can use Quora?Click here if you want to see responses.

When you have a question with which you’d like other people’s opinions, where do you go online? Google? WordPress? Blogger? Facebook? LinkedIn? Quora? Where do you find the most value in your search for answers? Have you used Quora yet? If so, what was your experience? Please scroll down and share your thoughts and experiences in the comment box below because 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