Tag: board of directors

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

Board governance, Fundraising

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

What is your non-profit predicament?

Uncategorized

predicament1Welcome to O.D. Fridays at DonorDreams blog. Every Friday for the foreseeable future we will be looking at posts from John Greco’s blog called “johnponders ~ about life at work, mostly” and applying his organizational development messages to the non-profit community.

In a post titled “My Predicament Is Not My Problem,” John makes a distinction between things that are “problems” and things that are “predicaments“. In short, he talks about how predicaments are a special kind of problem that require different leadership skill sets and approaches.

Here is how John sums it up:

“And, while predicaments are (of course) problems, they aren’t problems that can be solved in any ordinary problem solving way. And therein lies the problem. For when leaders treat predicaments like problems — analyzing the components, fast-acting on this part or slow-tweaking that part, they make their predicaments worse.”

predicament2I find this distinction really fascinating, and I haven’t been able to stop thinking about it since I read this post. So, I’ve been focused on identifying some non-profit related “predicaments” and here is what I’ve come up with . . .

  • Over the last decade, donors’ needs have shifted. Investing in an organization’s mission isn’t enough anymore. They want to see results . . . outcomes . . . data. But wait! That stuff is boring and they want it all wrapped up in an engaging narrative that is spun by someone who is a good storyteller. Too much data or too much storytelling, and the whole experiment in philanthropy seems to fall short. 
  • The Great Recession started in 2007 with a stock market crash occurring in 2008. Before the crash, many non-profit agencies’ fundraising plans appeared to work well enough to get them what they needed to function. After the crash — what some people are calling ‘The New Normal’ — those same fundraising plans for some agencies don’t seem to work as well, but abandoning the plan and starting from scratch doesn’t appear practical or reasonable. 
  • In the middle part of the 20th Century, non-profit boards were composed of local business leaders who were CEOs and owners of local businesses. Fast forward to the end of the 20th Century and the early 2000’s, and big box stores have replaced locally owned businesses. CEOs and business owners are located in major cities and in some cases halfway around the world. Many non-profit boards are full of middle managers, and many people are left asking “Who will be the next generation of big time local philanthropists?“

In John’s post, he talks about needing a special kind of skill set to solve “predicaments“. Specifically, he points to interpretative thinking skills, patience, and sustained attentiveness.

Heading into this Labor Day weekend, I’m asking you to scroll down to the comment box below and consider doing two things:

  1. Share your opinion on whether or not the three things I’ve identified above are “problems” or “predicaments” or neither. You are also welcome to talk about other “predicaments” you see in the non-profit sector or at home in your agency.
  2. Do you or others in your agency possess the special skill sets that are identified as being necessary to handle “predicaments“? Are there other skills you think are necessary? If you, your employees and your board don’t possess these skills, how are you planning to acquire them?

Enjoy the long weekend and please take a moment to contemplate and respond to these questions. 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

Engaging your non-profit board volunteers more effectively

Board development, Board governance, organizational development

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?

Board development, Board governance

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

Board development, Board governance, organizational development, volunteers

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

What revenue model is your non-profit agency using?

Board development, Fundraising

source of fundsMore than a year ago, I stumbled upon a fun article published in the Stanford Social Innovation Review (SSIR)  titled “Ten Nonprofit Funding Models“. It provided clarity for me around what I was seeing in the non-profit sector. So, I bookmarked it and re-read it from time-to-time. Recently, I’ve found myself talking to a number of different non-profit professionals and board volunteers about this article, which is usually a sure sign that I better blog about it.

As you know, there are many different types of organizations calling themselves members of the non-profit sector.

  • Churches
  • Universities
  • Hospitals
  • Arts organizations
  • Membership organizations (e.g. chamber of commerce, etc)
  • Human Services/Social Services

Each of these types of non-profit organizations look very different. Each board has different wrinkles, and their revenue models also take on a different complexion.

The SSIR article by William Landes Foster, Peter Kim, & Barbara Christiansen names and describes ten different funding models:

  1. Heartfelt Connector
  2. Beneficiary Builder
  3. Member Motivator
  4. Big Bettor
  5. Public Provider
  6. Policy Innovator
  7. Beneficiary Broker
  8. Resource Recycler
  9. Market Maker
  10. Local Nationalizer

Some of you are probably wondering what each of these models means. I encourage you to click-through to the SSIR article and read it for yourself. Those authors do a great job of breaking down each of the models.

What I’ve found myself talking to many non-profit professionals and board members about lately isn’t which revenue model they’re using. My conversations have been rooted in what the authors of this article say in their final few paragraphs:

“In the current economic climate it is tempting for nonprofit leaders to seek money wherever they can find it, causing some nonprofits to veer off course. That would be a mistake. During tough times it is more important than ever for nonprofit leaders to examine their funding strategy closely and to be disciplined about the way that they raise money. We hope that this article provides a framework for nonprofit leaders to do just that.”

In my opinion, it is so true that many non-profit organizations have sought money wherever they can find it, especially once they realized that the economy isn’t going to just snap back into place and we now find ourselves in a “New Normal”.

board of directors4So, the conversations I’ve been referencing throughout this post have to do with board development and not the actual revenue models.

I believe that non-profit organizations build their boards around their revenue model. For example, if your agency is highly dependent on fees, then you probably haven’t recruited world-class fundraising volunteers to sit on your board. The same holds true for organizations with a government funding revenue model.

So, when you start tinkering with your revenue model (e.g. adding an event, pledge drive, direct mail, etc), I believe it creates tension in the boardroom for two reasons:

  1. You’re asking people to do something that wasn’t part of the original deal.
  2. You’re also asking people to do something they aren’t likely good at doing.

If you find yourself in the position of having to tweak your revenue model, I suggest the following:

  • Facilitate a conversation in the boardroom and build consensus around the idea of changing or tweaking your revenue model. Make sure all consequences are understood and appreciated.
  • Ask your board governance committee to complete a new gap assessment based upon some of the new roles you’re asking board members to take on.
  • Focus your board recruitment efforts on bringing in new board volunteers to help fill your newly identified gaps.
  • Allow current board members to step off the board gracefully and help them find a new seat on the bus where they can still participate in your mission.
  • If you need a blended board to make your blended revenue model work, then deliberately talk about roles and responsibilities in the board room to avoid misunderstandings between volunteers.

The New Normal may have thrown your organization a curveball, but it doesn’t mean you need to go through a dysfunctional transition. A little bit of thoughtfulness and board engagement can go a long way.

Did you click-through and read the Stanford Social Innovation Review article? If so, what were your thoughts? Which revenue model is your agency using? Do you find yourself tweaking your revenue model in an effort to adapt to The New Normal? How is your board handling the transition?

Please scroll down and share your thoughts and observations 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

Mmmmm … strategy for breakfast again?

Board development, Fundraising, organizational development, volunteers

breakfast5Welcome to O.D. Fridays at DonorDreams blog. Every Friday for the foreseeable future we will be looking at posts from John Greco’s blog called “johnponders ~ about life at work, mostly” and applying his organizational development messages to the non-profit community.

In a post titled “Making Breakfast,” John talks about how “culture eats strategy for breakfast“. He is referencing the importance of your organizational culture in everything you do. Of course, John says it in a way that only an organizational development professional can:

“The strategy required specific organizational knowledge, competencies, and behaviors to effectively execute and deliver the results as envisioned. And the organization didn’t have those. So with every presentation of the strategy, I was conflicted.  Despite being consistently motivated by the possibility, I was increasingly concerned about the capability.”

In 2006, I made what I’ve now come to see as a brave decision when I left the front line and took a job as an internal consultant working for a national non-profit organization. For five years, I woke up every morning (usually in a hotel room somewhere on the road) and learned over and over again that culture eats strategy for breakfast.

To broadly and simply define my job . . . I was “Strategy Man”. My employer armed me with a 110 page manual focused on how to plan, organize, develop, implement and evaluate an annual campaign pledge drive. In addition to that manual, I was provided tons of tools, templates and samples that filled my consultants toolbox.

Some of you might be thinking “Easy, peasy, lemon squeezy.” But you would be way off target. Why? Because culture eats strategy for breakfast!

So, picture this . . .

I walk into an organization’s boardroom and sit down with a group of agency staff and volunteer board members. I pull out my PowerPoint presentation and lots of other shiny objects. Nothing up my sleeve … right? This fundraising thing is easy. Making an in-person, face-to-face fundraising solicitation is as easy as following these simple 12-steps.

When I was done selling the sizzle (e.g. teaching fundraising strategies), I was often met with resistance, bombarded with reasons why it wouldn’t work and told why they wouldn’t do it that way (e.g. organizational culture).

breakfast1Do you see it? Culture eats strategy!

If your non-profit organization has hired staff who don’t possess fundraising skill sets and don’t have a track record of success with resource development, then sitting through a meeting listening to “strategy” can be arduous and sometimes downright frightening. The typical response is “resistance,” which is what John means when he says culture eats strategy for breakfast.

The same explanation holds true for your organization’s board of directors.

If you are just recruiting warm bodies to fill chairs around your boardroom table without being intentional, then you probably have a boardroom of people who say things like: “Ask me to do anything, but please don’t ask me to fundraise.”  (If I had a nickle for every time I heard that expression, I’d be retired and living on a tropical island sipping cool drinks in the shade.)

“If you want strategies to work, then you need to have the right people sitting around the table!”

Hire the right people. Recruit the right volunteers. Be intentional.

Last week, I was told by a board volunteer that he didn’t appreciate all of this talk about developing and following a board development process to increase the size of his board of directors. He kept arguing that we should throw process out the window and ask every existing board volunteer to ask a friend of theirs to join the board. Doing so would double the size of the board much quicker than how I was suggesting they do it.

breakfast2Hmmmm … looking back at that meeting, I think he was cooking up a hearty breakfast for me.

Some of you are probably wondering if your hiring and recruitment practices are intentional. If you answer ‘YES’ to many of the following questions, then you are probably being intentional:

  • Do you have a board development committee focused on growing the board?
  • Do you use tools that set expectations for prospective new board members (e.g. written volunteer position descriptions and commitment pledges)? Do you share these tools with prospects before asking them to join your board?
  • Do you build prospect lists with the thought of filling gaps and acquiring volunteers with specific skill sets and experiences?
  • Are you doing some informal background checking (e.g. asking friends and acquaintances about their current commitments, passions, past experiences, etc) before prioritizing who you plan on approaching first?
  • Are you able to rattle off a list of characteristics and traits of a successful board volunteer? How about a successful fundraising volunteer?

If you want to succeed at whatever your organization is looking at doing, then first ask yourself if your agency “possesses the organizational knowledge, competencies, and behaviors to effectively execute and deliver the results as envisioned“. If not, then you need to work on organizational culture first before introducing strategies into the discussion.

How do you change organizational culture? Be intentional!

If you choose to plow forward with strategy with a blind eye turned towards culture, then you better be hungry for a large heaping breakfast plate.  😉

Have you ever had to change the people (e.g. staff, board, etc) who were sitting around your table? If so, how did you do it? What lessons did you learn? Do you have a very intentional board development process? Scroll down and use the comment box 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
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

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

Board governance

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

Board governance

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

Board development, Board governance, volunteers

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 site “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.

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