Please stop using the economy as your whipping post

Yesterday, I was on the phone with a board volunteer. We were talking about their organization’s annual campaign efforts. In the middle of that conversation, this volunteer launched into a full-blown rant about the state of the economy and why no one has any money anymore to give to charity. It was all I could do to keep from screaming. I am so tired of hearing this kind of thing.

I know. I know. Things are still tight. Recovery is slow. Some people are still hurting terribly. We’ll most likely never return to the days we knew before the Great Recession. There is a New Normal.

However, please humor me and take a look at the following chart from the Giving USA Foundation which was published on the National Philanthropic Trust blog:

charitable giving stats

Do you see what I see?

  • 2007 was the high water mark for charitable giving
  • 2008 and 2009 were nightmares. As our economy entered a state of free fall, so too did charitable giving
  • We’ve seen very positive growth in 2010, 2011 and 2012

We haven’t recovered everything that was lost in the crash. I suspect that will take many more years . . . BUT the growth is real and the sector isn’t in a state of free fall anymore. We’ve come out of the tunnel, and we’ve been on the other side for quite some time. It may not be what we had hoped for, but this is what recovery looks like. Deal with it!

excusesI am of the opinion that those of us who still use the economy to explain our shortcomings are simply making excuses. In fact, let me take it a step further. Invoking the economy to explain your poor fundraising performance is nothing short of excuse making.

If you have a moment, please click-through to the National Philanthropic Trust blog. They have captured a number of very nice philanthropy statistics all in one place. Here are just a few that I find interesting:

  • 88% of households give to charity.
  • The average annual household contribution is $2,213 while the mean is $870.
  • Charitable giving accounted for 2% of gross domestic product in 2010

I am not suggesting that “Happy Days Are Here Again,” but can we please stop the excuse making?

If your fundraising efforts are dragging, there are likely many other explanations other than the straw-man argument of the economy. Furthermore, if you accept the economy as the reason, then you are likely blinded to all of the other reasons. Here are just a few of those possible explanations:

  • You have the wrong people sitting around the table
  • You’re using the wrong campaign model for the talent you’ve assembled around your table
  • You’re not stewarding your donors correctly
  • Your focus is too much on donor acquisition and not enough on donor retention
  • Your case for support is stale and not as compelling as it used to be

This list can go on and on, but you’ll never know the real reasons unless you invest in evaluation efforts and reject silly explanations such as “the economy ate my homework“.

So, what should an executive director or fundraising professional do when faced with volunteers who refuse to face facts?

Be a leader!

I’m not suggesting you tell volunteers they are wrong. Don’t launch into a full-blown rant like I’ve done this morning. But leaders lead and you may want to try doing the following:

  • transformation leadershipEmpathize . . . they are grieving the lack of results from their collective efforts
  • Agree with what is obvious (e.g. the economy is sluggish)
  • Inject truth into the conversation (e.g. people are still giving, donors are still being generous, charitable giving has rebounded nationally over the last three years)
  • Suggest that a more thorough critique of your situation might help uncover more facts that will help you make adjustments to next year’s efforts
  • Stand tall and make the case for thoughtful evaluation, ROI calculation and critique

There is a New Normal in America when it comes to the economy. What you did before the recession might not work now quite the same way it did back then. They only way to fix this situation is to not accept excuses like the economy, discover the real reasons, and put new strategies in place to deal with the New Normal.

I am tired of the excuses. In fact, I believe accepting those excuses is dangerous for your non-profit organization because it keeps you from moving forward. Do you agree? If so, how are you dealing with it? Have you had any success in moving your volunteers forward? Please use the comment box to share your success stories and strategies. 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

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

Those shiny fundraising tools in your resource development toolbox

personal pagesJeff Bezos has been on my mind lately. Of course, he is the 49-year-old owner of Amazon.com, and this internet pioneer recently purchased one of the iconic old media newspapers — The Washington Post — for $250 million. It was no more than a few days after this announcement that I was talking to a non-profit board volunteer about fundraising when I was reminded of this famous Jeff Bazos quotation: “A company shouldn’t get addicted to being shiny, because shiny doesn’t last.

Here is how the fundraising conversation with the board member went:

  • Board member:  “Erik, I am so happy with our agency’s foray into online fundraising. I especially LOVE these ‘personal pages’ where I set-up my online page and email a link to everyone in my email address book.”
  • Erik:  “Why do you like this new fundraising strategy so much?
  • Board member:  “For starters, it is so easy and doesn’t take much time. Who has time to do fundraising the way we used to do it? Chasing down friends — who also don’t have time — and ask them for money when they don’t really want to be asked.”
  • Erik:  “Ummmm … well, hopefully there wasn’t a lot of ‘chasing’ and ‘forcing’ going on. Fundraising should be more about connecting people’s philanthropic wishes with opportunities. We’re not stalking people and stealing their money.
  • Board member: “Well, I just hated sitting down with my friends. It was so uncomfortable. Now, with these new ‘personal pages,’ I don’t have to do that anymore.”
  • Erik:  “Ummmm … that can’t be entirely true, right? I mean you should still be sitting down with large donors because it isn’t very respectful to ask donors of a certain size to simply ‘click and give,’ right?
  • Board member:  “I guess, but I’m not really focused on ‘those donors’. Staff can take care of those individuals.”
  • Erik:  “How do you ask donors to consider making a specific sized contribution that is commensurate with their capacity and willingness to give to your agency?
  • Board member:  “I really don’t worry about that either. I just ask them to give whatever they feel like donating, and the contributions rolled in! I can’t believe it, but my response rate has been approximately 30%. Many people are giving $25 and $50. A few people even donated more than $100. The biggest contribution was $200. I just can’t believe it!
  • Erik:  “I have some concerns about taking the personal touch out of your organization’s resource development program. Hopefully, these personal pages are simply one small strategy focused on the very bottom rung or two of your range of gifts chart. Or is it your agency’s new ‘donor acquisition’ strategy… like direct mail?
  • Board member: “Oh Erik … this is the future of fundraising!

I’m not going to provide too much commentary in today’s post because I suspect you can read between the lines.

unintended consequencesI am a huge proponent of using technology and integrating it into your non-profit organization’s fundraising program, but it shouldn’t be introduced in a way that undercuts the other best practices embedded in your resource development plan.

If your board members are ultra-reluctant fundraisers and you can’t introduce something like “personal pages” into your fundraising tool box without killing your annual campaign, then I suggest taking a pass on those opportunities for now. Timing is everything. Right?

Moreover, the Jeff Bezos quotation reminds us that shiny objects don’t remain shiny forever. So, what happens when those personal pages (or whatever the new online fundraising tool you’re using) become burdensome to volunteers and they resist using it?

My suggestion is that you fix the underlying problems and stop trying to deal with symptoms. If your volunteers are reluctant fundraisers, then help them overcome their fears or recruit additional board members who aren’t reluctant. Don’t just paper over their fears or blind them with shiny objects.

Please don’t misunderstand what I’m trying to say. I am not opposed to online giving. I am not against peer-to-peer web-based personal pages. I am concerned about misuse and unintended consequences.

Has your agency started using personal pages to support board volunteer’s peer-to-peer solicitation with their circle of influence? If so, what has been the result? Have individual board members raised more, less or about the same in year-to-year comparisons? Have you seen any ill effects of introducing a shiny new object into your fundraising tool box?

Please scroll down and share your thoughts and experiences in the comment box below.

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 CEOs need to be themselves

be youWelcome 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 simply titled “You,” John talks about how important it is that people try to be themselves and not other things to other people. Not only is it important, but it is courageous, stressful and scary.

John’s post got me thinking about those days when I was an executive director. Looking back, I now see that on most days I was not trying to be ME.  I was trying to be the position, which when you think about it is a crazy thing.

Here are just a few of the things I remember:

  • My CEO friend Karen was a hard worker. She obviously worked long, tireless hours and was attentive to every last detail at her agency. I saw her successes and thought I could replicate it by working insanely hard.
  • My CEO friend Marc was one of the best fundraisers I ever met. His polish and ability to effortlessly build meaningful and lasting relationships with donors was the key to his success. I saw his successes and thought I could replicate it by being friendly, approachable and social with donors.
  • My CEO friend Gretchen was soooooo passionate about her mission. She would give selflessly of herself until there was nothing left to give if it meant helping a client. I saw her successes and thought I could replicate it by constantly talking to anyone who would listen about my organization and clients.
  • My CEO friend Fred was persistent. He believed there was nothing in this world that couldn’t be successfully accomplished as long as you kept at it. I saw his successes and thought I could replicate it by bringing that proverbial “can of elbow grease” to every board meeting, committee meeting, and project.

Please don’t misunderstand what I am saying. I believe coaching and mentoring are very important when it comes to success. I am so grateful to everyone who influenced the type of executive director I became. If you don’t have coaching or mentoring relationships, I suggest that you figure that out quickly.

be you2However, John’s post gives me cause for pause. I wonder if I was so wrapped up in what a good non-profit CEO looked like that I forgot to look in the mirror and be myself.

Maybe not … maybe so. It doesn’t matter because it is all in the past, and I can’t change any of it even if I wanted to. And yet that isn’t the case for YOU if you are still working on the front line.

If you haven’t done so yet, click-through to John’s post, read it and reflect upon these simple questions:

Are you being you? How do you know you are being you? If you are holding back, what are you afraid of? What would be the consequences of letting the entire you shine through?

Not totally related to this post, but still important questions you should be asking:

  • Are you letting your organization consume you?
  • Are you giving more to the agency than you are to your family or to you?
  • Are you taking professional things way to personally?

If you’re answering YES to any of these last few questions, then perhaps you’re not being YOU. You might be trying to be your organization or your position. Maybe … maybe not. But it is worth thinking about don’t you think?

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?

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

What is wrong with the non-profit sector?

gdpI am sicker than a dog and my mind is foggy, which is why I couldn’t post yesterday. However, the thought of not posting two days in a row is inconceivable to me. So, I find myself sitting here staring at a blank screen wondering what I should type. Rather than wax poetic about a current event or best practice, I’m going to share with you a question that another blogger touched upon a few months ago. Ever since reading it, I just haven’t been able to get it out of my head. Are you ready? Because here it is:

Why is it that the non-profit sector hasn’t been able to gain any ground over the last forty years and remains at 2% of GDP?

I have a few guesses.

  • It could be the for-profit sector is very strong and its growth outpaces our sector, which in effect keeps us from gaining ground.
  • It could be how many new non-profit organizations register every year, and somehow we’re cannibalizing ourselves.
  • Perhaps, Americans are only generous to a point.

I really doubt all of these explanations. I blame these silly guesses on whatever ails me.

What I really think is happening is much more simple.

  • I believe non-profit organizations are bad at maintaining donor relationships.
  • The annual donor turnover rate is over 50%.
  • Most donors don’t make a second contribution after making their first one.
  • Very few people every make it past five consecutive contributions to any one charity.

The result is something like a hamster wheel effect for the average non-profit organization, and it has locked the sector into being just 2% of GDP.

OK … I’m going to run off to the doctor and get a throat culture. While I’m doing that what other reasons can you think of that might answer the question posed at the beginning of this post? Please scroll down and share your hypothesis in the comment box below.

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 tapping into the philanthropic power of women?

women in philanthropy1As many of you know, I subscribe to many different blogs and eNewsletters, and I do a lot of reading. A few weeks ago, I received an eNewsletter called theInsider in my email inbox. It is a connection back to my Boys & Girls Club family. I’ve always loved this publication because there has never been a time after reading it that I didn’t have something to mentally chew on. The July 29th edition planted the following one very powerful thought in my head:

Women are powerful!

I know that for some of you, this revelation falls flat because you probably already knew this. And I suppose that I did, too. However, the article in the eNewsletter that drove this point home shared a series of bullet points and startling facts, and each one was more powerful than the previous one. Here are just a few of those facts about women:

  • Women make 85% of the consumer decisions.
  • Women make 80% of healthcare decisions.
  • Women make 92% of vacation decisions.
  • 2 out of 5 business owners are women.

While these startling statistics are eye popping, it was the following philanthropy-related facts that got my attention:

  • Women are more generous than men.  A recent study by the Center on Philanthropy at Indiana University found for every $100 men gave, women in the same economic circumstance gave $258.
  • Women donate on average twice as much to charity as men and make three times as many contributions.
  • Women primarily support charities with a focus on children in need, education, health and other women-related causes.
  • Primary motivators for women are: change, create, commit, connect, collaborate and celebrate.

The author of this eNewsletter article started it with this simple and thought provoking question:

Do your fundraising strategies include women?

This question has haunted me for the last few weeks. In all of my years of working with non-profit organizations, I am hard pressed to think of more than a small handful of agencies who I’ve seen execute strategies focused exclusively on women.

women in philanthropy2This is the short list I’ve managed to come up with:

  • A fundraiser where women donors were invited to afternoon tea with the agency’s female members who put on a fashion show.
  • A fundraiser where women were honored for their community leadership.
  • A donor circle that consists exclusively of women.

I’m sure there are a few more, but I haven’t been able to think of them in the last few weeks.

I always start to giggle when I think about how many of us (and I’ve done these things, too) are making simple and easy to fix mistakes, such as:

  • Focusing 100% of stewardship activities on the male head of household when we know that he is likely to die first leaving everything to her including the planned giving decision-making.
  • Sending letters (e.g. solicitations, acknowledgement, etc) to him and not to him AND her.
  • Calling the household and asking for him and not her.
  • Looking for auction items that appeal to him
    (e.g. tickets to sporting events) and not necessarily her (of course, I have met more than my fair share of rabid female fans of the Chicago Cubs throughout the years).

Perhaps, the most important revelation we can and should take away from this discussion is that women are different than men in many respects when it comes to philanthropy, making decisions, and what they want to hear. The eNewsletter article acknowledged that women donors need to be stewarded differently than their male counterparts when they said:

“Women desire deeper communication, a greater efficiency and effect, they want to know the impact of the support, are more likely to stop giving if not properly stewarded and view volunteering as an important part of their involvement/investment.”

Still not convinced in the philanthropic power of women? Then please explain to me why Indiana University’s Lilly Family School of Philanthropy has an subdivision called the “Women’s Philanthropy Institute“?

What is your agency doing to cultivate, solicit and steward women? Are you making some of the same mistakes that I listed above? If so, what are you going to do about it? Does your organization have an event or fundraising strategy focused solely on women? Please scroll down and share a few of your thoughts and ideas 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

Mmmmm … strategy for breakfast again?

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

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