Nonprofit Boardroom Taboos

shhh-excepboardsBy Gary Patterson, principal, Fiscal Doctor

When you were a teenager, do you remember one of your parents saying “Speak to your father [or mother] about that” when you asked an uncomfortable question? Fast forward to today. Based on conversations I’ve had with hundreds of nonprofit board members, many feel they get a similar response in the boardroom when they ask questions without easy answers.

The fact is, most boards have issues they would prefer to glaze over or avoid. In my experience helping both for-profit and non-profit companies with fiscal issues, I’ve never seen one that has all the money, key people, time, or comfort level to pursue all the opportunities and address all the problems that lay before them. That doesn’t mean they shouldn’t at least talk about them.

At last year’s BoardSource Leadership Forum, I asked approximately 50 board leaders to identify the three top issues they felt their boards were avoiding. This year, I’ll be presenting the full list in the session titled “Boardroom Black Holes and Taboos.” In the meantime, I have three key suggestions that can help your board tackle sometimes uncomfortable fiscal issues and your organization attain success — not perfection but success.

  1. Get yourself into business of harnessing opportunities and solving problems through better CAPEX (capital expenditures) logic, which allows you to determine which issues to address with limited resources of people, money, and time. Some of you will be surprised to discover one or more historical activities (possibly galas) that require large amounts of resources actually no longer need to be done.
  2. Prepare for the blurring between nonprofit and for-profit organizations. Remember the pain and anguish from those last Form 990 revisions? Attorneys and CPAs are drooling over the next round of Form 990 safeguards. As the disclosure requirements move closer to for-profit proxy levels, what additional levels of corporate governance, enterprise risk management, and cash management will you need?
  3. Set up a planned giving program if you haven’t already done so. Setting politeness aside, your donor base is very likely getting old. If you have looked at the average age of the donors consistently providing most of your funding, you owe it to those donors to help them maintain the mission they care about — and without new passionate donors, the legacy of those who supported your mission in the past may not be able to go forward.

My impression is that nonprofit board members seem to be living in the land of denial more so than their for-profit counterparts. Acknowledging an issue in time to actually solve it is much more effective than ignoring an issue until it becomes a looming catastrophe. Think of an 800-pound gorilla. This monster started as a 100-pound gorilla. Better to tackle it than a beast that nobody can control.

This post is the first in a series written by nonprofit leaders who are presenting sessions at the 2015 BoardSource Leadership Forum, being held in New Orleans on November 9 and 10. Please consider joining us for two days of learning. You can learn more about the conference here.

Why Board Engagement in Advocacy is Essential

10basics_blogBy Anne Wallestad, president & CEO, BoardSource

We ask a lot of nonprofit boards of directors. We want them to be deep thinkers about strategy and mission, vigilant providers of oversight, rainmaking fundraisers for our work…the list goes on.

But where some have called for a narrowing of the board’s scope, this week BoardSource did the exact opposite. With the release of a new edition of Ten Basic Responsibilities of Nonprofit Boards, we have formalized the expectation that advocacy is an essential board responsibility.

This is not something that we take lightly. “Ten Basics” is widely considered to be the definitive resource on nonprofit board roles and responsibilities, and has sold more than 300,000 copies worldwide since it was first released in 1988. Expanding the expectations for boards around advocacy in this seminal publication is putting a stake in the ground. We are saying that advocacy is too important to the success of our missions to be considered something “extra” or “nice to do.” It’s absolutely essential to the work of our organizations and to our ability to fulfill our missions and serve our communities.

Here’s why we are taking this important stand:

  • Our missions are too important to sit on the sidelines. If there are policy changes that would advance — or threaten — our ability to do our work, we can’t afford to sit idle as the decision-making happens around us. We need to make sure that policymakers understand the impact of their decisions on our missions and our communities. We need to make sure that they know exactly what our communities have to gain — or lose — from those decisions; it’s our responsibility as protectors of our missions.
  • The need is too great to ignore. While it’s not all about public funding for nonprofit organizations, we cannot be naive about the fact that nonprofit organizations are extremely vulnerable to shifts in public funding priorities. With a third of all revenues received by public charities coming from government sources, there’s no denying that a huge portion of the programs and services that we provide to our communities depend on public support. And when that support shrinks, goes away, or is delayed, the people that we serve suffer. That’s not a fundraising problem for our organizations; that’s a survival problem for our communities’ most vulnerable. We have to make sure that policymakers understand the impact of their decisions before the damage is done.
  • We are the people decision-makers need to hear from. Policy-makers are hungry for information and education from community leaders and constituents, and board members’ motivations and intentions are perceived differently than those of paid lobbyists or even nonprofit staff. When an unpaid volunteer board leader takes that time to speak with them about an issue of community importance, they pay attention.
  • We have more power and influence than we think. There are an estimated 20 million board members in the United States alone, and we represent our communities’ most connected and influential leaders. When the stakes are high, these relationships and networks matter, and we have the power to partner with decision-makers to align priorities with what our communities really need.

Board leaders are a powerful and influential group of leaders committed to the missions and organizations we serve. To leverage the positive potential of our leadership, we have to expand it outside of the boardroom. We have to communicate with passion and clarity about why our work matters to those who are making decisions that will impact our missions.

If we care enough to sit on a board, then we must care enough to stand up for our missions. It’s not one more thing. In some circumstances, it’s the one thing that will really make a difference.

The new edition of “Ten Basics” is a part of a broader effort to get boards engaged as ambassadors and advocates for their missions — an effort BoardSource formalized last year with the launch of the Stand for Your Mission campaign, together with the Alliance for Justice, the Campion Foundation, the Forum of Regional Associations of Grantmakers, the John S. and James L. Knight Foundation, and the National Council of Nonprofits. Learn more about the Stand for Your Mission campaign and how your board can stand for your mission at  


This post was featured in the July 15th issue of NPQ. 

B-Minus! Nonprofit Boards Can Do Better

leading-blog-imageBy Bruce Lesley, BoardSource senior governance consultant

In my community, the public schools dismissed their students for the summer last week, which means that some parents are spending this week contemplating what to do about Junior’s report card. He’s a smart kid and full of promise, so why is he getting B-minuses? And what can be done to help him improve his grades?

Nonprofit board members should be asking themselves the same questions. According to Leading with Intent: A National Index of Nonprofit Board Practices 2015, nonprofit boards across the country also are earning B-minuses for their performance. Why is this when board members are smart people, just like Junior? Shouldn’t we too expect more of ourselves? I have some thoughts about this, but for now, some tips to help underachieving boards improve their grade.

Light a fire under your governance committee. Maybe it’s inactive and needs a more enthusiastic chair. Maybe you need to repurpose your nominating committee to focus year-round on the board’s engagement. Having this standing committee become more active will force the right conversations about roles and responsibilities, composition, orientation, effectiveness, and the right leadership. One colleague of mine even recommends making your corporate secretary the chief governance officer of the organization and asking him or her to chair this committee.

Repurpose your board meeting agendas so that there is less passive listening to oral reports and more meaningful dialogue on the most important issues. Call it generative work or strategic thinking, when board members are in the same room, the best use of their time is interactive discussion. This is more than just asking questions for clarification; it is when the dialogue generates better understanding among board members and new ideas that will advance mission and strategy. To free up more space for this interactive communication, consider delegating more oversight functions to committees, using consent agenda more aggressively, requiring written reports from your CEO and committees be sent out in advance, preparing visual dashboards for mission impact measures, or even holding a conference call in advance of a board meeting to review fiduciary matters — all so the in-person time can be spent better in interchange.

Close the feedback loop. Board member performance needs to be assessed at all levels, and then the aggregate data reported back to directors. How can a team improve if it doesn’t know how it’s doing? Assessment can be as simple as a 3X5-inch card used at the end of a board meeting for directors to share with the chair what they most liked or disliked about the meeting. Or a board can complete (as BoardSource recommends) a full self-assessment every two to three years and benchmark against its own performance over time. Even peer-to-peer assessments are starting to be used by some exceptional boards. And BoardSource has assessment tools to help with all of the above!

Be positive. Do you truly believe in the potential value-added to mission of an exceptional board? Do you truly believe in the benefits of a constructive partnership between your board and CEO? Maybe all of a board’s successes start with the right attitude, the right values of trust, respect, and interdependence between a board and its CEO. In Forces for Good, the authors state that “most of the (CEOs) we interviewed maintained that their relationship with the board was critical.” Recently some colleagues and I were deliberating about what characteristic most determines how good a board really is. The first answer was a board-centric CEO, one that truly appreciated all the value-added and benefits that a great board can bring to a mission. The second answer was board leaders who realize the importance of doing its job well in support of the mission, its constituents, and its CEO.

All of these considerations emphasize being more intentional about what it means to be an exceptional board and about implementing practices that will improve your board’s performance. There’s a lesson to be learned from those parents intent on helping their children succeed in school. They understand that our children are tomorrow’s leaders. But let’s not forget today. Nonprofit board members are today’s leaders. I encourage us to set equally high expectations of ourselves. Let’s live up to our own promise.



Employment Agreements: Five Things Every Nonprofit Board Should Know

Employment contractBy Anne Wallestad, president & CEO, BoardSource

This morning, I had an opportunity to sit in on a session hosted by CEO Update, which focused on the ins and outs of CEO contracts and compensation. The panel included four experts in CEO recruitment, compensation, and contracts, including Brian Vogel, who is senior principal with Quatt Associates and co-author of BoardSource’s book, Nonprofit Executive Compensation: Planning, Performance, and Pay.

Each of the experts had tremendous experience working with both boards and CEOs on the art and science of employment negotiation and agreements. And while the session was primarily focused on professional and trade associations, many of the points that they shared are applicable more broadly. This includes situations where agreements between boards and CEOs are not necessarily memorialized in an employment contract, which is the majority of most 501(c)(3) organizations, according to a 2013 study by The Nonprofit Times.

So, in the interest of sharing their good insights with all of you, here are the five things I think it’s most important for nonprofit boards to keep in mind:

  1. It’s about getting the best candidate, not the best deal: Each of the experts cautioned that boards should be focused on getting the right candidate to lead their organization and — to do so — they need to be prepared to compensate him or her fairly. Of course, there are boundaries that boards need to keep in mind, and the experts reinforced that boards should benchmark compensation against similar organizations to ensure that they are not putting the organization at risk in terms of intermediate sanctions. But boards that are hyper-focused on keeping CEO compensation as low as possible need to understand that they may end up getting exactly what they pay for.
  2. Establishing a common language around expectations is key: One of the big benefits of a formal employment agreement is that it establishes a common language and understanding of expectations. According to the experts, it’s not about mapping out all of the specific performance objectives or goals, but it is about identifying the process by which those goals will be established and reviewed. This is an especially important point for an incoming CEO, given the context that 17 percent of boards aren’t regularly assessing CEO performance, according to BoardSource’s report, Leading with Intent. Helping to map out how performance (and compensation) will be managed over the CEO’s tenure is a very important step in ensuring that the board is holding itself accountable to its role of managing and supporting the CEO, and communicating that commitment to him or her.
  3. When it comes to negotiations, you’re a board, not a boss: Unlike other positions within organizations or companies, the CEO reports to the board as a whole, rather than to one individual, and boards (especially board chairs) can get themselves into trouble when they forget that. The panel referenced horror stories about what happens when board chairs or a small group of board members negotiate with a candidate or CEO in a way that is not inclusive of — or empowered by — the full board. Whether it’s an initial offer of employment or a renegotiation of salary and terms, it’s essential that the full board be informed and comfortable with the employment agreement and compensation of the CEO, and has memorialized that in some way.
  4. Creating consistency across board change is important (especially to incoming CEOs): Another unique aspect of reporting to a board is the fact that the board can change radically as its composition changes, and that can happen as often as annually. For many organizations, this upheaval is smoothed through thoughtful recruitment and staggering of board terms, but — in some organizations — CEOs can literally face a brand new board all at once. In organizations that have board structures that don’t prevent this sudden change in board composition, the employment contract or agreement plays a critical role in ensuring that what one board commits to, a future board doesn’t renege on. Or, similarly, if a new board sees challenges with performance or fit that a previous board didn’t, there is some mechanism for managing the terms of an abrupt dismissal. It’s not difficult to see why both of these situations would make a CEO skittish, and why he or she might be uncomfortable accepting a position without some protections against quick and radical shifts in board thinking.
  5. You want to start your partnership in a good place: The experts at today’s session likened the recruitment and negotiation process for a nonprofit CEO to personal relationships and marriage. The recruitment process is courtship, the employment contract (if there is one) is the pre-nup, the onboarding is the marriage…you get the picture. And — as many CEOs and boards learn — some “marriages” end in divorce, rather than “happily ever after.” But the experts cautioned that CEOs and boards that focus too much on how a relationship might end, risk dooming the relationship from the start. Expectation-setting is one thing (and it’s essential), but being overly adversarial or confrontational isn’t the way to launch a constructive partnership.

Ultimately, that final point is probably the most important one. The entire recruitment and hiring process is about bringing on a CEO who will partner with the board to lead your organization toward the best possible outcomes for your mission. The hiring process should reflect the way that you will work together — with respect, clarity, and candor, and a focus on the organization’s mission.

For more on the board’s role in hiring and supporting a new CEO, check out these BoardSource resources:

Calling All AmeriCorps Alums

excepboards-teamby Andy Davis, BoardSource director of training, AmeriCorps alum

A year ago, AmeriCorps Alums and BoardSource began to discuss a potential partnership. I immediately thought it would be a great idea because it would shine a light on new service opportunities for a group of individuals committed to giving back to their communities. However, as BoardSource’s director of training, an AmeriCorps alum, and the vice chair of the National Advisory Council of AmeriCorps Alums, I recognized that I was perhaps a bit too close to both organizations to be objective. Since then, as I reflected further on my own history, I have come to the conclusion that no matter my relationship with BoardSource and AmeriCorps Alums, this really is a great partnership. Board service is a wonderful opportunity for alums to continue to volunteer in a way that has lasting impact and meaning.

I learned the definition of a “board of directors” when I was about 11 years old. My father, the executive director of the homeless shelter in my hometown, was explaining to my grandmother why my family couldn’t attend a Sunday lunch — he had a board meeting. She asked what a board did, and he explained in a way that made sense to her, and me.

Because I grew up around a small nonprofit that relied on volunteers to help deliver its direct services, I grew to respect and admire those individuals who volunteered and, when old enough, started volunteering myself. And almost every single time I completed a volunteer assignment — for a school, a Boys and Girls Club, a food bank, or on the deck of the USS Missouri, for example — I would wonder, what else can I do? How can I become more involved? How can I impact the future of this organization? I wanted more!

So I joined AmeriCorps NCCC and helped get things done for America — both up front in operations and behind the scenes in back offices. And I wasn’t the only one. Not by a long shot. Today, there are nearly a million AmeriCorps alums. And that number is just a drop in the bucket for overall volunteering in the United States. According to the Bureau for Labor Statistics, more than 63 million individuals volunteered in 2014 — a number that should be admired and celebrated. But, let’s break that number down a bit. In the same link, we learn that 35- to 44-year-olds are most likely to volunteer (29.8 percent) and 20- to 24-year-olds are least likely to volunteer (18.7 percent).

So you may be wondering where nonprofit board service fits in. Well, according to BoardSource’s Leading with Intent: A National Index of Nonprofit Board Practices 2015, less than 17 percent of all board members are under the age of 40. When you look at individuals under age 30, the percentage shrinks dramatically to 3 percent. Why is this? Anecdotally, we hear that many younger people don’t know how to join a board or what it means to serve. Nonprofits tell us they don’t know where to find potential younger board members and aren’t sure what skills and interests they can bring to the table. What this says to me is that we aren’t doing enough to find each other, and that we are not communicating the vast array of skills and experience that Gen X and Yers bring to the table. The new partnership between BoardSource and AmeriCorps Alums aims to fix this issue.

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CEO Transition: Are You Ready for the Inevitable?

excepboards-leavingBy Katha Kissman, BoardSource senior governance consultant; interim leader and organizational development consultant

BoardSource has long noted that one of the 10 basic responsibilities of all boards is to support and evaluate the chief executive. Another is the hiring of the chief executive. The first is a given — or should be. The second, thankfully, is not a regular board responsibility — at least, I hope not! But after working more than 30 years in the nonprofit sector, I would offer that these two are the most important responsibilities that a board must address, and address well.

Keeping an effective CEO engaged and happy shouldn’t be hard. The Ethic of Reciprocity (often referred to as The Golden Rule) essentially states “Treat others as you would like to be treated.” In a professional setting, management best practices help us understand that when we treat others well, we get the most productivity and reduce turnover.

That said, no matter how well we treat a CEO, he or she is not going to stay forever. It’s inevitable: One day, the CEO will walk out the door and on another day, a new CEO will walk in. What we can do, however, is keep our effective CEOs as long as possible and then manage CEO transition well.

According to BoardSource’s Leading with Intent: A National Index of Nonprofit Board Practices:

  • Half of all CEOs intend to leave their posts within the next five years, yet only one-third of nonprofit boards have an executive succession plan.
  • One out of five nonprofit boards have not conducted a formal performance evaluation of its CEO.
  • One out of four nonprofit boards have not done their due diligence on setting executive compensation in terms of gathering comparable data and documenting their process and decisions.

Boards cannot afford to wait to address these issues until they receive a CEO resignation letter, have to let a CEO go, or, in the worst-case scenario, learn of an unfortunate turn of events that would preclude a CEO from returning to work. Boards need to act proactively for the good of the organizations they serve.

Here are simple yet concrete steps that a board can take now to prepare for the inevitable.

Make sure your governance house is in order

While Leading with Intent had lots of good news to share, the bottom line is that nonprofit leaders give nonprofit boards a “B minus” grade in overall performance. A correlation may be made between this and a CEO’s desire to stay with a particular organization. Because effective CEOs are in high demand, those who are good will likely lean toward employment with organizations that demonstrate a track record of strong board performance.

Ensure an effective and annual CEO performance review process

Typically a CEO receives the best feedback when all board members are asked to complete a performance assessment tool, which should be based on the CEO’s job description and stated performance goals. Results should be compiled so that the data reported is not attributable to a specific board member, ensuring candid reflection, and presented in a written format as well as a verbal discussion. In addition to praising and/or providing constructive feedback to the CEO, the results of a performance evaluation also should be used to set performance goals for the coming year and be shared with the full board.

With CEOs reporting as follows, boards have an opportunity to improve in this area:

  • 26 percent of CEOs indicate that they are not satisfied with the process used to evaluate their performance.
  • 23% percent of CEOs indicate that their evaluations are not based on performance goals mutually agreed upon by the board and CEO.

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Executive Committees: To Be or Not to Be?

photo (6)By Robin Hindsman Stacia, BoardSource senior governance consultant; principal, Sage Consulting Network, Inc.

Not to be? Many of you may think that questioning the relevancy of the executive committee (EC) crosses a sacred line. If you do, it’s because somewhere along the way, we’ve allowed our executive committees to become sacred groups with the ability to make limitless decisions and act in lieu of the board’s full participation. And when I say “we,” I mean board members. Our executive committees didn’t take this level of power by force or coercion; rather, we have been giving away this power so we can do less! There, I’ve said it: Board members allow the executive committee to cover for their lack of engagement.

Just hold your horses, you say: Executive committees have the authority to act on behalf of the board, and they are a common standing committee. According to Leading with Intent: A National Index of Nonprofit Board Practices, 78 percent of boards have executive committees, making them the most prevalent of all committees reported. Surely, 78% of nonprofit boards can’t be in the wrong!

Okay, maybe there are a few effective executive committees out there, but, in many more cases than we hate to admit, our executive committees are what were intended to be a good practice gone wrong. And I’m not alone in my desire to see them ‘not be.’ In the May 26, 2011 issue of The Nonprofit Quarterly, Simone P. Jayaux defiantly declared, “I’m on a worldwide mission to destroy all executive committees.” Why? Because board disengagement — something many, many boards struggle with — can be worsened by the presence of even a halfway functional executive committee. And, as the board’s engagement deteriorates, the executive committee grows in strength, becoming the de facto board and undermining the legal and statutory responsibilities of the full board.

If you’re among the 78 percent of boards that have an executive committee, the full board must retain its position as the primary authority for the organization and take steps to ensure that your EC doesn’t exceed its boundaries. There must be full transparency between the deliberations and decisions made by the EC and the full board. The take-away here is that board members can’t delegate their responsibilities, fall asleep on the job, and fail to maintain full engagement and accountability.

The following are some practical actions that will help your board improve its executive committee processes:

  • Consider if your executive committee is necessary for your board. Not all boards require an executive committee, and each needs to consider the added value and if the EC’s responsibilities could be handled by other committees or perhaps the board’s officers.
  • Make sure the bylaws detail the specific scope of responsibilities for your EC, clearly state the membership, and indicate when the EC’s decisions must be confirmed by the full board. The more structure the better — limit flexibility. Clearly identify what the EC should not do.
  • Use the EC to vet ideas and options for full board discussion, not decision making.
  • Ensure that there is a process in place for full board review of EC minutes and actions.
  • Consider the appropriate meeting frequency for the EC. Consider having this committee meet only when necessary and not routinely, which will minimize the possibility of diluting board responsibilities. Executive committees that meet more frequently are prone to doing more work — work that might be better delegated to other committees, your board officers, or even management.

Executive committees: To be or not to be? Emerging governance trends suggest that we change or eliminate our executive committees. That means we need to rethink business as usual and engage in an honest evaluation of the impact of our executive committees on our boards. Are we, as board members, enabling board disengagement by allowing our executive committees to make decisions for us? If so, it’s time to reengage and take back our power.

Is Your Spending Rate Sustainable?

boards_blog_imageBy Heather Myers, managing director, non-profits, Russell Investments

As a board member, you have a difficult job. You need to ensure that your organization has the money, talent, experience, and resources to fund your mission. And you need to do this in an ever-changing environment. Additionally, if your organization relies heavily on your investment program to meet your spending needs, it has become essential that your board fully understands how to effectively manage that program.

Forecasters expect the inflation-adjusted growth of a passive portfolio of stocks and bonds to fall to 3.3% over the coming 10 years — a level that would make supporting even a 5% spending rate unsustainable. What this means is that nonprofit fiduciaries are going to have to think differently about how they go about meeting their return objective. The good news is that while the outlook for market returns has declined, there are still ways to improve portfolio returns.

Here are five strategies my Russell Investments colleagues and I suggest nonprofit fiduciaries embrace going forward:

  1. Be nimble. Gone are the days when you can set and forget your strategic asset allocation (your long-term policy allocation to all asset classes and sub-asset classes). Markets are fast moving and increasingly complex; you need to be fleet of foot to capture evolving market opportunities.
  2. Be mindful of your spending policy and evaluate it annually. Know how much your organization draws from your investment portfolio to meet your spending requirements and, unless you have a legal requirement to spend 5% annually, ensure that you don’t overspend and evaluate the planned spend at least annually.
  3. Manage your liquidity. Spending policy and liquidity go hand in hand. A sound liquidity program means aligning the liquidity profile of your investment portfolio with your time horizon and cash-flow demands. If you do that, it can help you meet your spending obligations as they come due, while reducing the risk of mission-threatening investment losses.
  4. Manage risks holistically and assess your risk tolerance. Focus not just on investment risk, but also on governance issues and other aspects of risks. Ultimately, you need an investment approach that can deliver the returns you need at a level of risk you can survive.
  5. Take an organization-wide perspective. Be aware of the impact your investment program has on your organization’s ability to achieve its broader goals.

It’s important to realize that these strategies don’t operate separately; prioritizing one will have an impact on the others. At some point, you will need to decide which of these is most important to your organization, and then manage the rest accordingly. For example, if your spending target is high, and you do not have a high tolerance for risk, you may need to rethink your spending target. Having a firm understanding of these strategies and how your board wants to prioritize them is essential to effectively managing your investment program.

Does all of this sound complicated? While it wouldn’t be fair to say that it is not, Russell Investments has a new resource that we think will help, and that is available free of charge to the BoardSource community. The Non-profit Fiduciaries’ Handbook is a step-by-step guide to investment strategy for nonprofit investors. It discusses each of the above strategies and includes worksheets you can complete with your investment team or questions you can ask to prompt discussion. To request a copy of The Non-profit Fiduciaries’ Handbook, click here or visit

The opinions expressed in this material are not necessarily those held by Russell Investments, its affiliates or subsidiaries. While all material is deemed to be reliable, accuracy and completeness cannot be guaranteed. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.

USI-21652 03-16



Adaptive Strategic Planning for Today’s New Normal

blog-imageBy Ann F. Cohen, chief strategist and change agent, Ann Cohen & Associates; BoardSource senior governance consultant

Do you remember that childhood game called “Freeze”? If only we could play it now with the world in which our nonprofits operate. “Freeze,” I’d yell, when it comes time to create a strategic plan — “Stop moving, we have to plan.” After all, setting direction for the organization is one of the board’s primary responsibilities. But no, there’s no freezing the world today. The “new normal” is change — fast paced, constant, and, at times, unpredictable. In fact, organizations that do attempt to stop the world while creating a strategic plan usually end up with credenza ware — a document that sits on the credenza collecting dust until the time comes to create another plan.

It’s not surprising to me that BoardSource’s new study, Leading with Intent: A National Index of Nonprofit Board Practices, found that boards are doing only a mediocre job at monitoring programs and setting direction. It’s hard to do when the external environment in which our organizations operate won’t stand still for a moment.

In today’s new normal, the key to successful strategic planning is to do a little changing ourselves — to approach strategic planning not as an event or a means to an end but rather as a dynamic, ongoing learning process or cycle.

The process begins with board and staff co-creating an aspirational vision that answers what has become the iconic and ubiquitous Gandhi question: What is the change we want to see in the world? From there, it moves forward with intentionality.

Learning occurs in many ways:

Questioning our board and staff members, clients, and important thinkers, funders, and partners (via interviews, surveys, and today social media as well) and truly listening to what they say, being mindful of our own biases. I recommend the following two lines of inquiry:

  • Strategic impact questions that go directly to what the organization has been doing: What is our core work? How well is our organization performing — programmatically, financially, and administratively? Are we making a difference? How do we know? Who else does our work, and are we competing for the same funds?
  • Generative questions that look at the work of the organization from a different angle: If we do X, what will we look like? What is the biggest gap between what we claim we are and what our actual performances or actions say we are?

Assessing: Did we reach our goal? What stood in the way? What propelled us forward? What measures support this assessment?

Researching: What do relevant studies — whether trend analysis, demographics, or research — tell us about the changing landscape (economic, social, and environmental) in which the organization operates?

Transforming knowledge into action: By asking strategic and generative questions, listening, assessing, and researching, we surface the needs, possibilities, strengths, weaknesses, opportunities, and signs of caution that should be addressed as we design our plan — one that we believe (based on our learning) and hope (based on our passion) will propel the organization toward its vision. As we identify and choose between different design elements or strategies, we know that nothing can be set in stone; our strategies must be adaptive to the changing reality, lend themselves to effective monitoring, and remain relevant and imperative. And if we later discover through monitoring that we aren’t meeting our strategic goals, then we ask more questions, we learn more, and we apply that learning to our design. Amending a design, a course of action, a plan, should become part of the board’s culture and ongoing oversight responsibilities.

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Make Informed Fundraising Decisions

if-blog (4)By Ron Wormser, lead author, Informed Fundraising: An Introduction & Guide               

“Why does the world need yet another book on fundraising?”

I was asked this question by a friend who is a long-serving senior staff member of a community foundation. Throwing caution to the wind, I answered her question with another: “Do all the nonprofits in your community raise the money they need?” After a slight pause, she answered, “No, they don’t.”

The sad reality is that too many nonprofits are unable to raise the funds they need to maintain current programs and services let alone serve all the others in need. Yes, some nonprofits have staggering fundraising success. But most often they are large, well-established organizations with years of accumulated fundraising experience and abundant fundraising expertise and resources — organizations like large private universities and hospitals.

But most nonprofits are not large (according to Urban Institute’s Nonprofit Almanac 2012, almost half of all public charities have annual expenses under $100,000) and have limited, sometimes very limited, fundraising experience and even more limited current fundraising expertise and resources. Yet it is the smaller nonprofits that are typically the most dependent on contributed funds, as are those they serve, and that have the hardest time raising needed funds.

There can be many reasons why smaller nonprofits have limited fundraising success. Based on my experience working with community-based nonprofits, one major reason has become painfully apparent to me: Large, established nonprofits can 1.) easily attract community members to board service who have experience with fundraising as well as personal resources and access to others with discretionary resources, and 2.) afford chief executives with years of fundraising experience. In contrast, smaller nonprofits have access to different pools of prospective board members and chief executives. Their board leaders are likely to be less experienced in fundraising and less informed about what it takes to do it well.

Many who are new to nonprofit board service think that fundraising is about writing a big check and asking their friends to do the same. That perception, that misunderstanding, could well be the single most significant reason why smaller nonprofits struggle to raise the funds they need.

Consider an alternative, where fundraising efforts are based on the following:

  1. A clear understanding of what is required to be effective in raising money so that whatever fundraising efforts are authorized are well-conceived.
  2. Carefully prepared fundraising plans, strategies, and goals supported by necessary capabilities that reflect the unique needs and circumstances of the nonprofit, resulting in a well-planned program.
  3. Competent and consistent implementation of the plan by those qualified for the tasks, resulting in a well-executed program.

Fundraising based on those three components is almost always highly effective in achieving the desired results, and is what I refer to as “informed fundraising.”

Informed Fundraising: An Introduction & Guide is not another “how to” book. Rather, it is designed to provide nonprofit decision-makers associated with small nonprofits with the information they need to make informed decisions when presented with proposed fundraising plans and programs. It provides them with the understanding needed to ensure that those plans and programs have been carefully prepared and will be well executed.

Learn more about Informed Fundraising: An Introduction & Guide.




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