Dani Robbins

Posts Tagged ‘board roles’

The Thing About Nonprofit Leadership

In Leadership, Non Profit Boards, Organizational Development, Strategic Plans on April 13, 2017 at 9:49 am

One of the honors of my professional life, in addition to leading nonprofits and working toward social justice, is teaching at the Glenn College of Public Affairs at The Ohio State University. The students are so earnest and bright! Every semester, and sometimes every week, a student tells a story and I answer, “that was a leadership decision.”

  • A donor wants to control the programming; that’s a leadership decision.
  • A Board member wants you to co-mingle grant money; that’s a leadership decision- and a teachable moment.
  • A parent challenges a procedure; that’s a leadership decision.

How you react is the difference between an agency that flourishes and one that struggles.

Donors, community leaders and others may want your agency to go in a way that is contrary to your agency’s agreed upon strategic direction. (Saying no to those requests, alone, is worth the investment in a strategic plan.) They may want you to do something with their gift that is against your values. Their values may be contrary to your organizational values. They may not want you to go in the direction that the Board has set.

That is the beauty of a strategic plan. In addition to aligning the work of an agency and getting everyone on the same page working toward the same goals, it allows the CEO to say no. Or, if the opportunity is so fabulous that no is not the right answer, to bring the idea to the Board for their consideration. That, too, is a leadership decision.

It’s easy to say yes. Someone brings you something, you say yes. They go away happy. No, on the other hand, engenders the completely opposite reaction. It’s hard to say no. It’s also critical to your and your agency’s success.

Those are not even, or by a long shot, the only decisions you will make or the only people to whom you will say no. Here’s some more:

  • A funder wants you to apply for a new grant. It’s a lot of money but it’s not exactly what your agency does. Do you say no? (Yes, you do.) Can you? (You can.) Do you follow the money? (No.)
  • A staff member does something that is against the spirit of a policy (or the law) but not technically the letter of that policy (or the law).
  • The Executive Board regularly makes decisions in lieu of the full Board, which very well may be codified in your by-laws. (I recommend that clause is only used in the case of emergency.) That, too, is a leadership decision and while it’s not your decision as the CEO, it’s totally your problem. Fix it.

Your Board members will be as aware of their role as the person who trained them, which may have been no one. If you want your Board to speak with one voice, to understand their role and the expectations of that role, to understand your role, and the responsibilities within each, you will have to train them.

You will get the Board you build; some might say (have said) you will get the Board you deserve. The nonprofit Board structure is an illustration in opposites. CEOs serve at the pleasure of their Board. Our Boards are intended to be representative of the community we serve. We want and need a diverse mix of Board members, with a diverse set of experiences, and a diverse set of skills, who have the time, talent and treasure to help us move our missions forward. It is also true that nonprofit CEOs – many of whom have spent our lives in this field and have advanced degrees, decades of experience working on the issues our agency exits to address, and significant knowledge of board process, nonprofit governance and the law – may be reporting to a group of people who have none of the above.

It’s why building your Board is so critical. You can get a lot done on sheer willpower and many nonprofit CEOs have, but your agency will be unstoppable when your Board is trained to their role and fulfilling that role.

Everyone has different goals and often different priorities. It’s why it’s so important to define both for an agency.

That’s the thing about leadership, whatever you allow, whatever you promote, whatever you support, overtly or implicitly, intentionally or accidentally, you own.

The other thing is this: you also own the decisions the people who report to you make. How you react afterward? That’s all you!

We all know that any day could be the day we quit or get fired. There’s still a job to do – and you’re in the chair. Decide wisely.

What’s your experience with leadership decisions? Do you have a story you can share?  As always, I welcome your insight, feedback and experience.  Please share your ideas or suggestions for blog topics and consider hitting the follow button to enter your email.  A rising tide raises all boats.

Things Nonprofit Boards of Directors Can Do, But Shouldn’t

In Leadership, Non Profit Boards, Organizational Development, Resource Development on December 13, 2016 at 2:16 pm

Serving on the Board of Directors of a nonprofit is an honor and a privilege as well as a job and a liability.  As with any job, there are things that you cannot do because they’re illegal and things that you should not do because they’re inappropriate and/or unethical.

Here is a list of things Board members shouldn’t do, even though, technically, they can.

Pay Yourselves

I had the privilege of co-facilitating a training recently and no less than five representatives of different agencies stood up and asked us follow up questions when we said Board members shouldn’t get paid.

Here are a few of the questions:

“Can we pay them a stipend?”

“Can we give them a gift card?”

“We really can’t pay them?”

Um…no.

It is not illegal to pay Board members, but it is widely considered to be inappropriate in a charitable institution that is soliciting donations from its community. The one exception is when the (paid) executive director has an ex-officio seat on the Board. Other than that, staff shouldn’t be on the Board and the Board shouldn’t be paid.

You can pay mileage to and from the Board meeting and reimburse expenses when Board members are on agency business. You can, but you really shouldn’t, pay Board members for doing the work of the Board of a community agency.

Assign Work to Staff, other than the CEO

Boards have one employee, the CEO.  Every other employee works for that CEO.  The CEO’s role is to lead the staff, support the Board, manage the day to day operations and serve as the face of the organization in the community. It is the CEO’s role to execute the strategic plan in support of the mission and vision of the organization.

It is hard to sit in a Board committee meeting that is staffed by a senior yet non-executive leader of the agency and not assign work to that staff member. Work often gets assigned in such meetings and it likely there is a process in place for the staff member to go back to the CEO and update her on the results of the meeting. That’s not what I mean. What I mean is the Chair of the committee or of the Board directly assigning work to a staff member, outside of a committee or Board meeting and unbeknownst to the CEO.

When Boards choose to not honor the “one employee” rule, and assign work to staff, it quickly becomes very confusing whose instructions take precedence and whom will be held to account. It also plants a seed that challenges the CEO’s legitimacy.  That seed (of dissent) grows and eventually it becomes difficult for the CEO to maintain his or her position, either because they quit, or challenge the Board’s overstep and are fired.

Hire Staff

Since we’re already here, let’s keep going. The only staff Boards should hire is their CEO. All other staff should be hired by that CEO. There will come a time when you do not have a CEO and also have other positions open. It will seem reasonable to try to hire some of those positions in the interim. Resist!

You don’t know what skills your new CEO will have, so it is unlikely you will be able to hire someone to complement those skills. Unless you have organizational values that you will expect your CEO to honor (which you should also be asking about in the CEO search process), you won’t know which values are important to your new CEO and won’t be able to see if the person you want to hire is a match. It is as likely that whomever you hire will not be a good fit for the team already in place and since you know them but don’t directly work with them, you might not be able to assess that.  You want the CEO to build their own team. That may mean you have to let them.

If you must, hire someone as a temporary with the option to stay at the discretion of the new CEO. That sets the tone for both the new person and the new CEO that the Board understands the difference in roles.

Avoid Fund Raising

Boards are tasked with securing the resources of the organization. I’ve heard consultants say that Board don’t have to fund raise, but it is very rarely true. Fund raising is a group effort, led by the leaders.

The CEO cannot raise money alone. The Development Director cannot raise money alone. Fund raising works best in a culture of philanthropy when both the staff and the Board are working together.

The Board’s role is to set the fund raising goal, financially support the agency themselves, embark on the campaign, open doors, introduce staff, “make the ask” when appropriate, pick up the tab for lunch when possible, and thank the donor.

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 letter asking for a specific dollar amount, attending the meetings as necessary and documenting the meeting in the database as well as writing the formal thank you note, and then creating a plan to steward the donor.

Unless you are getting all of your money from program fees, and if you are you may have issues with the public support test, fund raising is one of the five roles of the Board.

Do Business with the Agency you Serve

The law allows Board members to “do business” with the agency they serve if it is at “fair market value.” Do not be fooled. This is a case of the law allowing something that it’s likely public opinion will not support. Just because something is allowed does not make it right. It is an enormous conflict of interest and a quick way to get a spot on the front page of the paper for all the wrong reasons.  If you are on the Board, do not do business with the agency you serve.

What things have you seen Boards do that they shouldn’t?  Any advice to share? As always, I welcome your insight, feedback and experience. Please offer your ideas or suggestions for blog topics and consider hitting the follow button. A rising tide raises all boats.

Things that Aren’t Really Free and Don’t Raise Money Anyway

In Leadership, Non Profit Boards, Resource Development on November 21, 2015 at 10:33 am

There are three questions that I regularly ask when it comes to fund raising and many other topics as well. The questions are “What is the goal?” “Is this a good use of your time?” and “To what end?”

What is the goal?

When the answer is raising money for an agency, sometimes the goal is not in concert with the actions. I once ran an agency that held a duck race as a fund raiser. I should say I ran an agency that had a duck race in process when I arrived and that once I saw recommended we never do again.

If you’ve never seen a duck race, it really is just that: a race of plastic ducks down a river. People pay $5 each for their ducks and get assigned a number; if their duck wins, they win a prize. Now all of this sounds fine, until you hear the details. The devil is always in the details.

Here are the details: We rented for $1 and then “sold” 8,000 ducks for $5 each.

They – and I’m completely disowning this part- had my Board members selling ducks for $5 a piece at Walmart. My Board members, the pillars of our community whom we (they) should have been treating like gold, honoring and cherishing, and giving meaningful strategic work to do, were at Walmart selling ducks for $5 apiece, and not just them either.

It takes a long time to sell 8,000 ducks, so we also invited service groups to sell ducks on our behalf for which we paid $1 for every duck they sold. If you’re doing the math with me, and I know you are, I’m now down $2 for every $5 we bring in.

8,000 ducks were sold. They came in filthy from whatever river they had most recently been fished out of and needed to be cleaned, stored and have the 8,000 stickers from the prior race removed and 8,000 new stickers added. We borrowed the factory and used volunteers so other than the cost of soliciting and managing those pieces, no additional cost there, but man was it a lot of work!

The prize was a $5,000 cash prize. As you might imagine, it came right off the top and in case you’re wondering was not donated back to the agency. 8,000 ducks at $5 a piece is $40,000, minus the $1 cost per duck, the $1 we paid other groups to sell them, the cash prize and the staff time.

I had two staff, one of whom was an intern (brilliant who I later hired and who we’ll come back to later), that worked nonstop for at least the two months I was there on nothing other than this event, which did not have the agency name in its title. No one even knew the event benefited the agency.

What was the goal?

It was intended to be a fund raiser. Because it didn’t really raise funds, especially once you added in staff time; because no one knew it benefited the agency so we couldn’t even call it a friend raiser; because my BOARD MEMBERS WERE AT WALMART SELLING DUCKS; I recommended we never do the event again.

That is my favorite illustration of “things don’t raise money anyway.’” Now, let’s move on to things that “aren’t really free.” Our intern, later promoted to event planner who was amazing – and also ornery – insisted she stay and physically put together 300 program books for our gala. She printed, copied, hole punched and bound each book by hand. It took forever. It possibly would have been justifiable but it didn’t even save us money. She spent hours on something we could have paid a printer to do for less money in less time.

I cajoled. I teased. I encouraged her to make a different decision. Finally, I insisted, sent her to the printer and then home. If the goal is raising money, spending 10 hours to do something I could pay someone else to do for a fraction of the cost is counter-productive. Had I asked, the answer to my next question would have been no.

“Is this a good use of your time?”

I am consistently amazed at the things people do that are not only not a good use of their time, but are actually other people’s jobs. Weekly, someone tells me about a situation in which they, as the executive, do the work of the board; they, as the board, do the work of the executive. Worse, sometimes they, the executive, do the work of the staff. If you are doing the work of someone who you pay, what are they doing? Also, what are you not doing?

I totally get that it’s easier for you to do it. Here’s the problem with that logic: you will always be the one that does it. If you don’t want to be the one that does it, and if you want to be the kind of leader that develops others, you will have to teach other people how to do it and then allow them to do so.

Boards that are trained to their role and allowed to fulfill their role, do. Ditto for staff. Let them.

Doing other people’s jobs isn’t the only way to “not really free.” When you have a small agency and the CEO is doing basic admin work, such as coding or data entry, there is an opportunity cost. It’s not only the highest paid admin work in town; it’s the actual CEO work that is not getting done. It’s every donor that is not getting cultivated; every public event at which your leader is not being seen; every strategy that is not being considered. This brings me to my last question:

“To what end?”

If the end game is a strong sustainable agency, and your CEO is doing work that you could pay someone else a fraction of the cost to do, that not only isn’t really free, it’s costing you money and opportunity.

If you want to go down a path, it is important to know where it will lead. Sometimes, it’s staff that are doing things that are not within their charts of work, and way below their hourly rate. Sometime it’s volunteers. If the cost of free is high, maybe it’s time to pay someone to do what needs to be done.

I know of agencies that get a variety of things done for free, which is awesome when it works and totally frustrating and disengaging for all involved when it doesn’t. If you can’t get done what you need done, free isn’t working for you and it’s time to do something different.

Free is only free when it gets you what you need. If the cost of free is frustration and disengagement, your actions aren’t aligned with your goal. It’s time for a new decision. Life is about making new mistakes.

What price have you paid for free? Will you share your stories? As always, I welcome your insight, feedback and experience. Please offer your ideas or suggestions for blog topics and consider hitting the follow button to enter your email. A rising tide raises all boats.

Get Rid of Your Give or Get Policy

In Leadership, Non Profit Boards, Resource Development on December 9, 2014 at 8:04 am

In case you’re not familiar with them, Give or Get policies require individual board members to donate or solicit a minimum amount of money each year. It’s intended to be a one size fits all way to deal with board giving: Board members can write a check themselves, ask others for it or some combination therein. The idea is that you can engage board members who hate fund raising because they can write a check to cover the minimum gift and you can engage people who may not have disposable income because they can solicit others to cover their gift. It’s a win win, right? Wrong!

Give or Get policies get in the way of good governance. They get in the way of 100% board giving. They get in the way of your ability to steward your board members as donors, or thank them for their gift or ask for a larger gift. They get in the way of building a culture of philanthropy. They’re bad policies.

Any policy that is in conflict with your goal is a bad policy.

Give or Get policies allows for members to just “get” and not give at all, which precludes the possibility of reaching 100% board giving.

Most communities have an expectation of 100% Board giving. That means there is an expectation that every single member of the board of directors has personally financially supported their agency. It matters.

Foundation officers ask if there if 100% board giving at meetings to discuss grant submissions. Major donors ask at solicitation meetings. Sometimes there are forms agencies must complete that ask. The answer has to be yes.

If it’s no, you are inviting the question of why someone else would support an agency that its own leaders don’t support. That is a question you really don’t want to have to answer, because there is no good answer.

That’s not the only reason not to do it. Give or Get policies take what is intended to be a minimum gift and make it “the gift” thus minimizing the amount that could be raised and the potential investment of board members. Having such a policy leaves money on the table. It’s possible that every member of your board has the same capacity, but it’s unlikely.

Minimum gifts invariably become maximum gifts by anyone other than the Chair, and sometimes them too. Such policies also works as a disincentive for potential board members who can’t give at the minimum level and limit the gift amount for seated board members that can.

Finally, such policies eliminate the agency’s ability to steward their board members. Board members should each be asked by the appropriate person (defined as the person most likely to get a yes, which is often another board members but may be the executive or a volunteer) for a specific gift that is reflective of their capacity and level of engagement.

Board members should be treated like the donors they are. They should be thanked. They should be appreciated. They should be cultivated, solicited and stewarded. They are not one size fits all and shouldn’t be treated as such.

Some policies don’t stop there. I saw a board member contract the other day that included among its requirements that each board member is expected to “present a check to the agency without having to be asked.” I’m guessing that whoever wrote that policy doesn’t like to ask or be asked for money. I’m guessing that they’re also not satisfied with the amount they receive in contributed income.

Our board members should be our advocates, our ambassadors, our cheerleaders, our leaders, and – yes – our donors. Allow yours to fulfill all their roles and create a plan to ask each one individually for a significant (to them) gift that reflects their capacity and level of engagement. You, your community and your coffers will be glad you did!

What’s your experience with give or get policies? As always, I welcome your insight, feedback and experience. Please share your ideas or suggestions for blog topics and consider hitting the follow button to enter your email. A rising tide raises all boats.

Events, Grants and Individual Giving

In Leadership, Non Profit Boards, Resource Development on October 23, 2013 at 9:08 am

I was having breakfast this week with a friend and fellow consultant and we were discussing resource development efforts, including events and grants.  As I’m sure you are well aware by now, I’m not a huge fan of organizations hosting multiple events.  Events are expensive, labor intensive and don’t usually generate a lot of income.

I can hear you out there saying “No Dani, they’re fun!”  And they are, at least some of them are.

One signature event a year is a wonderful way to engage new donors, connect with current donors and showcase your programs while raising significant money. Even signature events that don’t raise significant money may still be a good use of your resources.  However, more than one signature event a year is too much.

More than one event (two, if you must) may be a sign that your leadership, board or executive, is reluctant to raise money in other ways.

Leadership that doesn’t want to embark on an annual appeal or a major donor campaign will often advocate more grants be written or additional events be introduced.  Not only will more events not raise more money, more events will cannibalize your signature event and may yield less income for more work.  Any process that doesn’t get you to your goal is a bad process.

“The Executive Director is the Chief Development Officer” of any non profit that seeks contributed income. (Erik Anderson Donor Dreams blog) Whether they want to or not; whether they’re good at it or not; whether they have a development director whose job it is or not, the Exec is still responsible for fund raising and one of the responsibilities of a governing board is to raise money. Neither is a role that can be abdicated.

Events are often 5-15% of an agency’s budget and generally net 50% of what they cost, sometimes less. Most attendees would be appalled to know that, but it’s true. It’s too high! I recommend events net 75% of what they cost. There are other, better, avenues to raise money.

Grants, which are often 30-50% of an agency’s budget, more if they receive United Way funding, are one way.  Yet, they too come with a cost. Most agencies get somewhere between 50-80% of the grants they submit. That means that the time spent on writing the 20-50% of the grants that don’t get funded is time lost.  For the grants that are secured, there are reports to be written, dollars to be tracked, objectives to reach and programming to introduce. All of which is as it should be, and none of which is without cost.

As I mentioned in the Culture of Philanthropy or Fund Raising post, according to “Fund-Raising: Evaluating and Managing the Fund Development Process” (1999) individual giving offers the highest rate of return for the lowest cost (5-10%) to the organization.  It is also the largest pot of money given in this country and usually only reflective of the percentage of special event income in most agencies’ budgets.  In other words, 80% of the philanthropic dollars in this country are given by individuals yet 10-15% of most agencies budgets are received from individuals. Like the post says, “opportunity is knocking. Get the door!”

Your board, staff and major donors will be the foundation of any individual giving program and the program should be introduced in just that order: Board giving should come first with the Board setting and then meeting a giving goal. Staff should then be asked and then major donors. Individual giving is about one on one relationships that are cultivated – and later, stewarded – and require intentional asks for specific dollar amounts.

Once those asks are made, as mentioned in the Sustainability by Descending Order of Love post, “if you have the time and the volunteers, consider asking your larger mid level donors and prospects in person. Those with the potential to become major donors should also be asked in person as should anyone who is committed to your organization.  While we follow the path of descending order of love in planning, we love all of our donors equally.  If someone would like to see you in person, even if it will be a small gift, go.  It is fun to thank someone in person and is worth keeping a committed donor engaged. When that is not practical, the next best thing is a phone bank or phone calls.”

There are a lot of ways to raise money and some will generate more money in less time than others.  Nonprofit leaders are busy.  Get the best bang for your buck and get on the individual giving path.  It will be scary, and also worth it!

What have you done to increase individual giving?  As always, I welcome your insight, feedback and experience.  Please share your ideas or suggestions for blog topics and consider hitting the follow button to enter your email.  A rising tide raises all boats.

Board Meetings Gone Wrong

In Leadership, Non Profit Boards on August 16, 2013 at 6:34 am

Boards meetings can quickly go from productive to destructive in any number of ways.  Here’s a few:

The morning after is too late

I cannot tell you the number of times in my career that a Board member has called me the morning after a board meeting appalled by something the Board voted to approve the night before, at a meeting they themselves attended.  I can absolutely tell you the number of times those very same Board members have voiced their objections in the room: zero!

The next morning is too late.  If you do not like the motion that is on the table, it is not only your right to object out loud and on the record, it’s your obligation.

Sometimes individual Board members come up with wacky (read: dangerous) ideas.  When those ideas become motions that get seconded is when they go from wacky to possible.  Motions that have no second die, and so do the ideas that spawned them.

Motions that are seconded prompt the chair to call for a discussion and a vote.  If you are uncomfortable with the motion that is on the table, I implore you to speak.  Silence is acquiesce.  It is usually too late (and much harder) to address something after a vote has been concluded.

When you don’t know where you’re going any road will get you there.

No written agenda or an agenda that isn’t followed practically guarantees a long, meandering meeting that will only serve to frustrate those in the room, but won’t accomplish much beyond that.  It’s also likely that such a meeting will not produce formal votes or minutes that capture the work the Board has accomplished – or not as the case is (more) likely to be.

No Strategic Plan works the same way.  In the absence of a plan, you will have a lot of people working on a lot of things that may or may not align because the Board has not articulated and voted upon a formal direction.

If everyone’s in charge, no one’s in charge.

Boards elect Chairs to be in charge (of the Board). It’s awkward and feels weird the first time you chair a meeting, but the weirdness will pass when you begin to lead.  However, not leading guarantees the weirdness moves in and sets up shop.

It’s the forth Tuesday at 4; let’s meet!

Don’t have a Board meeting if you have nothing to talk about.  If there are no committee reports to give and no business for the Board to address, cancel the meeting.

At the end of the day, there’s no accounting for crazy

The easiest way to avoid crazy in the board room is to not let crazy on the board.  A Board Development plan and a formal process to elect board members will weed out inappropriate board prospects, before they become inappropriate board members.

Time of Death: 2 hours after we started talking about this

Discussion that seems to be spiraling can be stopped by two of my favorite phrases:

1. “Let’s call the question” which in Board speak means enough talking, let’s vote.

2. “Let’s send this back to committee.”  This phrase, when used by the chair, is a declarative statement that the board meeting has devolved into a committee meeting.  When used by anyone other than the chair, it is a prompt to the chair that the discussion has gone on too long.  In either case, there should be a vote, reflected in minutes, that the motion was tabled pending the committee’s review and consideration of the issues raised.

What’s the Executive Director’s role?

Good Execs do their homework before the meeting and usually know how people are going to vote before the meeting begins……which doesn’t ensure they will do so.

If a meeting goes off track, Execs can:

  • stall by whispering the potential negative impact to the Chair and hoping they agree;
  • offer to get more information and bring it back to the board at a future meeting; or
  • recommend the motion be sent back to committee prior to being voted upon.

If you have to, you can object out loud and on the record but be aware that doing so may spend significant political capitalIt also may not help, which does not mean you should not do it.

As mentioned in Hiring, Supporting and Evaluating the Executive, “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.”

What’s been your experience?  Have you seen Board meetings go off track?  What has gotten them back on track?  As always, I welcome your insight and experience.

Governance: The Work of the Board, part 5 Setting the Mission, Vision and Strategic Direction

In Non Profit Boards, Strategic Plans on August 10, 2013 at 8:17 am

Welcome to the final post in 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, Setting Policy, and Raising Money.  Today, let’s discuss the Board’s role in setting the mission, vision and strategic direction.

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:

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

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 setting the mission, vision and strategic direction means is:

The Board sets – meaning discusses and votes to adopt or revise – the mission statement, which answers why your organizations exist.

The Board also sets the vision of the organization. A vision statement is a description of what the organization will look like at a specified time, usually 3-5 years, in the future. There are two minds in the field as to if a vision statements should be a utopian view such as “an end to hunger” or a more concrete view such as “to be the premier youth development organization.”  I lean toward the latter; I find it challenging to set goals to get to utopia.

The Board votes upon the strategic plan, after participating in a strategic planning process “in which the board, staff, and select constituents decide the future direction of an organization and allocate resources, including people, to ensure that target goals are reached. Having a board-approved, staff-involved strategic plan that sets organizational values, includes effective measurements and the allocation of resources aligns the organization, provides direction to all levels of staff and board, and defines the path for the future of the organization. It also allows leadership, both board and staff, to reject divergent paths that will not lead to the organization’s intended destination.” (Innovative Leadership Workbook for Nonprofit Executives)

The process – and the document – can be very long or very short.  In fact, I have a new theory that the longer strategic plan is, the less likely it is to be used.  For my clients, I recommend a 4-5 meeting process: We start with setting or revising values, vision and mission and end with assignments, measurements and due dates.

Please do not accept a plan that does not include assignments, measurements and due dates.  If you cannot answer the question “How will we know when we get there?” you will not get there.  A plan without each of three is just a list of goals that are unlikely to be accomplished.  For information on what else should be included in the process, please click here.

A strategic plan should be a living document that guides the organization and provides a point for ongoing programmatic and organizational evaluation.  It should not sit on a shelf.

All organizations should have a strategic plan.  Strategic plans get everyone on same page as to where you are as an organization and where you are going.  They allow the group to decide the goals moving forward; create measurements to determine if you met your goals and assign responsibility and due dates for specific goals.   It is a process that results in not only a document but also a shared understanding among key stakeholders.

In the absence of that shared understanding and agreement, there are still moving parts, but they’re not aligned. The absence of a plan sets the stage for people to do what they feel is best, sometimes without enough information, which may or may not be right for the organization.  It opens the door for one person’s vision to get implemented and others to feel unheard or unengaged.  The absence of a plan allows for major decisions to be made on the fly and for potentially mission driven decisions to be compromised.  As we all know, movement goes in other directions than forward.

What do you think?  As always, I welcome your insight and experience.

Governance: The Work of the Board, part 4 Raising Money

In Non Profit Boards on August 9, 2013 at 7:40 am

Welcome 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; 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 that can give more.  Finally, it eliminates the Resource Development Committee’s opportunity to seek out and personally go to 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 cannot raise money alone.  The Development Director cannot raise money alone.  Fund raising 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.

Governance: The Work of the Board, part 3 Setting Policy

In Non Profit Boards on August 2, 2013 at 7:40 am

Welcome 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 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 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.

I recommend organizations have the following policies:

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

Policies dictate what happens in a 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 your 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.

Policies 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.

Governance: The Work of the Board, part 2 Acting as the Fiduciary Responsible Agent

In Non Profit Boards on July 20, 2013 at 7:18 am

Welcome 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 than 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 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 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

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.

The 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.

Finally, 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.  That 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.

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