Category Archives: Nonprofit Boards

Do you have Board term limits?

Dave Blankenhorn

 

A recent survey on boards by a community bank trade group highlights issues pertinent to not just banks but also to nonprofit organizations.

While many board members are “baby boomers” and getting older many boards have avoided the issues of term limits. This is a touchy subject as many are “founders” and feel a proprietary interest in the group. On the flip side without limits directors can become stagnant or cliquish and can stunt the success of the organization. In some cases, the long-term directors may prevent a younger and more diverse crop of leaders from joining the board.

Advantages to setting term limits include: the ability to add directors with specific skills, avoids stagnation, group-think, boredom and loss of commitment, avoids the potential for unhealthy insider attitudes, allows for a respectful and efficient way to remove ineffective directors, and most importantly brings in new ideas, perspectives and contacts.

There are some disadvantages to term limits; potential loss of expertise, loss of organizational memory, the time spent required to recruit and educate new directors, a loss in board cohesiveness and possible donation losses.

It is important for the current board leadership to step back and view what is right for them. While new blood and fresh ideas are vital to any organization so to are the loyalties and knowledge of existing members.

A way to retain these valuable people would be to set up an “Honorary Board” informing them of current activities, soliciting their input, and giving them the recognition, they so deserve.

No matter the path you choose about this issue not making one is a decision in itself.

Author: Dave Blamkenhorn, Executive Coaches of Orange County, www.ECofOC,org

Can Nonprofits Meet the Challenge of Social Change?

Adrianne Geiger Dumond

 

 

There is a movement afoot that supports “collective impact” by nonprofits. That is, for agencies serving similar (or the same) target populations, they should consider collaborative planning and actions with government, funders, and foundations, to better maximize resources. With trends that predict less government funding and an exponential need for services, proponents of this movement tend to minimize the effectiveness of individual organizations tackling a major social problem.

Perhaps the best example of this approach is the Orange County Human Trafficking Task Force that unites the various services that respond to this need. There is law enforcement, rescuing agencies, housing agencies that all must play an important role in fulfilling the mission. I have written in a past article of the changing nature of governance in nonprofits because of similar opinions about how social change needs can be more effectively handled. And there are other national sources who are expanding on this theme.

There is UCLA and the Center for Civil society that has collaborated with consultants to espouse the Nonprofit Sustainability Initiative. The Stanford Social Innovation Review has an article and movement titled “Collective Impact” which I highly recommend for any agency thinking about the shift.

The thesis for Collective Impact is that ‘large scale social change comes from better cross-coordination rather than from the isolated intervention of individual organizations.’ The article states five conditions of collective success:

  • Common agenda – a shared vision of change.
  • Shared measurement systems – claiming web-based technologies have enabled common systems for reporting performance and for measuring outcomes.
  • Mutually reinforcing activities – participants undertake activities for which they are best trained and accountable, but that support and coordinate with the actions of others.
  • Continuous communication
  • Backbone Support Organization – a separate organization and staff with a specific set of skills that provides the infrastructure that is required for the     collaboration to succeed.

I encourage you to be aware of these changing trends even if your organization is thriving. I believe that this knowledge should be part of a strategic planning process to help participants know the reality of what is in the nonprofit universe of thinking.

Author:  Adrianne Geiger DuMond, Executive Coaches of Orange County, www.ECofOC.org

Are You Prepared? The Breach of Data Security

Adrianne Geiger Dumond

 

 

I recently wrote about the benefits of data as a public relations tool – especially when the IRS Form 990 is available to the public. I would be remiss if I didn’t address the possibility of such data being hacked. “The philanthropy community is still catching up to the digital security needs faced by civil society” says two security experts, whose article is noted below.[1]

The article recommends four steps to take to be AWARE of the risk. They are:

  1. Commit to digital security as essential to all work. Although digital security work takes resources and energy, it is critical to keep a focus on its importance. Like fiscal responsibility and good governance, digital security needs to be part of strategic planning.
  1. Take big responsibility for big data. Organizations must take responsibility for stewarding their data seriously, or many people they serve, engaged supporters and institutions may be at risk.
  1. Prioritize “capacity building”. This means addressing the structural vulnerabilities that make it easy for an online adversary to attack the organization. This includes auditing the specific systems the organization uses to store, share, and process user data. The authors point out that individual training programs are not sufficient, since the ground is always changing. It takes focused, structural change. 
  1. See the shared threat as a call for interdependence. Digital security is a shared responsibility among funders, donors, partners, and our own customers and clients. Organizations need to be realistic about the interdependencies and work together to avoid the risks. But lastly, data security relies on a structural, system-wide focus in the organization to avoid the risk.

[1]Tackling Digital Security Across Civil Society”, Josh Levy & Katie Gillum, Stanford Social Innovation Review, April 20, 2018

Author:  Adrianne Geiger DuMond, Executive Coaches of Orange County, ECofOC.org

5 Traits of Effective Bylaws

Michael Kogutek, nonprofit management coach

Michael Kogutek

 

Bylaws can be intimidating and complicated. Benjamin Miller from the Community Legal Education Group,Ontario, Canada writes a very concise and pragmatic article on the topic.He has given me permission to reproduce this article.  No matter how good your bylaws are in theory, if they don’t get used, they aren’t effective. Here is a list of 5 key traits of bylaws that actually get used.

1) They reflect the realities of your organization. The rules and processes set out in your bylaws should reflect what you actually do as an organization. You may have read about some great practices other organizations have put in place. Even if you think that your organization should be working to put those practices in place, remember that your bylaws have to grow with you. Recommendation: You can’t draft effective bylaws simply by looking at the best practices of other organizations. You must start by learning what your organization currently does and values. If someone is writing your bylaws for you, even an expert, make sure they spend enough time familiarizing themselves with your organization.

2) They reflect the delicate balance of interests in your organization. Every organization has to balance the interests of many groups, including directors, donors, funders, members, users, and others. If your bylaws exaggerate the power of any of these groups, you are on the road to either conflict or having those rules ignored. Recommendation: Just because only a few people are actually interested in the bylaws doesn’t mean their say should count for more. You should reach out as much as you can and make consultations as fun and social as possible.

3) They are easy to navigate and read. People don’t have the time to read bylaws back to front to collect all the relevant rules for a particular decision. On the spot in a meeting, you must be able to know exactly where to look for all the relevant rules and be able to scan them quickly for the right information. Recommendation: Organize the sections of your bylaws according to how they’ll be used, e.g. AGM, Directors Meetings, etc. Use generous margins and lots of space between sections that express different ideas and topics. Have a table of contents.

4) They are written clearly and efficiently. If you can’t understand your bylaws then you can’t use them. It’s that simple. Recommendation: Make a special effort to write your bylaws in plain language.

5) They are designed for the beginner. Your bylaws need to be used by your most junior board members, who may have no previous experience with this kind of document and may represent a vulnerable community. In fact, ideally your members should be able to understand your bylaws to hold you to account. Recommendation: When writing the bylaws, ask yourself “could an average member easily use these bylaws to hold our board to account?”

Finally, remember that your bylaws also need to be legally compliant. Consult with an appropriate legal advisor to make sure your bylaws are not only useful but legal too.

*This list is based on The Drafting of Corporate Charters and Bylaws (2nd ed.) by Kurt Friedrich Pantzer. (1968).

Author:  Michael Kogutek, Executive Coaches of Orange County, www.ECofOC.org

A Guide to Succession Planning

Adrianne Geiger Dumond

 

 

Succession planning is one of the hardest activities that non-profits take the time to consider. I was recently given a document that I feel every non-profit leader should read. This is because it provides every single consideration, every step, and many resources for completing the task. It is called, ‘Building the Organizations:Succession Planning for NonProfits’, funded by the Annie E. Casey Foundation. The author is Tim Wolfred of CompassPoint Nonprofit Services (compasspoint.org).

The document is 20 pages, and I would like to just tell you some of the subjects included, in the interest of space.

  • Three ways of thinking about succession planning:
    • Strategic leader development – assuring the right skills are present for the leadership in the strategic planning process.
    • Emergency succession planning – the document does an excellent job of laying out first steps, of demystifying the hesitancy that ‘being prepared’ might engender, and providing care for the departing leader.
    • Creating the probability for successors to the Executive Director and other important leaders to emerge from your talent pool.
  • A Succession Readiness list
  • The importance of sharing knowledge – to increase bench strength
  • The nuts and bolts of Departure-Defined Succession Planning – when a leader announces a departure date ahead of time.
  • Getting the Board on board
  • The Tough Issues
  • Finding an Interim Executive Director
  • Tools You Can Use – and where to get them
    • Staff surveys
    • Stakeholder Surveys
    • A sample of an Emergency Succession Plan – with steps to how to accomplish the plan (compasspoint.org/et).

I hope this information will encourage you to consider succession planning as vital to the success and sustainability of your organization.

Author:  Adrianne Geiger DuMond, Executive Coaches of Orange County, www.ECofOC.org

Can Your Data Tell a Story?

Adrianne Geiger Dumond

 

 

 

How many of us input data, and never see it again, lacking an effective way to use it? What if the data could tell a compelling story that might inspire others to support the mission? An article on the Stanford Social Innovation Review website provides some recommendations for helping your data tell a story/[1]

 

1. Data storytellers answer a question – “so what”. I recently had a client whose services had added 20 customers for the quarter. That number had no significance until he asked some questions:

  • What percentage is 20 of our customer base?
  • How does this effect our operation?
  • Who needs to know these numbers?

Analysis of the data leads to clarity and to more questions.

2.  The data should inspire us to ask more questions.

Back to the example:

  • What factors contribute to this increase?
  • How does it effect staffing?
  • What external factors are contributing to the increase?
  • How can we portray this information graphically for social media purposes?

3.  The use of rigorous analysis is better than numbers on a page. A concise Executive Summary of the findings from the analysis is a first step.The author, Jake Porway, favors visualization of the data over raw numbers – a graph or pie chart to crystallize understanding for an audience. Porway has several websites in his article for learning more about data visualization. This may be difficult for some IT personnel. But the goal may be worth the investment in order to impress upon donors and volunteers, viewing the media source, that their service and contributions are needed and welcomed.

[1] Three Things Great Data Storytellers Do Differently,  Jake Porway, author, Stanford Social Innovation Review, June 8, 2016

Author:  Adrianne DuMond, Executive Coaches of Orange County, www.ECofOC.org

The Glossary for Nonprofit Governance

Adrianne Geiger Dumond

 

 

Many of us in the nonprofit world use terms and acronyms that may be confusing to newcomers – especially young employees trying to learn about the nonprofit as a business. I recently ran across a very useful tool for educating everyone in this business. The glossary should probably be in every manager’s office.

The Glossary is published by BoardSource and can be found under Nonprofit Board Fundamentals on their website. The glossary is alphabetized and runs five pages and has every term that is ever used in this business.

For example: have you ever wondered what the difference was between a 501(c)(3) and a 501(c)(6)? There are also simpler definitions: For example:

  •  Board Development
  •  Disclosure requirements
  •  Emeritus status
  •  Fiduciary duty
  •   Immediate sanctions
  •   Operational reserves

Possibly the most Important definitions provided for novices are the terms for IRS requirements, which can be confusing. For example:

  • Form 990
  • Form 990 – PF
  •  Form 990 – T
  •  Form 1023
  •  Form 1024
  • Or maybe a ‘Federated Organization’ ?

I recommend every nonprofit have a copy of this glossary – maybe even board members might appreciate the information.

Author:  Adrianne Geiger DuMond, Executive Coaches of Orange County, www.ECofOC.org

Leading From Behind

Karen Haren

 

 

One of the biggest challenges nonprofit Executive Directors report is having effective boards. Effective boards don’t just happen, they are developed and supported by effective Executive Directors. The Executive Director leads the board from behind ensuring the board is prepared to fulfill the it’s role in governing the organization.  Here are 5 key responsibilities of ED.

  1. Build a strong partnership with the board chair. Keep the chair informed of any issues.  There should be no surprises between these two partners.
  2. See that officers and board members are oriented and trained. Spell out expectations, provide background on roles, structure of the organization, mission, programs, fund raising, finances, strategic plan, successes and challenges etc.
  3. Prepare for board meetings. Develop an annual strategic agenda calendar for board meetings. Draft the board agenda and discuss with board chair, prepare background materials for actions that the board is being requested to take, distribute packet to board members one week before the meeting. Consider having a web page for board members with bylaws, board minutes, board calendar, meeting materials etc.
  4. Ensure the organization has a strategic plan. Annual plans, budgets, and staff performance plans all flow from the strategic plan. Present a dashboard at each board meeting that shows the board where you are in achieving the targets in the strategic plan.
  5. Ensure there is a performance management process for the ED. The criteria for the review as well as the process and time line should be spelled out at the beginning of the fiscal year.  Compensation and an annual raise should be tied to the performance review process.

While the ED may not be the individual who completes all of these tasks, it is important that the ED ensures that these tasks are accomplished.  Leading from behind ensures an effective governing board.

Author:  Karen Haren, Executive Coaches of Orange County, www.ECofOC.org

Improving Board Governance: Part 3

Adrianne Geiger Dumond

 

The role of the CEO/Executive Director: Barriers and Risks

I have spoken in past blogs of the importance of a ‘generative mindset’ for enhancing the importance of Board governance. Generative mindset encompasses a macro level of thinking for Board meetings. There is a risk when Board members are confortable with a less strenuous mode of thinking. They may be uncomfortable with the new mode. It may take some time for Board members to accept and participate easily.

Perhaps the most important role for success is by the CEO/Executive Director (ED).  The ED is the primary conduit between staff and Board (as should be defined in the by-laws). The ED is responsible for educating the Board – to improve governance – and is accountable for the knowledge and information the Board receives. The ED also controls the pace of meetings so they are useful as well as informative – and this is an important necessity. Meetings can drag on, lots of talk, little new understanding or resolution on next steps.

Meeting guidelines for the CEO/ED:

  • In a separate meeting, beforehand, brief the Board chair, explain your goals so that he/she can support your quest.
  • Explain how governance is a partnership – between ED, staff, and Board.
  • Prepare and select carefully the project/subject for which the Board can provide guidance.
  • Encourage Board members to ask more questions than statements – challenging suppositions.
  • Ensure that nothing is “undiscussable” in the board room, and assure confidentiality.
  • Encourage different opinions.
  • Share information and leadership opportunities – asking questions can prove this to members.
  • Control discussion where a member dominates – one way to do this is to say,  “Sam, in the interest of time, let’s meet after the meeting to hear your viewpoint so that others can express their opinions here more openly”.
  • Don’t be too wedded to the past, but also not too far ahead of the Board.

Author:  Adrianne Geiger DuMond, Executive Coaches of Orange County, www.ECofOC.org

Improving Board Governance: Part 2

Adrianne Geiger Dumond

The Importance of Effective Board Meetings

Board meetings can be comprised of dedicated supporters, and/or highly trained professionals – all committed to the cause, but with different skill sets for good governance. Part 1 of this series named the three ‘mindsets’ that Boardsource likes for adequate governance of a nonprofit. They were: Financial Insight, Strategic Insight and Generative Insight – the third mindset being the most challenging to grasp.

Generative governance requires time being spent to feel comfortable with the concepts – critical thinking, problem analysis, and tackling ambiguous Board circumstances. It’s more than the usual Board meeting agenda. Board, staff, and CEO must work as partners to handle the strategies going forward. A generative mindset might be quite healthy in a nonprofit’s staff and its teams. For example, a problem arises, the appropriate team analyses cause and effect, researches possible solutions, proposes recommendations to the CEO – who then takes it to the Board. A generative mindset might mean that the staff person/team leader also present their reasoning to the Board, since the Board may need to approve a large expenditure. This thinking for the Board is at a macro level that may feel uncomfortable at first. And it requires better preparation for Board meetings – asking better questions instead of focusing on immediate, short-term considerations – like balancing the budget.

Operating in a generative mode is educating Board members and requires more meeting time and resources for critical thinking, discussion and debate. Here are some tips for making the transition easier.

Consent agendas:  Sending out an agenda ahead of the meeting allows quick acceptance of routine reports and approval of recurring actions.

Pre-reading: No meeting time should be spent reviewing documents for information and knowledge, Information should be sent early enough for Board members to be prepared for discussion and to provide their opinions.

Board Composition: A diversity of thinking styles and problem solving is important. This is a great learning opportunity for all involved. Often, great team work is the outcome – members having better understanding of each other.

In Part 3 I will cover the important role of the Chief Executive in this process, and the risks and barriers.

Author:  Adrianne Geiger DuMond, Executive Coaches of Orange County, www.ECofOC.org