Nonprofit Board Crisis

Results Accountability

Just finishing up the book "Trying Hard is Not Good Enough". 

This pretty easy read is focused on one thing: focusing on outcomes (results).  The book gets the reader through the language, process and so-what of results thinking.  There's even a couple of related web sites: http://raguide.org/ and http://www.resultsaccountability.com/.

The one thing I can't figure out: why every nonprofit and governmental agency doesn't apply this thinking as their primary reference.  If it's just because they haven't read the book, that can be solved (The Annie E. Casey Foundation supports the websites to provide the basic materials).

You know, being results or outcomes focused is the only way we can all be satisfied we have really made a difference.  This is important stuff.

No Insurance Wipes Out Youth Building and Program

A Chicago Times report described the impending failure of an Indiana youth organization whose property was essentially destroyed by floods.  The organization annually serves 6,000 youth with a wide range of programming.

FEMA, the disaster aid arm of the US Government, will not provide financial support noting it does not fund sports complexes.  The youth organization is counter arguing that it is not just a youth service organization but a community center.

Arguments not withstanding, the center's insurance did not cover this type of disaster.  Of course my query: doesn't the board have some responsibility here?  Who made the initial decision not to carry broader and deeper insurance? 

Good governance: make decisions as though it was your own business.

$9 Million Settlement to Nonprofit Ex-CEO

According to the Washington Post, "the Maryland insurance commissioner yesterday cut in half the $18 million severance package paid to the former CareFirst BlueCross BlueShield chief executive saying the CareFirst board failed to restrain his compensation and the company "strayed significantly from its nonprofit mission."

There's a 65-page order by the insurance commissioner that says the "retirement package violated a 2003 state law that limits compensation at CareFirst to "fair and reasonable" pay.  As a nonprofit health service plan exempt from taxation, CareFirst is subject to government regulation.

Perhaps CareFirst is not really a nonprofit and certainly not for the right reasons (mission).  If that's the case, $9 million, while large to nonprofits, isn't so large when compared to some of the big packages paid by the big capitalist corporations CareFirst must compete with. 

Nonprofit Board Meetings etc.

Been facilitating some nonprofit board retreats often with a focus on good governance (as though...).

A frequent question: how many meetings a year make the most sense to ensure good governance.

I lean toward quarterly or bi-monthly (every other month) with task forces or special committees doing homework in advance of each meeting.

What's your thoughts?

ETS: A Nonprofit IS Questioned

The Educational Testing Service (ETS), the big kahuna in the academic testing world, and a nonprofit, is beign sued by some California city school students who were able to do all kinds of activities during their placement tests ultimately invalidating their tests.  ETS is being sued for not being more rigorous and for not establishing a more acceptable and appropriate testing environment.

ETS is really a big business and kind of a monopoly in its field.  ETS in many ways sets the standard for what is right about testing and while I can't figure out why it's a nonprofit, as a nonprofit it really should be mission-focused.  Mission-focused would include creating appropriate testing environments.

What has gone wrong by whom: too big and too out of control; less than effective management and operations; weak governance that doesn't establish and enforce high standards?  I am sure the courts or out-of-court discussions will help determine the answer and the public may never know but in the meantime, scratch your heads.  The story may be found here.

Nonprofit Board Doesn't Manage But Should It?

The Freedom Schooner Amistad, a replica ship educating about the slave trade and in particular one important event that resulted in freedom for a group of slaves, recently returned from a challenging trip accross the Atlantic where it retraced the slave trading triangle.

According to reports, the ship did not have a consistently smooth sail.  No question, sailing a schooner is hard and many things can go awry.  But these "waves" might have been addressed through better planning or at least, more money.

The questions for this blog: a number of aspects did go wrong and the natural question: shouldn't these unexpected events have been planned for better?  And if the answer is yes (which I believe to be the answer) - who was responsible for the lack of planning: board or staff or both?  Did the board know from the staff about the stuff that could go wrong and the money needed to ensure it didn't and then didn't raise the needed money?  Was it the board's job to raise this money in the first place?  Is it always the nonprofit board's job to raise money?  And, if plans indicated trouble would be brewing, should the board have signed off on an adventure that wasn't fully funded?

Your thoughts are welcome.

Nonprofit Money is For Nonprofits

Al Sharpton was freed from facing legal charges after Federal and State IRS folks have found a way to be paid back taxes without prosecuting for ill intent. 

Charges and the investigation stem from Rev. Sharpton's not having paid some back taxes and raising questions about the nature of his relationship (income) from a nonprofit he started and supports. 

Right or wrong, good or bad, true or false, this period of tax-exempt history illustrates that the IRS is serious about drawing lines between personal and nonprofit income and related benefits.  Boards and Execs should be careful and conscious when managing personal and tax relationships and responsibilities.  Good policies guided by IRS actions can be helpful.

For more about the story, check-out a Hartford Courant story based on a New York News story.

A Model for Higher Education Tax Exemption

Berea College, located in Berea, Kentucky is what I'm talking about when I say the words tax-exempt.

With a $1.1 billion endowment, students enter the school without money and leave the school with a degree, no debt and a quality learning experience.  This is what I believe is the meaning and spirit of tax-exemption. 

To learn more, check out the New York Times article from Sunday, July 20,2008.

When a Nonprofit Board Makes A Difference

The LA Times tells an intriguing story of a nonprofit's birth, life, near-death, life and near-death in its July 19, 2008 arts section.  Titled: "Self Help Graphics' Struggle Somewhat Self-Inflicted", the LA Times story focuses on a community arts organization that had special relationships, important results and constant institutional struggles. 

For me, there are at least three key points where the nonprofit's board plays a significant role: in its founding, in it's near-closing (for a number of reasons), and, most importantly, its own questionable ability to govern. 

The Story of Self Help Graphics should get written-up and studied by all students of nonprofit lives.  Students should in particular consider the multitudinous governance issues raised in the story as well as a reality that often and maybe eventually faces many nonprofits: relevance.

Board Can't Keep All of Library Functioning

The Hartford Public Library (Hartford, CT) is going to make about $530,000 worth of changes that will mean some branches get closed and employees get laid off (see story).  Simple fact is that the nonprofit/public library just doesn't have all the income it needs although it does have a small endowment ($14 million).

Although I can't really tell from its website I am fairly confident that the Library is a nonprofit organization.  It gets a huge chunk of operating support from the City of Hartford.  It has some kind of fundraising effort although again, that is not particularly clear from the website.  It's even hard to tell if there's a development director.

So, if a really big nonprofit needs to make huge cuts in a city where there actually are opportunities for raising money and other really big institutions are seeming to be holding on at the very least, what's going on?  Me, I of course think of the board first and wonder why more isn't being done.  Wrong people at the table? 

Whatever, it's clear that some kind of different action must be taken.  Board and staff have failed to keep a critical community resource serving at its fully needed capacity.