Nonprofit Board Crisis

Nonprofits and Foundations Can Be Partners

It doesn't always feel like nonprofits and foundations can be true partners.  One side has and the other side wants.  But as the SingleStop story illustrates, the two can be partners and get real results.  Check it out: http://www.slate.com/articles/life/philanthropy/2008/06/the_best_povertyfighting_bet.html

Nonprofit Loses One Million Dollars Over Six Years

Yes, you read it correctly: one million dollars.  The worse part: the CFO took the money.  The problem as stated by an expert on the matter: no accountability or transparency. 

The "incident" I am referring to is chronicled in the Philadelphia Inquirer in a story about the Archdiocese which was contacted by American Express over suspicious use of the company credit card.  And still, six years in time to identify?

No accountability or transparency: you think?

Nonprofit Professional Board Member

I admire the Junior League as an organization of very smart, pro-active professional women who truly understand how to effectively combine networking, skill development, volunteerism, and getting results.  And, despite a time when the average citizen continues to "Bowl Alone" (see Robert Putnam), the Junior League thrives.

Thriving is partially credited to the women who continue to do the hard work Junior League requires.  Another credit goes to Jean Smith who in the 50's was one of those consumate volunteers and professional board members (and a socialite to boot) that had wit, wealth and wisdom and used all of these to good purpose.

Mrs. Smith and the Junior League are to be toasted while acknowledging Mrs. Smith's death (LA Times) and the Junior League's continued success.

Nonprofit Board Has One Employee: Maybe

There's a general rule of thumb that is supposed to help a board discern its role in relationship to the organization's employees: the board has one employee.  Usually this means that only the exec reports to the board. 

But what happens when a nonprofit founder, now serving as COO (a mystery in itself) decides that the exec is a problem?  This story from the Las Vegas Journal Review provides some insight.

My take-away -- what exactly was the board thinking?

Nonprofit Book Review: The Non Nonprofit

If you believe that a former for-profit executive turned nonprofit founder and executive has something to say about how you can improve your nonprofit's success, then you may be interested in hearing what Steven Rothschild has to say. 

The Non Nonprofit  (Jossey Bass, 2012) offers seven principles (kind-of like other management improvement authors who have come before Mr. Rothschild): 1) Have clear and appropriate purpose; 2) Measure what counts; 3) Be market driven; 4) Create mutual accountability; 5) Support personal empowerment; 6) Create economic value from social benefit; 7) Be learning driven. 

To illustrate his seven principles Mr. Rothschild tells stories about a number of nonprofits.  And true to Jossey Bass style, there are helpful questions at the end of each chapter (which parallel the principles).

Should you purchase The Non Nonprofit?  Maybe not if you already know AND practice these principles.  I'm willing to admit that while most nonprofit execs actually do know these principles, they may not all fully implement what they know (e.g. being market driven). 

If The Non Nonprofit can help in this regard, maybe the book is worth picking-up.

 

Nonprofit News

With the consolidation and corporatization of the news media, one hope was that nonprofit web news sites could pick-up the slack.

The Project for Excellence in Journalism has released an analysis of this field and found that nonprofit news does not necessarily mean nonpartisan.  The study of 46 sites launched after 2005 and across the US found that: roughly half of these sites produced clearly ideological news coverage.  And, in general, the more ideological sites tended to be funded mostly or entirely by one parent organization, to be less transparent about their funding sources and to produce less content. 

Sites with a mixed or balanced perspective tended to have multiple funders and revenue streams, greater transparency and more content.

Strikes me that the latter group is consistent in every way with all the better results-focused nonprofits.  Nonprofit boards may want to consider this criteria (balanced perspective, multiple funders and revenue streams, transparency and more offerings/results) when considering sustainability and results-focused strategies.

Nonprofit Boards and Political Engagement

The Center for Political Accountability and the Zickilin Center for Business Ethics Research of the University of Pennsylvania's Wharton School created an index to rate companies in the S&P 100 for the quality of political disclosure and accountability policies and practices.  According to the index, fifty-seven of the S&P 100 have adopted board oversight on speding and politicies/practices related to political spending (or they bar spending corporate cash on politics altogether). 

You are likely seeing some if not lots of messages about how nonprofits should engage their constituents in thinking about the candidates and how the nonprofits themselves might ensure that the candidates are thinking about their issues.  This is good I believe because nonprofits, continuing to fill the void between the interests of the for-profit sector and the mandates of the government, frequently serve constituents not otherwise represented or communicated with about the political issues the candidates are addressing. 

This reality combined with the CPA-Zicklin index story move me to ask: isn't it time for your board to review what is permissible as a nonprofit (and a lot is) around political engagement and, how the board will both strategize and monitor such engagement?  Once again, much is riding on the results of this next presidential election. 

Nonprofits and Status Quo

I just read a brief The Conference Board Review "sounding" by Kathy Clonninger, the CEO of the Girl Scouts of the USA. The copy was from Ms. Clonninger's book, From Tough Cookies: Leadership Lessons from 100 Years of the Girl Scouts (Wiley 2011).

The theme and title of the article: The status quo has got to go!.  Ms. Clonninger reflects on what caught her attention to begin a process of institutional change needed to address a number of external variables potentially affecting the future of the organization. 

I believe that the article was not however as much about the process as about the responsibility for execs (and their boards) to constantly be aware of changes and shifts, internally and externally, that could affect achievement of mission.  Point made.

Also not the focus of the article, but a point which is a curiosity to me, is the reality that the leader-manager most admired by Peter Drucker (management guru for those who don't know) Frances Hesslebien, retired from the Girl Scouts in 1990.  Ms. Clonninger joined the Girl Scouts in 2003.  Ms. Clonninger notes that it was only two months after she joined as exec that a Council meeting of CEO's and board chairs (700 from all over the country) were chanting in unison, "The status quo has got to go!"

Hm....so only 13 years after one of the most acclaimed corporate Execs in the country retired and status quo had set in? 

Hm....

Nonprofit Board Investment Lessons

2011 was a bad year for nonprofit investors (what with Madoff and all).  But a bad year for some doesn't mean that other boards will learn anything. 

Despite the incredible refusal by some nonprofit boards to understand the prime principle behind the duty of care (prudence or at least, make decisions as though the nonprofit were your own business) there are still many willing to offer counsel and ounces of prevention.

Take Dr. Ethics (Michael McMillon) who is willing to step up and offer guidance in his own treatise which all nonprofits with any money to invest should consider.  By the way, I'm a strong proponent of supporting that nonprofit boards with money to invest should first look in their front yards at the local community foundation.  Community foundations are in place to serve and protect your investments, and donations to these institutions benefit your community, possibly advancing your own mission.

Anyway, do check-out Dr. McMillan's investment advice.  By listening and acting appropriately, you may be able to preserve your institution well into the future.

Nonprofit CEO Pay

The numbers appear and are BIG!  According to the Dayton Daily News, the retiring CEO of the Dayton Hospice got a $1.3 million (incentive) deferred compensation payout for her departure.  She also got her paycheck which is $318,246 plus a bonus of $62,246.

Whoa, or is it a whoa?  Clearly this one percenter got a lot of money but is that the issue -- it's a really large sum of money?  Right answer: yes, it's just sticker shock and this CEO did a whole lot to earn her check.  After all, she kept her hospice from being eaten by the for-profits (it's a quality of care issue) and she made this hospice worth $59 million (net assets).  What more could a board want and that's what the Dayton Hospice board says.   And when a board sets compensation, they are mindful of what everyone else will be saying and of what they determine is justified. 

So, should we be up in arms that there are jobs at nonprofits that put people in the 1%?  Not at all, would that more of us were there.  This example is about someone who did what she said she would do and she should be rewarded.