Nonprofit Board Crisis

Nonprofit Hires White-Collar Fellon

Generally, I believe that ex-offenders should be given a chance to work once they've paid their debt to society(although I don't believe that prison is the most cost or program effective tool for repaying societal debt). 

But, perhaps with the socially correct intention of giving an ex-offender another chance, the nonprofit Waterbury Chamber of Commerce hired the former govenor of CT.   Unfortunately, this nonprofit appears not to have many policies guiding the hiring of ex-offenders, also it is unclear if the proper management or governance supervision is in place to ensure that all benefit from an otherwise appropriate practice. 

 

The consequence:

Closing In on Rowland. Feds Raid Waterbury Chamber Office. Investigators
Take Computers.

by Kevin Rennie

Federal investigators today raided the offices of the Greater Waterbury
Chamber of Commerce and left with the business association’s computers, Daily
Ructions has learned. This will add more bad news to the prospects of felonious
former Governor John G. Rowland, who is the subject of a federal criminal
investigation of his dealings with Republican congressional hopeful Lisa
Wilson-Foley and her family nursing home business.

Rowland, who was paid $5,000 a month to provide consulting services to the
Foley and Wilson-Foley family business while “volunteering” for her campaign,
enjoyed a lucrative, hazy contract with the Waterbury business association to
provide economic development services to the city. City officials recently told
the Torrington Register Citizen in response to a Freedom of Information request
that the city possessed no records of Rowland’s activities.

The federal investigation of Rowland, first reported here on June 18th,
appears to be growing more intense.

Board note to management and self: good ideas demand good policies and oversight!

Nonprofit Board Strategies can have funding consequences

I believe that change is a necessary task in making communities more effective or at least, better.  I believe that to effect some change in communities members of these communities must come together and this coming together may then result in what we call nonprofits.  Nonprofits in turn select volunteers to serve as their leaders and the IRS recognizes these leaders as, effectively, the surrogate "owners".  These leaders or surrogate owners are known as the board.

Obviously not all the changes in a given community that nonprofit boards seek will satisfy everyone.  Indeed, some choices nonprofit boards make will even offend portions of their communities.  In many cases the portion that may be offended includes those with power, money, connections, etc.  Those who have power may choose to support the direction and programs of the nonprofit, but if they philosophically disagree with the nonprofit's path they may withdrawl support or even try and hinder. 

Why do I speak of this?  In a National Committee for Responsive Philanthropy blog entry, a community organizing group in Colorado and a national organization of religious women are profiled as folks who are basically being oppressed by their funders because of directions they have chosen. On the one hand, I want to shout aobut the unfairness of this situation, as the author of this blog has done.  At the same time I want to say: hey, you hopefully knew the consequences of your decisions and as is true for every market decision, you can't satisfy every audience all the time.

The lesson: nonprofit boards must be mindful of the consequences of their actions.  Mission comes first but mission first does not guarantee support from everyone. 

 

Nonprofit Board Fires Exec

In a recent Nonprofit Quarterly article Rick Cohen volunteered some of his thoughts about what "is wrong" with the University of Virgina board which summarily dismissed its President.    At the very least, Rick is certainly correct, in my opinion, to note that the board certainly doesn't have a lot of class in its management of the exec, actually dismissing her (firing) via a phone call (not "face-to-face").  Rick is also right, again in my opinion, to note that something about the firing doesn't seem to click given the reaction of the faculty fully against the board for its action.

But Rick, noting that the situation raised his curiosity about the origin of the board, found in his research that all the board members were from the business sector and this origin helps accounts for the board's level of mis-guidance and behaviors.

Really, Rick?  If I have all business people on my nonprofit board I'm not going to be as wise and better behaved than where there are boards comprised of few if any business people?  I don't think I can fully agree.  I do agree though that a board that has no diversity is not as effective as a board that does -- especially if those board members can provide insights about management, program and sustainability otherwise not at the table.  And certainly, providing insights about programming and programming outcomes is best achieved when those who are the beneficiaries of these services are at the table.

But having a board composed singularly of business people can only lead to ruin?  i just can't see it.

 

Nonprofit Board Fades Away

It looks like the board of the nonprofit children services organization founded by Coach Sandusky may get a break.  Their nonprofit, its staff and programs will likely be aquired by another larger nonprofit.  The board, on the other hand, looks like it will "go quietly into that good night" although certainly with no credit to them.

The Sandusky trial is certainly not over but the life of the nonprofit founded by Coach Sandusky is.  But really, shouldn't this board be subjected to a bit more pain having sanctioned a culture that permitted Sandusky to work as he pleased among those the organization seeked to serve?  I am thinking that the failure to develop and implement and oversee policies to prevent what appears to have occured -- this is on the board; a board that was totally focused on protecting the interests of Sandusky, not the kids served.  Where is the duty of care in this behavior?  I can tell you: someplace else.

Go to the Washington Post to read the story of the impending acquisition.  Oh, and for you boards who have no term limits and are still being directed by a founding director, have you learned anything from this story?  Will you do anthing different going forward?

Nonprofit Leadership

Here's Ari Weinzweig's 12 "Natural Laws of Business" pulled from Zingermanns book, Being a Better Leader. I believe these are translatable to nonprofit boards and staff.  I like the way these are presented and the content too!  By the way, these aren't new (think Drucker and Jim Collins and....) but they are succinct, folksy even, and send clear messages.

1. an aspiring, strategically sound vision leads to greatness

2. you need to give your customers some really compelling reasons to buy from you

3. without good finance, you fail

4. people do their best work when they're part of a really great organization

5. if you want a staff to give great service, give great service to staff

6. to get great performance you need to give clear expectations and training tools

7. succesful businesses do things others know they should do, but generally don't

8. to get to greatness you've got to keep getting better, all the time

9. success means you get better problems

10. strengths lead to weaknesses

11. it takes longer to make something great happen than you think

12. great organizations are appreciative and the people in them have more fun

Nonprofit CEOs and Accountability

I found the commmentary posted in The Week this past Saturday worth nonprofit board's and execs consideration.

The commentary by Gary Belsky read:

CEOs get too much credit for corporate success and too much blame for failures.  In fact it is very tough to determine how much any company's trajectory is determined by "policies established by the guy in charge." Think about it in sports terms: A brilliant football manager can be undone by a weak training staff, and a terrible manager will look like a genius if the other team just can't play.  Outcomes are even more unpredictable in complex companies, where so many decisions and actions are taking place that input from the very top may not be a decisive factor.  Research suggests that when two companies go head to head, the one with the demonstrably better CEO is more successful 60% of the time.  That means that even if we knew "which CEOs were aces and which were duds, we'd still only have a slightly better than 50/50 shot at predicting how their firms would perform."  That's something to keep in mind the next time someone showers a CEO with praise--or calls for his/her head.

Nonprofit Board Member and Officer Selection

Nonprofit boards are constantly seeking new board members.  After all, most board members have term limits resulting in some degree of empty seats needing to be filled each year.  And of course, on top of this, most boards need new officers, at least a chair and maybe a treasurer and/or secretary.

One question that arises as a result of these seat-filling needs is the extent to which board members should know a prospective board candidate or prospective officer?

Let's talk about the officer first.  Simply enough, I believe that officer seats should only be filled by a current board member.  An officer has leadership responsibility and their familiarity with the organization, its and the board's culture, and the role an officer plays are all critical information pieces to a prospective officer filling their role effectively.

Now, about prospective candidates.  I believe that the correct answer is that no one should become a member without somebody in the organization having a working familiarity with the prospect, and without meeting with a group of memebers for an interview.  Also, a prospective member should already possess a working familiarity with the organization.  The best approach for a prospect to achieve these two goals is by participating actively as a volunteer in the work of the organization or as a board committee or task force member.  In summary, I believe that engagement in the organization is an essential credential for every prospect.  Engagement demonstrates interest, commitment, skills and knowledge.  It just makes sense.

Outside of engagement and more consistent with what I encounter in many organizations is the familiarity by one board member and/or the senior manager as the introduction and gateway to entry on the board.  This is certainly positive, but I don't believe enough of a credential for immediate entry.  Yes, the "who you know" credential matters, but only as a gateway.  I would recommend that a board committee still be responsible for conducting an interview and providing "intelligence" to the board about their impressions and how much the candidate meets the board's needs.  And following this, the full board still may want an introduction, if only for social purposes, prior to a vote.

The bottom line: off-the-street recruitment is more likely to result in a negative impact on the culture of a board -- trust will not likely be present or established.  Nonprofit boards rely on trust to be effective decision-makers.

Nonprofit Board Closes Organization

Is this good governance?

The American Pain Foundation Board decided last week to close its doors according to the Chronicle of Philanthropy.  In the same article it was noted that the Foundation "received 90 percent of its support from makers of drugs and medical devices, and has issued guides that play down the risks of such opioid painkillers."  The announcement of the closing coincided with a US Senate investigation into the influence of corporate cash on doctors, academic researchers, and others who offer medical advice to the public.

So, if good governance is essentially about fulfilling the duties of care, loyalty and obedience than closing an organization that will likely not benefit from a US Senate investigation kind-of makes sense...no?  Of course what makes this question more curious is the Foundation's web site statement about closing: "due to irreparable economic circumstances.”

 

Nonprofit Scaling 10

It is my first day back in the office after 3 days at the Social Impact Exchange.

Whew! It was an impressive group of funders, intermediaries and nonprofits dedicated to making a nonprofit sector that achieves its goals of making a world that works for all.

The conference provided lots of networking and lots of elements to consider with Scaling the primary focus of the event.  I believe, like many in the room, that it is critical to find ways to ensure that no one in a community is left behind (be it education, health or welfare).  

At the same time, I am a bit concerned about this emphasis on nonprofits achieving scale (reaching the most while achieving efficiencies ('cause there's only so much money) not to mention who in the end decides who should be the scale achieving nonprofits.  This emphases and the darwinian result of putting money into the scalers could have a less than positive impact on the many nonprofits who are not about and practically will not achieve economies of scale.  Plus, what if, like in presidential races, there are those who pursue change for the "wrong" target audiences or are seeking change which isn't that palatable to those who rule society?  Then what?

In the meantime, thanks to the folks at Growth Philanthropy for pushing forward -- expanding the pool of those who have and can care is a critical contribution to society.   

Nonprofit Scaling 9

Social enterprise (aka revenue generating activities -- an area in which BWB Solutions has extensive experience) can play a role to achieving sustainability but first, this is not a panacea especially for nonprofits in crisis; second, the selected venture does best when related to mission (I'm not 100% in agreement); third, there must be a defined market/demand (ABSOLUTELY); fourth, there needs to be some internal capacity to do this.

From one study on the matter, there appears to be a preponderance of ventures at the small and large end of nonprofits but not much in the middle.  Hm....

Social Impact Bonds will likely have some impact on all of the way nonprofits can finance themselves in meeting social needs but this may take time -- the long range strategist though should be thinking about this source...