Nonprofit Board Crisis

Nonprofit Board and Executive Relationship: Not always tangible

A recent consultation reminded me that on occasion, a CEO's effectiveness and efficiency is not the primary criteria behind a nonprofit board's dismissal of that same executive.  There can come a time in the life of the board where a trust, perceived or real, is perceived to be broken and the board no longer believes it can work with that executive.  Similarly, the "love" a board once had, can for perceived and/or tangible reasons, erode.  In my experience, once lost that "love" cannot be re-won.  In these two cases, action by the board becomes necessary.

This reminder should serve all to understand that there is a deep relational element, not always measurable, embodied in what must transact between a nonprofit board and its executive.  This relationship has a beginning and a middle and maybe an end.  It requires nuturing and understanding.

Nonprofit Value: Transparency

One of a nonprofit board's tasks in strategic planning is to review and/or adopt a set of values.  Values are core guiding principles that inform the decisionmaking and operational behavior of a nonprofit's board members, managers and staff. 

Over the past few years, transparency has frequently been examined and often adopted as a core value.  I believe that transparency has risen in status for a number of reasons including donor-voiced desires; staff disgruntlements; and the efforts of middle-to-senior managers who believe that transparency facilitates more effective management.

One media story in particluar stimulated my thinking about transparency.  One Wall Street Journal story about the New York State Attorney General's request to some 75 nonprofits that they report-in on monies raised in response to Hurricane Sandy so that the AG can ensure the funds raised were spent as intended.  I believe that nonprofits that truly hold transparency as a value would not need to be asked by a State Attorney General to report-in on the disposition of their donations.  These nonprofits would have in place the processes that would clearly and timely distribute information about the status of donations, be they for relief work, other special purpose or general program.

Nonprofit Board Compensation Committee

A recent conversation with a client introduced to me the possible benefits to be had by a standing board compensation committee.  Now I recognize that for many nonprofits executive and key employee compensation is a pretty simple exercise.  At very miinimum it doesn't require much energy to benchmark i.e. find out what the competitive pay is by peer organizations (this is pretty much the standard used by the IRS to test "outrageous" compensation). 

But as my client indicated, a compensation committee can be way more helpful to the board.  The committee can stay on top of other regulatory matters, frame the evaluation/compensation related questions, review benefits and incentive plans (again for key employees).  Clearly for a really large nonprofit, a standing compensation committee could prove very useful.  For the majority of the remaining nonprofits -- maybe the compensation committee looks more like a workgroup.

Nonprofit Governance Revised

I think the Phillie.com story pretty much answers the question of who and where was the board (ans. there wasn't one).

Funds frozen to nonprofit tied to Evans

Inquirer Exclusive: A confidential audit flags $1.5M at the Urban Affairs Coalition, including $1M to a Beloff nursing home.

November 19, 2012|By John P. Martin and Angela Couloumbis, Inquirer Staff Writers

A Philadelphia nonprofit with ties to State Rep. Dwight Evans mismanaged $1.5 million in state grants since 2006, raising questions about how the money was obtained and spent, according to a confidential state audit.

At Evans' direction, the Urban Affairs Coalition put a Philadelphia pastor and his aide on its payroll, the auditors found, then used taxpayer funds to pay them $365,000 for work that auditors said they could not verify.

The grants included $1 million that went to renovate a nursing home run by Leland Beloff, a former Philadelphia city councilman who was convicted in an extortion scheme in 1987 with mob boss Nicodemo Scarfo.

Nonprofit Board Advice

Charitable wealth managers are people who spend their life skills, knowledge and experience looking out for donors to ensure that the donor's money grows and that it is "invested" in nonprofits wisely.

Yesterday, Melissa Berman, a veteran in the world of charitable wealth managers offered some advice to donors considering making charitable gifts.  I think Melissa's advice equally helpful for Boards who, as the surrogate owners of their nonprofits, want to be sure their nonprofit is appealing and "doing things right" to attract support.  More in the Wall Street Journal article. 

No Nonprofit Board

Apparently military generals can de-commissioned way easier than I would have imagined.  That's perhaps one take-away from all that is currently going on with two of the highest ranking generals in the US military.

Rick Cohen however noticed and eloquently offered some questions about one of the sources of the decommissioning and her charity which may or may not be serving as a front for questionable activities.

The one question I think Rick did not ask:  where on earth is the board in all this or is there even a board beyond the husband and wife team?

Nonprofit Values Will Lose Major Source of Support

The Boy Scouts are going to lose a big source of support -- UPS.  Yup, Big Brown is going to dump the other Big Brown (no, that's not their name but the uniforms are kind-of similar).

Anyway, UPS is saying they can't tolerate the Boy Scouts' intolerance over gays and they just aren't going to give any more money.  I would offer that UPS is saying it has a different set of values then the Boy Scouts and true to these values, it can't righteously provide support. 

I always applaud a nonprofit that sticks by its values, no matter the cost and possibly the gain.  I equally applaud a corporation that has and observes its values.

The only question I have: why isn't the reason for the dumping about or also about the child abuse issue? 

Nonprofit Board Crisis Planning

I suppose one really important lesson we can take away from what is going on over at the BBC is that an effective governing body should have a communications crisis plan sitting on a shelf and ready to be implemented should a crisis occur.

Based on what is described as a disarray at BBC, it is not clear that a communications crisis plan has ever been developed or is being implemented. The reality is that bad stuff can happen be it internally generated or externally generated and a good board will know what to say and do, internally and externally. 

There are plenty of marketing communications consultants around to help a nonprofit with developing a crisis plan and all I can say is, if you don't have one, maybe now's as good as time as any to put one together.  At very minimum, a crisis plan will identify who will be determining the message (internal and external) and who will be responsible for giving the message.

Thanks BBC for this reminder -- always teaching.

Nonprofit Board Chair Selection

As you may have gathered if you regularly check-in to my blog, I have become vary focused on the importance and role of the nonprofit board chair.  I have come to believe that the success of a nonprofit, at any given point in time, depends as much on the paid leader as the volunteer leader.

My believe in the importance of the nonprofit board chair has me paying great attention to the selection and training/orienting of board chairs and hence today's blog.  Earlier this year, the Patriarch of the Egyptian Coptic Church died.  Now I will recognize that the Church and position of Patriarch is a bit different than the average nonprofit and average nonprofit chair but bear with me.

While the article was very brief regarding the selection of the Patriarch, what was said was that a young boy was selected to put his hand in a hat and pull out one of the three slips of paper.  On each slip was a prospective Patriarch. 

Hm, not much better than american-idol type voting you might say.  But I'm thinking that the electoral college (or some such body of the Egyptian Coptic Church), using some criteria establshed some 2000+ years ago, identifies all the best candidates and winnows the option down to three.  These three I'm thinking have been really vetted and principle would say that they all would bring something very special to the role such that the Church would not suffer if any is selected.

Now, imagine a nonprofit board adopting this process.  It could certainly reduce the political element of selection -- no?

Nonprofit Board Fundraising Committee

Is a nonprofit board fundraising committee really a useful entity? 

The current best thinking about board committees is that effective committees get their marching orders from the board and report on their efforts to the board.  Committees do not really have "authority" over staff or others.  The best committees have very defined tasks that have beginnings and endings.  And, most important, the best committees are not managing or staffing.

So, what then to do about a fundraising committee where most often the expectation is these folks are expected to go out and implement a fundraising plan.  They are not expected to do governance type stuff (the point of a committee) like policy, planning and evaluation noting that this stuff doesn't raise money which is the perceived need.

So, does a nonprofit board really need a fundraising committee that is part of the board structure or does it more need a group of volunteers who are organized, managed by and report to staff to accomplish specific fundraising goals?  I'm thinking no to option a and yes to option b.