Nonprofit Board Crisis

Nonprofit versus Forprofit Values

Is it really possible that a nonprofit's values and thus standing in the courts can trump a forprofit's values?  This appears to be the case for a for-profit school in California now facing a law suit by two teachers who were fired for not identifying their beliefs (nb. yes there is more to the story but for now, this is enough to chat about).

My understanding of what the Court is considering is that the teachers may well be able to take such action because a for-profit cannot establish, shall we say, prejudicial, standards for its employees like, shall we say, a school run by a religious organization. In essence, for-profits can and should be held to a different standard than nonprofits.

So, while there are many nonprofits doing lots of harm to their constituents if not also their employees (e.g. your faith belief dictates whether you can use your skills OR your employees can be pedaphiles), for-profits cannot establish that a particular set of beliefs (like employees can't drive cars that polute?) is required to be a good employee? 

Maybe I'm missing something (not improbable) but at minimum, the question certainly challenges a number of premises that go far beyond the fundamental difference: nonprofits' profits go to service and for-profits' profits to to owners.

 

 

Hm, is it really true then that for-profits in general

Nonprofit Board Punts

According to the LA Times, the Boy Scouts USA Board, you know, that paramilitary organization that has been hiding the incidents of pedophilia by its scout leaders, is going to consider whether it should drop its exclusion of gays as possible members and leaders.  On the one hand I can't understand why folks who are gay want to be "allowed-in" to an organization that has stood its ground on exluding this population but perhaps that's a different conversation. 

More important for this topic: according to the story, the Scouts Board is going to consider lifting the ban and make it ok for local chapters to individually consider their position on permitting gays to join.  Wow, big move!  Instead of taking a firm position that the chapters should permit gays, the National, standard-setting body is going to only not restrict chapters.

Is this great governance?  Does not governance of a national organization require the provision of more definitive direction?  Does not governance of a national organization require the provision of clear values?  Is not taking a position really governance?  I for one don't believe so.  This is no better or different governance than saying: hey, if you want to do harm, create injustices, whatever, go ahead - that's up to you.

Nonprofit Tax Exemption: When Should It Be Questioned

It's not often I see a public call for the removal of a tax exempt status from an organization.  I'm not even sure I remember the causes for the few times I have indeed witnessed such a call.

There's a new book on Scientology that not only challenges the validity of the Church but indeed, it's tax exempt status.  I'm not actually interested in the question of whether Scientology's tax exemption should be singled-out for reconsideration.  What I am more interested in is the question of when is it exactly the correct time to question the exempt status of a nonprofit. 

If a nonprofit has beliefs and practices that "seem" just too weird to the majority, is that the time for a review? And what exactly would constitute "weird"? Or Should the question come when the organization or its principles have been found to be either doing harm or covering-up the doing of harm by its volunteers and employees?  Or how about when a nonprofit is all about profits and there's few indicators of its charitable activities?  Or how about nonprofits that aggressively promote and rouse its members to promote public policies that do not necessarily advance society and could produce more harm than good if adopted?

Clearly, few of these rationale are currently applied as the singular standard for when a nonprofit should be permitted to stay as such.  But is this what is needed to fill the void for what the for-profit has no incentive to produce and the public sector has no mandate to produce?

Nonprofit Board Loses Mission Focus

The Roman Catholic Diocese of New York City announced today that it is going to close a huge chunk of its schools.  The announcement cited expenses and lack of enrollment as the basis for this decision.

Now I recognize that there really isn't a board of directors for this nonprofit called the Roman Catholic Diocese  of New York City but let's put that little detail aside for the moment.  More important for this conversation is the question of a nonprofit's mission.  I generally understand there to be many reasons for a religious organization creating a school, never mind a school system.  Of course all of these reasons have to do with mission.  Religious organizations most importantly want to create their future members and one generally sure-fire way to accomplish this goal is to get them in the doors during their formative years.  Another motive is even more fundamental: establishing the future population with a set of values which in theory will be beneficial to the individuals, those they touch, and the community in which they live.  Once upon a time parochial schools also had some of the best quality education and certainly discipline.  And finally, schools have been revenue producers, at least when they were staffed with volunteers (aka nuns and brothers).

So, has the mission of the Roman Catholic Diocese school system changed?  Or has the Diocese not changed enough in its approach to teaching such that it is no longer the place where folks want their kids?  Or does the Church have other goals for its money - equally important goals as training the future.  I obviously didn't get the internal memo but I must of course ask the question which many nonprofits must ask in what continues to be very challenging economic times:  is the nonprofit shedding what no longer achieves mission so it can better achieve mission or has it just lost its way?

Nonprofit Board Becomes Strategic?

Conventional wisdom about strategic (results-focused, fully-informed, multi-year) planning is that the optimal time to engage in this work is anytime but a crisis.  But, the American Independence Museum, according to the Union Leader, appears to not have heard this wisdom.  According to the story, the "board's short-term focus is threefold: to continue to stabilize and build a strong financial foundation for the museum; to hire a temporary administrator; and to hold the American Independence Festival". 

Now I do believe these to be great goals but I also believe these to be too many really big goals for an organization that laid off all its staff and has just added five new board members doubling its size.  Trying to do strategic planning while facing a bunch of really big challenges is, in my experience just too complicated and too much a diversion from what really needs to be done, especially for an un-staffed organization and for an organization that has now moved back into its infancy or maybe juvenile stage of development (noting that these stages require a board to give most of its attention to volunteering and operations/management) because if it doesn't, there will be no organization. 

However there is one strategic question that is appropriate for the board to take up now, and it also is a survival questions.  Is there a possible merger partner or at least a partner that can help offload some of the operational challenges the museum will likely face for the unforeseen future?

 

Nonprofit Board: Not So Strong?

Yup, it's time for me to once again weigh-in on the projected plight of Livestrong, the nonprofit founded and fueled by Lance Armstrong. 

The question most are asking: what is the future for Livestrong?  My answer: there's never just one ingredient that determines a nonprofit's future and success.  True, Lance Armstrong is a huge character who made a real difference in the success of his foundation.  But it's equally true that Livestrong found a niche in the cancer market, a niche that moved money and action that satisfied consumers. 

What is also true is what feels like an absentee board of directors.  This, of course, is a classic problem with big character founders/funders -- they can easily overshadow their board and when crisis hit, without a really strong CEO in place, typically just tread water. 

Maybe Livestrong will need to ride out the tsunami caused by its founder.  But a proactive board, one that revisits purpose and direction and perhaps equally important, revisits the organization's values and the standards it wants to hold-up for how it does business and with whom, could make all the difference in how well the ride goes.  If I have doubts about the future of Livestrong, it is pretty much because I have doubts about the board -- but that's just what I see.

Nonprofit Boards: Do No Harm Dashboard Gauge

Over the past several months the public has learned a lot about cover-ups in nonprofits: churches, boy scouts, football, cycling -- the list goes on and on.

Should the public accept that the boards governing these nonprofits really were all "in the dark" about all these cover-ups?  At some level - sure.  We know that most of these organizations have a CEO who stands as the buffer between what goes on in the "weeds" and governing.  So, does this buffer excuse the boards?

I propose not.  At minimum, let's say that the board has a dashboard that provides an assessment of where the organization is at in relationship to its goals and values, yes, values.  If so, the board, through this manner, is asking the right questions, which in turn can lead to understanding about what should and should not be happening.

Easy, no.  Responsible, yes.  Certainly, there is not a nonprofit that subscribes to the "do harm" value, is there?  So, let's suggest there is a "do no harm" gauge and under that are subcategories that include: customers, employees, vendors....  Well, you get the picture.

Nonprofit Boards and CEO Salaries

What's with the public's or at least press' obsession with what nonprofit boards choose to pay their CEOs.  For instance, a quick glance at the Chicago Tribune shows five salary-related stories over the most recent three-week period.  Really: salaries? 

Why aren't the stories about results?  No doubt there were some impressive results with all kinds of peoples' lives changed in all kinds of great ways.

If a nonprofit board wonders at all why legislators do not smile so much at nonprofits and heads of public agencies smile even less, a partial answer may lie in what is the messaging that goes out to the public, be it the formal press or other avenues.  I believe this messaging question to be strategic first -- just how do nonprofits want the public to know them?  And this then becomes a board question. 

So nonprofit boards....how's your strategy conversations going?

Gift Economy Venture and a Business Plan

A Yes! Magazine article carried in the Christian Science Monitor raises the question: should there be a business plan for a "gift economy" venture?

First, a gift economy venture differs from other ventures in that the "exchange" of the offer essentially comes without strings and the beneficiary is the key focus, not the giver (who in theory is not also a beneficiary although I would offer quite differently).  

No matter whether there is ever mutual giving without mutual receiving -- my question is about what kind if any planning should go into the business of a gift economy venture.  And I would argue that the same type of planning (actively or passively) that goes into a revenue generating venture should be placed in a gift venture.

Let's look at the most prominent venture in the article: the cinematic artist moving from community to community creating community films.  That artist does need to answer the business planning questions before they start their journey.  They must determine the essentials about their offering (the film). What story will appeal (answer -- one that provides community members the opportunity to see themselves doing what they do best).  Are there competitors? Yes, all the other activities in which community members might be engaged.  Price is free on the surface but the artists asks for food and lodging in exchange.  And of course word of mouth is the communications channel.  And there are some capital costs as well: the recording camera and perhaps software for editing in addition to travel clothes and transportation costs -- you get my point.

Business planning can make a positive difference for a gift economy venture.  Imagine if Panera had no understanding of the costs of operating its "free" stores.

 

 

Nonprofit Board: It's About Starpower

I recognize that in some nonprofits, one expectation or at least hope is that board members will be about bringing in the dough.  And I agree that certainly in their voluntary capacity as individuals dedicated to mission, board members should give and get.  Certainly, loading up a board with the heavy hitters who have access to money is a way to make this expectation achievable.

So, does Bright Future International (BFI" serve as the definitive example of what an effective board composition should represent?  The Wall Street Journal article headline: "Bright Future International Announces Star-studded Board Of Directors Including Forest Whitaker, Dionne Warwick And Others".

Hm....A closer look reveals that the apparently new (totally?) 14 member board includes:

BFI Founder and Chairman, Anthony Melikhov, will be on the board along with BFI's Strategic Planning Director, Lindsay Miller. Other board members include: actor and director Forest Whitaker; Grammy winning artist Dionne Warwick; Illinois Secretary of State Jesse White; producer Damon 'Dame' Elliot; Brooklyn Nets player Charles "CJ" Watson; attorney Juliette Passer; family practice physician Dr. Andrew Ivanchenko; producer Vladimir Alenikov; Children Affected by HIV/AIDS director David Loewenguth; Program Director of BFI's Children's Program in Panama Biljana Bijelic Rosen; Chicago Bears player Jonathan Scott and Dance4Peace Executive Director Sara Potler.

So, you be the judge: does this look like a board that will govern AND raise money?  Is this a composition model that should be emulated?