Board Chairs and Board Leaders Mary Hiland, nonprofit leadership expert, interviews Mike Burns to discuss national research on board chairs and board leadership.
Inspired Nonprofit Leadership Mary Hiland, nonprofit leadership expert, interviews Mike Burns to explore nonprofit board stages of development. Mike offers that recognition of board stages helps establish achievable expectations.
"Effectively Raising Capital: The Board Chair & Executive Director Relationship" Mike Burns and Kevin McQueen, partners at BWB Solutions, and special guest Carla Weil, the Chief Strategy Officer from Capital for Change, the largest full-service CDFI in Connecticut, share their experiences effectively identifying funding sources and raising capital to strengthen an organization and provide more impact in low-income communities. Carla Mannings of Partners for the Common Good and CapNexus moderated the panel.
Share power to strengthen your board. Are your board leaders struggling to balance power among themselves? Are they not understanding their roles outside of the boardroom? If you answered yes to any of these, listen to Ep. 58 of our podcast as we host Mike Burns and Judy Freiwirth. Mike and Judy share their expertise, which is based on their Nonprofit Alliance study Voices of Board Chairs.
Making a Lasting Difference I've been struggling to finish "Making a Lasting Difference" by Graeme Reekie since first I received this book about 6 months ago from Wren and Greyhound. The press is British but I thought the subject would be universal for nonprofits.
Alas and sadly, this is a slow, tedious read filled with platitudes and almost helpful considerations nonprofit managers might want to consider when thinking about how to financially sustain their organizations.
I have generally posited that a nonprofit has 4 "pillars" that comprise its DNA: program, management and operations, governance and sustainability. M. Graeme offers five: involvement ((having community support); Income generation; Innovation ("how to nourish and encourage incremental innovation); Improvement (systems and structures); and impact measurement. So he and I don't operate from the same lens but his is certainly one perspective.
Making a Lasting Difference is constructed in four parts, 20 chapters and 211 pages. The possibly most innovative content is in Part 2, Chapter 2 where paradoxes, principles and practices of sustainability are presented. The paradoxes:
a. Change - only by changing can organizations be sustainability, sustainability does not mean sustained, and, the lesson is that an org. must learn, adapt and evolve purposefully. Here the author poses that an org has to have its act together to achieve sustainability
b. Octopus - organizations need to reach out in new directions to grow but growing in too many directions pulls them out of shape; diversified income does not mean reduced risk; and, an org must focus on core organisational purpose and structure. Here the author says that mission drift will not make you sustainable.
c. Yes/No the things that an organisation needs to survive can also kill it. Saying yes to everything is fatal; sustainability is about more than just money. Capacity and quality matter. Understand when, how and what to say no to. I would offer this is the "stay in your lane" paradox.
d. Efficiency - Efficiency preserves resources but can impair development. Organisations cannot evolve, adapt or respond without spare capacity. And orgs should balance strategy and scrutiny. They should invest in capacity building.
To all of this I just want to say: uh, ok and thanks for the amazing insight. No, not really! I would not invest in this book. You can better spend your time reading the Federal Register looking for grant opportunities (good luck given the current environment) or going through the Foundation Center directory or building an endowment from rich people who loved you (yes, this really is the key to sustainability). Making a lasting difference may be a good idea when thinking about long-term impact from what your nonprofit does - reading this book will not.
The Supreme Court ruling regarding college admissions appears to be on the edge of becoming a Pandora's Box for the nonprofit community. The central question: can grantmakers (and likely soon enough, all nonprofits) "target their benefits to one or more specific race, color or creed. The possible answer: no. The possible consequence: changes the whole purpose and meaning of grantmakers and perhaps the whole nonprofit sector.
The latest Chronicle of Philanthropy offers some helpful insights on this subject. Nonprofit Boards be ware: this is a conversation you should be undertaking.
The U.S. Supreme Court’s June decision barring the use of race in college admissions was watched carefully by nonprofit legal experts, who predicted the ruling would be used as a basis for litigation targeting race-based philanthropic grant making.
A lawsuit argues that a company’s grants to Black women entrepreneurs violate civil-rights laws.
In two cases brought by conservative nonprofit Students for Fair Admissions, the Supreme Court found that affirmative-action programs aimed at diversifying the student bodies at Harvard University and the University of North Carolina were unconstitutional.
Now, as the first cases that attempt to apply the decision to philanthropy have arrived, many grant makers and nonprofits are feeling legally exposed.
Trends Special Report
A new year has begun. Here’s what you need to know about the most important trends shaping philanthropy and the nonprofit world.
In one case, the American Alliance for Equal Rights, a nonprofit run by Edward Blum, the conservative legal strategist behind the Students for Fair Admissions cases, filed suit against the Fearless Fund, an Atlanta-based venture-capital firm, and its associated foundation. In its filing in U.S. District Court for the Northern District of Georgia, the Alliance argues that the Fearless Fund, which makes grants to Black women entrepreneurs, runs afoul of Section 1981 of civil rights rules first enshrined into law during the Reconstruction era barring discrimination based on race when two parties agree to a contract.
The case, one of a few that are being heard in lower courts, doesn’t squarely deal with college admissions. But legal experts say the Supreme Court ruling has opened the door for conservative lawyers eager to test whether invoking diversity in other activities, such as grant making, will be viewed by the courts as discriminatory. Another case filed by the American Alliance for Equal Rights targets diversity fellowships offered by two law firms, while a separate action has been filed against the Abundant Birth Project, a San Francisco Bay Area effort to provide cash stipends to pregnant Black women.
Grant making that singles out race as a factor invites lawsuits, says Jonathan Berry, a lawyer who led the Department of Labor’s regulatory office under former President Trump.
“I would expect more lawsuits like these to crop up in the next few years, and if there is enough of them and thorny-enough issues get implicated, I would expect the Supreme Court to step in,” he says.
A Contract or a Gift?
A key question in the Fearless Fund case is whether a grant agreement should be interpreted as a gift, which would give grant makers great discretion over who receives funds, or a contract that falls under civil-rights law and thus bars excluding recipients on the basis of race. If a grant agreement provides benefits to both parties and gives them legal recourse to sue if the provisions of the grant aren’t followed, it can generally be seen as a contract. But there isn’t a solid accumulation of case law providing an exact definition, says Gene Takagi, principal at NEO Law Group, a law firm that advises nonprofits.
“You can draft a grant agreement so that it is not a contract,” he says. “But we don’t exactly know where that line is” legally, he says.
Takagi predicts that the pending lawsuits will have a chilling effect on some grant-making activity, compelling foundations to steer clear of any grants that specify the race of a recipient. Some, he says, will adjust their grant language to try to make it clear that they are providing a gift rather than entering into a contractual relationship, or they will attempt to use proxies for race, such as making grants to recipients in certain ZIP codes that have a large population of Black or Latino residents, for instance. Others, he says, will “be bold” and continue their current practice of supporting grantees based on race, such as providing grants to Black-led organizations.
“If you’re a very rich organization with access to lawyers, that’s much easier to say than a smaller organization that might be wiped out” by legal fees associated with a lawsuit, he says.
But nonprofits that support racial-justice work should not be afraid to stand on principle, says Carmen Rojas, president of the Marguerite Casey Foundation. Four years ago, philanthropy largely embraced the Black Lives Matter movement, she says. She fears that the affirmative-action lawsuits could lead foundations to “water down” their approach by focusing grants on census tracts with disproportionately Black areas, rather than specifically saying a grant is meant to help Black people.
Experts predict the lawsuits will have a chilling effect.
The lawsuits, she says, are “nefarious in their desire to push the pendulum from 2020 to a whole different moment in which not only are we not talking about race but where we’re afraid to actually imagine race as a factor shaping our lives.”
Mitigating Risks
Before the Supreme Court decision and in the months since, nonprofits have worked to develop a coordinated response. The Hewlett Foundation commissioned a legal brief outlining the risks to nonprofits of the ruling, and the MacArthur Foundation has met regularly with foundation leaders, including members of ABFE (formerly known as the Association of Black Foundation Executives), Asian American/Pacific Islanders in Philanthropy, Hispanics in Philanthropy, and Native Americans in Philanthropy.
Susan Taylor Batten, president of ABFE, says a legal fund to support nonprofits that have been sued is “on the table” but that donors have not finalized plans.
Meanwhile, in December the Council on Foundations and Independent Sector, two membership organizations of grant makers and nonprofits, filed a friend of the court brief in the Fearless Fund case. They argued that grant making is protected free expression and not bound by discrimination law. The Fearless Fund’s support of Black women entrepreneurs, they said, was a noble attempt to right past wrongs, as Black business founders have been woefully underfunded.
Akilah Watkins, Independent Sector’s president, urges foundation and charity leaders to “take a beat” before making any major changes to their grant making that could reverse years of effort. Rather than stop making grants designed to benefit members of a specific race or using proxies for race, Watkins suggests that grant makers investigate the language they use to publicize and complete their grants to ensure that they cannot be interpreted as contracts.
“This is a good time for all of us to do that internal housekeeping,” she says.
Before joining the Chronicle in 2013, Alex covered Congress and national politics for the Arkansas Democrat-Gazette. He covered the 2008 and 2012 presidential campaigns and reported extensively about Walmart Stores for the Little Rock paper.
I don't believe there to be a huge amount of chatter about the board's role in reviewing budgets and particularly salaries or at least salary ranges. But perhaps there should be more questions about what is the beginning and end of this board fiduciary duty. The biggest tension of course is management versus board - when are questions "micro-managing" versus fiduciary. I've seen the tension live where execs are reluctant to have too deep a conversation often citing privacy issues which of course do play a minor role in understanding salaries.
The following Letter to the Editor does a fine job discussing these issues and more related to management/board trust and accountability and responsibility. Take a look - I propose that this would be a helpful conversation, perhaps at the annual board reflection about the coming year.
As director of a nonprofit in LaPlata County, I was dismayed to read the headline “Former director of Southwest Colorado nonprofit suspected of embezzlement.” The director of the local nonprofit, 4 the Children, which helps abused and neglected children, allegedly stole more than $20,000 from the organization from 2018 through 2022.
LaPlata County alone has approximately 100 nonprofits, entrusted with millions from combined revenue, donation and grants. It is a special relationship between the nonprofits and the community, as we depend on the community to help fund us, and the community entrusts us to “fill in the gaps” that government services don’t provide –from childcare and afterschool programs, to helping the homeless, pet adoption, conservation efforts and cultural programs.
As director of Riverhouse Children’s Center, I see our staff and board of directors as responsible for our clientele’s children, their hard-earned money, the other monies donated to us and – most importantly – everyone’s trust. We need to do our very best for the population we serve, which includes using every dollar as efficiently as we can. This is what we’re entrusted to do.
Accountability must be a priority for all nonprofits. At Riverhouse, we have several measures in place to be accountable for every dollar. Our board looks over our financial information on a monthly basis. Our board president receives notification every time our credit card is used, or a deposit or withdrawal is made from our bank account.
Our local accountant looks over our books each month. If we have a cash withdrawal, she emails me and another administrator to clarify exactly what the funds were used for. We use two-party check signing and do not accept cash. We have yet another accountant who conducts our annual audit.
There are other things that can be done, too. There can be clarity between the board and the director regarding for what purposes food or drink can be purchased, and what the maximum allowance is for such expenditures. Any bonuses or “extra money” that goes to employees should be 100% transparent so every board member knows of the allocations – not only when they’re to occur, to whom and for how much, but all the other options for such funds, too.
When San Juan Basin Public Health received $846,000 for “emergency pay compensation,” there was a lot of controversy over how those funds were distributed as more than half the money ($442,000) went to the top three administrators (on top of other salary increases and bonuses already received). One of the board members said, "We never looked at anyone’s salary, we have never (done that) and that is the operational part of the shop and we’re not an operational board.“
There were no details in the finance reports about the size of the payments or the individuals who were receiving them.
My problem with what happened with SJBPH is that this type of occurrence erodes the trust that nonprofit and public organizations alike must hold sacred. I understand that most boards exist to primarily do governance, and to a large degree rubber stamp the CEO’s budget and plans.
But I don’t understand how a board can think it is not responsible for knowing an administrator’s salary (not even the executive director’s) or overseeing the fiduciary systems watching almost a million dollars in emergency pay.
Most of us who are working for nonprofits are doing so because we are placing the very real needs of our community over our own personal profit. SJBPH’s top administrators and the woman who ran 4 the Children are not “bad people.” But if they lost sight of the need to place their clientele first, if they lost sight of the ever-present question of “What’s the very best use of every dollar?” and if they failed to fully communicate to their board anything even remotely controversial or questionable, then they eroded some of the collective community trust that is the grace upon which we all operate.
I am sorry for that. For the hundreds of community members who so generously serve as board members of our organizations, for the hundreds of nonprofit staff members, and for the hundreds of donors who assume our trustworthiness every time they give, we must call out those who are casual or careless about this relationship of trust, and let our community know that we don’t take it lightly.
There is no excuse. And the rest of us will continue to place service and transparency above all else.
Becky Malecki of Durango has worked for the government or nonprofits for four decades. She serves as executive director of Riverhouse Children’s Center.
The following is an panel discussion about how to build a board. Admittedly the focus is for-profit boards but I believe the recommendations to be relevant for nonprofits. From Directors & Boards:
SPEAKERS:Beth Brooke, director, The New York Times Company, eHealth; Charles Elson, director, Blue Bell Creameries Inc., Enhabit Home Health and Hospice Corporation; Bill Rock, president and CEO, MLR Media
ROCK: What skill sets and experiences do you think are going to be more important in the future?
BROOKE: Emotional intelligence, agility, listening skills, collegiality, trust, cross-functionality and clearly tech. But everybody comes to a board position with a fastball. Mine is finance. Other people have different fastballs. But it’s not just about the fastball. You’re looking for a breadth of experience the director can bring in addition. That’s experience and wisdom. But the softer skills, I think, are even more important today because of the fast-paced nature of change, the need for agility, the need for innovation, the curiosity, the ability and the need to learn. Those are incredibly important skills. But you don’t go out and recruit for that. You recruit the fastball you need and then make sure you get the rest.
ELSON: I think of a couple different skills, and they’re basic. A number of years ago, I was on an NACD Commission on Director Professionalism and it talked about specific skills you need — the basic skills that every director should have. Number one was integrity. Number two was financial, not necessarily acumen, but literacy. Everyone ought to be able to read a financial statement and understand it. Some will obviously have greater expertise than others, but everyone should be able to understand how a balance sheet works. Then the other is mature judgment and courage. If something is really wrong, you have to say something.
The problem with a lot of boards is that no one wants to be the fly at the picnic. And usually if you think there’s something wrong, everyone else does, too. They’re just afraid to say it. That’s where the courage point comes in. You have to be able to say, “There’s something off.” Those are the basic skills. Once you get beyond that, that’s where the specifics come in — someone with finance skills or marketing skills. Each company has regulatory issues, so compliance has become critically important. You need someone who understands that and can ask the right questions. The key is you have to have good judgment, and you have to have a group that asks the right questions. Then you have to learn to work together with everyone. You can’t have someone dominating and running the show who has maybe one skill, but there are other skills that need to be listened to and appreciated. A board works as a body. It doesn’t work with one person or two. Everyone brings a different set of skills to the table.
BROOKE: The one area we haven’t mentioned is talent, and that dilemma of “Do we go recruit a CHRO?” How do we address that? Boards are handling it differently. On my boards, we’re not looking to recruit a CHRO. That’s where emotional intelligence comes in. When we recruit, we expect that the candidates have a set of experiences that will allow them to come in and help us. They should have the emotional intelligence to help assess talent in the organization, because it’s extraordinarily complex today. And I also don’t think you can look for an AI person or a cyber person and just say, “That’s your job, not the rest of us.”
What's involved when a board is tasked with performing due diligence to fulfill its fiduciary duties? A lot is the answer but not precisely what happened, according to the Asheville Watchdog. The following article tells you the rest of the story.
The question posed by Asheville Watchdog to the former Mission Health board members who voted for the deal five years ago was: Did the sale of nonprofit Mission to for-profit HCA Healthcare turn out the way you hoped it would?
“Well, obviously not,” said Janice W. Brumit, a former Mission board chair who became the inaugural chair of the Dogwood Health Trust, the successor nonprofit created with proceeds from the sale.
Janice Brumit, a former Mission board chair, said that HCA assured the board that it would maintain Mission’s quality standards.
“Obviously we had hoped that HCA would be a better corporate citizen,” Brumit said, “and we had hoped that they would maintain the quality and the quality standards that Mission was so proud of. They had assured us that they would. That was one of our guiding principles on looking for a partner.”
Asked if she thinks the sale to HCA was in the best interests of the community, Kristy Elliott, a former system executive of the Memorial Hermann healthcare system in Houston, was blunt.
“No. Absolutely not.”
“I was disappointed in the choice of HCA as a buyer for Mission and wish a more thorough search for an appropriate buyer had been conducted by an outside consultant,” said Elliott, who was listed as a board member on Mission’s 2018 tax return, but who said she was only on the board’s audit committee and did not vote on the deal.
“I think the board all voted their honest conscience,” Elliott said. “But it’s the information they were fed — hand-fed, spoon-fed, however way you say it — was selective.”
“I was disappointed in the choice of HCA as a buyer for Mission and wish a more thorough search for an appropriate buyer had been conducted by an outside consultant,” said Kristy Elliott, a former system executive of the Memorial Hermann healthcare system in Houston.
The Watchdog recently queried all members of the board about how they now feel about the deal. Only Brumit and Elliott would talk, and their comments to The Watchdog are the first by any former Mission official or board member to break the official silence surrounding the $1.5 billion sale, which occurred five years ago.
As first reported by The Watchdog, the Mission board entrusted then Mission CEO and president Ronald A. Paulus and his outside strategic advisor, Philip D. Green, with identifying potential partners for Mission. Only two healthcare companies — HCA and Novant — were invited to make formal presentations to Mission’s board.
Novant’s offer was equal to or superior to HCA’s, according to former Mission chief financial officer Charles F. Ayscue, who later worked for Novant.
Attorney General Josh Stein’s office investigated the proposed sale and determined that it was “rigged from the beginning” in HCA’s favor. On Jan. 16, 2019, Stein issued a “letter of non-objection” to the deal after the Mission board reiterated its determination to sell to HCA.
Profits over patients
As a long-time philanthropist and community leader, Brumit was one of the most vocal and influential advocates for the sale at the time. She volunteered to appear with Paulus, board chairman John R. Ball, vice-chair Dr. John W. Garrett, Mission Hospital president Jill Hoggard Green, and other Mission executives praising the deal in public sessions.
John R. Ball, chairman of the Mission board
“Only after careful review and discussion did the board unanimously decide that joining HCA would best continue the quality, accessibility, and affordability of care that our people and communities have come to know and expect,” Dr. Ball, a physician and lawyer who was then serving as Mission’s board chairman, wrote at the time.
Brumit’s and Elliott’s comments five years later suggest that the promises and assurances made to Mission’s board of directors — that HCA would bring higher quality of care, technological innovations, new services, more doctors, greater efficiency, and lower healthcare costs to western North Carolina — were accepted under the belief that HCA would place patient care ahead of profits.
That belief has been tested.
Instead, five years of HCA management has resulted in documented chronic understaffing; hundreds of physician and nurse departures; higher healthcare prices; plunging employee morale that led to the formation of a nurses’ labor union; multiple lawsuits against HCA-Mission by local citizens, the cities of Asheville and Brevard, Buncombe County, and the state’s attorney general; heartbreaking stories by patients and family members of substandard care — all culminating with the determination in December by state inspectors that patients seeking care at the once-proud Mission Hospital were in “immediate jeopardy” of serious injury, harm, impairment, or death.
HCA, a $60 billion corporation that operates more than 180 hospitals and more than 2,000 other healthcare facilities, reported $5.6 billion in income for 2022. At last year’s shareholder’s meeting in Nashville, HCA’s board rejected a proposal to tie executive compensation more directly to quality of care, not just hitting financial targets.
The company will report its fourth-quarter 2023 and year-end earnings at the end of this month. In its 2022 fiscal year, HCA spent $7 billion to repurchase its shares and increased dividends to shareholders by 17 percent.
The Watchdog requested comment for this article from HCA’s North Carolina Division, which oversees six hospitals and other facilities. It had not responded by deadline.
Knocking on doors
Unable to reach the former board members by telephone or email, Watchdog reporters fanned out one day recently to knock on the doors of every one of them who still lives in the area. Some were not home, some who were home did not answer their doors, some live in gated communities that block uninvited visitors.
In these cases the Watchdog reporter left business cards along with a letter asking three questions:
Knowing what you know now, five years later, do you still feel the sale of nonprofit Mission to for-profit HCA was in the best interests of the community?
Do you still feel that HCA was the best possible partner or buyer?
Do you feel that the quality of care at Mission since the sale is equal to or superior to the care that local residents enjoyed under nonprofit Mission Health?
Several former board members told The Watchdog that they were legally prevented from publicly talking about anything related to the sale, because of a nondisclosure agreement (NDA) they were obligated to sign — an agreement that a Dogwood Health official told The Watchdog is effective “in perpetuity.”
The NDA, along with various clauses in the Asset Purchase Agreement that bound Mission Health to sell itself to HCA, also discourages anyone involved with the deal to disparage HCA, Mission, or Dogwood.
Even though the NDA seems restricted to details about the sale, and not about the aftermath five years later, several board members balked.
Former Mission Health board member Wyatt Stevens declined to speak with a Watchdog reporter, citing a nondisclosure agreement.
Even on his deathbed, former Mission Health board member Wyatt Stevens, an attorney, declined to speak with a Watchdog reporter, citing the NDA. Stevens died Jan. 10.
Others seemed angry at being approached at their homes.
“No, no. I have nothing to say to you. This is a private home. We have nothing to say to you. This is private property. You’re a member of the press and you’re not welcome here,” former Mission board member Daniel Casse said to a Watchdog reporter who knocked on his door.
“I want you to leave, now,” Casse said. (To his wife) “No, no, no, no, he’s not welcome here. He’s with the press. He’s not welcome here.” (Back to the reporter:) “This is private property. I want you to go away.”
“I have nothing to say to you,” former Mission board member Daniel Casse told a Watchdog reporter.
The reporter retreated.
[After this story was published, Casse retorted that the Watchdog reporter “made no attempt to contact me by phone or email, as he claims in this piece,” and accused the reporter of “ambush” and “TMZ-style” reporting tactics. The reporter apologized to Casse for not contacting him before knocking on his door.]
Ball, who later served on the board of the Dogwood Health Trust, did not respond to multiple requests from The Watchdog to discuss the aftermath of the Mission board’s decision.
At former Mission board member Bridget Eckerd’s residence, a Watchdog reporter “rang the bell twice, with no answer, though there were lights on in the house. So, I left the letter in the mailbox. After I crossed the street and was getting into my car, I saw a woman come out of the door and retrieve the letter from the mailbox. I was too far away to shout at her. About an hour later, I called the phone number and left a message, asking to speak with her.”
There has been no response since then.
The home of Winston Leon Elliston, a former Mission board member, “looked very empty with no lights on at all,” a Watchdog reporter recounted. “I rang the bell anyway, and no one came. I put the letter in the mailbox … I phoned about an hour later and left a message, asking to speak with him.”
There has been no response.
Dr. Christopher Flanders is on the Mission Board of Trustees and voted for the sale to HCA in 2018.
“The door was answered by a woman whose name I did not get, likely his wife,” a Watchdog reporter said. “She said she was on a Zoom call. I asked if Dr. Flanders was home. She said no and went to shut the door. I asked if she would take the letter. She said I could leave it outside the door, which I did.”
There has been no response.
Dr. John William Garrett, now retired, but then vice chairman of the Mission board of directors and one of the strongest proponents of the sale to HCA, was not home when a Watchdog reporter knocked.
The reporter left a letter and business card in his mailbox. No response has yet been received.
Former board member William S. Hickman lives in a gated community, and the reporter left a letter and business card at the gate. No response has been received.
No one was home at the residence of Lynn Kieffer, a retired pharmacist and former Mission board member. A reporter left a letter and business card, and still awaits a response.
“I rang the bell twice” at the home of former board member Thomas Maher, a Watchdog reporter said, “and he came to the door. I said I was from Asheville Watchdog and wanted to speak with him. He said he was in a meeting, and I asked if there was another time, and he said no. I said I have a letter for you, and he opened the door a pinch and I inserted the letter and he closed the door.”
So far, no response has been received.
The Watchdog was unable to locate Robert M. Moore Jr., a former Mission board member who was present for some discussions about the sale but was not on the board at the time of the vote. A letter mailed to an address in Georgia has not been acknowledged.
Thomas Oreck, who championed the sale as a Mission board member, lives in a gated community. A Watchdog reporter left a letter for him at the community’s gatehouse but has received no reply.
By email to a Watchdog reporter, former Mission board member Margaret E. “Peggy” O’Kane cited her departure from the board ahead of the vote and said The Watchdog’s questions were not applicable to her.
Margaret E. “Peggy” O’Kane was also on the Mission board during 2017, when then-Mission CEO Ron Paulus and his advisor, Phillip Green, solicited offers from HCA to partner with or buy Mission outright. She was not on the board for the final vote to sell Mission to HCA.
By email to a Watchdog reporter, O’Kane cited her departure from the board ahead of the vote and said The Watchdog’s questions were not applicable to her. She did not respond to subsequent emails, but last month wrote to the reporter, “On reflection, I don’t think I have anything to add to what I told you.”
Anne Ponder, chancellor emerita of the University of North Carolina Asheville, was not at home when a Watchdog editor came to call. A voicemail left later for Dr. Ponder was not returned.
A message left for former board member Kenneth G. Racht was not returned.
Jeffrey “Jed” E. Rankin, a former Mission Health board member who is currently chairman of the board of trustees of Mission Hospital McDowell in Marion, said he remains “very much a supporter” of HCA five years after the sale.
“They just did a $20 million improvement for our hospital,” Rankin said.
Asked by a Watchdog reporter about well-publicized problems at Mission, Rankin ended the interview. “I’ve said all I’m going to say,” he said.
Robert C. Roberts, past chairman of the board of Mission Health, was not on the board for the final vote, but sat on it in the early days of discussion about the search for a possible buyer.
A Watchdog reporter knocked on the door but no one appeared to be home. “Left letter,” the reporter reported.
Former Mission board member Robby Russell’s home was dark. A Watchdog reporter left a letter and card. No response.
A Watchdog reporter left a letter and card for former Mission board member Robby Russell. There was no response.
Lavoy Spooner Jr. was a Mission board member who voted for the sale.
“After several knocks on the front door, a woman resembling Spooner’s wife answered and said he wasn’t home,” a Watchdog reporter said.
“I identified myself, and she said, ‘No, he won’t be talking to you.’”
“We just wanted to talk to Mission board members on the five-year anniversary,” the reporter said.
“He’s not going to talk to you.”
“May I ask why?”
“No, thank you.”
“Draconian cuts”
In her comments, Brumit stressed that the all-volunteer board made the difficult decision based on the best information it had at the time, and in the sincere belief that the sale to HCA — which would fund the Dogwood Health Trust — was in the long-term best interests of the people of western North Carolina.
“We thought they would make their cuts in the back office, in the supply chain, all of those things you already know about,” Brumit said. “We didn’t think that they would make draconian cuts.”
“But I will say, that’s the way of the modern healthcare world,” Brumit added. “Mission might have had to make some of those cuts too. So…”
Asked why the board chose HCA instead of Novant, Brumit spoke for the first time publicly about the board’s decision.
“Okay, well, Novant made a very nice presentation. That wasn’t the problem. Based on the discussion, we thought HCA could bring more cutting-edge technology, could bring their power of purchasing, all of those things to western North Carolina, and they told us they would.”
For example, Brumit said, “They [HCA] have this Sarah Cannon Cancer Center. We had hoped that they would bring some cutting-edge cancer research and cancer services to …. Anyway, we had hoped that that would come to fruition.”
In the end, “We just felt that [HCA] would be a longer-term potential partner,” Brumit said. “We also got that Novant, while they gave a strong presentation, that perhaps at some point they would be ripe for a takeover. You know, conglomeration is the name of the game with health service systems, so there was no guarantee that Novant wouldn’t be, you know, gobbled up shortly thereafter.”
What can be done?
Brumit, who stepped down as chair of the Dogwood board at the end of 2022, remains an active board member. She was asked what Dogwood could do to address the many complaints about HCA’s management of the Mission system.
“Well, that’s a good question,” Brumit said. “From Dogwood’s perspective, nothing. We don’t hire doctors, we don’t negotiate contracts, we can’t step in. We can try to work with the asset purchase agreement, but from our perspective, that’s between HCA and the physicians’ groups. The attorney general could try to put some pressure on HCA to do some more lucrative contracts with the physicians, and create a nicer environment for the physicians to work in. But, you know, that’s between them.”
“And unfortunately,” Brumit said, “the general public can only give some outcries, which you have done in your articles, and can give some outcries to HCA … why are you not, you know, playing well with the physicians and the nurses and all that.”
Right of first refusal
“Some people think that Dogwood has the power to go in and take [Mission] back over,” Brumit continued. “We have the first right of refusal to buy Mission Health, but as you know, we don’t have the expertise to run the hospitals. That would be a different ball of wax for us.”
Some people think that Dogwood has the power to go in and take [Mission] back over, We have the first right of refusal to buy Mission Health, but as you know, we don’t have the expertise to run the hospitals. That would be a different ball of wax for us.”
JANICE BRUMIT, A FORMER MISSION BOARD CHAIR WHO BECAME THE INAUGURAL CHAIR OF THE DOGWOOD HEALTH TRUST
“I will tell you this, from a different perspective,” Brumit said. [Until HCA fulfills its promises] “the best we can do is … we are trying at Dogwood, trying to set up systems and policies and work in communities to start upstream. What makes individuals unhealthy to begin with, we’re trying to help people, earn, learn, thrive in western North Carolina, be healthy, have a safe home, [get] educated, and all of those things that prevent you from needing hospital services to begin with.”
“If [Dogwood] can be upstream and help prevent emergency room care or all of that, than that will be huge in changing the whole dynamic of the healthcare community in western North Carolina.”
“It’s a shame that we have lost some very good physicians [since the HCA sale],” Brumit said. “You hear the horror stories. But then again, then you’ll hear a good story.”
Wanted: 800-pound gorillas
Elliott, now the dealer-operator at family-owned Sunshine Chevrolet in Asheville, was a healthcare executive before she joined the Mission board.
“I worked for Memorial Hermann Health System, and I don’t know how familiar you are with healthcare in Houston, but Texas Medical Center is located there, which has some of the most amazing providers in the world, all of which are not for profit,” Elliott told a Watchdog reporter. “And then you have for-profit providers, including HCA, in the community.”
“If people asked me if it was okay to go to different hospitals in the community, if they ever asked me about HCA, I said I would maybe go there for an appendectomy or to have a very normal baby delivery with no predicted complications,” Elliott said. “For any kind of more complicated (issue), I would maybe choose something else.”
Now that HCA owns Mission, Elliott was asked, what’s the best thing that could happen for the community?
“I guess the best thing for the community is for the other not for profits in the area to continue their efforts in recruiting the specialist physicians and for hiring more nurses to provide more care to more patients, and then to continue to build bigger facilities, in hopes that one day they can just rival the size.”
And, you know, hey, HCA has been known to sell off hospitals that have not been profitable for them. So fingers crossed that one day, maybe they do that.”
KRISTY ELLIOTT, A FORMER SYSTEM EXECUTIVE OF THE MEMORIAL HERMANN HEALTHCARE SYSTEM IN HOUSTON
“It’d be great to have one of the other 800-pound gorillas like a UNC system or a Duke system come into this area with a hope that Duke partners with one of the other systems around here. That, or UNC does. One of them.”
“And, you know, hey, HCA has been known to sell off hospitals that have not been profitable for them,” Elliott said. “So fingers crossed that one day, maybe they do that. The system I worked for in Houston bought several HCA facilities that were failing, and made them not only profitable or have a positive margin, but also really increased the quality of care.”
Brumit, the former Mission board chair, concluded her comments by saying, “I’m sincerely hoping that [Dogwood] can get their [HCA’s] attention, and that they understand that this community is … was … proud of their health system, and that we’d like to see some steadiness coming from them. And it’s not all about the stockholders, it’s about humans. Healthcare is a human business. We’re not making widgets.”
[This story has been updated to include comment from former Mission board member Daniel Casse, who points out, correctly, that he was not contacted by The Watchdog before a reporter showed up at his door.]
Watchdog journalists John Boyle, Keith Campbell, Barbara Durr, Andrew R. Jones, Sally Kestin, and John Reinan contributed to this story.
Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Peter H. Lewis is The Watchdog’s executive editor and a former senior writer and editor at The New York Times. Contact him at [email protected].
If you ever read this blog you should know by now that politically I believe in the purpose of democracy and government as an extension of that. You likely know that I am not fond of, putting it mildly, politicians who have been on the bandwagon of changing how we govern and particularly not putting into place a fascist or oligarch driven government. I don't need to spell out names but this trend by 50% of the US public (if the polls are correct) truly scares me.
Having declared this I do wonder how politically motivated the move to censure or even remove the tax exempt status of the Patriot Freedom Project is over the presented concept that these folks are violating nonprofit law in openly supporting and encouraging others to support the candidate whose dreams of being king dominates the airwaves.
I certainly have no doubt that the Jan 6 rioters were any more than that and I guess, even though they should have thought of this, participants should have been prepared for trials and consequences. At the same time, if they couldn't afford the consequences, they should have thought of that but we as a country do believe in the rights to representation so having a fund that ensures this representation is consistent with a democracy (kind of ironic that the anti-democratic group depends on the democratic structures to achieve their goals).
Having said this, the question as to when or how far a nonprofit can go to challenge the rules to being a nonprofit before they can no longer be a nonprofit is far more subjective than I believe it should be. We must tighten-up these rules if we want to ensure they exist. I regularly remind nonprofit board members and volunteers that they are perfectly free without affecting a nonprofit's tax status to advocate for whatever. They can not specifically represent their nonprofit but they can obviously identify their affiliation. Church leaders these days have been dancing on this principle at way more often now encouraging their members to vote and vote in a specific direction. On the other hand, check out the Patriot Freedom Project's website - if this isn't overt political advocacy, what is?
The law reads too thin and the IRS doesn't have the people power to enforce the laws. This clearly needs study and action. Meanwhile, the real winners of this challenge of the Patriot Freedom Project members advocating for their king-to-be: lawyers who will be representing the organization. Money in the bank.
Former President Trump has embraced defendants charged in the January 6 insurrection. And the Trump reelection campaign has developed close ties with a nonprofit that provides financial support to January 6 defendants. As NPR's Tom Dreisbach reports, members of Congress are calling for the IRS to take a close look at whether that group's activities violate federal law.
TOM DREISBACH, BYLINE: Donald Trump's political operation first featured this group at a rally in 2022.
(SOUNDBITE OF ARCHIVED RECORDING)
DONALD TRUMP: The Patriot Freedom Project - what a job they do. Where are you? Where are you? Stand up. What a job.
DREISBACH: The Patriot Freedom Project provides financial help to January 6 defendants and describes them as, quote, "political prisoners." The group is organized as a charity under section 501(c)(3) of the tax code. That means they don't have to pay certain state and federal taxes, and their donors can deduct their contributions to the group at tax time. Those benefits have helped the Patriot Freedom Project raise more than $2 million, including $10,000 from Trump's political action committee.
But under federal law, those benefits come with an absolute restriction. The group cannot legally get involved in political campaigns by directly or even indirectly supporting or opposing candidates. So it raised questions when the group held a fundraiser at a Trump golf club last summer, and the group's leader, Cynthia Hughes, stood next to Trump and said this.
(SOUNDBITE OF ARCHIVED RECORDING)
CYNTHIA HUGHES: When you go to the ballot box, don't worry about what you hear in the media. Worry about what's right for this country. And the only thing that's right for this country is this gem.
(CHEERING)
DREISBACH: The gem Hughes was referring to was Trump, and she then gave him a hug. And NPR found other Patriot Freedom Project events where speakers promoted the Trump campaign. Congressman Jamie Raskin is a Maryland Democrat and served on the January 6 Select Committee in Congress.
JAMIE RASKIN: I'm certainly alarmed to learn that a 501(c)(3) organization is sending out direct political advocacy, meaning messages telling people to vote for this candidate or to vote against that candidate. That clearly cuts against the letter of the law.
DREISBACH: Congressman Bill Pascrell, a New Jersey Democrat, told NPR that the IRS should, quote, "immediately open an investigation." If the IRS does find that the group violated the law, they can revoke its tax-exempt status and impose tax penalties. The Patriot Freedom Project did not respond to NPR's requests for comment.
Tom Dreisbach, NPR News. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
The following Forbes piece attempts to offer three "essentials" to building a healthy (nonprofit) board. Well, maybe. I would offer that the article leans toward being CEO-centric (that CEOs have all the solutions) and clearly draws lines between CEOs and boards and many times this is an important line to draw. But the three essentials (this is really reductionist theory) focus on: board recruitment; communication; and, board/staff relationship.
These are certainly important areas for developing a "healthy" board but of course then there's the question of "what is a healthy board?" the one question that I think would be useful to answer. Your own thoughts on what is the answer to "healthy board" are welcome.
Jerry T. Haag, Ph.D., CFP, President/CEO of One More Child.
Simon Sinek once said, “It’s better to have a great team than a team of greats.” This is true for staff and for building a successful board. As the CEO of a global nonprofit with 23 years of experience working closely with various boards of directors throughout my career, I can attest that having the best board team—whether it’s made up of 11 people or 80—will determine the degree of success an organization will achieve, both in the short term and well into the future. But it doesn’t happen by accident.
Assembling the right team for your organization’s board of directors, and then managing it effectively, requires strategic awareness and intentionality. While there are many aspects to a healthy board, there are three essential elements that serve as guideposts for leaders involved with nominating and developing their company’s governing body.
Choose wisely.
Be stingy and thoroughly vet new board members. Every position is critical to the health and culture of the leadership team—and ultimately to the entire organization.
While the saying “hire tough and manage easy” applies to building a winning team of employees, it is also a wise approach to recruiting board members who will shoulder a tremendous amount of responsibility. When organizations have processes to guard against hiring the “wrong” employee, how much more should we ensure board positions are not filled by individuals likely to do more harm than good?
In his book, Board Member Orientation, my friend Michael Batts writes, “The board must ‘own’ the organization’s mission... it must understand it, believe in it, promote it, and protect it.” They must be its biggest fans!
It is vital to define the attributes and values you are seeking in a candidate and not stray from them. As part of those values, the selection process should ensure the composition of the board represents diverse backgrounds, races, ages, ethnicities, viewpoints, skills and even methods of information processing. Healthy organizations understand there is strength in diversity, and they must build a leadership structure—both on the staff and board—to reflect that maxim.
Communicate often.
Early in my career, a wise board chair told me, “Nobody likes surprises unless it’s their birthday.” I live by that philosophy. If the only interaction we have with our board is during the regularly scheduled meetings, we shortchange what they can bring to the table. It also sets the stage for disunity and distrust. While no news can be good news, the lack of communication leaves people in the dark and reliant upon their own assumptions to inform them about what is happening within the company.
When those responsible for governing are disconnected and uninformed, they are at a serious disadvantage when it comes to decision-making. Not to mention it sends a dangerous signal, implying that the members are not an integral part of the team.
The answer is not to bombard them with lengthy emails or drag them into daily operational decisions. But they do need to have a high-level understanding of how operations are conducted across all parts of the organization. They need to be apprised of the successes and notified when trouble is on the horizon.
Regardless of the industry, every business is a human endeavor. That means board members should be familiar with the people on both the company and customer side of the operation—not just those at the top of the org chart. Our board gatherings regularly include a cross-section of staff and clients with personal testimonies of how our work is making a difference and changing lives. For a board to fully do its job, it needs to see people and not just spreadsheets.
Specific methods of communication will vary depending on the size and function of the organization. However, personal contact carries the day!
Lead upward.
The best boards rely heavily on the upward support given by the executive staff. They need executives who can cast a vision, set priorities and cultivate an environment that fosters growth. While it’s clearly understood that the board has the ultimate authority to preside over the affairs of the organization as outlined in the articles of incorporation and bylaws, the board chair and other members should take their lead from the recommendations of senior executives while leaning on the staff for information and support. This includes preparing and facilitating productive board meetings, educating members on trends and issues that impact the organization, and providing the most current and useful data.
A good CEO doesn’t want to work for a micromanaging board. And a good board doesn’t want passive leadership averse to making tough decisions. In his article "The Board’s Role in Strategy," published in the Harvard Business Review, Roger L. Martin states:
“If the board feels it needs to do strategy for the company, it is prima facie evidence that it should fire the CEO. If a board that meets just a few days a year can do a better job of setting strategy than the CEO who is in the business 24/7, then the board has the wrong CEO.”
However, there are exceptions. Some organizations, such as family foundations, are structured for their board members to be heavily involved in management and operational decisions.
At the same time, the role of the CEO is to present a plan and a solution, especially when communicating problems to the board. Do not transfer the problem to them to solve. By doing so, you have abdicated your responsibilities and leadership to them. Instead, anticipate the board’s questions, work with your leadership team to find solutions and present your recommendations. Then listen. Board leadership and its input are invaluable.
Since all boards and organizations are made up of people, they will never be perfect. Many will experience the tension that occurs when a group of driven and highly successful professionals with different personalities and backgrounds gather to make decisions and solve problems on behalf of an organization they deeply care about. Leaders who choose wisely, communicate often and lead upward will benefit from that healthy tension while making their organization stronger, more sustainable and more likely to advance its mission. That makes a great team!
There clearly are a lot of nonprofits in the world. Some within a community duplicate, albeit with some nuance, other nonprofits. For most communities of course there is only so much money to go around for philanthropic endeavors (although I actually believe there is way more money that appears - just hasn't be appropriately tapped).
Anyway, where duplication or similarity occurs and the competition for the same donors is evident, I believe the respective boards should get together and have discussions. Yes, founders who are still "leading" will have to step aside as they ALWAYS have a lot riding on the results of conversations. But when all else fails I say "bail". The following Fast Company article tells this story well. Please take a look and share with those you know.
The Fast Company Executive Board is a private, fee-based network of influential leaders, experts, executives, and entrepreneurs who share their insights with our audience.
Understanding which of these challenges you’re facing may help to navigate the situation so that the outcome is something other than turning off the lights.
Recently, a non-profit organization I co-founded 18 years ago and led for nearly a decade announced it was shutting its doors at the end of 2023. The decision to close was not one the organization preferred; rather, a lack of philanthropic funding had forced its hand, and there was insufficient time to pull off a strategic pivot.
Underlying the board of directors’ decision to shutter was the reality that the core services the organization offered were no longer “in demand” from the private foundations and other donors that historically supported the organization financially. It was sad news all around, and something I personally regretted.
Digesting the news forced me to think more deeply about the reasons organizations and businesses choose (or are forced) to shut down. So much of organizational and business leadership theory and practice tacitly center on the notions of indefinite growth and success. It’s less common to read case studies of when and how leaders decided to intentionally plateau or even sunset a business unit, never mind an entire company or organization.
We need more of that “real talk” to help boards and leadership teams navigate challenging existential moments. In the real world, growth is never a given and hard times ultimately confront nearly every business, regardless of size or historical success.
While the following list isn’t exhaustive, there are at least three categories of triggers that often force businesses and organizations to wind down. Understanding which of these challenges you’re facing may help to navigate the situation so that the outcome is something other than turning off the lights.
PRODUCT-MARKET MISALIGNMENT
Put simply, if no one wants to buy what you’re selling, you’re likely in a bad place regardless of whether you’re running a business or nonprofit organization. In the commercial world, any number of basic metrics tell business leaders and managers when things are going wrong: declining revenue, poor customer satisfaction numbers, and dropping sales figures.
n the social impact and nonprofit world, it’s surprisingly harder and not nearly as automatic to diagnose a product-market failure. This is due to the disconnect between the “consumers” of social impact work (e.g. target communities and individuals) and the payors of the work (usually, philanthropists and everyday donors like you and me).
Sometimes payors keep paying even if the consumers don’t need or want the organization’s products or services, and vice versa. Despite that real dysfunction in social impact feedback loops, eventually, reality does catch up with most organizations, like my previous nonprofit.
The typical remedy for product-market misalignment is the classic strategic pivot: abandoning low-demand products and services for something the market is willing to buy more readily and/or at higher margins. Time, cost, and know-how remain major barriers to successfully pulling off a strategic pivot, but it’s possible, and there are myriad examples to learn from.
FAILURES OF LEADERSHIP AND MANAGEMENT
Sometimes, the product is great, but the business or organization is being run so poorly that even the tightest product-market fit can’t overcome internal dysfunction. I suspect most of us have been around an organization that simply can’t get out of its own way.
If left unchecked, that dysfunction can ultimately run businesses into the ground. Margins evaporate and staff morale erodes to a point that triggers a talent exodus, forcing a wind-down in the most severe cases. This vicious cycle can be challenging to overcome short of a leadership overhaul; it’s the role of boards (or business owners) to ultimately take the tough decision to implement a leadership change, no matter the optics.
Besides the obvious cure of a change in leadership, the other path many boards ultimately embrace is a merger or acquisition. If the product-market fit is still there but held back by poor leadership, an acquiring organization will find value in the company knowing they can run the place better.
COMPETITIVE PRESSURES
Apart from product challenges and leadership dysfunction, a third common trigger for business shutdowns is traditional competitive pressures. These can be especially acute in commodity-like industries or sectors where product or service differentiation is challenging. If you’re selling widgets and the place next door can sell the same widget for less, you have a problem.
In these industries, smart marketing, supply chain creativity, cost management efforts, and investing in customer loyalty are ways to combat competitive pressures, but none are a panacea (and all require investments of capital that may be in short supply).
For organizations and businesses facing severe competitive pressures, there are additional structural ways to avoid a race to the bottom on price (which can often serve as a death knell for the company). Diversification efforts are one way out of the conundrum by bolstering balance sheets with new products or services that aren’t as susceptible to price wars and fierce competition. Like strategic pivots, product or service diversification requires significant time and capital, but it can help businesses rescue themselves before needing to call it quits.
For organizations and businesses facing an uncertain economic climate in 2024, being mindful of these shutdown triggers may help to proactively avoid the worst of the pain points. At a minimum, understanding which solutions are fit for purpose for the different types of pressures can give leaders and their boards the ability to control their own destinies, rather than feel they are at the mercy of larger, uncontrollable market forces.
Nathaniel Heller is Vice President & Managing Director at Geneva Global overseeing the firm’s support to philanthropists and foundations.
As a result of the Greenhouse Gas Reduction Fund from the EPA, there's a bunch of money available to put solar on nonprofit roofs. Yes, there is likely some fundraising to be done to put together a complete package but think about the doing-good framing of mission that is a starting point driver for this conversation.
Toward this end take a look at the following excerpt from NACDonline regarding the role of boards to getting this conversation started and moved to action. Yes, saving the environment not to mention saving money is absolutely the purview of a nonprofit's board - if the exec doesn't bring this forward first, then board should. And the framing of this article is particularly interesting - considering the board beyond its risk-reduction compliance mode to proactive. Wouldn't this be something?
As companies continue to recognize climate risk as a material financial risk to their business, conversations are occurring in the boardroom regarding how to address these new risks. Investors continue to scrutinize the sustainability of business models for a low-carbon economy, connecting a company’s ability to address climate risk to long-term value creation. The board’s role of stewardship is critically important in this transition.
Increasingly, US boards acknowledge that climate change is not just about protection against downside risks. Having a well-constructed, strategic transition plan can position a company to recognize opportunities and gain a significant competitive advantage in a low-carbon economy.
Fundamentally, boards play three main roles in a company’s climate transition:
Regulatory conformance: Oversight and governance responsibilities are central to the board’s role in ensuring that organizations fulfill regulatory requirements for all stakeholders, regulators, and the communities in which they operate. This includes holding management accountable for compliance and making sure that climate disclosures are truthful and accurate. Many boards have designated these issues to their audit committee, but oversight remains the responsibility of the full board.
Organizational performance: The responsibility of a board is to drive sustainable performance that balances short-term gains and long-term value creation that requires investment. In the climate context, this means advising and challenging management to articulate the risks and opportunities associated with climate change, and to establish a clear business case for climate action that aligns with the organization’s philosophy for value creation and purpose.
Sustainability and “future proofing”: Related to the other two areas, the board has a responsibility to drive management for a plan to adapt and thrive in a low-carbon economy. This goes beyond articulating a business case and requires the board’s holistic oversight over major investments, business model analysis, risk management, and cultural alignment. These are all critical to successful transition planning.
Move From a Compliance to a Strategic Mindset
The board has a fiduciary duty to hold management accountable to a comprehensive assessment of climate-related risks and opportunities and to ensure the accuracy of disclosures. While regulatory conformance is critical, we urge boards to recognize their stewardship role in driving organizational performance and “future-proofing" organizations to adapt and thrive in a low-carbon economy.
WTW is a NACD partner, providing directors with critical and timely information, and perspectives. WTW is a financial supporter of the NACD.
On the slim chance your board has never engaged in strategic planning or has but it's been a long time, a SWOT is a standard part of the "discovery" process toward informing goals and strategies. The following may be far more than one might want to know but is certainly detailed and explanative. I do believe however that SWOT alone does not a strategic planning process make. I recommend a Theory of Change as the starting and ending point informing mission, values and the strategic goals and strategies and of course the implementation plan. I would emphasize that most boards and staff don't have the internal resources to do a thorough SWOT on their own - that's what consultants like me are for :). That said, here's a primer sans the nifty graphics provided by StreetWise Journal.
SWOT analysis is a strategic planning tool that can be incredibly beneficial for nonprofit organizations. It helps you to identify the internal and external factors that can impact your mission. This method evaluates the Strengths, Weaknesses, Opportunities, and Threats related to your nonprofit, offering a clear picture of where it stands currently and what it can achieve in the future. By understanding the unique position of your nonprofit, you can better navigate the complex landscape of philanthropy and social impact.
Just like for-profit businesses, nonprofits face challenges that can hinder their growth and success. However, they also possess unique strengths, such as a strong sense of mission and the power to mobilize volunteers. SWOT analysis enables nonprofits to pinpoint these distinct advantages while acknowledging improvement areas. Moreover, it assists in discovering new opportunities for expansion and preparing for potential threats that could impede progress. This thorough understanding forms the basis for effective strategic planning, goal setting, and developing initiatives that further your nonprofit’s objectives.
Engaging in SWOT analysis can also improve other areas, such as marketing and outreach strategies, fundraising efforts, and managing volunteer networks. Strong leadership and governance are essential for driving your nonprofit forward, and SWOT analysis plays a crucial role in evaluating your organization’s performance and impact. This tool is not just about identifying areas for development; it’s about maximizing your impact by leveraging your strengths and seizing new opportunities.
Key Takeaways
SWOT analysis helps nonprofits understand their strategic position and plan for future growth.
Identifying strengths and weaknesses while exploring opportunities enhances organizational effectiveness.
It is a dynamic tool that supports leadership in decision-making and achieving goals.
Understanding SWOT Analysis
To effectively utilize SWOT analysis for your nonprofit, it’s crucial to comprehend its structure and significance. This tool can shape your strategy based on internal and external factors.
Basics of SWOT Analysis
SWOT analysis is a strategic planning tool to help you identify Strengths, Weaknesses, Opportunities, and Threats. These four components are crucial in assessing your nonprofit’s internal and external environments.
Strengths: Characteristics of your nonprofit that give it an advantage over others.
Weaknesses: Internal elements that could be improved or are at a disadvantage relative to others.
Opportunities: External factors in the environment that your nonprofit can exploit to its advantage.
Threats: External factors that could cause trouble for your nonprofit.
Examining these areas allows you to develop strategies that capitalize on strengths and opportunities while addressing weaknesses and threats.
Importance for Nonprofits
Nonprofits often operate with limited resources, making it all the more important to allocate what you have strategically. A clear understanding of your organization’s strategic position can inform decisions, prioritize actions, and maximize available resources.
A deep dive into your strengths can reveal resources you can harness for better outreach and impact.
Identifying weaknesses allows you to allocate improvement resources or mitigate potential risks.
Recognizing opportunities can lead to innovative programs and funding sources.
Acknowledging threats helps in crafting contingency plans to safeguard your mission.
Constructing a SWOT Matrix
Creating a SWOT matrix involves dividing a square into four quadrants, each representing a different analysis aspect.
Top Left Quadrant – Strengths
Top Right Quadrant – Weaknesses
Bottom Left Quadrant – Opportunities
Bottom Right Quadrant – Threats
Craft your matrix by:
Listing internal strengths and weaknesses in the top two quadrants.
Identifying external opportunities and threats in the bottom two quadrants.
This visual arrangement makes it easier to see how you pair each strength with an opportunity or how a threat might exploit a particular weakness. It’s a dynamic tool to guide your strategic planning process.
Key Takeaway: Understanding the basics of SWOT analysis can significantly enhance your nonprofit’s planning and decision-making process. Building a SWOT matrix provides a clear snapshot of where you stand, helping you to strategize effectively.
Identifying Nonprofit Strengths
When embarking on a SWOT analysis for your nonprofit, it’s vital to recognize the unique strengths that help propel your organization forward.
Internal Strengths
Your nonprofit’s internal strengths are the positive attributes that reside within your organization. These include:
Mission: Your guiding star. It’s well-defined and resonates with both your team and the larger community.
Team: A dedicated team, often marked by diverse skills and a commitment to your cause.
Volunteers: The lifeblood of many nonprofits, offering time and skills that amplify your capabilities.
Expertise: The specialized knowledge you have accumulated making you an authority in your service area.
Technology Infrastructure: An enabler for efficient operations and engagement, often reflecting your smart investments in this area.
Bullet points to remember for Internal Strengths:
A clear, compelling mission can attract support and provide focus.
A robust team is integral, blending professional expertise with passion.
Volunteers expand your nonprofit’s reach and impact.
Your collective expertise sets you apart as a thought leader.
Effective technology infrastructure streamlines processes and magnifies your presence.
Key Takeaway: A nonprofit with a clear mission, a passionate team, committed volunteers, specialized expertise, and solid technology infrastructure is well-equipped to make a meaningful impact.
Leveraging Core Competencies
To leverage your core competencies means understanding what your nonprofit does best and applying those capabilities to achieve your goals. Here’s how:
Mission & Expertise: Use your specialized knowledge to drive mission-related initiatives that showcase your nonprofit’s impact.
Technology Infrastructure: Utilize technology to improve outreach and foster community engagement.
Bullet points to consider when Leveraging Core Competencies:
Align activities with your mission to maintain focus and effectiveness.
Continuously invest in and utilize technology that propels your mission forward.
Key Takeaway: Your nonprofit’s core competencies are your superpowers. Lean into them to stand out and make a more significant difference in your community.
Addressing Nonprofit Weaknesses
In order to strengthen your nonprofit organization, it is crucial to acknowledge and address internal weaknesses. Let’s explore practical ways to recognize these areas and apply strategies for meaningful improvement.
Recognizing Internal Weaknesses
Your first step is to conduct a thorough internal audit to identify your nonprofit’s weaknesses. Common areas that tend to need attention include:
Limited Resources: Financial constraints or lack of support can hamper your nonprofit’s growth.
Outdated Technology: Falling behind in technological advancements can limit effectiveness and efficiency.
Staffing Challenges: Insufficient or inadequately trained staff can affect your organization’s performance.
Key Takeaway: Recognizing the specific weaknesses within your organization is the foundation for targeted improvements.
Strategies for Improvement
Once you’ve identified weaknesses, you can focus on strategies to turn them into areas of strength:
Resource Allocation:
Prioritize projects and allocate resources more effectively.
Explore new funding opportunities, like grants or partnerships.
Technology Updates:
Invest in current technology to streamline operations.
Provide training to ensure staff can leverage new tools.
Staffing Solutions:
Consider strategic hiring or staff development programs.
Implement volunteer programs to bolster the workforce without heavy financial investment.
Key Takeaway: Targeted strategies can transform weaknesses into growth opportunities for your nonprofit. Remember, a weakness recognized is an opportunity to become stronger.
Exploring Opportunities for Growth
In the landscape of non-profit organizations, growth is vital to extend reach and increase impact. Recognizing new opportunities while aligning them with your mission can result in significant development and success.
Identifying External Opportunities
To stay relevant and effective, your non-profit should constantly be on the lookout for external opportunities. These could come in various forms, such as:
New Funding Sources: Explore grants, donor-advised funds, or crowdfunding platforms to boost your financial resources.
Emerging Trends: Keep an eye on societal and sector-specific trends that can be leveraged for your cause.
Community Partnerships: Connect with local businesses and non-profits to expand your network and resource pool.
Key Takeaway: Regularly scanning the environment for these opportunities helps you stay ahead and ensures that new doors are always opening for your organization to thrive.
Aligning Opportunities with Strategy
It’s not just about finding opportunities; it’s about finding the right ones. Your strategy should guide which opportunities you pursue. Consider the following:
Strategic Fit: Does the opportunity align with your non-profit’s values and long-term goals?
Resource Allocation: Assess if you have the necessary resources or can acquire them without straining current operations.
Outcome Projection: Make educated projections about an opportunity’s potential impact on your growth.
Key Takeaway: Aligning new opportunities with your strategic plan is crucial; it ensures that growth is managed and sustainable and that your mission remains the focal point.
Mitigating Potential Threats
Effective mitigation prevents the negative impact of identified threats on your nonprofit, ensuring longevity and efficacy in serving your purpose.
External Threats Analysis
To buffer your nonprofit against external threats, it’s important to monitor various factors outside of your control closely. For starters, competition from other organizations can affect your funding and visibility, so keep an eye on the competitive landscape. One strategy includes:
Networking: Forge strategic partnerships to leverage each other’s strengths.
Economic downturns are like stormy seas – navigate these with caution. Tighten your budget and focus on maintaining a loyal donor base through transparent communication.
Policy changes can come like a bolt from the blue, potentially altering the nonprofit landscape overnight. To stay ahead:
Stay Informed: Regularly review policy updates and adjust your operations accordingly.
Advocacy: Get involved in advocacy to influence policies favorable to your cause.
Key takeaway: Staying aware and adaptable is crucial in managing external threats.
Contingency Planning
Contingency planning is like having an umbrella ready for a rainy day. Here’s how you can prepare:
Risk Assessments: Regularly conduct these to identify potential disruptions early.
Backup Plans: Have clear, documented backup strategies for critical functions; think of it as your nonprofit’s life jacket.
When dealing with threats, keep your friends close and your emergency plan closer. Diversify funding sources and establish an emergency fund to weather financial storms.
Key takeaway: A robust contingency plan is your nonprofit’s safety net—regularly review and update it to stay prepared.
Strategic Planning and Goals
Strategic planning in nonprofits is a compass guiding you toward your desired future. It aligns your resources and efforts with your mission and the impact you aim to make. Let’s focus on how you can set clear objectives and create your roadmap for success.
Setting Clear Objectives
Setting clear, measurable objectives is essential for your nonprofit’s growth. Think of objectives as specific milestones on your journey to achieving broader goals. When defining them:
Be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
Ensure that every objective has a corresponding strategy to guide its execution.
Regularly review and adjust objectives as your nonprofit evolves.
Your objectives might include expanding community services, increasing fundraising by a certain percentage, or boosting volunteer engagement. The clarity of these objectives will fuel the strategic planning process and provide your team with direct targets to aim for.
Roadmap for Success
Crafting a roadmap for your nonprofit encapsulates the action plan you’ll follow to hit each objective. Your roadmap should:
Outline key steps for each objective.
Designate resources such as personnel, budget, and time.
Identify potential risks and include strategies to mitigate them.
Be visual – create a diagram or chart for easy reference.
Let’s say you want to enhance your donor outreach. Your roadmap could detail steps like updating your donor database, implementing a new communication strategy, or organizing targeted fundraising events. Remember, a well-thought-out roadmap turns objectives into actionable tasks.
Key takeaway: Your strategic plan’s true north lies in clear objectives and a detailed roadmap. Nail these, and you’ll pave a clear path toward achieving your nonprofit’s ambitions.
Marketing and Outreach
In non-profit organizations, effective marketing and outreach are pivotal for enhancing visibility and increasing awareness of your mission. Let’s look at how to tailor your marketing strategies and leverage social media for heightened awareness.
Crafting Marketing Strategies
When piecing together your marketing strategy, remember that it’s about connecting your non-profit’s brand with the right audience. Here are a few tips:
Identify Your Audience: Pinpoint who cares about your cause and where you can reach them.
Set Clear Goals: Decide what you aim to achieve. Is it donations, volunteers, or general awareness?
Leverage Branding: Your brand’s voice and image should consistently echo your values and mission.
Test and Adapt: Not every strategy will be a hit. Be ready to tweak your campaigns based on feedback and results.
Remember, your strategy is your roadmap. Without it, you’re traveling blind.
Choose the Right Platforms: Not all platforms will be right for your brand. Identify where your audience hangs out the most.
Create Engaging Content: Whether it’s stories, images, or videos, make your content compelling and shareable.
Interact with Followers: Respond to comments, messages, and mentions to build relationships with your supporters.
Monitor and Measure: Use social media analytics to track what’s working and where to improve.
Your presence on social media is not just about posting; it’s about sparking conversation and building a community around your cause.
Fundraising and Resource Development
Effective fundraising and resource development are pivotal for the sustainability of non-profit organizations. In this space, it’s all about nurturing donor relationships and branching into novel funding channels to build a stable revenue stream.
Building Donor Relationships
Knowing your donors’ motivation to give can significantly impact your fundraising outcomes. Here’s how you can forge and maintain strong connections:
Personalize Communication: Regularly reach out to your donors with updates and stories that resonate with them, showing their support’s direct impact.
Appreciation and Recognition: Show gratitude for contributions, big or small. Personal thank-you notes or event recognition can go a long way in making donors feel valued.
Stay Engaged: Keep the dialogue going. Invite feedback and involve donors in decision-making processes when appropriate.
Major Donors Engagement: Tailor your strategies to build deeper relationships with major donors, as they often contribute substantially to your revenue.
Key Takeaway: Personal connections mean everything. Make your donors feel like they’re a crucial part of the team, and they’re more likely to stick around.
Exploring New Funding Avenues
Diversifying your funding sources ensures that your nonprofit isn’t reliant on a single revenue stream. Here are some approaches to explore:
Grants and Foundations: Research and apply for grants that align with your mission. Keep an eye out for those that match your projects and activities.
Corporate Sponsorships: Partner with businesses looking to enhance their social responsibility footprint. Offer sponsorship packages that provide mutual benefits.
Events and Campaigns: Host fundraising events that align with your cause. Consider peer-to-peer campaigns where advocates fundraise on your behalf.
Key Takeaway: Be bold and innovative. By tapping into a mix of funding sources, you’re securing your nonprofit’s financial health for the long haul.
Building and Managing Volunteer Networks
Volunteer networks are vital for your nonprofit’s growth and sustainability. Effective recruitment and retention strategies for volunteers significantly boost your organization’s mission.
Recruiting Skilled Volunteers
Finding volunteers with the right skills can be like locating a puzzle piece that fits perfectly within your organization. Here’s how you can attract them:
Identify specific needs: Outline the skills your volunteer base lacks and target those competencies in your recruitment efforts.
Communicate benefits: Let potential volunteers know what’s in it for them, be it skill development, networking, or the fulfillment of giving back.
Use multiple channels: Spread the word through your website, social media, and local community boards to maximize your reach.
Key Takeaway: Build a diverse volunteer base by clearly communicating your needs and the benefits volunteers will gain.
Volunteer Impact and Retention
Once you have volunteers on board, keeping them engaged is your next mission:
Provide training: Equip your volunteers with the knowledge and skills they need to be effective.
Acknowledge efforts: Regularly appreciate and recognize volunteer contributions to keep morale high.
Create a sense of community: Encourage interactions among volunteers to foster a supportive network.
Key Takeaway: Boost volunteer retention by investing in their development and ensuring they feel valued and part of a community.
Organizational Leadership and Governance
In nonprofits, leadership and governance are not just necessary; they’re pivotal. Your organization flourishes when board members and leadership understand their roles and work seamlessly together.
Role of Board Members
Your board members are the backbone of your nonprofit. They provide strategic leadership and are responsible for:
Overseeing the mission to ensure it’s being followed.
Financial oversight, including budgeting and funding advocacy.
Policy development and review to guide the nonprofit’s actions and define its values.
Evaluating the CEO/Executive Director, ensuring they align with the nonprofit’s vision.
Key Takeaway: Strong board member involvement is crucial for steering your nonprofit toward its mission and ensuring legal and ethical integrity.
Setting clear goals and expectations for the management team.
Fostering a culture of transparency and communication within all levels of the organization.
Encouraging ongoing professional development among staff members.
Adapting and responding to challenges in the nonprofit sector with resilience and innovation.
Leaders must also be adept at rallying internal and external support to sustain and grow the organization’s impact.
Key Takeaway: As a leader in your nonprofit, your ability to adapt, communicate, and motivate is critical to driving your organization’s success.
Performance Evaluation and Impact
In the realm of nonprofit organizations, thoroughly examining how programs perform and the extent of their impact is crucial for ongoing development and accountability.
Measuring Program Effectiveness
When you’re looking to gauge the effectiveness of your nonprofit’s programs, you should consider both qualitative and quantitative metrics. It’s like having a GPS for your workload—track progress by milestones, and when something’s off-course, you’ll know exactly what needs a tune-up.
Qualitative Measures: Interviews and surveys can provide insights into the experiences of those involved.
Quantitative Measures: Data such as the number of people served, or specific outcomes achieved can offer solid evidence of success.
Key Takeaway: Combining stories and statistics will give you the richest picture of your program’s effectiveness.
Impact on Beneficiaries
The true measure of impact lies in the tangible changes in the lives of beneficiaries. Are you making a difference? It’s not enough to hope so; you must be sure.
Short-Term Impact: Look for immediate signs of improvement in beneficiaries’ conditions.
Long-Term Impact: Consider the sustained changes over time, such as changes in behavior or increased opportunities.
Key Takeaway: Constantly seek feedback from those you serve to ensure the impact you aim for is the impact you achieve.
Frequently Asked Questions
A SWOT analysis is a fantastic starting point when you’re eyeing ways to improve your nonprofit. It helps you harness your organization’s strengths, shore up weaknesses, tap into opportunities, and avoid potential threats.
How can a SWOT analysis benefit a nonprofit organization?
Performing a SWOT analysis gives your nonprofit a clear snapshot of its current standing. It’s like a health check-up that can reveal the robust areas you should capitalize on and the frail spots that need help.
Key takeaway: A well-done SWOT analysis is the first step to a strategic plan that guides your nonprofit toward sustainable growth.
What are common strengths identified in SWOT analyses for nonprofits?
Typical strengths for nonprofits include a dedicated volunteer base, a strong community presence, or unique service offerings. Remember, these are your aces, so keep them up your sleeve and play them wisely.
Key takeaway: Leverage these inherent strengths to create a competitive edge for your organization.
How might a nonprofit organization address weaknesses found in a SWOT analysis?
Upon spotting weaknesses, strategize! Maybe you need more skilled staff, or it’s time for a tech upgrade. Craft a plan to turn these weak points around, starting with small, manageable goals.
Key takeaway: Tackling each weakness with tailored strategies strengthens your nonprofit’s overall foundation.
What opportunities should nonprofit organizations look for during a SWOT analysis?
Stay alert for fresh trends, funding sources, or community needs that align with your mission. Spotting these gems could propel your efforts and broaden your impact.
Key takeaway: Opportunities are your runway to innovation and expanded reach—be ready to take flight.
How can a nonprofit identify potential threats in a SWOT analysis?
Watch for new regulations, shifting social attitudes, or emerging competitors. Awareness is your shield, and preparation is your plan of attack.
Key takeaway: Foreseeing threats allows you to navigate rough waters with confidence.
Can you provide guidance on conducting a SWOT analysis for charity fundraising efforts?
First, evaluate what’s worked before—this is your foundation. Look at your donor data, consider market trends, and then survey your stakeholders. It’s about connecting the dots between where you are and where you want to be.
Key takeaway: A SWOT analysis for fundraising can illuminate the path to more effective donor engagement and higher revenue.
A big, resounding YES to the following. IF your board makes ground breaking decisions, EVER, please to consider the following from www.DirectorsandBoards.com.
Learning from the Struggles of Penn and Harvard
Can public company boards learn from the foibles of two high-profile (yet nonprofit) universities? Charles Elson thinks so. In “A Governance Lesson from Academia, Part II,” he lauds the University of Pennsylvania for their dispatching of former President Liz Magill after her testimony before Congress but wonders why the firing did not take place quicker upon the heels of an event at which highly antisemitic positions were taken by several speakers. What would Elson suggest for boards?
“While precipitous and hasty action is at many times inadvisable, once managerial leadership has exercised extremely poor judgment, the board must act quickly and decisively. I have been in several similar situations and a prompt response is ultimately the best course, despite the criticism the board may get from some quarters.”
Elson reserves even sharper criticism for the inaction of the Harvard board, which stood behind then-president Claudine Gay despite a similarly poor performance in the halls of Congress and mounting accusations of plagiarism in her academic work. Gay later resigned her position, but only after serious damage had been done to the university’s reputation.
Elson writes, “When leadership demonstrates a significant lack of judgment or integrity, it is time to move on. There are plenty of highly competent people in this world who can effectively take over the job. Move quickly and decisively, lest the manager’s failings become your own.”
What do you think your board can learn from the events that took place at Penn and Harvard? We would love to receive your perspective at [email protected]. Make sure to check out Charles Elson’s “A Governance Lesson from Academia.”
