Your Board Members Have Got to Go (eventually)…
I was talking to a friend the other day about his involvement with a local nonprofit organization. He proudly noted that he has been on this organization’s board of directors for over 20 years, and was taken aback when my jaw dropped and I exclaimed, “WHY WOULD YOU EVER??” Once I recovered from my shock, I explained to my friend that board service is not intended to be a life sentence, and that he and the organization’s leadership are doing the nonprofit a disservice by allowing board members to stick around that long. I have heard several arguments in support of long-term or even permanent board service. One is that long-term board members are valuable because they bring institutional memory that can help inform current and future decisions. Another is that board member recruitment is so challenging that it’s easier to just hold on to the board members that are willing to stay involved. The most egregious reason I’ve heard is that it’s easier to manage a nonprofit board when there are fewer new personalities to learn and navigate. Seriously, friends. While some reasons may sound better than others, they’re all just excuses for bad nonprofit management behavior. Simple and plain. First of all, it floors me that anyone would want to serve on a nonprofit board for 20 years…heck, I’m amazed that I am able to get some of my board members to serve the six years that are allowed by my organization’s bylaws. Board service is a volunteer duty that should have a fixed start and end point. Board members should know what to expect, what is expected of them, and understand that they are not intended as permanent fixtures in the organization. Next, the nonprofit executive director who allows herself to slip into this sort of comfort zone with her board is failing at one of the most important leadership qualities there is: VISION. It is the executive director’s role to lead the nonprofit, and one of the most important aspects of this role is ensuring that the future of the organization is secure. The expertise your organization needed when it first started 5 or 10 years ago, for example, is not the same expertise it needs today. Nor should it be what you are looking for in a board member 5 or 10 years down the road. Nonprofits change, grow, and develop over their lifespan…and this requires a changing, growing and developing board to govern it. Finally, and most importantly: I have never seen a set of nonprofit bylaws that intentionally allow for permanent board service. Every set of nonprofit bylaws includes language about board member election, terms, and most also include language about term limits. The bylaws are the primary governing document for any nonprofit, and failing to govern the organization according to the provisions therein is a huge problem. Two quick asides: The truth is that most board members do not keep track of their terms and when their service is supposed to expire. They rightfully rely on the organization’s executive director (or whoever the leader is in an all-volunteer organization) to make sure this issue is managed correctly. So, if the leader fails to pay attention or doesn’t prioritize board management, board members can easily be stuck with the organization far longer than they ever intended. And the organization can be equally stuck with them. So friends, please take some time to review your bylaws and see what they say about board member terms. If you’re not following these provisions, figure out how to fix that. Depending on how bad the problem is, you may need to create a phased solution…but ignoring the issue of permanent board members will only create more problems in the future. Nobody wants a stagnant nonprofit organization. Keeping your nonprofit fresh and current involves more than just introducing a new program or initiative every now and then. Preventing stagnation starts with the organization’s governance, ie: the board of directors. New blood creates new ideas and new opportunities. Don’t get so tied to any of your existing board members that you can’t imagine the organization without them. That’s contrary to best practice and harmful to any organization. Good board management is good nonprofit management. Do this part right and everything else in your organization will be better for it. I promise.
Read moreAnecdotes are Cute, but They Don’t Prove Success
I will never forget the first face-to-face meeting I had with a program officer at a major national grantmaking foundation. It was 2002 and I had flown to New York City with my boss for a three-day foundation meeting spree. I was brand new to the nonprofit sector and the greenest of green in terms of fundraising. My then boss, while very charming, was also not the best fundraiser (or mentor). We both knew why he had invited me to join him, though neither of us said it out loud – I was there to be the brown employee face to help bring legitimacy to the organization’s racial justice work. At the time, I was all too happy to be the token if it meant a free trip to New York and the opportunity to get some real experience in major grant work. We can talk about racial bias and tokenism in the nonprofit sector another time…but today, friends, I’m here to talk with you about handling your program evaluation business so you can prove your success to your board and funders… So, there I was, young and green, sitting in front of the program officer and shaking like a leaf while she peppered me with questions about the work I was doing, helping people with prior felony convictions regain their voting rights. We talked about the conversations I was having with my state’s legislators, testimony I had given in legislative hearings, research I had conducted about what was happening on this issue in other parts of the country. But when it came to answering questions about the impact of my work, all I had was a few stories to tell. I shared stories of individual successes. I talked about the positive feedback I had received facilitating legislative testimony from people impacted by the criminal justice system. I spoke about letters I received from people who had registered or voted for the first time thanks to the work my organization was doing. And on and on like such with the stories. But what I failed to do was show any actual, scalable strategy or any actual, scalable impact. That’s not to say that what I was doing wasn’t making any impact. But if it was, I had not come prepared to prove it. All I had were stories. And at the end of the day, friends, stories are nothing more than anecdotes. Anecdotes are cute. Anecdotes pull heartstrings. Anecdotes can hit the emotions like nobody’s business. But they can never replace the value of cold hard facts when it comes to proving success and impact. If only I had known then what I know now, I would have arrived in New York prepared with all the data I needed to show the value and impact of my work. I would have had statewide voter data from before the passage of the voter restoration law we had advocated for; I would have had output numbers on how many community forums and voter registration drives we had hosted since the law’s passage; I would have had numeric and demographic information on those we had registered to vote; I would have had even more statewide voter data at 6 months post-passage, 12 months, 18 months, and so on, to demonstrate any positive trends resulting from our network of nonprofit partners who were doing similar work around the state. You get my point, friends. But instead, all I had was a bunch of cute stories. Too many nonprofit leaders rely too heavily on anecdotes when talking about their successes. But when it comes to actual data to back up the anecdotes and show real impact, things tend to get sparce. I cannot stress enough the importance of defining and measuring the impact of your programs and services. Real success must be backed up with data. Period. I have written before about the importance of program evaluation. Process evaluations are helpful for understanding a program’s efficiency, service delivery mechanisms, and overall cost-effectiveness. Process evaluations can help you make internal improvements to enhance the delivery of your services, reduce costs and enhance efficiency. But outcome evaluations are the key to proving your impact and success. Outcome evaluations are all about the numbers…and analyzing the numbers over time to track whether and how your work has created the change you intend it to. So, what sorts of data should the nonprofit leader track for a meaningful outcome evaluation? It really depends on the program, the target population, and the goals. Your programmatic goals will dictate what you should be tracking in order to prove your success. Take a close look at your goals and consider all of the different pieces of information you can collect and analyze over time to show the impact of your work. Please don’t misunderstand me, friends. Stories and anecdotes have their value and can play a significant positive role in your community outreach and fundraising. They can even come in handy when you’re talking to a program officer at a major grantmaking organization. Just remember to keep the anecdotes in their proper place – as examples of the great work you do, but never as proof of your success. Nothing can take the place of proper data collection and tracking when it comes to showing your organization’s actual impact. Period.
Read moreLeveraging Your Nonprofit’s Major Milestones for Fundraising
Most small and midsized nonprofit organizations run on shoestring budgets. Their primary fuel comes from the passion, care, and a sense of community service that seems innate in the people who start and work in nonprofit organizations. On a day-to-day basis, nonprofit leaders often wear so many hats that they sometimes forget to slow down and celebrate their successes. But friends, today I want to remind you of two important things: Yep. Here I go again with the fundraising. You know I can’t help myself. Nonprofits can’t operate, sustain, or thrive on passion alone. And anyone who has worked in this industry for any amount of time knows that funding doesn’t simply fall from the sky. Thus, fundraising should always be front of mind for nonprofit leaders and board members. And, I can think of few better fundraising opportunities than those that are associated with celebrating your organization’s successes! Did your nonprofit just hit a major programmatic milestone? For example, one organization I work with just reached the “1,000 clients served” goal that its board envisioned several years ago when they created a new community-based program. Is your organization looking ahead to a major “years in operation” milestone? For example, I’m currently assisting a nonprofit as they plan for their 10-year anniversary milestone later this year. Organizational milestones are subjective and can only be defined by your leadership team. Sure, time and/or program-based milestones are the most obvious, but a major achievement for your nonprofit could be something as ordinary as unveiling a new brand identity. Or celebrating the success of your 5-year strategic plan goals and/or the launch of your new 5-year strategic plan. You get my point, friends. If you can identify the milestone, you’ve got a reason to celebrate it! And what better way to celebrate than with a fundraising campaign?! Seriously! Please keep in mind, a fundraising campaign is so much more (and, trust me, way more impactful) than a fundraising event. You will rarely see me write about fundraising events because, well….they have proven time and time again to be the least efficient and effective fundraising method. But, executed well, a fundraising campaign to celebrate an organizational milestone can energize existing donors, attract new donors, and give your nonprofit a boost of funding and momentum to move towards its next milestone. A few tips to keep in mind as you consider celebrating your nonprofit’s next milestone with a fundraising campaign: Start planning and publicizing early. Obviously, this is easier to do when you’re planning for a time-based milestone. If you know that your organization is hitting its 20-year mark next year, you should start planning right away. It takes at least 6 months to plan and implement a successful milestone campaign. Planning a campaign for a service-based milestone should also start early. While it can be tricky, proper data tracking and forecasting can give the nonprofit leader a sense of when that 1,000th client will be served, for example, and planning can still begin with confidence. Create a goal and stay laser focused. The very first thing to consider when sitting down to plan a milestone celebration campaign is how much you want to raise. I know this seems like an obvious statement, but I’ve seen nonprofit leaders start out with a fuzzy goal or with no numeric goal at all. That is not a good look, friends. If you don’t have a firm goal in place from the beginning, everything else in terms of your planning and execution will struggle. Starting with the end goal in mind will inform everything from who you approach for sponsorships, to how much you ask individual donors to contribute, and how much you spend on getting the word out. You absolutely must begin with a firm goal. Brand your campaign and publicize, publicize, publicize! Is your organization turning 10 years old next year? How about a “$10,000 for Ten Years” campaign? Whatever the milestone, figure out a catchy theme to brand it with. Then, talk about it all the time, to everyone, everywhere. Social media, website, newsletters, public presentations, etc. Lead-up publicity is super important because you need people to know your campaign is coming before it ever begins. You also need to build a publicity plan to highlight the campaign’s progress and additional organizational success stories once you launch and throughout the duration of your campaign. Create your campaign messaging. Once you have a goal in mind and your catchy branding theme, it’s messaging time! Campaign messaging should include your case statement, success stories you’ve gathered along the way to your milestone, and most importantly, stories about where you’re heading in the future. Always remember to look forward more than you look back…people care much less about where you’ve been and will typically give more when you articulate where your organization is going in the future and why it matters. Target, launch, and ask. It’s always smart to spend some time identifying the key donor prospects you want to target during your campaign. Also consider creating a gift range table to give yourself a better picture of the various combinations of gifts and gift amounts that help you meet your goal. Failure to spend this sort of planning time for your campaign will surely result in willy-nilly fundraising and less than optimal results. Once you have all your target data in place, plan your launch and then get out there and start asking! In terms of the asking during your milestone campaign, please try to be as intentional and strategic as possible. Refer to your list of targets and utilize your gift range table to prioritize and solicit your highest level donor prospects. Be clear about who should be asked personally (in person or by phone) and who can be asked more indirectly (via email or mail, for example), and always remember to utilize your website and social media platforms to capture the many small gifts that will help reach your goal (and acquire new supporters in the process). Friends, this
Read moreDonors Behaving Badly?
I’ve written before about the importance of avoiding mission creep and other alignment issues when seeking funding for your nonprofit. I know, it is certainly easy to fall into the “any funding is good funding” trap, especially in small and often under-resourced nonprofit organizations. But, as I’ve noted, the pursuit of grant funding can definitely prove problematic if it is misaligned with the overall mission and direction of your organization. Mission alignment is key to ensuring that the funding your organization receives helps you accomplish what is in your strategic plan instead of taking you away from your actual goals. But there’s another type of funding related issue that can be even more detrimental than a misaligned grant award. So detrimental, in fact, that it can cause serious damage to an organization’s reputation or even land it in the headlines. And in the world of nonprofits, the marketing idiom there’s no such thing as bad publicity absolutely does not apply. So, what type of funding can be this problematic? The type that comes from donors who behave badly. I think you know what I mean…we have all seen the headlines: “XYZ Charity Under Immense Pressure to Return Tainted Millions” “ABC Nonprofit Accepted Donations from Criminals” “Corporation Attempts to Clear Bad Reputation through Charity” This issue can manifest itself in many different ways. It might be an individual who has been philanthropic for years but is later found to have engaged in criminal activity. It could also be a major corporate donor who finds itself the subject of a class action discrimination lawsuit. The potential problems are endless. But, it is up to you, the nonprofit leader, to ensure that your funding needs don’t overshadow the due diligence process that should always happen before accepting a major donation. Failing to do so can be costly, both in terms of financial and reputational damage. So, how do nonprofits find themselves in these predicaments? Through a combination of factors, really. It usually starts with leadership that gets a little too excited about a prospective major gift. It is hard not to get excited about an individual or corporate donor offering thousands or even millions to help your organization. And, when leadership is excited everyone gets excited, and it’s easy to miss issues if everyone is blinded by dollar signs. Along the way, there might be a red flag or two that get ignored or minimized. Someone fails to pause, reflect, and ask more questions about the donor. Perhaps no one thinks to take a closer look at the finances and/or history of the corporation, or maybe this donor has been throwing money around all over the place and folks are just pleased to finally be on their giving radar. So, the gift is negotiated, received, and celebrated. And everyone is happy, until a triggering event occurs — like a prominent philanthropist being charged and later convicted of criminal activity — and every organization that ever received charitable donations from this individual, including yours, is immediately under scrutiny. Ugh. It is always a smart practice for nonprofit leaders to conduct their own due diligence in advance of accepting major contributions. This is relevant for any major donor, not just the ones whose questionable reputations precede them. As a nonprofit leader, you want to have as full a picture as possible about the donor, the source of the funds being donated, and any legal or ethical issues that the donor may have dealt with in the past. One of the trickiest parts of the due diligence process is that there is a lot of gray area. What one nonprofit leader views as unethical another may view as capitalism at its finest. And, absent a criminal conviction, so much in these decisions is subjective, and every nonprofit leader has their own comfort level with risk. But the point of due diligence is to have as much information as possible to inform your decision about whether and how your organization should be engaged with the donor in question. I promise I’m not trying to freak you out, nonprofit leaders. My point is simply to remind you to slow down and do your homework before entering into agreements with major individual or corporate donors. Just as you should expect major donors to scrutinize your nonprofit before handing you a giant check, it is your duty to investigate the people and companies who show up with giant checks to give. If your nonprofit doesn’t already have a gift acceptance policy, I strongly encourage you to make it a priority to create one. This policy specifies the types of contributions your organization will accept, the grounds under which it will decline a gift, and can even spell out a process for handling ethical issues after a gift has already been accepted. I also recommend investing in one of the many prospect research software tools that can help with the due diligence process, in addition to identifying new prospective donors. Some organizations even go as far as creating standing ethics committees on their boards of directors that meet regularly to discuss and vet major donors who have been or may be approached for funding. Whatever path you take for your organization, just make sure you’ve got a plan and process in place to deal with donor ethics issues if they ever arise. A little bit of homework now can help your nonprofit avoid major ethical, reputational, and financial issues later.
Read moreThe Ever-Elusive Unrestricted Dollar
One of the biggest sources of stress and uncertainty in the nonprofit sector is ensuring sufficient funding to cover operational costs. Operational costs, or “overhead”, are all of the costs associated with keeping the doors open and the lights on in an organization: staff, equipment, supplies, rent, etc. The vast majority of nonprofit funding is restricted funding. The term means exactly what it looks like: funding designated for a specific purpose. And in most cases, the purpose is programmatic, not overhead. Donors are keen on supporting the mission of the nonprofits they contribute to, but in most cases this translates into support for the most visible and/or public aspects of the organization that donors see or experience: the programs. What donors, grant funders, and corporate sponsors don’t see – and therefore don’t typically want to support – are all of the other things required to ensure an organization’s programs run smoothly. Yep! The overhead. Restricted funding is wonderful for enabling organizations to accomplish their activities and programs. It is necessary and important, and worth every ounce of energy that goes into raising it. However, restricted funding does absolutely nothing to help a nonprofit stay alive. So, you might ask…how is a nonprofit supposed to sustain its programs if it shuts down because it can’t sustain its operations?? Enter the ever-elusive unrestricted dollar. The absolute most important funding in every nonprofit budget, and the absolute most difficult funding to secure. Unrestricted funding (also referred to as operational funding) is what allows organizations to meet payroll, purchase equipment & supplies, and also build reserves for long-term sustainability. Studies have shown that less than 20% of all funding received by nonprofit organizations is unrestricted. What does this mean? This means that organizations that may be swimming in money for their programs & activities can simultaneously be starving to death because there’s insufficient money available to cover operational costs. The inexperienced nonprofit leader might make the mistake of thinking it’s ok to move money allocated for programs to other purposes. But, don’t even think about it…that would be both unethical and illegal according to nonprofit laws and regulations. So, what is a nonprofit leader to do? How can we manage sustainable organizations with so few unrestricted dollars coming in to support operations? Here’s a few tips from my own experience: Ask For It The first and foremost thing that nonprofit leaders can do to increase unrestricted funding is to ask for it. Don’t get so caught up in raising money for your programs that you neglect the need for operational support. Sure, it’s true that the majority of funders will be most interested in helping your programs thrive, but my rule of thumb is that you’ll never receive unrestricted funding if you never ask for it. So, consider broadening your approach to asking for funding. Whether you’re writing a grant, soliciting a company for sponsorship dollars, or talking to an individual donor prospect, always look for opportunities to bring operational support into the conversation. The fact is it takes a healthy organization to sustain healthy programs, so don’t be afraid to make this case to your funders. Require It For many small or mid-sized nonprofits, the concept of a “gift fee” might be foreign. A gift fee is the portion of a gift or grant that is assessed by a nonprofit to provide unrestricted funding for the organization’s overall operations. Gift fees (or assessments, as they are also referred to) have been around for years, and even though some contributors balk at the idea of “paying” to donate to a nonprofit, these assessments are standard practice in large nonprofits and should be far more common in small nonprofits than they are. Gift fees, which typically range between 3% and 10%, become reliable sources of unrestricted funding by forcing funders to participate in sustaining the organizations whose programs they want to support. But please, before you start carving off slices of grants and calling them gift fees, be sure you’ve established a formal Gift Acceptance Policy that details the types of gift that you will accept and the parameters under which acceptance will occur. Your gift fee should be clearly defined in a Gift Acceptance Policy, and then implemented with confidence and consistency. Budget and Spend Wisely & Transparently One of the primary misconceptions about unrestricted funding in the donor community is that nonprofits use it frivolously. And, I imagine this is true in some nonprofit organizations who may not have a great handle on their budgeting and spending processes. But, for the responsible nonprofit leader who wants to expand overall organizational support, there’s no better way to counteract misconceptions than by being transparent with the external community about how organizational funding is put to use. If your board is not already reviewing and approving an annual operating budget, start now. If you’re not already making financial information available to the public, either by posting your audits & tax returns on your website or by creating and distributing an annual report, make 2021 the year you start doing so. And, if you’re not sharing success stories about organizational improvements that have been made with unrestricted dollars, try it out. The moral of the story is this: YES, unrestricted dollars are the most elusive of all funding for a nonprofit to secure. YES, they are the hardest dollars to raise yet the most needed for overall organizational health and sustainability. YES, some donors and funders are adamantly opposed to anything but restricted support. All of these things are true. But, you know what else is true? You must put a focus on ensuring that unrestricted operational dollars are coming into your organization or simply put, your organization will not survive.
Read moreHave You Checked Your Conflict of Interest Policy Lately?
Friends….Can we please talk about conflicts of interest for a few minutes? This won’t take long. We’ve all seen stories in the news about some of the more egregious examples of conflicts of interest. Individuals caught enriching themselves at the expense of one or more organizations they’re involved with (self-dealing). Business leaders making sweet-heart contract deals with friends and family members (nepotism). People using information not available to the general public to profit personally (insider trading). The examples are everywhere, and it seems to happen all the time. It’s no surprise, then, that we can become desensitized to the very real damage that a conflict of interest can do…to an individual’s reputation, to a company’s bottom line, and to an organization’s ability to continue its mission in the community. But let’s not be complacent, friends. This is a serious issue for any business, but particularly for nonprofit organizations. Did you know the IRS can strip your nonprofit status for conflict of interest violations committed by board members? Yep. Sure can. The IRS defines a conflict of interest as follows: A conflict of interest occurs where individuals’ obligation to further the organization’s charitable purposes is at odds with their own financial interests. Pretty simple, right? Unfortunately, the reality is that despite this simple definition, conflicts of interest aren’t always easy to identify. That’s because business and personal interests and relationships are often complex and nuanced. In addition, nonprofit leaders rely on the honesty and ethics of board members to be up-front about disclosing real or potential conflicts before they cause problems. This usually happens, but sometimes it doesn’t. And when a conflict arises, seemingly out of nowhere, the primary tool that a nonprofit leader has to address it is the organization’s written conflict of interest policy. Yes, written policy. It is not enough to talk about conflicts of interest. Nonprofit organizations are required by federal law to have written conflict of interest policies that apply to their boards of directors. Best practice also dictates that these policies apply to staff as well. A written policy is the first line of defense in terms of preventive measures that can mitigate the damage that conflicts of interest can cause. In addition, ensuring that board and staff acknowledge their understanding of the policy, in writing, is equally important. What this typically looks like in practice is an annual conflict of interest disclosure form that gives board and staff members the opportunity to disclose, in writing, any real or potential conflicts of interest and acknowledge that they understand the organization’s policies related to the issue. The annual disclosure and acknowledgment process is an opportunity to remind everyone involved in your organization about the importance of ethics in nonprofit management. So friends, please resist the urge to gloss over the subject when it’s time to complete this annual process. Lead by example…if you as the organization’s leader act like this is an important issue, your board and staff are more likely to treat it as important as well. A related issue that I will write about another time is the utility of having a robust board recruitment process in which potential board members are vetted properly before being asked to join a board of directors. Proper vetting in advance can uncover potential conflicts before board service even begins and help prevent surprises down the road. We all know what conflicts of interest are. We all know how serious the consequences can be when they go undisclosed and unchecked. I’m just here to gently remind you: please don’t be complacent about the issue. Even the perception of a conflict can cause very real and lasting damage to your organization. Take care, friends!
Read moreOrganizational Culture – Good or Bad, You Choose.
I have been doing a lot of reading lately about organizational culture. The topic is certainly not new to me, but I’ve been fascinated by it for many years, dating back to my banking career and subsequent transition to the nonprofit sector. Like just about everyone I know, I have worked in companies with strong, healthy cultures as well as some with toxic, unhealthy ones. I have experienced work settings where management was mostly unavailable, staff was fearful, and everyone was suspicious of everyone else’s intentions. I have even survived organizations where leadership purposefully fostered cut-throat competitive cultures because they mistakenly assumed it was good for productivity. As I type this, it feels like I’ve experienced more unhealthy organizational cultures than healthy. Could this be true? Maybe. But more likely, it’s that our negative experiences tend to linger in the memory longer than the positive. Organizational culture is defined as the values, beliefs, practices, expectations, and methods of interacting that create the professional, social, and psychological environment of an organization. Company culture has been researched by many, and we have all seen examples in the news about what can happen when organizational culture goes wrong. I truly believe that nonprofit sector leaders understand the importance of organizational culture just as well as leaders in the for-profit world. Unfortunately, knowledge doesn’t always translate into deliberate actions…particularly in under-resourced nonprofits that are simply trying to survive and serve their client base each day. Whatever the reasons, organizational culture is one of those issues that we understand in theory but don’t always have the wherewithal to pay attention to in practice. Is organizational culture overlooked because culture is difficult to causally connect to performance metrics? Could it be because culture is not a topic that is easily pointed out in a policy manual? Perhaps it’s because this “culture” thing is really a confluence of behaviors that, taken individually, wouldn’t necessarily be identified as impacting the overall atmosphere of an organization. Despite its ambiguous nature, organizational culture is created, fostered, and passed on. Negative culture may be easier to identify because its symptoms are easy to see in the form of miserable faces, high turnover, and lack of transparent communication between leadership and staff. The other unfortunate reality about negative organizational cultures is that they’re difficult to change because they become entrenched in every aspect of the organization. So, what are some of the things a nonprofit leader can do to foster a healthy organizational culture? Here’s a few of my favorite suggestions: Model mission alignment. As the chief leader, a nonprofit executive director plays a huge role in establishing and nurturing organizational culture. It is this person’s job to ensure that everyone on the team, and everyone on the board of directors, understands the organization’s mission and aligns their day-to-day work, advocacy, and decision making with this mission. If the head is not modeling mission-aligned behavior, he/she can’t expect anyone else in the organization to. Democratize your decision-making process. While it is certainly true that the buck stops with the head of the organization, a nonprofit executive director should never make decisions in a vacuum. First, he/she must know when a decision needs board approval, which is typically in relation to major policy changes, major financial decisions outside of the normal budget process, etc. But in the arena of day-to-day decision making, an executive director has a huge opportunity to nurture a culture of transparency and trust among their team. Sure, the E.D. makes the final decisions, but by encouraging team members to ask questions and offer feedback, the head is modeling that they value their team’s experiences and that their perspectives actually matter. Communicate with everyone, all the time. A good nonprofit leader talks with their team regularly. They talk to their board members, even outside of scheduled board meetings. They are transparent about what is happening within the organization – good and bad – and how what’s happening will impact the work. A leader who knows how to lay their cards on the table earns peoples’ respect and trust far more quickly than a leader who keeps their cards close to the chest. Also, communication with external constituents is just as important to building an organization’s brand and culture as its programs or events. Transparency breeds trust. Trust breeds investment. Investment breeds success. And on and on. Overall, executive directors must encourage and model transparency both internally, among staff and between staff and leadership, and externally, between the organization and its clients, donors and other constituents. Foster an atmosphere of support & respect. This sounds obvious, but if you’ve ever experienced a workplace where this is missing, you know it isn’t obvious at all: a leader who is attentive to nurturing a positive culture treats their team members like human beings. They assume that their staff members have goals that may eventually take them from your organization – and they do what they can to support them. They remember that their team’s personal identities are not defined by their jobs. They set professional boundaries for their own work/life balance and encourage their team members to do the same. And, they remember that their board members are volunteers and respect the time and commitment they give to the organization. The moral of this story is that organizational culture exists whether it is deliberately created or not. My advice – be deliberate about creating a positive, healthy, supportive culture in your nonprofit. Your staff, board, clients, donors and overall productivity will be better for it.
Read moreThis is (supposed to be) Serious Business
I can’t tell you how many times I’ve been subjected to this type of nonprofit board recruitment conversation: “Hey, L. I’m on the board of XYZ Organization and I’d really love it if you’d consider joining. There’s no real work to do, just show up at a few meetings. No, really, you don’t have to do anything…oh, but their events are really fun! Shall I tell them you’re interested?” Umm….how about NO. Sounds like a total waste of time to me. And if this is how your organization approaches board member recruitment, please step into my office because we need to talk. Don’t Sell Your Organization Short….The Board is There to Work A nonprofit board of directors is the most important group of volunteers an organization has. The board of directors is the governing body. The board is ethically, fiscally, and legally responsible for everything the organization does. Equally importantly, this group plays an integral role in creating and nurturing organizational culture – and this can be either positive or negative. While board members are not typically involved in running the day-to-day operations, they are responsible for setting policy, hiring & managing paid executive staff, and overseeing the organization’s finances. Board members should also be the most vocal advocates for the nonprofit they represent, working to bring increased visibility to the organization’s programs and services and expanded funding opportunities to sustain the work. How is it possible that all of this responsibility can be condensed into “just showing up at a few meetings”?? How can these important duties be dismissed as “not having to do anything”?? I don’t know…but it happens all the time. A functional and cohesive board can be the lifeblood of a successful organization. But a board that is not fully aligned and committed to the very real work that comes with running a nonprofit business can cause significant issues for the organization’s health. These issues can include negative community reputations, reduced funding opportunities, and even a loss of the nonprofit status in the most egregious of cases. So, what are some best practices when it comes to building a strong board of directors? Here’s a few of my tried and true strategies: Always remember, a nonprofit is a business. Every nonprofit is born out of a passion to do good. But, if everyone is busy building and expanding services and programs, who is keeping an eye on the business? A nonprofit board should be recruited based, at least in part, on the business expertise that is required to run a successful nonprofit organization. Sure, we all want our board members to participate in our events and help implement our programs, but their first and most important duty is ensuring a healthy business. Let your bylaws be your guide. Every nonprofit should be governed according to its bylaws, and this includes the recruitment and service of its board. When recruiting board members, it is important to have a clear understanding of what your bylaws say in terms of the board’s size and composition, board members’ terms of service, and any other rules governing how the board manages itself and the organization. Following your bylaws is not only a good business practice, it can also help lead the organization through tricky governance issues that arise from time to time. This is not a place for all your friends. Too many nonprofit organizations rely on the personal networks of existing board members to recruit new board members. What tends to happen in these cases is that the board becomes homogeneous, both in terms of representation and culture, and this is never good for the longevity of an organization. While it is perfectly fine to recruit from board members’ personal networks, this should not be the primary mode of identifying the people who will govern the organization. More important is identifying the right people, which should be done in accordance with the mission, goals, and business needs of the organization. Always remember your mission. In addition to recruiting according to the business needs of the organization, it is also imperative to have board members who wholeheartedly support and believe in the mission. It is not enough to identify people with great connections or deep pockets, it is much more important to recruit board members who believe in what the organization is working to accomplish. It is only through this mission connectivity that you will get the most out of your board members in terms of commitment, participation and advocacy. Clear expectations should lead the way. If you do not have a board member job description, get one in a hurry. Board members should come to your organization with a clear understanding of their role, duties, and what is expected of them. Does your organization have a board member giving requirement? Do you want board members to perform volunteer work in addition to attending board meetings? Be clear and up front with expectations so your board members join the organization with a full picture of what they will be responsible for. The worst thing you can do as a nonprofit leader is diminish the important role of your board of directors. And the next worst thing is having existing board members who fail to understand or embrace their fiduciary and legal responsibilities to the organization. Remember: This is (supposed to be) serious business. Treat it accordingly.
Read moreYou Think You’re Making a Difference…But Are You?
Nonprofit leaders and volunteers are passionate, busy people. There is so much to be done and in many understaffed and under-resourced organizations, not enough time or money with which to do it. Clients need to be seen, grants need to be written, board members need to be informed, staff needs to be managed…and the list goes on. But while everyone is busy with the day-to-day work of running the organization and its programs, who is paying attention to how these programs are being managed & implemented? Who is looking at the impact of these programs on the intended client base or the broader community? How does the nonprofit leader know if the services being provided are reaching the intended clientele? How does the board of directors know if the organization’s outputs are translating into the desired outcomes in the strategic plan? You probably know where this conversation is heading. So, before you give me the side-eye and tell me there’s no time left in your day to think about nonprofit program evaluation, just hear me out. I swear, it’s one of the best things you can do for your organization. Everyone in leadership and management should know and understand the importance of conducting regular nonprofit program evaluations. These are periodic reviews that nonprofits use to determine the efficacy of specific programs, the efficiency of fiscal strategies, and/or to answer critical questions about the organization and its work. Nonprofit evaluations are key to understanding how well programs are being run and, equally importantly, what impact an organization’s programs have in relation to their goals and objectives. A lot can be learned from regular program evaluations, and this is why I recommend them for looking at everything from individual fundraising efforts to year-end outcomes. And while there is no single model for conducting a nonprofit program evaluation, there are two main types to keep in mind: Process-Based Evaluations – This type of evaluation is used to measure and analyze program implementation. Process evaluations allow nonprofit leaders to understand and assess program outputs, costs, and efficiency of service delivery. These evaluations look at what and how much is being done, what the program/service costs to deliver, how many clients are being served, and what problems have been encountered during service delivery. Process evaluations allow nonprofit leaders to understand the how and how much of their work so they can make improvements in process and efficiency as needed. Outcomes-Based Evaluations – This type of evaluation is used to measure and analyze program results and effectiveness. Outcome evaluations allow nonprofit leaders to understand the impact of their services or programs on their intended client base or the broader community. If done consistently over time, outcomes-based evaluations can be extremely valuable in the evolution and growth of a nonprofit organization, particularly as it relates to attracting and retaining larger sources of funding. While process evaluations are valuable tools for internal use – particularly for helping organizations become more efficient and effective in their program implementation – outcome evaluations enable organizations to understand their impact and demonstrate their value to the broader community. Regardless of your organization’s size or age, every nonprofit leader should conduct process and outcomes evaluations at least annually as an exercise in good nonprofit management. To do this effectively, evaluation should be built into your strategic and annual plans from the very beginning. Creating your organizational plans with evaluation in mind enables you to identify what data you will need to track to successfully evaluate when the time comes. For example, if your strategic plan calls for expansion of your services into a new geographic market, an evaluation-proactive approach might dictate the collection of zip code data in your client intake process so that the expansion’s success can be analyzed. Nonprofit program evaluation may seem like a daunting task, especially for under-resourced and understaffed nonprofits already operating on shoe-string budgets. But at the end of the day, program evaluation is key to ensuring your organization is functioning efficiently, effectively, and in alignment with its mission, goals, and objectives. Treating program evaluation as part of your overall program creation and implementation cycle is one of the best ways to set your organization up for long-term success, attract more of your target population, and make your nonprofit more attractive to donors and grant funders.
Read moreOn Gardens & Donors: Great Relationships Take Work!
I spent last weekend outside in my back yard, toiling in my garden and getting it ready for spring and summer planting. The front of my home is completely xeriscaped and filled with beautiful yet intimidating agave, cacti and succulents. From this vantage point you’d never know that there’s a small but productive vegetable and herb garden out back that helps nourish my family year-round. Nothing brings me more joy than the seasonal cycle of cultivating and harvesting the fruits of my own labor. Unlike many home gardeners I know, I plant from seed instead of transplants because I want to be part of every stage of the growing process. I love the way the soil feels in my hands which is why I stubbornly refuse to wear gloves despite owning more pair than I can count. I prefer hand watering because it allows me to conserve by giving the thirstier plants what they need without overwatering the rest. It also gives me time to think, which is the other part of gardening that brings me so much pleasure. I consider my garden an important part of my personal ecosystem, one that I must work to nurture in order to be rewarded with the food that graces my table. Just because I put seeds in the ground and water them doesn’t mean that the vegetables will magically appear. If I haven’t done my part to prepare the soil and make sure I’m planting my seeds at the appropriate time of year, my results will be spotty at best. If I fail to be attentive to pests and other issues that can arise during the growing process, I could end up with an aphid or beetle infestation that could ruin the whole plot. But when I amend my soil between seasons, rotate crops, and stay attentive to pests, the results amaze me each and every year. When I think of all the work that goes into keeping my garden healthy and productive, it’s an easy comparison to the fundraising and donor relations work I’ve done for the past twenty years. Those of us who focus on the philanthropy part of nonprofit businesses understand that more than anything, we are in the relationship business. And, just like the relationship I have with my garden, donor relationships are only as good as the time and effort we put into them. If we don’t do the work to build relationships of care, trust and accountability with our donors, we cannot expect them to reward our organizations with their generosity. If we do a poor job nurturing and managing these relationships, the fundamental missions of our organizations and the client bases we serve will suffer. But when we do our jobs well, the results and impacts are fantastic. Cultivating strong donor relationships takes creativity and flexibility. There is no exact formula for doing it right, but a general rule of thumb is that good donor cultivation arises naturally from good nonprofit management. Here are a few fundamentals to illustrate what I mean: Engagement. Engaging donors can take a variety of forms, including but not limited to regular communication, special events, face-to-face meetings, etc. Telling your organization’s story is important for its overall brand recognition and visibility, so regular and consistent communication to your surrounding community is just one component of good nonprofit management. This outward-facing communication can take the form of digital newsletters, social media outreach, email campaigns and even special events. Broad community engagement, along with strategic communication and outreach focused on current and potential donors not only builds overall awareness but also helps establish reputation and trust with existing and potential donors. And as I’ve written before, trust is key to creating lasting donor relationships. So, find creative ways to communicate and engage your donors. I know you’re busy with other things, but trust me…this is worth your time. Transparency. Another important way to build awareness and trust in your organization is through openness and transparency. Most nonprofit leaders already understand that the IRS mandates at least some level of fiscal transparency to the public. What often gets neglected, however, is the personal touch that nonprofits can offer donors through deeper transparency and focused reporting. Donors give to nonprofits because they believe in the mission and want to make an impact. But if we don’t show and tell our donors how their gifts were used and the impact they have made with their philanthropy, we can’t expect them to continue giving. Transparency is really an offshoot of engagement, as it’s a deeper method for nonprofits to share their stories. Some nonprofits choose to take a formal approach to transparency through the creation of glossy annual reports or impact reports. Other nonprofit leaders take a more informal approach by carving time out each month to call donors and share information with them. I advocate for a solid hybrid of these two approaches, because I’ve found that most donors appreciate both formal and informal communications about their impact. Flexibility. Always remember that every donor is different and should be treated as such. Building strong relationships is impossible with a cookie-cutter approach. Not all donors are interested in attending your events. Not every donor wants to read your monthly newsletter. Some donors only want to see your annual audited financial statements. Other donors only want to hear about how their funding helped the organization. I have closed some of the largest gifts of my career by taking the time to truly get to know the donors I work with. By paying attention and getting to know my constituents as human beings, I can be agile in my approach and develop more impactful cultivation plans. And, impactful cultivation leads to impactful gifts. The moral of the story…. Don’t get me wrong. Donors are not plants. But just like the relationship I’ve cultivated over the years with my veggie garden, good donor relationships can be so fulfilling and rewarding, year after year. And, like the vegetables that I so
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