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Board of Directors

The Importance of Taking Time Off

hammockThere was a very disturbing report last week. An NPR poll found that half of Americans who work 50-plus hours a week don’t take all or most of the vacation they’ve earned. And among those who do take vacations, 30% say they do “a significant amount” of work while on vacation.

Ugh!

I cannot stress enough how important it is to the critical social change work we are all doing to take a break every once in awhile. And I mean really take a break and reconnect with those things that make us human, not machine. I don’t care what your job is and how critically important the work you do is, you will do it more effectively if you are a whole person. And you become and stay a whole person when you take time away from that job.

And because I believe in practicing what I preach, I’m about to take my own advice and disconnect from the world of social change (and social media) for the next few weeks. Instead I will be relaxing, playing with my kids, reading, hiking, and just being.

But in case you’ve already taken your time off (good for you!) and you want some things to read while I’m out, here are a few things to explore:

I’ll be back to writing the blog in mid-August. In the meantime, I hope you all find some space to breathe, to think, and to reconnect with what you are meant to do. Because believe me, we need you back in the Fall inspired and ready for the hard work ahead.

Photo Credit: Five Furlongs

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Why Nonprofit Boards and Fundraising Must Mix

mixing board and fundraisingI recently received a note from a blog reader who disagreed with my argument that a nonprofit’s board of directors should be charged with raising 10% of their nonprofit’s budget. Not only did this reader disagree with the idea of setting a 10% board fundraising goal, but he disagreed with linking board governance and fundraising at all.

As he wrote:

“I recently resigned from a board of a nonprofit, after a 5-year stint. I was honored to be asked to join the board, until at my first meeting pledge cards were passed around, and I realized it was my money, not my leadership skills, that qualified me for board membership. I have given on numerous occasions, but I refused to pay a “bill” I received for my share of employee Christmas bonuses last year. There have been many instances where the board was expected to give money. Only a tiny fraction of the budget would be raised through these measures, so it seemed like it was a membership test. Governance should be totally separate from fundraising.”

While I appreciate this reader’s frustration as a board member, I would argue that his unfortunate experience had more to do with poor management of a board, and less to do with fundraising being part of a board member’s charge.

I don’t believe board members should ever be “billed” for a contribution. Rather, the board chair and the executive director should sit down with each board member individually on an annual basis and have an open conversation about that board member’s role on the board. This should be a much larger conversation than just what she wants her annual financial commitment to be, but that still must be part of the conversation. So while you absolutely should discuss why the board member has chosen to serve on your board and what she would like her role to be, you also can (and should) discuss how she wants to contribute to the financial model of the organization.

And if you define a board member’s “contribution” much more broadly than just a check she writes, the sum total of all of the contributions each board member makes can be much more significant than “a tiny fraction of the budget.” Every single board member, if truly right for the post, has many ways to contribute to the financial model of a nonprofit (here is just a beginning list of ways). If you ask board members to think strategically about how they can contribute, and if they are well versed in the financial model of the organization they serve, it should be fairly easy to get them involved in a significant way.

And getting each board member engaged and involved in the organization should be the aim. While I agree that the idea of a “membership test” is certainly unappealing, there should be a bar to being a member of the board of a nonprofit organization. If some members are allowed to be members in name only, but not required to have any skin in the game, then what compels any member to invest their time and resources in a significant way? If there is no bar that a board member must clear to be a board member, then what separates a board member from just an interested member of the public?

A board of directors must be a nonprofit’s staunchest supporters, most vocal advocates, and most committed allies. If a nonprofit cannot depend on its board to work tirelessly, not only to ensure achievement of the mission, but also to ensure financial sustainability, how can a nonprofit possibly expect those outside the organization to care? So, yes, being a member of a board must come with some level of commitment, both of time and of resources.

Because at the end of the day, there is no mission without money. By allowing any individual board member, let alone your entire board, to make programmatic and organizational decisions without fully understanding and contributing to the financial model of the organization you are creating an enormous disconnect between mission and money. A person cannot hope to understand something unless they have actually worked within it. So each board member must somehow contribute to the financial model of the nonprofit on which they serve.

Just because nonprofit leaders sometimes do a poor job of engaging their board in the financial model does not mean that we should separate the governance of a nonprofit from its financial model. All board members must understand, embrace, and actively work toward the financial sustainability of the nonprofit they govern.

Photo Credit: Susana Fernandez

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10 Great Social Innovation Reads: May 2016

social change

May offered some interesting insights into the world of social change. From a plea by nonprofit infrastructure groups for more funding, to some criticisms of philanthropy’s unwillingness to invest in rural economies or provide a realistic runway to nonprofits, to digital’s impact on journalism, to the evolving sharing economy, to a call for more nonprofit board resignations, to a way to break the nonprofit starvation cycle, there was a lot to read.

Below are my picks of the 10 best reads in the world of social change in May. But you can always follow me on Twitter (@nedgington) for a longer list.

And if you are interested in past months’ 10 Great Reads lists, go here.

  1. Perhaps the biggest news of the month was the letter written by 22 groups, which provide support to the entire sector (like the National Council of Nonprofits, the Nonprofit Finance Fund, and GuideStar), asking foundations to provide more funding for the nonprofit ecosystem. GuideStar CEO Jacob Harold (here) and National Council of Nonprofits CEO Tim Delaney (here and here) explain why this issue is so important.  But Pablo Eisenberg disagrees.

  2. National Committee for Responsive Philanthropy Executive Director Aaron Dorfman takes philanthropy to task for not investing enough in rural communities, where change is needed most. As he puts it: “The philanthropic sector continues to neglect rural communities. A changing national economy, entrenched racial inequity and foundations’ reliance on a strict interpretation of strategic philanthropy has meant philanthropic resources for rural communities are few and far between, just when the opportunities for change are most urgent. This has to change if we want to see progress on the issues we all care about.”

  3. Piling on to the criticism of philanthropy, Laurie Michaels and Maya Winkelstein from Open Road Alliance, encourage their fellow philanthropists to help nonprofits deal with risk and disruption. As they put it: “Most grant budgets are designed with zero cushion even when the nonprofit is working in tough conditions that can turn the simplest obstacle into an unmanageable issue…any unexpected but inevitable change or deviation in the budget is potentially catastrophic. The nonprofit’s inability to fluidly adapt the budget to manage these roadblocks, however minor, can jeopardize even the largest of undertakings…Risks alone are threatening, but when the concept of risk goes unacknowledged, undiscussed, and unaddressed, those risks are more likely to become realities. All this adds up to lower impact, turning manageable events into liabilities.”

  4. Maybe female philanthropists can turn the tide. The Lilly Family School of Philanthropy released some fascinating new research about how women are changing philanthropy. And Megan O’Neil, writing in The Chronicle of Philanthropy, explains how nonprofits must adapt in order to tap into this growing philanthropic force.

  5. Journalism is changing rapidly, due in part to the growth of digital. Research shows that different social media platforms connect people to news in different ways, and long-form journalism is seeing a resurgence thanks to mobile.

  6. And it’s not just journalism that digital is changing. The Nonprofit Tech for Good blog offers 16 Must-Know Stats About Online Fundraising and Social Media and 5 Ways the Internet of Things Will Transform Fundraising.

  7. The growth of the “sharing economy”, where consumers rent or borrow goods and services rather than buy them, has huge implications for the social change sector. Pew Research outlines 8 key findings about how Americans relate to the sharing economy and interviews NYU professor Arun Sundararajan about how the sharing economy is evolving.

  8. Nonprofit Law blogger Gene Takagi pulls no punches in offering 12 Reasons Why You Should Gracefully Resign from a Nonprofit Board. Yes, yes, yes, to more accountability, honest conversations, and clear expectations on nonprofit boards.

  9. Writing in the Stanford Social Innovation Review,  Jeri Eckhart-Queenan, Michael Etzel, and Sridhar Prasad discuss the findings of a new Bridgespan Group study that analyzed the indirect costs of 20 different nonprofit organizations. What they found, not surprisingly, is that indirect rates vary greatly depending on the business model and industry of a given organization (just as it does in the for-profit sector).  The authors argue that if more nonprofits understand and report their true costs, nonprofits could break the starvation cycle: “It’s clear that philanthropy’s prevailing 15 percent indirect cost reimbursement policy does not take into account the wide variation in costs from segment to segment. Doing so would have far-reaching effects on philanthropy and grantees. If nonprofits committed to understanding their true cost of operations and funders shifted to paying grantees what it takes to get the job done, the starvation cycle would end.”

  10. A nonprofit dashboard is a good way to monitor and report on a nonprofit’s effectiveness and sustainability over time. Hilda Polanco, CEO of FMA, explains how to create a great one.

Photo Credit: Omarfaruquepro

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Is Your Frustrating Board a Symptom of a Larger Problem?

nonprofit board frustrationOne of the biggest complaints I hear from nonprofit leaders is that their board is not working well enough for them — most often around fundraising. From board members who are largely in name only, to others who refuse to fundraise, to those who meddle or micromanage, to those who don’t understand the organization or its programs, there can be a large list of grievances that nonprofit leaders have about their board. So nonprofit leaders often look for a magic bullet to get their board in gear.

Just last week a nonprofit leader approached me seeking help getting her board engaged. She thought that if she hired a consultant to rewrite their board by-laws and rework the board committee structure, all would be well.

But it just isn’t that simple.

An ineffective board is often just a symptom of a larger problem at your nonprofit. And while nonprofit boards can be incredibly frustrating, it is often not their fault that they aren’t working harder for you.

If you are frustrated with your board, ask these questions to uncover the larger issues at play:

Do We Have a Compelling Case?
You simply cannot get people excited to help further your nonprofit’s cause if they don’t fully understand and embrace that cause. Have you had a conversation with your board about why your nonprofit does the work it does? Have you articulated together your nonprofit’s Theory of Change? Have you involved your board in creating your nonprofit’s Case for Investment? It surprises me how often I see nonprofit leaders leaving these critical and investing conversations at the staff level. The number one way to get your board excited about your work is to get them involved in articulating to others why that work is so critical.

Do We Have a Long-Term Strategy?
But it’s not enough to articulate what you hope to accomplish as a nonprofit, you also need to create a strategy for bringing those goals to fruition. You must involve your full board in your nonprofit’s overall strategy. They must buy in at the ground level to the goals of your strategic plan. And then the board must be in charge, as is their true leadership role, in  monitoring in their ongoing board meetings whether those goals are actually being realized. Give your board the opportunity to create and then drive the overall organizational strategy, and then see how they start to come alive.

Do We Have Clear Board Responsibilities?
And they will truly come to life when they understand how each of them individually can and must contribute to bringing that larger strategy to fruition. You simply cannot expect a board to engage when they don’t understand how and where they can be helpful. Give the overall board specific goals and responsibilities and then talk one-on-one with each individual board member to determine together where their unique skills and experience can be brought to bear on the larger strategy. With a clear roadmap for how they can help, you will see your board start to pick up the pace.  

Do We Have the Wrong Board Members?
However, you may find that some of your board members are simply taking up space. It may be that some are disengaged because they simply don’t have the skills, experience and networks necessary to achieve your goals. That’s why you have to do the analysis and look at every single board member against the skills, experience and networks you need to deliver on your strategic plan. Please, please, please don’t fall for the temptation of filling your board with warm bodies. Make sure that you are recruiting the type of board members that you truly need to deliver on your organization’s strategy.

Are We Afraid of Asking For What We Really Need?
Nonprofit leaders sometimes fear their board members as much as they fear their donors. Rather than insisting their board members step up to the plate and effectively contribute their time, energy, and resources, nonprofit leaders may be overly grateful for ineffective board members. But when you operate under that dysfunctional power imbalance, you are setting the bar incredibly low for your board. And when a person is confronted with a low bar, there is nothing compelling him to get engaged and get working. So be very clear with your board members about what you want from them, and then be equally clear when they aren’t delivering. There is a nice way to tell a board member that you need more from her. And if she isn’t willing, then it is probably best that she walk away and leave room for more effective board members.

If you are fed up with your board, use frustration as an opportunity to dig deeper to figure out what is really causing their uselessness. And if you need some help to get there, check out the nonprofit leader coaching I provide.

Photo Credit: Peter Alfred Hess

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Where Does Your Nonprofit Fit In the Market?

nonprofit puzzleAs much as we might like to deny it, nonprofits exist in a market economy, which means that nonprofits, like everything else, must compete for customers and resources. Therefore it is critical that you understand where your nonprofit fits in the market.

While a business has one customer, a nonprofit has at least two distinct customer groups:

  1. Those who benefit from a nonprofit’s work (clients), and

  2. Those who fund that work (donors, government contractors, etc).

So it is absolutely critical that nonprofit leaders understand what unique value their work brings to these customers. This can be done through a Marketplace Map, which is one of the first exercises (along with a Theory of Change) that I help nonprofit leaders create during a strategic planning process.

A nonprofit organization is best positioned to create social change in a sustainable way when their core competencies (what the organization does better than anyone else) intersects with a community need (or set of social problems) apart from their competitors or collaborators, like this:

Marketplace Map

 

But don’t get me wrong. I am not saying that a nonprofit shouldn’t collaborate.

On the contrary, nonprofit leaders must forge strategic alliances that help move the social change they envision forward. However, when they create those alliances, they must be crystal clear about what their organization brings to the table, versus what a potential ally brings to the table. Thus, a marketplace mapping exercise is absolutely critical to charting a way forward.

In order to create their marketplace map, a nonprofit’s board and staff must answer these three key questions:

  1. Core Competencies: What superior assets (expertise, relationships, etc.) do we possess as an organization that are not easily replicable?

  2. Community Needs: What community needs/social problems are we attempting to address?

  3. Competitors/Collaborators: What other entities are working on some/all of those same problems?

The social change sector has become increasingly competitive in recent years. Now more than ever, nonprofits need to understand this external marketplace of competitors/collaborators against their own core competencies in order to understand the unique value that their nonprofit can contribute.

From this marketplace mapping exercise, some key strategic questions will emerge for the nonprofit, such as:

  • Where do our core competencies and activities end, and where do others’ begin?
  • Is our nonprofit better positioned than other entities to conduct all of the activities (from our Theory of Change) that we currently do? Should some activities be left to those who do it better?
  • Are there core competencies that we must develop in order to better address the community needs we’ve identified?
  • Are there collaborators/competitors that we should be more strategic about aligning with?

Creating a Marketplace Map, much like creating a Theory of Change, is an incredibly useful exercise that gets your board and staff thinking in bigger, more strategic ways about your work. And those more strategic conversations can help lead to a more effective and sustainable path forward.

If you want to learn more about how I work with clients to develop their strategic plan, download the Strategic Plan benefit sheet.

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A Summer To Do List for Nonprofit Leaders

nonprofit summerMemorial Day is almost here, and in my mind that means so is the beginning of summer. While work surely carries on over the summer months, for many of us there tends to be more space to reflect, recharge, and reconnect with your core.

But you have to make time for it.

Sometimes nonprofit leaders will tell me that they love the slower pace of summer because it means they can catch up on their to do list, move paperwork off their desk, make progress on their filing, get more organized.

Ugh!

Let me tell you right now that your to do list will never be complete, so instead, make better use of the space summer provides by taking a big step back and getting inspired for the work ahead.

Here are some tasks I suggest you put at the top of your to do list this summer:

Get Quiet
Before you can do anything else, you need to step out of the rat race for a bit and listen to the silence. There you can reconnect with your core, ponder some bigger questions, figure out what you are meant to do. Maybe you need to take a trip away from your normal routine and the many demands on your time. Maybe you need to find a space to just be. Maybe you need to find activities that are outside of your job, because remember that you are so much more than the leader of a nonprofit organization. However and wherever you do it, you have to make some time to journey inside.

Find Inspiration Again
I know as a nonprofit leader you are (or at least once were) inspired by the work you do. Passion and commitment to mission are often what define a social change leader. But that source of inspiration is not endless. And the day-to-day drudgery of trying to move mountains can wear you down and make that light grow dim. When that happens you have to seek inspiration elsewhere. The world we live in is endlessly inspiring, so when you are feeling that your vision is impossibly narrow, get outside your walls. We must give ourselves permission to reconnect with what makes us human, not machine. But if you simply cannot figure out what will inspire you, go back to the first item and get quiet enough, long enough to figure it out.

Ask Some Big Questions
Once you have found quiet and inspiration you will then have the capacity to figure out what’s next. Nonprofit leaders are so busy with the day-to-day that they often find themselves disconnected from the big picture. Why are you doing this work? What are your ultimate goals? Who is your target audience? Take advantage of the mental space summer provides to ask yourself and your board some of the big questions that can help you recommit to the work and more easily attract the other people and resources necessary for the next chapter.

Figure Out What’s In Your Way
If you are like most nonprofit leaders, you are so accustomed to scraping by without the necessary tools, staff, systems to do your job that you rarely take a big step back and ask, “What do we really need to accomplish our goals?” Take some time to figure out the things that drive you and your staff crazy. What are the hurdles standing in your way of doing more? An ineffective board? A lack of strategy? Not enough money? The wrong technology? Not enough staff? Create a list of what you really need to do the work, put it in front of your board and ask them to help put together a capacity building plan.

Forgive Yourself
Man, are social change leaders hard on themselves. Apparently it’s not enough to work on saving the world, but you have to continually berate yourself for not doing it quickly enough, or well enough. So get over it. You are doing the best you can with what you have. Give yourself a break and you will find that without a bully constantly breathing down your neck you can accomplish much more. Take that knowledge with you into the fall, and you may just be transformed.

This summer, step outside the routine and commit to a real break that allows you the physical, mental and spiritual space that you as a social change leader so desperately need. Happy Summer!

Photo Credit: Unsplash 

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Blogging the Grantmakers for Effective Organizations Conference

GEO conferenceI’m really excited to announce that I will be doing something a little different on the blog next week. I am attending the Grantmakers for Effective Organizations (GEO) conference in Minneapolis May 2nd – 4th, and GEO has asked me to curate a set of bloggers to report on the conference.

I have rounded up a rockstar group of bloggers who will be sharing their insights from the conference with you here on the blog. And the blog series will be reposted to the Minnesota Council on Foundations blog, which is a co-host of the conference.

GEO is made up of 500 member grantmakers who are working to reshape the way philanthropy operates and promote strategies and practices that contribute to grantee success.

The GEO conference is held every other year and brings together philanthropic leaders from across the country who all share a common vision for advancing smarter grantmaking practices that enable nonprofits to grow stronger and more effective.

Some of the sessions in this year’s conference that I am particularly excited about include: “Can Foundations Help Grantees Build Fundraising Capacity?,” “Real Costs, Real Outcomes. What Funders Need to Know,” and “Supporting Leadership Development in Social Justice Organizations.” In addition, there will be some really interesting plenary sessions about things like culture in philanthropy and philanthropy’s role in overcoming inequity.

It promises to be a fascinating conference.

So, starting next Tuesday, May 3rd you’ll be hearing from this great group of guest bloggers:

 

phil buchananPhil Buchanan, President of The Center for Effective Philanthropy 
Phil is a passionate advocate for the importance of philanthropy and the nonprofit sector and deeply committed to the cause of helping foundations to maximize their impact. Hired in 2001 as CEP’s first chief executive, Phil has led the growth of CEP into the leading provider of data and insight on foundation effectiveness. CEP has been widely credited with bringing the voice of grantees and other stakeholders into the foundation boardroom and with contributing to an increased emphasis on clear goals, coherent strategies, disciplined implementation, and relevant performance indicators as the necessary ingredients to maximize foundation effectiveness and impact. Phil is no stranger to the Social Velocity blog — I interviewed him here, and he guest blogged last summer here.

 

trista harrisTrista Harris, President of The Minnesota Council on Foundations
In her role at MCF, Trista helps award more than $1 billion annually. Prior to joining MCF in August 2013, she was executive director of the Headwaters Foundation for Justice in Minneapolis, and she previously served as program officer at Minnesota Philanthropy Partners. Trista earned her master’s of public policy degree from the Humphrey Institute of Public Affairs, University of Minnesota, and her bachelor of arts from Howard University, Washington, D.C. She is a passionate national advocate for the social sector using the tools of futurism to solve our communities’ most pressing challenges and is a member of the trends in family philanthropy task force for the National Committee for Family Philanthropy.

 

mae hongMae Hong, Vice President of Rockefeller Philanthropy Advisors
Mae is responsible for building RPA’s presence in serving individual donors, foundations and corporations throughout the Midwest. Bringing 18 years of nonprofit and philanthropy experience to RPA, she previously served as Program Director at the Field Foundation of Illinois. Mae actively participates in local and national philanthropic associations and networks, serving in leadership roles on committees, engaging in public speaking opportunities, and facilitating planning and execution of philanthropic initiatives. She currently serves on the boards of GEO, the Illinois Humanities Council and the Daystar Center. She is a past chair of the board of Chicago Foundation for Women.

 

And once the conference is over, I will plan to do a wrap-up blog post on my thoughts and insights from the conference.

If you plan to be at the conference, please let me know, I’d love to see you there! And if you can’t make the conference but want to follow the content from afar, follow the Twitter feed at #2016GEO.

Photo Credits: GEO, CEP, MCF, and RPA

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Do You Know Your Nonprofit’s Target?

targetWhen I work with nonprofit leaders to create a strategic plan, one of the first things we do together is create a Theory of Change. A Theory of Change is an articulation of why your nonprofit exists — what you ultimately hope to accomplish. The Theory of Change is the culmination of answers to a set of 5 key questions, the first of which is, “Who is Your Target Population?”

Your Target Population is the individuals or groups that your nonprofit is seeking to benefit or influence. So if you are a social services nonprofit, your target population is probably your clients. If you are an advocacy group, your target population is probably lawmakers. But often a nonprofit has multiple target populations. For example, a school that works directly with both children and their parents would have both groups as separate target populations.

When a nonprofit exists just to do good work, its leaders are less clear and less disciplined about exactly who they are seeking to benefit or influence. But it is absolutely essential that your nonprofit get crystal clear about who your target population is, in order to better create change for those targets, more effectively encourage funders to invest in what you are doing, put your limited resources to their highest and best use, and, most importantly, to really understand how best to create change with your target.

But figuring out your target population is not easy.

First, let’s start with who is not your target population:

Not Your Funders
Your target population is not individuals or groups who fund your work. While funders are absolutely critical to your success, they are not core to your mission-related work. So while you would love to influence them to give you more money, their doing that will not by itself create social change. They are not your target population, rather they are a means to an end.

Not The Targets of Your Competitors or Collaborators
Your target population is also not individuals or groups that are being better benefitted or influenced by other organizations or entities. This is where your Marketplace Map comes in (another key part of a strategic planning process). As a nonprofit you will be most successful when your 1) core competencies (what you do better than anyone else) uniquely position you to address 2) a community need, apart from your 3) competitors or collaborators. So once you figure out who your competitors and collaborators are, you should avoid target populations that are being more effectively served by those other entities.

Not Those Who You Cannot Change
Your target population is also not individuals or groups who you really want to help, but are simply not well-positioned to do so. This is the case with nonprofit leaders who are so big-hearted that they continue to add new groups to serve until they realize that their services and the people they serve range much too far and wide. This approach often spreads a nonprofit too thin and ends up providing diminishing returns for the organization and their clients. While it often goes against a nonprofit leader’s ethos, sometimes you have to turn some people away in order to better serve those who you can serve really well.

So who is your target population?

Your target population then are those people who you are uniquely positioned to benefit or influence and in doing so you will move closer to achieving your nonprofit’s long-term vision for change. When you get clearer about who you are best positioned to benefit or influence, you will be better able to direct your precious resources (staff, board, funders, volunteers) toward achieving that ultimate goal.

In other words, when you are clearer about who you want to change, you will become better at actually creating that change.

If you want to learn more about a Theory of Change, download the Design a Theory of Change Guide, or if you want to learn more about the strategic planning process I take clients through, download the Strategic Planning Benefit Sheet.

Photo Credit: vizzzual.com

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