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Board of Directors

Why Nonprofits Must Stop Being So Grateful

gratitudeThe other day I was talking to a nonprofit executive director who was delighted because he finally convinced a reluctant board member to become board chair. Over the past year, this board member had been delinquent in his meeting attendance and fundraising requirements. But since the executive director had no other viable candidates for the chairmanship, he was incredibly grateful that this board member finally relented and agreed to become chair.

What kind of crazy is this?

Gratitude is being thankful when someone performs a helpful act. But in the nonprofit sector there is such a pervasive power imbalance that misplaced gratitude, or gratitude for acts that are actually NOT helpful, often gets in the way of real work.

If a nonprofit leader acts grateful when she should actually voice frustration or disappointment, she is cutting off authentic conversations that could result in more effective partnerships.

Nonprofit leaders could stand to be a little less grateful for:

Board Members Who Aren’t Thrilled to Serve
If a board member doesn’t want to be there, and they are making that blatantly obvious (by not showing up to board meetings, not meeting their give/get requirement, or derailing board meetings with self-serving tangents) then take them at their word. Stop thanking them for serving and instead have a conversation about their poor performance. Ask them to change or resign. Don’t be grateful that you have 15 warm bodies listed on your letterhead. Each ineffective board member takes up space that could be filled by a committed and productive member. So take a hard look at the actual performance of each board member and build a board for which you can actually be grateful.

Donors Who Don’t Fund Real Costs 
There is (I hope) a growing recognition in the sector that you cannot have high-quality, results-driven solutions without the appropriate staff, technology, systems and infrastructure behind them. Not every donor is there yet – by a long shot – but when a donor wants to fund the programs they love, you need to educate them about all of the costs involved in those programs. And if they want the “program” without the “overhead,” explain that the two are inextricably bound and an inferior investment will yield an inferior result.

Superfluous In-Kind Gifts
Nonprofits cannot be the dumping ground for the things companies want to get rid of while they enjoy a fat tax write-off. If a donor wants to give your literacy program boxes of age-inappropriate books, or your food bank out-of-date Halloween candy, or your management team old, slow computers, just say “No”. You shouldn’t be grateful for something that makes your job harder. Take the opportunity to educate the potential donor about the work you do, how important it is, and the most effective ways to support that work.  And if they just want the tax write off, suggest which more appropriate gifts (including money) would earn it.

An Inexperienced Fundraiser
I see this all the time. A nonprofit won’t pay a market rate salary for a high-calibre fundraising director so they recruit an inexperienced person who eventually fails. Instead of being grateful that your board will let you hire an underpaid fundraiser, or grateful that someone is willing to take the position, talk to the board about what is really going on. If you don’t make fundraising part of everyone’s job and hire someone to truly lead those efforts, you are simply setting the organization up for failure. Make your financial model a key part of your overall strategy and then hire (and pay appropriately) the right person necessary to lead that financial strategy.

Rise from bended knee with confidence in yourself, your staff, and your social change work to articulate what you really need. To be truly successful, a nonprofit leader needs a board that will move mountains, donors who fully fund and believe in the organization, and a staff that can knock it out of the park. And you get there by being honest about, not grateful for, the roadblocks in your way.

Photo Credit: Victor Bezrukov

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Investing in Nonprofit Leadership: An Interview with Rick Moyers

Moyers-PortraitIn this month’s Social Velocity interview, I’m talking with Rick Moyers, vice president for programs and communications at the Meyer Foundation in Washington DC – a regional grantmaker that is nationally recognized for its capacity-building programs. Rick is a co-author of the Daring to Lead 2006 and Daring to Lead 2011 national studies of nonprofit executive directors, and has written and spoken extensively on executive and board leadership. He currently serves on the boards of BoardSource, the Alliance for Nonprofit Management, and the Community Connections Fund of the World Bank Group.

You can read other interviews in the Social Velocity Interview Series here.

Nell: You write a lot about nonprofit boards of directors. As a general rule, because they are volunteers, nonprofit boards tend to be pretty ineffective and disengaged from truly leading their organizations. Can the current structure of nonprofit leadership be made more effective? Or is there a better structure, and if so, how would we undertake such a fundamental shift in the sector?

Rick: We can’t give up on boards just because many boards are ineffective, any more than we can give up on public schools just because so many are struggling. And the fact that board members are volunteers doesn’t necessarily account for their disengagement—some of the most passionate and productive contributors to the nonprofit sector are volunteers.

But just because I’m not ready to give up doesn’t mean we can just keep doing the things we’ve been doing to improve boards, hoping our efforts will produce better results, and wringing our hands when they don’t. We’ve heaped so many expectations and roles onto the backs of boards that I’m not sure it’s possible for any board to fulfill all of them all the time. A good place to start improving things would be to become much more focused and pragmatic about what we expect from boards. A clear set of expectations – one that’s not simply a laundry list of everything we wish boards would do – would be a start. Along with the recognition that organizations need different things from their boards depending on their circumstances.

We need to recruit board members with at least as much thought and effort as we put into recruiting employees, if not even more given that board service is a multi-year and often multi-term commitment. I know board members who have been invited to join the boards of organizations with which they were completely unfamiliar after a 15-minute conversation with the chair of the nominating committee—or a casual lunch with the executive director. And then we wonder why they have a hard time engaging. If we recruited board members as if the job mattered and their selection was an important decision, perhaps they would start taking the job more seriously. We can’t give up on boards without doing a better job of trying to help them function better.

At the same time, there would be enormous value in trying out alternative structures and talking openly about whether they worked any better than the current model. My hunch is that alternatives are being tried out quietly, but we don’t talk about them much. I’d be interested in learning more about very small boards (four or five carefully chosen people), the impact of compensation on board member performance, boards with greater staff representation, and boards that are more democratic and representative of the constituencies and communities being served. I’m not confident in suggesting any of these as an alternative to current practice because I don’t think we know enough. But we don’t know enough because most organizations don’t believe they have permission to experiment (and maybe they don’t). There’s enormous pressure for “normative” behavior in governance, even though we know that normative behavior often produces mediocre results.

I don’t have a good answer for how we break this cycle, but I think we need a “learning lab” for governance practices. We need to be bolder in our experiments, and more open in sharing the results, even when they are unsuccessful.

Nell: The Daring to Lead studies that you co-authored with CompassPoint demonstrate a deep leadership crisis in the nonprofit sector – nonprofit leaders are burned out, planning to leave, and lack support for leadership development. Is more money for leadership development the answer, and if so, how do we get funders to understand the need and fund it?

Rick: More money is the answer, but not necessarily more money for leadership development. My take-away from this body of work is that chronic under-capitalization is at the root of executive director burnout and dissatisfaction. The problem is not just that organizations don’t have enough money for leadership development. They don’t have enough money for anything.

While I applaud funders that invest in leadership development—and the Meyer Foundation is among them—there’s also a danger that funder-driven leadership development programs become simply another demand on already overextended executive directors. Funders need to recognize the importance of leadership development, but also need a keen understanding of the financial and organizational constraints that have a profound impact on executive directors who may already be accomplished leaders. One of the lessons from my foundation’s experience is that large grants for leadership development can be hard to use when executives are facing so many other challenges and distractions, many of which are related to finances and fundraising.

Nell: Why is leadership development taken as a given in the for-profit sector, but taboo in the nonprofit sector? Why do we assume that nonprofit leaders should be able to go it alone? And how do we change that attitude?

Rick: In the for-profit sector, there are more vehicles for ensuring adequate capitalization and leaders have greater discretion over how they can use that capital, with the mandate of producing the greatest return for owners, investors, and shareholders. That said, it’s very telling that so many large companies spend freely on leadership development without questioning the return on investment, while nonprofit leaders are conditioned to question every penny spent on anything other than program delivery. Boards can be especially shortsighted in this regard, under-investing in current executive directors without considering the costs—in money, organizational reputation, and lost momentum—of an untimely transition. We need more evidence, both anecdotal and quantitative, of the ROI for leadership development in the nonprofit sector. Producing that evidence and telling that story will require resources, but I’m concerned that without that investment we’ll never be able to make a convincing case to boards and funders that are increasingly focused on evidence-based approaches.

Nell: Do you think as Millennials age into leadership positions in the nonprofit and philanthropic sectors they will fundamentally change nonprofit leadership? And if so, how?

Rick: While not wanting to sound cranky, I object on principle to making generalizations about a group of 80 million people as if they were a single thing. And as a member of Generation X, I also must point out that we’re the ones who are currently aging into leadership positions. What about us, damn it?

Crankiness aside, as someone who works with younger leaders every day, I have noticed some differences that hold promise for the future. Many in the rising generation are much more socially aware, passionate about social change, and optimistic that they can make a difference than I was at their age. They are choosing careers in the nonprofit sector with more thought and intention than previous generations. The dramatic increase in the number of academic centers and degree programs focused on the nonprofit sector and philanthropy over the past 20 years is producing accomplished young leaders with broad skill sets and considerable insight into nonprofit work.

I do notice a more conscious commitment to work-life balance, and more intentionality around achieving it, which I hope will help reduce burnout and abrupt departures of nonprofit executives. Just within the last six months, I’ve watched three younger executive directors transition out of their jobs because they were seeking greater work-life balance. The difference from what I’ve seen in the past is that these executives decided to leave after successful tenures of more than five years, and after working intentionally to develop a strong board and staff leadership team that could handle the transition. These leaders stepped down before they burned out, and handed off strong organizations that were prepared for the change. That’s very encouraging, and I hope it’s a trend.

A committed and talented cadre of younger leaders is already in the nonprofit leadership pipeline – not by accident, but because they want to be here. Daring to Lead and many other studies have highlighted the challenges inherent in being an executive director, so these younger leaders know what the role entails. And they still want to do it. I think that bodes well for the future, and I’m optimistic.

Photo Credit: Meyer Foundation

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5 Questions Every Nonprofit Leader Should Ask

nonprofit leaderOne thing the nonprofit sector desperately needs is more people asking hard questions. A lot of time is spent skirting issues or sugar coating situations. If nonprofit leaders instead forced some challenging conversations, with hard questions as the impetus, the sector could become more effective.  And the place to start is with a nonprofit leader questioning herself.

I’ve written before about questions to ask your board, and questions to ask your nonprofit, and questions to ask before you pursue a new opportunity, but there are also some key questions a nonprofit leader should ask herself.

On a fairly regular basis a nonprofit leader should ask:

  1. Am I Leading or Managing?
    A manager shuffles resources around, waits to be told what to do, and focuses on checking things off her list. But a leader crafts a larger vision for her organizationarticulates what her nonprofit is  trying to accomplish, and then marshals all the resources at her disposal (board, staff, funders, partners) toward that vision. And when some of those resources won’t align to the vision (board members who aren’t performing, donors who want to veer off course) she confidently tells it like it is. A manager will deploy resources, but a leader will ensure that the deployment results in social change.

  2. How Can I Address My Weaknesses? 
    A great leader recognizes when he is falling short and where he needs complementary abilities. A leader who doesn’t know how to fundraise hires a rockstar Development person, or gets fundraising training. A leader who struggles with strategic decisions finds a leadership coach. A leader who can’t build an effective board, asks fellow nonprofit leaders for counsel. Most importantly, if there are costs associated with addressing his weaknesses, a leader raises the money he needs, instead of doing it on the cheap.

  3. Am I Selling Myself (and My Nonprofit) Short?
    I see so many nonprofit leaders not fighting for what their organization really needs. From not articulating the true costs of their nonprofit to funders, to allowing the board to shirk their fundraising responsibilities, to addressing capacity constraints with a band-aid, to burning out from long hours with not enough staff, nonprofit leaders are constantly giving their organizations, and themselves, short shrift. A true leader finds the confidence to stand up for herself and her organization and demand what is truly required to achieve the vision for change.

  4. Which Other Leaders Should I Align With?
    It amazes me how many nonprofit leaders exist in a bubble. They may collaborate with others on a programmatic level, but they are not regularly analyzing the larger marketplace in which they operate (emerging competitors, new technologies, changing needs) and figuring out with which other leaders impacting the field (policymakers, organization heads, advocates, influencers) they should forge alliances. Social change requires much more than any single organization can accomplish. It is critical that nonprofits become fully networked in their area of social change. A nonprofit leader makes that happen.

  5. Am I Still The Right Person for The Job?
    This is such a hard question. But if you simply don’t have the skills (or the energy) to lead the right road ahead, then you must step aside. Don’t hold your organization and the vision back because of your ego. If you are a true leader, you have assembled a whole army of board, staff, supporters and allies that can continue to move forward in your wake. It’s not easy to recognize or admit, but if you really care about the cause and want to see real change happen, then you should regularly be assessing this.

A true nonprofit leader drives the vision, marshals resources, forges alliances, inspires support, and, ultimately, leads the charge toward social change. Because now more than ever we need real social change leaders. People who are willing and able to find the best way forward and the confidence, smarts, and humility to lead us there.

If you want to learn more about nonprofit leadership, download the Reinventing the Nonprofit Leader book.

Photo Credit: iwona_kellie

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New Webinar: How to Build a Fundraising Board

moneyI’ve been conducting a lot of Financial Model Assessments lately (where I analyze how a nonprofit raises money and show them how to do it more effectively) and, not surprisingly, the board of directors often comes up as an impediment to greater financial sustainability.

There are so many reasons why a nonprofit’s board is not helping to bring money in the door. Often board members:

  • Don’t know who or how to ask for money
  • Can’t articulate why someone should give to their nonprofit
  • Are unable to figure out where they can be most helpful
  • Don’t understand how money works in the sector
  • Can’t connect their individual actions to the larger financial engine of the organization

…and the list goes on.

But instead of pleading with, chastising, or complaining about your board, you need to take a big step back and get strategic.

By figuring out your nonprofit’s long-term goals, determining who you need on your board to get you there, tapping into their unique strengths, and creating a system for involving each one in the financial engine, you can transform your board into a money-raising machine.

They can become a board that no longer drags their feet about fundraising, but rather acts as a team to fully finance the nonprofit in which they believe so strongly.

The newest Social Velocity webinar, How to Build a Fundraising Board will show you how to get there.

How to Build a Fundraising Board Webinar
On-Demand Webinar

This webinar will help you:

  • Analyze what kinds of board members you need
  • Create a system for getting each individual member involved
  • Give them clear money raising responsibilities
  • Create a message they are excited about delivering
  • Give them many options for bringing money in the door
  • Get them excited and engaged in the future of the organization

Download Now

And remember, all Social Velocity webinars are available On-Demand.

Photo Credit: Dennis Skley

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Fundraising’s Shiny Object Syndrome

shiny objectI have to be honest. I am so sick of hearing about the ice bucket challenge that I am loathe to write about it. But I wonder if many in the nonprofit and philanthropic sector are falling victim, yet again, to shiny object syndrome, so I feel compelled to say something.

To me the ice bucket challenge is yet another example of what happens so often in the world of fundraising. Nonprofit board members and staff hate fundraising, so they desperately search for a magic bullet to make it all go away.

Sometimes that magic bullet is “an endowment,” sometimes its “earned income,” more recently it has been “crowdfunding.” This month it’s a form of crowdfunding taken to the extreme, the ice bucket challenge. Some have been so swept up in the hype that they have gone as far to say that the challenge is “rewriting the charity model.

Oh boy.

The reality is that if you want to create social change you need to develop a sustainable financial model that aligns with your long-term goals. It’s not sexy, it’s not easy, and I’m probably one of the few people on this planet who thinks it’s fun. But there it is.

While many nonprofits are scrambling to figure out how to create their own ice bucket challenge, and some thought leaders are offering tips along the way, maybe we should all just take a step back.

Let’s be very clear. ALS’s close to $100 million windfall is not a revenue stream. It is a one-time infusion of money. Yes, ALS may try to replicate the ice bucket challenge on a regular basis, but the stars will never align in quite the same way, people will move on to the next shiny object, and the money will eventually fade.

Because this pile of money is not a revenue stream, ALS can’t and shouldn’t add long-term staffing or programming because the money won’t be there next year. At the same time, they probably can’t create an endowment because the donors’ intent was not for the money to sit in a bank account. Regranting the money is also tricky, again because donor intent was for it to go specifically to ALS. In all of this ALS will be under the microscope, because as Ken Berger of CharityNavigator cautioned, a year from now everyone will be asking where the money went.

One of the few paths that I see for ALS is to treat the money like capacity capital. This could be an opportunity to invest some of the windfall in building a stronger organization by investing in technology, infrastructure, and systems. And they could do the same for their affiliates. They could require capacity building plans and budgets and invest in those plans accordingly. They could, in essence, create a $100 million capacity capital investment fund for the ALS system.

But the point is that far from being a great thing that all nonprofits should strive to emulate, the ice bucket challenge creates a complex and potentially damaging problem.

So instead of spending board and staff time trying to dream up the next ice bucket challenge, please, please, please spend that time and those resources building your financial model, by creating a long-term financial strategy, raising capacity capital to build your revenue-generating function, developing a compelling strategic plan in which people will want to invest, and growing and educating your board.

These are the ingredients for a robust, sustainable financial model. Not a bucket of water, a video camera, and a social media stream.

Photo Credit: StoiKNA

 

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The Value of Quiet for the Nonprofit Leader

QuietAs summer draws to a close and my own downtime ends, it occurs to me that there is a real need, in our increasingly always-on world, for leaders to find time for quiet reflection, to reconnect with their core.

And particularly in the nonprofit world, where a leader is constantly bombarded with suggestions – from funders, board members, staff, fellow leaders, Facebook friends – it is critical that she find regular solitude to analyze and plan the best way forward.

Indeed true leadership lies not in finding the lowest common denominator among a disparate group of supporters, volunteers and staff, but rather in analyzing all options and then driving the most effective way forward (even if it is unpopular). Real leadership is not about giving the people around you what they want. It is about doing what is best and what is right. And often you find that path through time alone to think.

Perhaps thoughtful, reasoned leadership has taken a hit in recent years. Our push toward social technology has created a culture of extreme extraversion and constant noise. Dave Eggers 2013 novel, The Circle, describes a world where companies like Google and Facebook have taken over. He offers a chilling view of social media taken to the extreme with destructive group think and no room for solitude.

Don’t get me wrong, I’m a big proponent of social media, but I also think there is tremendous value in regular, silent retreat.

And I’m not alone. Amid the broad adoption of an increasingly social way of life, we are, in certain pockets, beginning to realize that quiet has its place as well. Some politicians, finally turned off by the constant screaming of our increasingly partisan political system, have begun turning toward inner reflection to find a better way. Steven Pressfield describes the importance of getting away from it all and “letting the well fill up overnight.” And even social media mavens, Beth Kanter and Arianna Huffington have both recently begun promoting solitude and reflection.

Could it be that we are realizing that while new tools to make us more social have their place in the work of social change, individual reflection is also quite necessary. While crowdfunding and crowdsourcing and crowdthinking all have an important role to play, there is also tremendous value in a leader spending time, alone, to process the world around her and then emerge with a plan.

Nonprofit leaders are often working on large, intractable social problems. Those problems require the right way forward, not the most popular way forward. As a social change leader you must claim your very real need to turn off the noise. Amid the quiet you may just discover the necessary path. And perhaps also, the will to lead us there.

Photo Credit: Sebastien Panouille

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How to Fundraise for a Stronger Nonprofit [Slideshare]

In order to add to the growing Social Velocity Slideshare library, I’m delighted today to offer How to Fundraise for a Stronger Nonprofit.

If you want to get your nonprofit out of the (all too common) starvation cycle of never having enough money to achieve your goals, you must raise capacity capital. Capacity capital is not the day-to-day revenue you need to keep your doors open. Rather, capacity capital is a one-time infusion of significant money that can help you grow or strengthen your nonprofit. It is money for things like: technology, revenue-generating staff, systems, a program evaluation.

This Slideshare helps you understand capacity capital and how to raise it. And if you want some additional guidance for launching your own capacity capital campaign, download the Launch a Capacity Capital Campaign Step-by-Step Guide.

You can see the growing library of Social Velocity Slideshare presentations here.

How to Fundraise for a Stronger Nonprofit from Nell Edgington
Photo Credit: 401kcalculator.org

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10 Great Social Innovation Reads: July 2014

social innovation readsDespite being the height of summer, July was far from the month to put our brains at rest. The blogosphere created some really great pieces.

A couple of fascinating debates – one about the role of philanthropy in democracy, and one about the value of nonprofit evaluation – were fascinating reads. And I always love a good controversy, so July gladly provided at least two. The much heralded “sharing economy” came under fire and the hype around social impact bonds was called out.

Below are my 10 favorite reads from last month. If you want to see a longer list of great reads, follow me on TwitterFacebookLinkedIn or Google+. And you can see past months’ 10 Great Reads lists here.

  1. There was a really interesting debate on the Markets for Good blog (always a place for thoughtful conversation) between Andrew Means and Patrick Germain about the value of program evaluation and performance measurement in the nonprofit world. Andrew Means kicked it off here and here and Patrick responded here.

  2. I absolutely love it when someone makes you think about something that you took for granted in a whole new way. Conventional wisdom is that the sharing economy is a democratizing development. But Max Holleran, writing on the OpenDemocracy blog, argues that perhaps it is the complete opposite. As he says, “Our concept of what sharing means has gone from The Gift to the paid-for lift…How we assess public goods has also changed dramatically: urban commons have been ceded to private-public management initiatives.”

  3. The Hewlett foundation announced a new $50 million initiative to “strengthen representative democracy in the U.S.” And that announcement inspired a thought-provoking back and forth about the role of philanthropy in democracy among Daniel Stid and Larry Kramer (both from Hewlett) and Maribel Morey (assistant professor of history at Clemson University), via a Stanford Social Innovation Review blog post and the subsequent comments to the post. No matter your politics or your views on philanthropy, it is refreshing to see such an open discussion about a foundation’s efforts.

  4. On a somewhat related note, Amy Schiller argues that we cannot allow philanthropy to be a “workaround” to the “friction of democracy, ” which is necessary for truly solving social problems.

  5. To get more funders to invest in nonprofit organization building we need more data and case studies on the return on investment. Building the case for funder investment in nonprofit technology capacities, Berta Colón, Cynthia Gibson, Michele Lord, and Geraldine Mannion examine recent data on building nonprofits’ digital reach, and the Knight Foundation provides a case study on how National Public Radio (NPR) built their digital skills.

  6. I love New York Times food columnist Mark Bittman for his fabulous recipes and views on food, but recently he’s become somewhat of a food activist, and his article on the the true (social) costs of a burger is eye-opening.

  7. Is there hope for the famously dysfunctional nonprofit board? A new report from Urban Institute suggests we need to raise our expectations of nonprofit boards. Let’s hope!

  8. I know I’ve been including Steven Pressfield in my round ups lately, but this man really knows how to inspire people to fight the demons that face them in order to create whatever they were put on this earth to create. His recent blog series entitled “Why” does just that. I think social changemakers, more than anyone, need this kind of inspiration.

  9. Curt Klotz from the Nonprofits Assistance Fund argues that nonprofits must price their services according to value because “there is no virtue in self-imposed austerity that leads to mediocrity in our programs, and constant turmoil in our finances.” Amen to that!

  10. Writing on the PhilanTopic blog, Laura Callanan pulls back the curtain on some of the hype around social impact bonds and social innovation in general. Instead of falling victim to shiny object syndrom she asks that “we all bring our critical minds – as well as our open hearts – to the job of social change. Let’s celebrate the potential in the new approaches but also integrate them with prior experience and test them with our constituents…Let’s remember that a tool is just a tool.”

What thought-provoking or controversy-inspiring read caught your eye last month?

Photo Credit: Josue Goge

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