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December 20, 2012

Board member investment

Essential #6: Board Members as Investors: the boards role in giving and fundraising


What would it mean to your organization if your Board of Directors worked hard to ensure the financial sustainability of your nonprofit? How would your clients or community benefit from the board being fully engaged in the fundraising efforts of your organization? Imagine, if the financial pressure were taken off of the Executive Director and shifted to the BOD; would the effectiveness of the organization increase as the Executive Director became able to focus efforts moving the organization towards its vision and mission?

As we’ve been discussing, an active and engaged Board of Directors is primary in the success of a nonprofit. Fundraising or ensuring the organization has adequate financial resources to achieve its mission is one of the primary functions of ALL boards. This means good board members both give personally and influence others to give.

WHY DOES BOARD GIVING MATTER?

Board giving is the #1 Indicator of fundraising success for nonprofit organizations. Research indicates that the most effective fundraising campaigns involve board members. This is because board members are the primary investors in the organization; they are the bedrock to supporting and ensuring the success of a nonprofit. As such, they should support the nonprofit, not only through a personal investment of time, but also by investing their financial resources into the organization. This personal investment sets the tone for the organization’s overall fundraising success. June Bradham, author of What Boards Really Want, found that the single most powerful predictor of overall fundraising success is Board Giving! This alone should encourage our board members to get involved.

Board giving should be standard in nonprofits but unfortunately this isn’t the case with all organizations. Without board members adequately securing financial sustainability and leading the organization as an example in individual giving the organization may find it difficult to raise funds from individuals or foundations. If the closest people to the organization, ie: the board members, are not giving, then why would any one else want to give?

Board giving sets a leadership example for staff, volunteers and other funders to follow. As Timothy Seller noted in an article, Roadmap to Fundraising Success, “Historically, and still today, the most effective gift solicitation is that of a peer volunteer asking for gifts in a face-to-face solicitation.”

Board members are uniquely positioned to invite peers to join them in their support of your organization and can open the door to a wealth of resources in the form of volunteers and finances. In the corporate world of products and services, word-of-mouth marketing is gaining momentum as the biggest trust builder between a brand and a new customer. What this means is if a friend tells you about a product or service that they love you are more likely to try and then buy into the brand. The same can be said of individual giving to a nonprofit, and the Board of Directors can play a huge part in building the trust and effectively fundraising for their nonprofit.

Board giving increases engagement. Through giving, members become much more engaged and passionate about the organization. Members have increased credibility when asking others to “join” their support for organization. By not only verbally supporting the organization, but also giving to it, board members can authentically encourage and inspire others to give.

If your board of directors does not have a Board Giving policy in place this should be the first step to better board involvement in fundraising. Support for the organization should start in the boardroom. This process may take time and may require a change in organizational culture. Start small and take little steps with the goal that eventually your entire board is on board and actively supporting your organization through giving.

KEY STEPS FOR BOARD GIVING AND FUNDRAISING INVOLVEMENT

1. Create a Board Giving policy and ensure that accountability is built into the policy. Without accountability it is easy for members to disregard the policy and not follow through on the commitment.

I work with many organizations that have policies that state something like, “I will financially support the organization at a level that is personally significant to me.” While this sounds nice it is not measurable and there is no way to determine if the member has met their responsibility. On the other hand, I work with other organizations that require board members to give a certain amount each year – for example, “As a board member I will give a minimum of $5,000 this year.” This is obviously easier to track but this requirement makes many leaders uncomfortable.

One idea is to include language that allows accountability but does not set a minimum giving requirement. As an example, “Each year, but no later than Thanksgiving and without having to be asked, I will make a personal financial contribution at a level that is meaningful to me and will put XYZ organization in the top 3 charitable organizations I support. This year I pledge to give: _________.”

2. Put into writing the fundraising roles and goals of board members. Share this information with potential members during the recruiting stage. Though it may scare some people off, it is better to be honest and recruit board members who understand and accept the duties you are asking of them. Luring people in under false pretenses almost always results in frustrations and headaches for everyone.

3. Model and reinforce success by providing annual training. Fundraising does not come naturally to many people. These are skills that should be taught and reinforced on a regular basis. Help board members understand that you aren’t asking them to “shake down” friends and family. Fundraising can be as natural as sharing stories and expressing a contagious excitement about all that’s happening at your organization.

4. Clearly explain the options for giving/getting to board members. Most board members I’ve talked to find it easier to fundraise for projects, or something tangible, than the broad mission. That means we have to make fundraising as simple as possible for them.

For example, I was working with a domestic abuse shelter and we were transitioning the board to a more active fundraising role. We explained the funding need and then helped each board member make a plan for raising funds. The options provided to members included things like: 1) sponsor a room night for $95, 2) sponsor a day in the life of the shelter $4,250, 3) become a premier sponsor for an event $5,000, 4) provide education/training to a woman $75/month.

Providing these options equipped board members to confidently go out and make specific requests for funds. It simplified the process and increased the comfort level with the process.

5. Provide written materials that allow board members to easily share more information about the organization. Our board members don’t always remember the stories and statistics that we share in meetings. They aren’t living and breathing the mission of the organization on a daily basis so it’s easy to forget the talking points when meeting with potential funders. Develop materials, perhaps even a simple impact card that members can keep with them to help them when sharing about the organization.

6. Reward successes by ensuring your members are continually recognized for their efforts. When a board member has successfully solicited funds for the organization, share and celebrate this with the other members. It’s great if the board member is also willing to share how they overcame any fear or objections. This will allow members to learn from one another and grow in fundraising together.

Jim Collins, in Good to Great and the Social Sectors notes, “To make the greatest impact on society requires first and foremost a great organization, not a single great program. To truly be a great organization, board members MUST embrace their role and responsibility as fundraisers for the organization.

If you would like help with this process, please contact me at tiffany@applegateconsultinginc.com or 417-894-4640.

Posted by Tiffany Applegate on December 20, 2012 at 1:32 PM
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Categories: Board Governance | Fundraising
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October 30, 2012

ESSENTIAL #5 - MONITOR AND STRENGTHEN PROGRAMS AND SERVICES

“The price of greatness is responsibility.” Winston Churchill

Halloween can be an exciting time when you are a kid. Candy, costumes, friends - it’s a time my youngest looks forward to enthusiastically. In fact, she begins dressing up and trying on costumes weeks in advance.

Recently she came out of her room with a pirate’s sword, a princess dress, and hulk hands. Though it was kind of cute it reminded me of some of the nonprofits I’ve seen (and worked with) over the years. They started out trying to be one thing (in my daughter’s case a princess), but because of funding cuts/availability, passions of board and staff members, or other reasons they end up losing focus and are now in a position where those looking in don’t know what they are supposed to be (Princess? Pirate? The Hulk?).

The Board’s Responsibility

It’s the Board of Directors’ responsibility to guide and keep the organization focused on the mission. In our previous article on strategic planning I mentioned that it is important to continually visit the mission – is it clear, accurate and up-to-date? Just as it is important to get a regular health check-up, an organization should make time to review the health of the organization. Are the programs and mission aligning? Do the programs or the mission statement need to tweaked or updated?

Example: Mission Check-Up

A non-profit in Chicago had a mission to provide immediate refuge for children ages birth to 12 whose families were in crisis. By partnering with families and the community, they believed they would strengthen families and prevent child abuse and neglect in their community. As the organization grew so to did their various programs and services to the community and they soon became extremely busy. On the one-year anniversary of the non-profit the Board and staff came together to review the programs and services. In a white board session they looked at each activity and reviewed how it aligned with the mission of the organization. They found their services fell into four main areas:

  1. Immediate shelter to children in need
  2. Educational/training opportunities for parents 
  3. Outreach and training to the community
  4. Crisis center activities and support for adults

The organization had found that as they helped children in need, often there was a mother or guardian needing crisis support. This resulted in the fourth activity where much of the organization’s resources and time was being focused. As the organization re-looked at their mission they realized that while this service was good it was not within their mission. The board members and staff chose to look at other community service organizations in the area that they could partner with in order to refer adults. This decision allowed the organization to continue being targeted on their mission to provide immediate refuge for children in crisis while still caring about the families of these children.

This example is one that highlights the importance of regular mission check-ups as they can help identify any areas of mission creep (or abandonment). Mission creep leads to confusion for the audience and it is the board’s role to stop it. Once identified, the board can choose to stop offering the service, pass it to someone else, or modify the mission. But that service or program that doesn’t align with the mission, must be questioned and something must change. There are several cases in which an organization has ultimately failed in it’s mission because they were constantly adding programs where money could be found – instead of keeping focused on the mission.

Ensuring Effective Programs

As regular review by the Board of Directors ensures that programs are aligning with the mission it is also imperative that the Board knows that these focused programs are effective and furthering the mission. It is vital to track outcomes or activities within each program. Outcomes are measurable end results and activities are a set of tactics that are used to achieve the outcome. The need for focused outcomes has become more and more important as many non-profits have performed activities and programs but have very little to show by way of evidence. By focusing on outcomes an organization can begin to measure success.

A recent article in the Boston Globe highlights the shift for non-profits to begin employing strategies that have traditionally been used by for-profits. In this article the president of a large nonprofit shares, “If you aren’t measuring what you’re doing, then you’re not evolving what you’re doing. In the for-profit world, companies live or die by whether or not they’re getting better at what they deliver, and in the nonprofit world, we need to be doing the same.”

The article also provides the following example of an organization employing an outcome tracking system:


Roca Inc., a Chelsea nonprofit for high-risk youth, has found that it is possible to measure the progress of changing someone’s life. Before Roca embarked on a radical transformation in 2005, participants considered it a place to hang out and play basketball with friends. There was no time limit on being in the program, and those who took part did not have to meet specific goals. Roca maintained a simple Microsoft Access database of members’ enrollment in GED classes and leadership seminars, but there was nothing to prove the agency helped people become law-abiding, employable citizens.

Now, every move participants make is entered into a software program, from their efforts to stay sober to completing a transitional employment program.

The group’s youth workers are also closely tracked, and outside institutions analyze Roca’s results. One significant finding that came from the overhaul: Those who had the most success holding down a job and staying out of trouble moved out of the program in just two years, leading the agency to establish a two-year model.

“It was all guesswork,” said founder Molly Baldwin, of Roca’s beginnings. “I hope we did more good than bad. But we weren’t really sure ever. Now we’re able to see if we’re being helpful or not.”


It is up to the BOD to help guide the organization into effective programs and services that are focused on the mission. All programs and services should not only have activities that are reported upon but these programs should be linked to outcomes tracking systems. As seen in the Roca, inc. case above the tracking system does not have to be complex – it can be simple and start small.

I recently worked with a crisis shelter that had a difficult time determining outcomes because of the transitional nature of their clients. We developed a simple pre- and post- survey that at least began showing immediate outcomes – such as savings accounts, educational level, income, etc. These details were able to lead the organization to making informed decisions about the successes and challenges within their services.

Why Bother with Outcomes?

In the 2012 report More Money for More Good, research was compiled on what donors are looking for in funding non-profits: 9 out of 10 donors say that an organization’s effectiveness is important. Donors say that information about a nonprofit’s approach, expected results, effectiveness, and past performance—in other words, impact information—is most important to them but hardest to find.

Funders give dollars with the intent to make a real difference. Board members are responsible for making sure this is happening.

Key Steps:

  • Regularly evaluate your organization’s activities: are they in line with your mission?
  • Ensure that every program and activity has some sort of outcome tracking system in place
  • Regularly evaluate and review the effectiveness and impact of your programs
  • Learn from your tracking systems and make changes and adjustments as necessary to ensure your activities are as effective as possible


Posted by Tiffany Applegate on October 30, 2012 at 3:11 PM
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Categories: Board Governance | Outcomes/Results
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August 30, 2012

Nonprofit Strategic PlanningESSENTIAL #4 - ENSURE EFFECTIVE PLANNING

“Destiny is no matter of chance. It is a matter of choice. It is not a thing to be waited for, it is a thing to be achieved.” William Jennings Bryan

Success is a team effort. Whether an organization succeeds or fails at achieving it’s annual goals or it’s mission, is not just the responsibility of the CEO. In fact, within nonprofit organizations the BOD holds the primary responsibility for actively planning for the future and achieving mission fulfillment.

Strategic planning is essential in regards to actively planning for the future. This process is so important for an organization that the non-existence or poor set up of a strategic plan can have detrimental results to the organization. The strategic planning process ultimately helps the BOD develop a plan that guides the actions and impacts the success of the entire organization.

Unfortunately the idea of strategic planning can seem tedious and daunting for many board members. Strategic planning does not have to take an unreasonable amount of time. Sitting in long, boring meetings on a regular basis to continuously plan and re-plan can create burnout for many board members. If an organization has been neglecting it’s strategic planning the initial fact-finding and preparation may prove to require a bit of a time commitment. However, as an organization begins to develop its strategic planning system the BOD will be able to move quite effectively and efficiently through strategic planning process.

The following are some helpful suggestions in ensuring that your organization develops a sound strategic plan.

Know your mission
A common mistake in strategic planning is developing a plan based upon a snapshot of what is happening right now – not on what the organization wants to make happen. If the organization currently exists with severe financial constraints those constraints may dictate what the BOD thinks the organization can do. Instead of focusing on these constraints, a good strategic plan should ask what impact do we seek to make and where do we want to be in a determined amount of time? Once these questions are answered it is easier to align your plans and activities with the mission and goals of the organization.

Be prepared
The world we live in is dynamic and these changes affect our plans and goals – but they should never hinder our mission. Your organization can spend six months developing a strategic plan and the next day a horrific natural disaster occurs in the area you work or Bill Gates knocks on your door and offers you a million dollars. What do you do?

An organization needs a plan that allows the BOD to make decisions on new challenges/opportunities as they arise. In Nonprofit Strategy Revolution, David La Piana recommends developing 5-8 key decision-making criteria to help decide whether or not a particular strategy is consistent with the organizational identity. This should be heavily influenced by your values.

I am on the board of a nonprofit and our decision-making criteria is based upon undertaking strategies that are consistent with our mission; focus on our competitive edge; are financially sustainable; don’t result in debt for our organization; allow us to be the best in the field; and strengthens our position as a community partner.

As new opportunities come up, we run them through our criteria to determine whether or not we move forward. If we answer no to anything, we don’t go forward. If we answer yes to all, then we have to compare it to the other strategies we are moving forward on and decide which one makes a greater impact on our mission.

Other decisions that should be made up front include:
  • Who will you serve? Who won’t you serve?
  • Where will you serve? Where won’t you serve?
  • What money will you accept? What won’t you accept? (i.e. Recently a little league was out of money and going to have to close down ending the little league program in the town. A strip club came forward to provide the money they needed to continue services. Some were outraged that a kids’ little league accepted money from a strip club. They made the decision in a desperate mind-set rather than ahead of time. I’m not making a judgment call on whether or not they should have accepted the funds but it’s easier to make clear strategic decisions when an organization is not completely out of money.)
Holding tight to your mission and values, as well as following the decision-making criteria your organization has created allows you to remain relevant in the face of dynamic circumstances while still continuing to focus on the mission and strategic plan. An organization that sways in it’s focus and changes it’s goals continually will not succeed because it will never have the ability to monitor it’s growth if it keeps changing the goal line.

Regular Check-ups
So you have a plan in place – now what? A typical strategic plan looks 3-5 years ahead. For some, making plans can be a fun activity – but how do you execute a 5-year plan and make sure you stay on the path to achieving your goals? It is very important that after goals are created that align with the organization’s mission these goals are then broken down into timely action items and deliverables.

This is how we function in every other area of our lives. For example, in The Pollyanna Principles Hildy Gotlieb suggests that if we had a flight at 12:00pm we would figure out what time we had to get up by working backwards. “I have to get to the airport by 10:30 so I’ll have to leave by 9:30. I still need to pack so I need to get up by 7:30.” If this is a part of our daily living (creating timely action items and deliverables), then it should certainly be a process we implement in our strategic planning.

In addition to developing key action items and deliverables, the BOD is also responsible for developing systems for monitoring and evaluating the progress of the strategic plan. Creating an effective monitoring and evaluation (M&E) framework requires that the BOD include in the strategic plan key questions and time frames for M&E. Monitoring is the act of continually checking in on targets and activities planned throughout the course of a plan. Evaluating assesses what the organization set out to do, what has been accomplished, and how it was accomplished. These tools help an organization know whether the plans are working and empower the BOD to make changes as needed.

Some key monitoring questions could include:

  • Will the goals be achieved according to the timelines specified in the plan? If not, then why?
  • Should timeframes be changed? 
  • Are there adequate resources to achieve the goals (ie: money, equipment, training, personnel)? 

 

The frequency of reviewing the strategic plan depends upon the type of organization and the rate at which the organization is experiencing change. At the least, the BOD should monitor on a quarterly basis and the CEO monthly. Evaluating the organization could be on an annual basis.

While a strategic plan is key to the success of an organization, it is important to remember that it is a roadmap that often changes based upon internal and external influences. Learning to be a relevant organization with a firm mission while holding to a strategic plan will give your organization the strong foundation it needs for success.

Key Steps:

  • Know your mission 
  • Be prepared 
  • Regular Check-ups

 

 

Posted by Tiffany Applegate on August 30, 2012 at 12:15 PM
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Categories: Board Governance
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July 23, 2012

 

SUPPORTING AND EVALUATING A NONPROFIT LEADERESSENTIAL #3 - SUPPORT AND EVALUATE THE CHIEF EXECUTIVE

“You cannot escape the responsibility of tomorrow by evading it today.” Abraham Lincoln

After the CEO/Executive Director has been chosen, the process of leadership has just begun. Now comes the real work. Supporting your CEO/ED and providing them with an honest assessment of their work are critical to great leadership.

SUPPORT

This should come as no surprise, but the CEO/ED can only be as effective as the team surrounding him or her; they provide leadership, but they should not be the only one creating or implementing all of the strategies and tactics that make for a successful organization. They need help. So supporting them and following their direction is necessary from all levels of the nonprofit, from the board down to individual staffers and volunteers.

Strong and vocal support of the right CEO/ED is critical for his or her personal and professional development, as well as the organization’s success. Support shows that you value the work they are doing and recognize that the organization is benefiting from it. As a result, the CEO/ED is more likely to stay. This is ever more critical as finding good Chief Executives is increasingly difficult.

The board (and especially the board chair) should ensure that the chief executive has the moral and professional support he or she needs to further the goals of the organization. Without this support, it’s easy for the chief executive to feel isolated and alone. This can be as simple as responding to emails, coming to board meetings prepared, or taking and returning phone calls.

WHY EVALUATE?

Evaluating the CEO/ED is a primary responsibility of the board, and for good reason. This regular review of the CEO/ED helps ensures that the organization has the right person in place to further the mission. It ensures that organizational goals are being met, new goals are being set, and the CEO/ED is growing professionally. It also helps set the appropriate compensation for the CEO/ED.

Reviews should be done annually, and the evaluation process should be formal and documented to ensure that it meets standards of fairness and practicality. Managing the process in this way also leaves written record of the board's impression of the chief executive's performance. This record can be necessary for a number of different reasons down the road, such as salary increases, probationary activities or in the worst case scenario, firing.

You should note that most CEO/EDs that I work with are quite eager to be evaluated, since they cannot know how they are truly performing without a review process. They want documentation of their performance - and also a development plan to improve upon it. But many boards are uncomfortable with the process so they avoid it. Don’t be scared to evaluate!

HOW TO EVALUATE

It should go without saying that evaluations should be done with the utmost integrity and honesty in the process. There should undoubtedly be some (or much!) good, but also some areas identified that need further development.

When reviewing your CEO/ED, you need to be aware of any internal politics that may affect the process, such as a board member who is on the opposite side of a hot button issue – and could use the performance review at their platform against the CEO. For this reason and others, reviews shouldn’t be based solely on opinions, but as objective as possible.

Though a general sense of the leadership ability of the executive will certainly emerge through generalized assessment, reviews should primarily be made against set standards; of things that can be measured. Don’t turn the review into a popularity contest rather than a results-based process.

Be sure when conducting a performance review that you are evaluating based on facts and give the opportunity for the CEO/ED to respond. Recently, a client received a review from her board. She felt much of the information was incorrect and went through board meeting minutes to show what she was instructed to do. When she submitted the rebuttal no one responded leaving her very frustrated and feeling attacked. The CEO/ED, a great leader, submitted her resignation shortly afterwards.

CONSIDERATIONS

There are many individual questions and answers that can be used to evaluate a chief executive. Some of the most effective that I have found over the years include:

Did the CEO/ED accomplish the goals set by the Board for the performance period?

How well does the ED understand the mission and strategy of the organization, and then translate them into action?

How well has the ED hired and developed staff members?How satisfied are you with the morale of the staff and volunteers?

Does the ED fully understand the organizations programs and services?

Does the ED ensure that programs/services are high quality?How satisfied are you with the fundraising ability of the ED?

How knowledgeable is the ED on financial matters?

Are you satisfied with how the ED makes financial decisions?Are the operations policies in place satisfactory? Any changes needed?

Is the ED professional?

Does the ED have good communications and provide a good environment for staff?

Is the ED maintaining a positive reputation in the community?

How has the ED responded to unexpected challenges or opportunities?

What are 3+ strengths you see in the ED?

What other ways does the ED contribute to the success of the organization?

Remember that these questions should be asked in a way so that they can be answered with measureable results. The goals set forth to answer them favorably should be well documented and understood by all parties. This can avoid frustration, misunderstanding and headaches at review time.

Once the review is complete, key areas for professional development should be identified and goals should be considered for the next review period. By supporting the CEO of your nonprofit with the right resources, and providing timely feedback and constructive advice on their performance, you are making a positive impact on the future success of your organization!

Next: Essential #4 - Ensure Effective Planning

Posted by Tiffany Applegate on July 23, 2012 at 2:01 PM
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Categories: Board Governance
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May 18, 2012


“No duty the Executive had to perform was so trying as to put the right man

in the right place.” Thomas Jefferson


Selecting a Nonprofit LeaderLeadership transitions are inevitable. For one reason or another, it’s only a matter of time before the board discovers it needs to recruit a new chief executive officer. Some CEOs accept other positions, others retire. Still others are not doing the kind of job the organization requires and need to be replaced.

While each organization’s situation is unique, the need for strong leadership has never been greater. Competition, financial constraints, political and social considerations and uncertainty about the future are among many issues that have transformed the lives of today’s nonprofit executive. CEOs are expected to be leaders, strategic thinkers, world-class marketers and financial managers—all while ensuring high-quality delivery of agency services.

How does the nonprofit organization prepare for one of the toughest decisions it must make, the selection of a new CEO?

The process of selecting a new CEO is certainly complex, and obviously has a tremendous impact on the future of the organization, but this doesn’t mean you shouldn’t enjoy a very positive attitude toward the search experience. It can be an exciting and challenging time for the board and organization. This is a great opportunity to embark on a new journey - or reflect on the organization’s past, present and future, for existing nonprofits.

One thing to keep in mind as you begin your search - you should postpone or proceed with the utmost caution on new ventures, programs and services, as well as promotions and discussions on new affiliations until you have selected your CEO. Making important decisions that do not take into account your CEOs opinions or ideas, or undermines his or her influence, is not a good way to begin the relationship.

Create The Search Committee

The first major step in finding your next leader is the formation of a search committee, with well-defined roles and responsibilities of the members. Individuals must be capable of objective decision making, and often includes the immediate past board chairperson, the current chairperson and/or the chairperson-elect. A committee size of about seven people seems to be most optimal for many groups; larger groups can become slow and unwieldy, while smaller ones might not represent a cross section of views. An outside perspective from someone familiar with the search process can also be invaluable on your committee, just one of the reasons that a consultant can be so vital during this process as well as other external voices.

The committee members evaluate the organization’s leadership needs, establish criteria for evaluating candidates, interview candidates, select a candidate and extend an offer.

A consultant or “outsider” as noted can offer an organization the expertise and objectivity it needs to manage a search from beginning to end and match the position, organization and community with the right person.

An organizational assessment is usually the first step in the process. During this time the consultant becomes familiar with the organization’s mission, operations, strategic direction, challenges and opportunities. Questions that need answers include what kind of experience and education should the CEO have, what skill mix they need to bring to the position, and many others.

Taking the time to consider the nonprofit’s mission, values and the future challenges it will face are also crucial (though as we will note, some of these considerations are not as important as you might imagine).

Immediately following the assessment, the search consultant meets with the search committee to provide feedback, validate and gain consensus on the candidate profile and advise the committee of problems that might interfere with the search. Potential barriers include compensation, structure, the board’s perception of its role, unrealistic expectations of the CEO, etc. The consultant works with the committee to provide solutions to any problem areas to ensure the organization is well-positioned to attract the very best talent.

After the assessment the process of searching for candidates begins, which often starts with internal candidates. Studies show that internal candidates perform better on average than outside ones with the same expertise, so looking inside the organization should be consideration. 

Internal or external, each is measured directly against the needs identified in the organizational assessment, which once again is why it’s so important. The search committee, with the consultant’s guidance, narrows the list of candidates for personal interviews based upon the profile, experience and skill set of each candidate.

The consultant should recommend an approach to interviewing that is right for your organization. For example, consider inviting candidates for a preliminary meeting with the search committee. If there is mutual interest after the initial “chemistry check” interview, follow up with a second, more comprehensive visit. Also know that you are “selling” your nonprofit agency too, so maximize the opportunity. Remember, candidates will be evaluating you as well. 

Upon interviews and narrowing the field to just a few prime candidates, the committee may want to conduct a secret ballot or develop total scores on a weighted system. Or it may prefer an open process where each committee member describes his or her ranking and provides a rationale for the decision. After this process, a candidate should emerge that is the best fit.

Making an offer and negotiating compensation and other parts of the benefits package (which may also include a severance agreement) should be done with the utmost confidentiality. These negotiations should never jeopardize either the search process or professional careers of course, and this can be the point in the process where an outside consultant can provide some of the best value.

Having a Succession Plan

These suggestions and recommendations are based on an organization filling their need for a new CEO when the need has arisen.

However, all organizations know their CEO position will need to be filled at some predetermined time in the future, and sometimes they have someone in mind for the position when it comes available.

This can be due to the current CEO grooming their successor, or the result of a proactive board who is engaged in the process and forward planning. (Every organization should also be continually recruiting and staying in contact with attractive prospects for their board) Having a succession plan does NOT mean that all the previous steps in the process are unnecessary, however. Ultimately the board must decide if the candidate(s) being considered are right for the position. But having an idea of who could potentially fill the role of CEO in the future is a wise one. 

All organizations should have a succession plan. The process of developing this plan is beyond the scope of this article but will be address in the future. 

Why Culture Can Be Less Important Than It Seems

It may sound surprising, but it’s often wise to downplay conversations about culture and “fit” at the beginning of the search process. Instead, be on the lookout for indications of mental toughness and someone people will trust. People will follow even the most demanding leader provided they trust him or her, so a board may be well-served by tempering its conversations about culture.

Some of the most outstanding leaders of our time are (or were) very demanding in their role.  Winston Churchill was a very challenging man, demanding much of those around him. Other great leaders of this mold include Vince Lombardi, the legendary coach of the Green Bay Packers; Steve Jobs, Founder and past CEO of Apple; and Martin Luther King, Jr., the most recognized leader of the civil rights movement.

All were demanding and at times critical when they needed to be, but these leaders all have something else in common. They were all very clear in what they wanted to accomplish and what it took to get there. When thinking of these leaders do you think of dissatisfied and discouraged employees (or players, citizens, or followers)? Or do you think of teams of people inspired to follow their leader through tough times?

There's nothing easy about being a CEO of ANY organization. It can be a lonely and tiring position at times. And while emotional intelligence and being someone who cares is a prerequisite for a CEO of a nonprofit, organizations of all types exist within an increasingly super-competitive landscape today. And building the best organizations often involves making tough calls that have the potential to hurt others. That's the simple truth in today’s marketplace – for the corporation, the small business owner and the nonprofit alike. Having someone who can take responsibility for these decisions is crucial.

“The price of greatness is responsibility.” Winston Churchill

Selection of the right CEO completes the first step in ensuring the continued success of your organization. Maintaining that success is a complex formula and will require continuous attention.

As you plan for the future, your CEO naturally will be expected to provide vision, direction, inspiration, influence and integrity to the organization —in sum, leadership. That leadership is a manifestation of character, and everything the leader does is a reflection of that individual. More than any other one person, the CEO will personify the organization…which is why making the right choice is so crucial.

STEPS IN THE SEARCH PROCESS

Succession Planning Occurs

CEO Vacancy Occurs

Board Appoints Search Committee

Consultant Evaluates Organization; Committee, With Consultant, Establish Position Criteria 

Based On Criteria, Consultant Screen Candidates, Interview Candidates, Conducts Detailed Evaluations, Checks Credentials/References

Consultant Recommends Candidates; Search Committee Selects Candidates to Interview

Search Committee Conducts Candidate Interview(s)

Committee Selects Finalist

Offer Made and Terms Negotiated

New Leadership/Transition Begins


Up Next: Essential #3 – Support and Evaluate the Chief Executive

Posted by Tiffany Applegate on May 18, 2012 at 2:19 PM
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April 17, 2012

Nonprofit Board PlanningWhat Should Be Contained Within the Board Mission Statement?

The board’s mission should be a clear and well-documented definition of what is expected of the board as a whole, and the requirements for each member. If you don’t know how to create these expectations for your own board members, you should get help in doing so. This is one of the absolute KEYS to a successful nonprofit board. When board members don’t know what is specifically required of them, what they are accountable for, it becomes a difficult task to measure or evaluate their progress and success.

Of course a primary objective of any board which should be included in every board mission, is accomplishing the goal of providing the financial resources needed to fund the support of its constituent individuals, groups and/or communities it exists to serve. Thus the mission answers the question “What actions will the board take to guarantee that successful campaigns are organized and launched to secure capital, endowment, sponsorship, and underwriting funds. This provides a good topic to illustrate how a board mission statement is used to back the mission of the organization as a whole.

Example:

If the Organizational Mission Statement Includes The Verbiage:

“Empower people around the world with a $25 loan” (part of the mission of Kiva, a “microloan” leader)

The Board Mission Statement Could Then Include:

“With the Board of Directors as a whole ultimately responsible for achieving this mission through providing support of organizational marketing efforts and also providing personal outreach that ensures that lender capital is always available to fund customer loans”

What Questions Must Be Answered In The Board Mission Statement?

So the board mission describes WHAT the board exists to accomplish; it essentially asks the question, “What is the board’s reason for existence?” Unlike the organizational mission, it is meant to describe the means, not the ends, of the nonprofit’s board. It is the how, not the why.

And unlike the agency’s overall mission, it should be noted that the board’s mission statement is not designed or revised with direct input from all constituencies. The board needs to define their own mission. Your own statement should also not be arbitrarily compared to the board missions of other nonprofits either – favorably or unfavorably. Recognizing your own unique characteristics and impact on the individuals and groups you serve is vital, so this rule is true no matter how much the apparent similarities of your two organizations might be.

Just some of the questions that could be addressed or answered when creating the board mission statement are:

What are the established boundaries, or “bounds” of the service to be delivered by the organization – and how the board will accomplish their delivery?

Does the language used in your mission statement elevate effort to effect? Words such as try, seek, influence, or encourage suggest exertion that focuses on achieving the results noted in the organizational mission.

Because the measure of the value of a nonprofit’s service is often much harder to define than a commercial business, how will the successful delivery of these services and resources be evaluated?

Is your mission accurate - or does it seek to glorify your organization’s intentions to make yourself sound better, loftier, more extensive or “glamorous” than you truly are?

Is your board mission too broad or too narrow? Does it allow for growth and expansion, but also narrow enough to keep the board clearly and strongly focused? Does it try to be “all things to all people”, or on the other hand restrict the organization from meeting changing needs?

Does your board mission statement use VERBS? If so, is the mission statement really focused on what needs to be done to support goals, instead of the outcomes of the actions, like the organizational mission should do?

Related to Using Verbs, Does Your Board Mission Statement Use Nouns that Signify Activities – the “Means” – Instead of “The Ends”? Examples Include Advocacy, Education, Program, Service, and Others.

Is Your Board (and also Organizational) Mission Statement a Direct Embodiment of the Founder’s Own Vision and Ideas, Typically Based on Personal Experience or Passion? This is “Founders Syndrome” – Where All Others Largely Play a Passive Role, and not nearly as effective.

Does Your Board Mission Use Technical Language or Jargon That Are Meaningless to the Outside World?

Is Your Nonprofit a Federation or Another Type of Membership Organization? What is the Net Value that You Add?

Does Your Board Have Authority Over Other Boards? Does Your Board Mission Statement Focus on How You Will Accomplish What is Unique About Your Organization? How Will Your Board Ensure that You “Stand Above the Crowd”?

Crafting a board mission statement can be a formidable challenge for an organization, but with the right assistance it can be crafted in a way that answers all (or at the very least, most) of these questions. And of course not only will these points of guidance aid in the writing of a new mission statement, they can also be used to revision and rewrite an existing one just as easily.

Unless you have an experienced writer within your organization, you will most likely need an expert consultant to facilitate the basic mission development process with you. Engaging an experienced nonprofit consultant and writer who will fashion the document for you based on your input is of great value to your organization and your board. They can provide the “outside” opinion and perspective that can be critical when crafting both your organizational and board missions.

To succeed in today’s nonprofit “marketplace” - along with volunteers, audiences, donors, and staff - a nonprofit organization must be able to attract high quality board members. Creating an effective board mission statement that outlines responsibilities and expectations can go a long way towards proving the serious focus of the board and their mission.

Your board mission statement is most successful when it clearly and firmly guides the board in making effective decisions about the organization’s future. It motivates and challenges board members to achieve well-defined and shared goals. It is the board’s responsibility of leadership to see to it that the organization always operates within the confines of its mission.

Why Is The Board Mission Statement So Important?

The board mission statement should directly support the mission of the organization, allowing for an action plan to be put into place that is clear, achievable and that board members can be held accountable for. This is a key to every consultancy that I do personally; no session or meeting should end without a detailed action plan to be implemented, so that board members know what they are supposed to be doing. Once again, this ties the board members in unity and clarity – and can help eliminate the issue of simply “chasing money” and thus moving the agency into areas that fall outside its stated mission.

When done correctly this process is of great benefit to the overall success of the organization and will certainly have a strong impact on its long-term sustainability. We should note that this concept of documentation and accountability included here are also addressed throughout this entire series, especially so when we reach Board Essential #8.

With a well-conceived and crafted organizational and board mission statement, the first and most critical step in the process of building a successful nonprofit board has been achieved. But also as noted this is a process that never truly ends for the best nonprofit agencies, as their mission statements are periodically reviewed to ensure that they continue to remain true as guiding forces that can move the organization forward.

Next Up: Essential #2 – Selecting the Right CEO

Posted by Tiffany Applegate on April 17, 2012 at 9:16 AM
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March 27, 2012

Creating a Mission StatementCreating an Organizational Mission Statement

As we begin our framework of steps that you and your board can take to ensure the maximum success and level of benefits that you can provide to your constituents, we start with our first essential: Determine the Mission and Purpose of the Organization, and also of the Board of Directors.

Though it may seem remedial, in reality this is where many nonprofits are tripped up. As important as missions are, nonprofits frequently go off in ineffective directions by relying on mission statements that can be little more than slogans. Many are too lengthy and ambiguous. And to be useful, they must be accompanied by vision statements and lists of values, goals, principles and objectives – which unfortunately many organizations just haven’t developed.

The organizational "mission" for a nonprofit is analogous to "profits" for private sector companies. In the private sector, corporations achieve their goals by carefully designing business operations that are reflected in a budget and then regularly reporting on how actual profits compare to that budget. And if mission accomplishment is as important as profit attainment in this ultra-competitive economic environment, why do most nonprofits not spend equivalent time in mission creation and monitoring?

This is because many mission statements have not been carefully constructed, and thus they cannot be used for regular and critical analysis, as is the case with corporate revenues and profits. Furthermore, many nonprofits do not instill the discipline within their organizations necessary to use the mission on a systematic basis as a tool to make daily decisions and achieve goals. The complete opposite is true of the revenue and profit budgets of successful corporations.

The organizational mission should make a compelling case for the need the nonprofit fills, the manifestation which outlines the reason for its existence. It should also clearly state the outcomes that you wish to achieve. The mission must be short and memorable, and appropriate for a variety of organizational stakeholders including staff, volunteers, funding sources and served constituencies. It must also be guide the creation of the mission statement for the Board of Directors.

However you should not fall victim to assuming that brevity suggests simplicity, which can lead to the conclusion that the process required to create or to rewrite a mission statement a brief exercise. That is far from the truth. But most mission statements err on the side of being too lengthy, with primary points buried in rambling, padded paragraphs – which greatly weakens its power.

The complexity of your mission statement and the delicate balance between too brief and overly long means that outside guidance in helping to create a new mission or revising an existing one can be of vital assistance. The process of creating a mission statement, often as important as the final result, may take several months. However, though the process is deliberate and comprehensive, it can be done in a way which creates a mission statement that will last for many years. This once again is why an experienced expert who can facilitate its creation and guide you through the process can be critical. This individual can help you take into account the core values and the outlook for the organization, which is the mission that the board is committed to achieve.

Nonprofit Board Mission & StrategyCrafting Your Mission Statement

A mission statement must clearly describe the nonprofit's positioning and strategy. When we discuss the word “strategy," we are defining what makes the nonprofit unique in the marketplace. In the private sector a clear and effective strategy (i.e., "uniqueness") facilitates attraction of customers, and that results in a profit. In a nonprofit a clear and effective strategy facilitates attraction of funds and provides the ability to take smart action. An effective strategy provides competitive advantage.

A well-defined mission statement is used as a tool to decide between various courses of action, a statement which is understood by employees and the general public in the same way over time and from location to location. It allows an organization to operate with focus and discipline, providing consistency in decision making over both time and geography. Is should be simple and clear to understand, not subject to multiple interpretations.

The process of creating this effective mission statement is just as important as the end result. Why is this? Because the staff and the board will have embraced this definition of strategy, and the statement can be used to create the board mission statement discussed below. Over time it is the board that is the keeper of the mission statement and the board should challenge the organization frequently to ensure that the statement is being lived up to just as the board of a private-sector corporation will monitor profit.

A great example of a nonprofit that has successfully implemented a strong statement is the Nature Conservancy, which states their mission is "to preserve the plants, animals and natural communities that represent the diversity of life on Earth by protecting the lands and waters they need to survive." The organization has been highly successful over the years, thus their mission has remained unchanged for a long period of time. This is because their stated mission is simple – only 26 words - crystal clear and compelling.

For a nonprofit, making the right choices and actions are equivalent to making a profit for a commercial enterprise. As much time, resources and energy should be devoted to crafting your mission statement as that which is used to create a sales and profit budget. And your mission needs to be reviewed regularly on a set schedule, such as annually or even bi-annually to ensure that it is still accurate. Missions may changes over time, and the mission statement should be updated to reflect this.

For example, a local ballet company has a mission which states they are “dedicated to developing a ballet company, and to helping expand public awareness of, participation in, and appreciation of a broader range of the arts through dance.” While this may have been accurate upon inception – they no longer have any plans to develop a ballet company. Because the mission statement hasn’t been reviewed or revised in many years, this is the mission that must be used on all grant applications and all marketing. It creates a real problem when trying to communicate what the organization is all about. It’s confusing for staff, leadership and the general public, since this stated mission has nothing to do with their current status as an organization. Don’t allow your organization to fall victim to the problem of not periodically reviewing and revising your mission statement(s), and thus sharing information about itself that is unclear or perhaps downright puzzling to potential volunteers, donors and other community supporters.

Once you have created your organization’s mission statement, it’s time to create your board mission; as you will see, it is a different concept. Instead of what you are and want to be, it should be focused on actions – what your board will do to ensure that the organization meets its goals.

How the Board Mission Statement Differs From the Organizational Mission

If the nonprofit organization’s mission statement declares ‘why’ an organization exists, the board mission statement defines how the board will support the organizational mission. It is a foundation upon which a long-range strategic plan for the board is created; how the blueprint for carrying out the organization’s ‘business’ can be developed.

The long-range strategic plan, with its clearly stated and defensible programmatic initiatives and their respective costs, allows for the creation of the fund-raising plan from which specific fund-raising campaigns are organized and launched to secure annual, capital, endowment, sponsorship, and underwriting funds. An organization’s mission statement and board mission statement are at the CENTER of it all.

This first Essential is so critical because it then guides each of the others, without which a nonprofit can begin down a road which they don’t truly want to go. “Mission drift” can occur when clear boundaries are not established, which can lead to simply chasing money, and pursuing projects outside the original goals of the organization. Having well-defined and articulated mission statements gives the board and other leadership the permission to say “no” and refer inquiring constituencies outside of their scope to other resources, which can keep the nonprofit on track and not splinter its focus. And organizations with long histories can still benefit from taking the time to review, refine or rework their organizational and board missions and stated purpose to better align with how they exist in the present.

After the missions have been determined, it’s critical that all activities and priorities be centered on this mission and also vision (where the nonprofit is trying to go) of the agency. You should also develop a visual representation of how the organization should work (i.e. a logic model), and research case studies of similar (and successful, obviously) nonprofits across the country. However, remember once again that this relates to the overall functioning of the organization, not the board mission statement – which is unique onto you. If you need help, don’t be afraid to ask. The investment you will make here at the beginning of the process can make a HUGE difference in the overall growth and financial sustainability of your organization, and the impact you will end up having on the individuals or groups that you support.

Our next article in the series will examine the board mission statement, and what it should (and should not) include.

Next Up:Essential #1, Part 2 – The Board Mission Statement

Posted by Tiffany Applegate on March 27, 2012 at 1:56 PM
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