Nonprofit University Blog

So often when I go to write these posts, it’s from a position of simultaneous dismay and negative amazement—are nonprofits organizations really doing that? could boards really believe that what they are doing is right? do donors really think one number tells it all? Today, I’m happy to say, I have nothing but high hopes.

What, you ask, has prompted this seeming 180 degree shift? A group of seven, amazing women currently working in supervisory roles, though not as executive directors, in the nonprofit sector and—get this—each seems to a) want to stay in the sector, b) not be motivated by money but motivated by cause and mission and c) not be ruling out, and perhaps many are ruling in, becoming executive directors. Not tomorrow, perhaps not even next year. But eventually. Hallelujah!

These are smart, energetic, eager young women working in all areas of the sector. They exude a strong sense of their professional selves and a desire not just to do their jobs but to do those jobs as well as they possibly can. They understand the importance of professional development in its myriad of forms, from reading to networking to workshops to mutual support. They get the importance of thinking about what they do before doing it, as well as questioning after the fact whether they did well and right. They understand the concept of being a living, learning, growing individual as a tool for being a better employee and a better supervisor.

There is no arrogance in this group, but there is a sense of confidence and control. They understand the need to find their own style of leadership that will allow them to support organizational goals while still allowing them to be comfortable within their own skins. These young women know that leadership doesn’t happen–it must be developed, nurtured and cultivated. It doesn’t happen overnight as in, today you aren’t the leader of the organization, tomorrow you are. (As if you wave a magic wand and, poof, you are a leader). No, these young women understand the work that goes into becoming a good leader, the trials, errors and successes that happen along the way, the charting of a course that equips them, when they land, to be that stellar leader of a deserving organization. Herein is the future of the sector, and I am heartened! Now, all we need is 639,993[1] other women and men out there like them wanting to fill the leadership void the nonprofit sector is creating, and we will be in great shape.

(By the way, the group I describe above comprises our first CLEAR Circle for future nonprofit leaders. CLEAR Circles are peer learning groups traditionally for nonprofit executive directors who meet for nine consecutive months for a facilitated discussion of shared issues and concerns, and for group problem-solving and support. Thanks to the Valentine Foundation’s support for emerging female leaders, we were able to inaugurate our first CLEAR Circle for “#2s” in nonprofit organizations.)

[1] This is based on the 640,000 executive director slots that Bridgespan projects will need to be filled over the next ten years.

Recently, I’ve been brain kneading (the visual I have as my brain works over an issue—the repetitive process of kneading bread, bringing it up to fold it over only to push it down and turn the dough a quarter to go through the same motion, over and over until the dough is ready) this whole issue of compensation in the nonprofit sector, piqued (or was it peeved) by the recent report saying that younger employees are looking to nonprofits for the same kinds of benefits and perks found in the corporate world. Combine this with the clear schooling I got from the class on nonprofit management that I’ve been teaching in La Salle’s MBA program—which was “everyone wants to make the most amount of money for the least amount of work”—and I knew it was time for this old dinosaur to pack it in.

And then I get a call from a reporter wanting to know if a practice that Scripps and some other universities and research institutes are using is a national trend. It seems that Scripps is offering mortgages (my assumption is low-interest, if not interest free) as an incentive for their top recruits to settle with them in Florida. A national trend? I wouldn’t say so. But a practice that colleges, universities, hospitals, and other large nonprofits have been using for quite some time? Absolutely. If you are a hot commodity and the nonprofit has the pockets deep enough to offer for-profit- like perks, why shouldn’t you and the nonprofit go for it?

Well, there is the rub, no? The mere fact that the reporter knew that some folks would undoubtedly raise eyebrows over this practice by a nonprofit says it all. Nonprofits aren’t supposed to reward like the big guys. But, what if you are a big guy? And you have the resources? And you want to get the best and brightest in whatever the field is to come and do what the best and brightest do, and do it for your nonprofit organization? Why shouldn’t you be able to do that? It isn’t the situation described to me by the other reporter who called me this week wanting to know what the “expert” response would be to the executive director receiving almost $100,000 in total compensation in an organization with a total budget a bit over $400,000. (Yes, that is a problem.)

It is not nonprofit versus for-profit. It is not what we are paid, but what we are paid in relation to the work that we actually do. This is true of for-profits and nonprofits alike. If a nonprofit research institute hires a scientist who ends up finding the cure for multiple sclerosis, who, pray tell, would begrudge—or even question the return on that investment–that scientist an interest-free mortgage? Do we begrudge all of the senior managers in for-profits their Blackberries? And there are a lot more senior managers walking around with free Blackberries than there are nonprofit employees walking around with interest-free mortgages.

People: let’s move on!

  Earlier this week, we hosted our first session explaining the new IRS Form 990 to nonprofits.  Have you ever seen a group of deer in headlights? 

Not a pretty sight. Nor is it going to be a pretty sight to get your board ready to answer all of its pages of questions with the “right” answer, and answered honestly.  After all, it is one thing to answer a question “yes” with a yes that means, “Yes, we have a policy.  We think we know where it is.” And quite another to answer a question, “Yes, we have a policy, we actually not only use that policy on a regular basis, we review and update it as needed.” 

To complete the new Form 990, you could get away, to a very great extent with the first yes; but to do your organization true justice, you should be answering with the second yes. Which brings me to the real point of my rambling.  The IRS does not know nonprofit best practices for management and governance, but it drafted, got lots of feedback, and finalized this new Form 990. 

Finally, please learn – and as soon as possible – what is expected of you under the new Form 990.  Right now there doesn’t appear to be an IRS imposed penalty if you give the “wrong” answer.  But don’t be fooled by the statement that there isn’t a right or wrong answer.  If you are given the option of yes or no, there is clearly a best or right answer.