Nonprofit University Blog

As many readers of this blog know, one of the programs we offer at The Nonprofit Center is what we call CLEAR (Cultivating Leadership Excellence and Responsibility) Circles. These are small groups (seven to eight people per group) of similarly situation individuals—either all executive directors, all new (less than three years in the position) executive directors or all emerging leaders (people who have direct reports and who report directly to the executive director of their organization)—who meet once a month over eight or nine months for two hours of peer-to-peer problem solving and support.

We first started these groups just for executive directors over seven years ago.  Consistently, we hear from executive directors how important these groups are to them, giving them peers from whom they can learn and with whom they can share, learning that they aren’t alone in their struggles, gaining perspective, and so much more.  Invaluable, we are told; wish I’d known about this sooner, we hear.  And on and on.

Yet, people don’t flock to these Circles in droves.  Why not?  For some, the cost is a factor—though we think at under $300 for eight sessions, CLEAR Circles are a bargain.  But nonprofits do cry poor faster than they think things through and, as I wrote in last week’s blog, nonprofits do not understand return on investment. For if they did, folks would be knocking down our doors to get into a CLEAR Circle, as the return on this investment—to the individual leader and to the organization—is huge.  For far too many individuals, however, the cost is the lesser of issues.  The real issue is executive directors can’t see themselves making the time “to get away.”Just what is this about?  Really, now.  What is going to happen in the three hours (I’m allowing for travel time) that an executive director is away, investing in her/his own professional development and, therefore, the organization’s development?  For, development and learning by the executive director has to translate to better development for the organization.  And I hear all of the objections:  but if I go to a CLEAR Circle, then I can’t go to meeting X for my organization or that panel discussion or that event.  Of, if a crisis happens at the office, what will happen?  Unless the executive director is an office of one, is s/he really that crucial to the functioning and well-being of the organization?  I certainly hope not, because if so, the organization has a problem.

The American Management Association has released the results of its December 2010 survey looking at how well prepared companies are for a sudden loss of a key, senior leader.  Of the  1,098 senior managers polled, only 14% said they were very prepared, while more than one-and-and-a-half that (22%) said their company was not at all prepared.  When asked to describe the leadership pipeline in their companies, 47% described it as “adequate” and 39% called it “inadequate.”  Only 10% described that leadership pipeline as “robust”.

Maybe the descriptors refer to mere size and numbers, but numbers don’t make a pipeline adequate or not.  It is the quality of person/people in that pipeline that determine the shape an organization will be in should it face a sudden departure of key leadership.  And I’d argue that the nonprofit executive director who sees him/herself as so indispensable that s/he must attend every meeting, must represent the organization at every event, is the only who can address a crisis isn’t creating a pipeline of future leaders, let alone developing it.

By taking ourselves out of the mix from time to time—be it to attend a professional development opportunity for ourselves or to take a day off or an even longer vacation, executive directors are giving others in the organization the opportunity to test their leadership wings, to grow professionally, to share the face and responsibility of the organization.  It is not shirking responsibility or being a bad leader but is, in fact, the exact opposite.  It is providing the organization an opportunity to assess its pipeline and prepare.

So, executive directors:  the next time you have the chance to invest in yourself, to stop and smell the roses, to say “no” instead of always saying “of course,” do so.  After all, it isn’t always about you.   Sometimes we have to think about what is best for the future of the organization.

Over the holidays, I was fortunate enough to see the revival of South Pacific, last seen when I was but a wee lass.  Its songs  are currently in that perpetual song fest in my head with one in particular:  a larger “I’m Gonna Wash that Man Right Outta My Hair.”  I have, however, swapped “Man” and “Hair” with other things.

The version I am currently singing for the sector is “I’m Gonna Wash Bad Practices Right Outta the Sector.”  Not nearly as catchy as Rodgers and Hammerstein, but it amuses me.  On the dawn of this new decade, it is truly more than time for the sector to rid itself of behaviors and cultural norms that hold us back.

To wit:  the nonprofit sector doesn’t fire; we work with people, we understand, we chicken out, we do infinite correction plans, and let time take its course.  If I hear one more person say to me, “But s/he is a nice person” as excuse for not firing an underperforming or nonperforming staff member or removing a board member, I will not be responsible for my actions.

Folks:  wake up!  When we work in the nonprofit sector, when we volunteer to do the job of board member, we are not taking on a hobby that we can pick up and put down as time and whim allow.  In both cases, we have agreed to do a job that should have a clear and written set of responsibilities attached to it, a set of annual goals, a scheduled and understood annual performance mechanism, and rewards for doing that job well (which can simply be heartfelt thanks and appreciation or other no- or low-cost options) and consequences, including the ultimate one of being let go (does that sound “nicer” than fired?).

The for-profit world understands the value and importance of firing people when they are not performing; in fact, many do adhere to Jack Welch’s principle of every year firing the bottom 10%, regardless.  Our failure to fire is often a point for derision by for-profit people who understand that we don’t know how to run our businesses effectively.  But more upsetting to me is that more and more of the younger employees in the nonprofit sector—our future leaders—simply roll their eyes, express extreme frustration with the failure to fire underperforming and nonperforming colleagues, only to later on suggest working a little harder or a little longer with this very same employee.  The unhealthy culture sucks them in, and bad practices continue.

So, to wit:  let’s us change the perception and reality that we are the nice sector and don’t want to offend anyone or hurt feelings.  Instead, let’s become the humane sector that understands its responsibility is to fulfill our mission promises to our stakeholders.  In order to do so, we must have the right players—staff, volunteers and volunteer board members—on the bus.  Which, in turn, means that we will have to say no, fire (no euphemisms, please) people, use the removal clause for board members stipulated in our bylaws, all with the goal of building the strongest team to carry out our mission.  Firing does not have to be ugly, as so many currently practice it; it can be done decently, humanely, allowing a person to leave with his/her dignity intact and support available.  But, loyalty must, first and foremost, be to our mission, not to the people—board, staff and other volunteers alike– who are supposed to help execute that mission.

To wit:   we must, and very quickly, come to understand the concept of return on investment (ROI).  Though funders, charity watchdogs and, increasingly, the general public, believe that upwards of 80% of money coming into a charity must be spent on programs and services always, the reality is that sometime we must invest in the administrative and fundraising side of the organization, beyond that 10%-20% those outsiders figure, in order to be better at fulfilling our mission for the long-term.  This is ROI!  We must invest in professional development for our board and staff; we must invest in organizational development by engaging in strategic planning and business planning and development planning; we must invest in marketing in order to ensure our ability to deliver on mission.

But ROI also comes from not taking short cuts and the easy way out when really an organization needs to invest in doing things the right way.  As a board, we have a legal duty to engage in reasonable inquiry and to demonstrate skill and diligence in all of our decision-making.  Thus, we should never be giving work to an individual just because s/he is the friend of a board member or it saves us having to look elsewhere, do some homework, interview candidates, etc.  We must first create a bid process and then adhere to it all of the time and not just when it is convenient.

We must understand that strategic planning cannot be done in a day or a month, by one or a subcommittee of the board.  Recognizing that the origins of strategic planning are rooted in the military–its process for preparing for battle—should sound the alarm that there is no quick, down and dirty way to do strategic planning, unless you want to risk a bad outcome.  Good strategic planning, planning that will reap that ROI for the mission and the organization for years to come, takes time and, to a certain extent, money.

We must understand that expediency in the short term often costs tremendously in the long term.  Time and time again, boards reach for the expedient way to replace an outgoing (fired or resigned) executive director by putting a board member in as interim, who then returns to being “just a regular board member” upon the arrival of the new executive director.

Or, equally expedient and treacherous, the board puts a staff member who is unlikely to be hired as the permanent executive director in as interim who then returns to a) being peer to those s/he recently bossed and b) being an underling when s/he was the top dog.  Or, the board hires too quickly simply because it wants the process over (it is, after all, hard work to do a good hiring process) and hires poorly, only to find itself spending too much time managing a poor employee and redoing the search process.

My list of cultural changes that must happen to make us as strong, healthy and vibrant a sector as we must be could go on and on and on.  But I’ll stop and return to singing, with what I hope is a Greek chorus behind me:  we must wash these bad practices right out of the sector.  And I do mean right now!

When it comes to political and nonprofit leaders coming up with interesting ideas, the United Kingdom is outshining its American child.  First, this past summer, Prime Minister David Cameron announced his intention to create a Big Society Bank.  (Just the name sends shivers up and down my spine!)  Initial funding for this bank – to the tune of  £350m to £400m (the equivalent of $544,519,104 to $622,307,547 in US dollars) – will come from bank accounts that have been dormant for at least 15 years.

But anyone is able to invest in the Big Society Bank.  In turn, beginning in April of this year, the Big Society Bank will provide grant funding to small, community based organizations and start-up organizations, with a mission to fight poverty.  To be eligible for a Big Society Bank grant, however, a charity will have to have first received a grant from a funder from within its community, ensuring, in the mind of the Bank’s creator, that a charity stays rooted in and tied to the local community it serves.  Though critics are wondering if this will ever get off the ground, the idea in and of itself scores one point for the motherland!

At the end of last year, Francis Maude, a member of the Prime Minister’s Cabinet, and former Chairman of the Conservative Party, made the proposal that people be allowed to “round up the pound” whenever they use an ATM or pay for a purchase with a credit card and the amount of the rounding up will be donated to charity.  (Apparently Maude also suggested that the wives of cabinet ministers write personal thank yous to large donors.  No one ever said Mother was perfect – except for mine, of course!)  This is not a unique idea, as Maude got the idea of rounding up the pound from Columbia and Mexico – so, kudos to them – where such a program already exists, and a number of other nonprofits and companies, such as The Pennies Foundation in the UK, allow people using a credit card in a store or on-line to add a bit extra to go to charity.  And several banks in this country allow people to round up for personal savings accounts, not charitable donations.  With his idea, Maude is proposing to get all of the financial companies that control ATMs and credit card payments to make rounding up the pound a system-wide option.  Score yet another for the motherland!

But perhaps my most favorite idea from across the pond comes from Sir Stephen Bubb, the CEO of the UK’s Association of Chief Executives of Voluntary Organizations.  He has just proposed that the bonuses bankers will receive this year – which is currently estimated to be about £7m (just under $11M – be taxed 50%.  And can you guess what he suggests be done with those tax dollars?  Yup, given to the Big Society Bank!  Brilliant – score a huge one for the motherland!

And in this country? What are the innovations our political, commercial and nonprofit leaders putting forth?  With one exception, nothing I’ve heard.  The new governor of Connecticut, Daniel Patrick Malloy, ran on a platform that included setting up a cabinet level position for and about nonprofits.  And one day before he was sworn in as Governor, he announced the appointment of Deborah Heinrich to fill that newly created cabinet position!  (An appointment that did not come without its grumbles, as people were quick to point out, and fairly, the tension between creating a new cabinet position and the need to tighten the State’s financial belt.)   I don’t know what is more exciting:  a politician who executes his campaign promises or the actual creation of this position.  Yet, it really is too early to rejoice; we must give Malloy, Heinrich and their supporters time to see what this position actually does.  But after Malloy, the American petrie dish of innovative ideas to support the work of our 1.9 million nonprofits who work each and every day to improve the quality of our individual and collective lives is empty.

Let’s hear it for the motherland.

When I was growing up, we had a vacation home on the Potomac River, right outside of Shepherdstown, West Virginia. We used the house primarily for weekends throughout the course of the year, with a bit more time during school holidays.  One of the first things we did as we drove into town on the way to our house was to stop and buy the current edition of the Jefferson County local newspaper (The Chronicle and The Shepherdstown Chronicle.

My siblings and I loved reading those papers.  It wasn’t that we were bereft of newspapers; we had plenty.  The Washington Post, The New York Times, The Wall Street Journal, and The Christian Science Monitor were all delivered daily to our house, and where Saturday and/or Sunday editions existed, they came, too.  So, it wasn’t that we were wanting for newspapers; we just didn’t see newspapers like these!

These were the newspapers that made community!  You could read who vacationed where and with whom—even if it was just in the next county and the in-laws or across the ocean with a church group.  You could find out who was applying to what schools and then, months later, where people were accepted and where they were going.  And, sadly, you knew who was going off to Vietnam and when, who came back—and how.  Naturally, you learned of all of the births, deaths, marriages, fidelity, infidelity, crimes, fires, etc., and the showers, funerals, and court appearances that accompanied them.  But not just of the rich and famous, but of everyone—regardless of position in society, wealth, geography, etc.  This was a world of ordinary people doing ordinary, every day things, and the people who loved them, missed them, raised them, scolded them, talked about them—up front and behind their backs.  This was a community that knew what was going on with everyone! There were little to no secrets in that world.  The world as seen through these local papers was not the same world viewed through the eyes of The Journal, Post or Times.

I think about that world every time I read my Google Alerts and see the newspaper articles printed in some local newspaper about local nonprofits receiving local grants.  Of nonprofits asking their communities for contributions for their clothing or food drive, for presents for their Santa program, for money for a new roof for their community center.  Of the local funder or Chamber of Commerce offering a program free of charge, or not, on nonprofit marketing or how to start a planned giving program.  Of how the horses saved by the local nonprofit are doing or the success of the drive to save the nonprofit itself.  And I rejoice that in so many places around this country the challenge of doing the work of nonprofits is being exposed, their struggles made real, their successes—and their closures—celebrated and mourned.

There are almost 2 million nonprofits throughout this country.  The vast majority go unrecognized by most people, while the  100 largest—and do not for a minute equate large with good and effective—seem known by almost  everyone.  The Post, Times, Philadelphia Inquirer, Chicago Sun Times, San Francisco Chronicle, etc. do not announce a community member’s first trip abroad or the Joneses cutting down the oak tree in their front yard anymore than they tell the full tale of the patchwork of nonprofits that support, enrich and enliven all of our lives.  And so we don’t know where the rents are in our fabric or how the talents of those who know how to darn are most sorely needed.  We do not have the information to save ourselves.

Some might say, “Not to worry, Laura!  Twitter is here!”  (I confess to feeling great sadness when I learned that I could now follow both the Jefferson County and Shepherdstown Chronicle on Twitter.)  But I got more than 146 characters to describe for me 75-year-old lace napkins used at the tea party at Susan Smith’s house and Stephen Jones said way more than that in talking about his excitement of going on his first fishing trip with his father and uncles.  You need more than 146 characters to make the connection and feel a sense of responsibility that I need to step forward and answer that nonprofit’s plea for help.

Growing up, I appreciated the world views I got from both sets of newspapers I read; one was not inherently better than the other and each was equally necessary to gain a full world view.  As we march through 2011, a year that promises for nonprofits to be harder than the previous two, we must make a promise to ourselves and our stakeholders.  Whether we live in Loving County, Texas, which claims to be the least populous county in the U.S., or in Los Angeles County, which has the distinction of being the most populous county, and anywhere in between, we must promise that we will put our story out there, successes, failures, antique napkins and all.

Living philanthropic—something to which we should all aspire, and something which is within everyone’s means.  There are those who inspire and those that leave us with a big thud.  As we launch into 2011, I challenge us all to be inspirational.

In October of this year, Forbes magazine published an interview with Warren Buffet and Jay-Z, an unlikely pair that apparently hit it off—once each got past his nervousness!  They talked about business and philanthropy.  Buffet, true to his beliefs, recognized that his area of expertise was not distributing charitable dollars and so he “turned it over to a specialist.”

Jay-Z, on the other hand, still young in his philanthropic career, chose to start by replicating his experience:  paying homage to the sixth-grade teacher who recognized something special in him(when he was Shawn Carter), he started the Shawn Carter Scholarship Fund to give other children an opportunity.   Different in approach, both agree that philanthropy is about teaching—leading by example and giving time to make a difference.  It is about inspiring—inspiring others to reach potential, inspiring others to follow suit, inspiring others to enrich our communities for all.

There are so many examples out there to inspire us—from the large to the medium to the small.

Marcos Lopez, owner of eXude benefits, a small business in Philadelphia offering total benefits solutions and identified by several sources as one of the best places to work , shares that sentiment, stating “I feel strongly about giving back to the community that we live in and that supports us.”  Acting on that commitment, eXude will donate just under $100,000 to charities this year, and countless hours of donated time.  Not sufficient, Marcos has his eye on giving 10 times that much down the road.

Subaru will donate up to $5 million to charities just through its “Share the Love” program.  In case you’ve missed the ads, between November 202010 and January 3, Subaru gives a donation of $250 to one of five charities selected by the buyer of a new Subaru.  And that doesn’t count its charitable giving that goes on throughout the year.

Carlo Garcia, a 28-year old “regular joe” from Chicago, as he says on his blog site Living Philanthropic is proving his mother’s axiom that “you can do so much with so little.”  He’s an aspiring actor and artist who is past the 2/3 mark in making one charitable donation each day for a whole year, having given just under $3000 (last time i checked) most in gifts of $5 and $10.  His blog chronicles his giving, telling you who, why and how much he gave, as well as telling you how much he’s inspired other to give as well.

Then there are the students from kindergarten through high school who donate the images of their art (but keep the original) to Fresh Artists, a nonprofit in Philadelphia.  Fresh Artists, with the rights to the artwork, sells the artwork—blown up to whatever size fits the space needs–to corporations around the region to decorate their walls.  It then uses the proceeds to buy materials for art teachers in Philadelphia’s public schools—to use in the very classrooms that produce the young artists and philanthropists.

This is not, by any means, an exhaustive list of the shapes and sizes, creative and not, of philanthropy that happens every day of the year and that should inspire us all  Most of it, fortunately or not, goes unsung.  But then, that is not why most philanthropists do what they do.

There are, however, some philanthropists who do use philanthropy to garner attention, improve perception, etc, perhaps not in whole, but clearly in part.  Most, if not all, nonprofits would be just as happy to accept this money as that which comes from individuals and organizations who give because they know it is the right thing to do; afterall, the money is just as good thought the story hardly inspiring.  So, Goldman Sachs Group gets kudos for giving $212 million to 1,100 charities from its Goldman Sachs Gives fund, a fund fiananced by the requirement that partners give a percentage of their income to nonprofits; however, they get praise here.  Required behavior, by its very nature, does not instill nor inspire.

Then there are foundations.  Pablo Eisenberg recently admonished foundations to give more than the mandatory minimum of 5%, noting that giving 6% or even 8% would not cause foundations to close, though failure to receive those extra thousands of dollars could cause nonprofits to go out of business.  In June of this year, Foundation Source, which supports donor led and family foundations, reported that almost 63% of its more than 900 members exceeded the mandatory minimum giving level in 2009.  Sounds good, but there were 120,810 private foundations in the United State as of April 2010, and I don’t know what the other 119,000 plus did.

And then there are those who should be ashamed to bring any attention to their philanthropic activities.  The Philadelphia Phillies (and I hate writing this as I do love the Phillies and Cliff Lee), within a week of announcing  that they were bringing Cliff Lee back to Philadelphia, for $120 million five years, received very noticeable media attention for their holiday charitable activity.  The front office, as it has for the last ten years, prepared and served food at a homeless center for a few hours;  by some accounts, they also brought a $10,000 check.  A look at their website indicates that their charitable activity throughout the year is limited to in-kind donations.  (Nothing here should take away from the individual philanthropic activities of Phillies players, such as Ryan Howard, Jimmy Rollins, Chase Utley, Jamie Moyer , Shane Victorino and more.  I am only talking about the Phillies Corporation.)  Really, Phillies?

We all have the responsibility to make our communities and their members strong, healthy, and vibrant.  Many of us exercise our philanthropy individually, every day of our lives; many corporations make it part of their ethos.  Now, those of us who are doing it must take on yet one more responsibility:  to teach and inspire others to do so as well.  Add to your 2011 “to do” list one more thing:  creating a philanthropist.