No matter how cynical you get, you can never keep up.”
-Lily Tomlin

The chant is getting louder:  “Tax the nonprofits!  Tax the nonprofits.  It’s the answer to all our problems.  They get away with everything.”

Every day I’m reading of another jurisdiction looking to tax nonprofits–all or some–from Honolulu seeking to rescind the property tax exemption of nonprofits to Pittsburgh wanting to not only rescind the property tax but put a tax on tuition paid to its numerous colleges and universities; from Kansas seeking to add a sales tax to the items nonprofits purchase, to some of its local jurisdictions wanting to rescind the property tax exemption for all nonprofits, to Georgia that is considering just rescinding the property tax exemption just for hospitals, while Rhode Island’s legislature is considering rescinding the 7% sales tax exemption for its 6,600 nonprofits.  The Boston Globe recently reported  that a task force is readying recommendations that would eventually seek up to the equivalent of 25 percent in contributions from tax-exempt entities in that city.

And the list goes on and on.

Why?  Because state and local governments’ coffers are, like everyone else’s, running low.   So, where to turn to reverse the coffers’ drain?  Let’s go for the deep pockets!  Let’s go for the nonprofits!  Whose brilliant idea is this?

The reality is that they have picked wisely for they have picked the weakest link in the chain.  Try suggesting an increase in residential property taxes and immediately the hue and cry is raised.  Neighborhood associations take up the attack; politicians from the opposite side of the aisle of the mayor’s/governor’s party start hurling barbs; political advisors start predicting defeat for the party in the next election.  The local association of realtors may even get involved.

Or, try as Philadelphia Mayor Michael Nutter recently did, and propose that one way to make up some of the shortfall in the City’s budget would be to tax soda sales.  There was an immediate outcry from the heavy, deep pocket soda manufacturers and the unions of employees involved in the production and delivering of soda.  And of course, the voice of shops that sell soda and restaurants that serve soda chimed in as well.

When the suggestion is made that the property tax on for-profit businesses gets increased, you know what happens.  The associations of every kind of property-owning businesses descend on the politicians, as do those responsible for wooing future businesses to the area.  After all, we don’t want to frighten off the businesses.

And of course, the local politicians will all chime in on whichever cause(s) is most represented in his/her district.

So who rushes to the aid of the nonprofits when they are threatened with taxes that most simply cannot afford?  With the exception of the large hospitals and universities, and the small minority of equally large nonprofits that more resemble for-profit businesses than a nonprofit, most nonprofits don’t see—or have–the available time, personnel or money to go argue their cause.  Thus, they are an easy target; few fight back.

Unfortunately, because too many in society do not understand what nonprofits do, don’t see them operating around them, don’t know how they are influencing their daily lives, nonprofits become an easy target for cynicism.  To too many, we are scoundrels and beggars who hide behind the nonprofit shield and “get away with too much.”  There is less recognition of the good that nonprofits do, of the help they quietly provide to communities day in and day out, of the enrichment they add to our lives, the succor given to those with no where else to go, of the problems they redress, etc.  And there is little recognition of the millions employed by nonprofits who work for far less than they could earn in the for-profit world because they want to provide such services, because they want to ensure that our communities are vibrant and healthy.

But, hey, let’s go ahead and make it even harder for the good guys.

It is time for the sector to get rid of the “gratitude factor” and remember why we are in the game to begin with. It is the gratitude factor that makes us keep long-time non-performing and under-performing board members on our board long past any “normal” person’s tolerance.  It is the gratitude factor that allows non-performing, under-performing and non-team players to stay on staff long past even the longest of times lines for improving performance.  And it is time for this to stop.

It goes along with what I’ve said before:  we are the “nice” sector.  We are so concerned with being nice to staff and board members, being understanding and caring, that we forget to what our first and foremost allegiance must be:  our mission.  The only thing which we must bend over backwards to nurture is that mission.  But when the gratitude factor controls an organization, it is being nice to neither its mission nor the vast majority of its staff and board to whom we really should be grateful for they truly work for and push forward the mission.

Don’t get me wrong:  I believe very, very strongly in the fact that an organization’s personnel policies must be as respectful, kind and supportive of its staff as the organization is to its clients.  We should want to do all that we can to keep those who do their jobs well as we want to keep those who are good clients.  But we have limits to how far we bend for our clients and passing those limits means consequences.  Don’t play by the rules, clients are gone:  for example, don’t pay your dues into the membership association, you aren’t a client any more; don’t show up to your job training site for the fourth time, you aren’t a client any more.  A client who violates conduct expectations—punctuality, being a team member when called for, disrespects property, etc.—will experience repercussions.

Yet, I regularly hear stories, complaints, laments about employees who have worked at nonprofits for years, sometimes decades, who do not perform their jobs, either because they don’t want to or are incapable of doing so, who are less than polite to colleagues, who ignore protocol, who overstep boundaries, who terrorize offices, who fail to comply with corrective action plans, and the list goes on.  These are not your once in a while stories; I have heard four such stories this week alone—and it has been a slow week in terms of stories!  And the stories cut across the organizational chart, from the receptionist to the executive director to a board member(s).

Why?  Why do we allow this?  Because we are grateful.  Grateful that someone is willing to hold the title (can’t say do the job) for the salary being paid and the conditions under which s/he works.  Grateful that someone is willing to fill the board seat so that the minimum in the bylaws can be met and the “difficult” (a myth that it is difficult) task of replacing that board member won’t have to be done. So, the gratitude factor allows us to be an inefficient, ineffective and wasteful organization—all because we don’t want to hurt anyone’s feelings, don’t want to play the heavy, don’t want to do the work and expend the energy that replacing that “problem” would cause.

The reality, however, is that so much more work, time and energy is already being wasted managing this problem, the tensions and, worse, this person causes, the anger and other emotions of the true workers, the negative impact on organizational morale, and this list, too, goes on.  All of this means a loss of resources that should be going to further the mission—the real reason why everyone is there.

It is time—and I do mean immediately—to fire these people.  Let them go from the board; let them go from the payroll.  They are poisoning the organization in ways seen and not seen and depleting the resources for mission service.  It is time to stop being grateful for mediocre or less than mediocre service to the mission; it is time to stop being nice to the wrong people.

Go fire and hire.

We are our own worst enemies.  We perpetuate myths, we engage in worst practices instead of best and we straddle ourselves with behavior and attitudes that can do nothing but harm us.  It is time for the nonprofit sector to take control of itself and prove to the rest of the world that we deserve the respect that we so crave.

First, let’s bust the myth that our employees do NOT deserve livable, competitive salaries.  They absolutely do, and you know it.  While many nonprofits have begun to address this, adjusting salaries and bringing them in line with what the real market will bear, others still cling to the notion that nonprofit employees get their reward in the mission work and aren’t there for a decent salary that ensures a reasonable quality of life.   And as long as there are any nonprofits living that myth, the rest of the world will continue to cling to it.

To wit the current hue and cry over the 2008 compensation of the CEO of Boys and Girls Club of America.  According to the Boys & Girls Club of America’s 2008 Form 990, the CEO made $988,591 in total compensation in 2008– $593,926 salary, the rest “other compensation.”  She also had 8 colleagues who also earned over $100,000, for a total of $1,862,519 in salary and a bit more than $300,000 in additional compensation.  So, in total, this organization spent $3,151,937 on its nine highest compensated employees.  The organization also reported total revenue for 2008 as $107,150,617.  Which means that in 2008, the Boys & Girls Club of America spent 3% of its revenue on what should be presumed to be its nine most senior managers.   These nine employees report working an average of 58 hours/week, with a range of 45-70.

Too much?  When I googled the question as to what the for-profit ratio of salaries to revenue should be (as this is not an area I claim to know anything about), I got back all sorts of figures, with a low of 16% to a high of 50%, and much here seems to depend upon the industry.  No where, however, did I see a figure as low as 3%.

Yes, it is true, that Boys & Girls Club gets almost $41 million in government grants.  And yes, it is true that, as with many for-profits and nonprofits, the Boys & Girls Club experienced an almost $14 M dollar loss in 2008, approximately 13% of what it did bring in.

But still.  Compare this with the salary of the AIG CEO installed in the aftermath of the meltdown of America’s financial industry.  In October 2009, Obama’s “pay czar” approved the salary of $10.5 M, which included $3 M in cash, $4 M in stock options and $3.5 M in annual performance bonuses, to be prorated for 2009.  At the time, the pay czar said this package was comparable to other CEOs in the post-meltdown world.  Too much?  Too little?

How do you decide in a vacuum?  Shouldn’t the salary and possible bonuses be determined based on the scope of the work being required to perform and the quality of the performance of that work and not the whether the organization is profit driven or mission driven?  That mission-driven organization is just as dependent upon its leader running and managing a successful business as the profit-driven organization; its leader needs the same savvy, skills, smarts, and leadership essence that a for-profit organization needs, if not more.  For, after all, as we are regularly reminded (as if those in the nonprofit sector need any reminding at all) that we are using other people’s money—from taxpayers to foundations and corporations to individuals—to fulfill the promises we make in our mission.  It could easily be argued that it takes more skill and savvy to raise money and ensure that those promises are kept, and Peter Brinckerhoff states that nonprofit employees work much harder than for-profit employees.  So, who is to say that nonprofit CEOs deserve a lower standard of compensation?

My son recently had to write a paper either agreeing or disagreeing with the statement that went something like this:  Marx preached a philosophy of freedom.  As he so often does before he has to start constructing an argument, he asked me what I thought.

Well, it has been a long, long time since I read Karl Marx, but it was an easy answer for me.  Absolutely!  Marx was all about freedom—freedom from the systems and structures that alienated ourselves from ourselves and breaking away from a world view that didn’t really let us see the world very clearly at all.

I confess that I didn’t—and still don’t—always understand all of Marx.  But the part about cultural revolution, that I get completely.  It is cultural revolution that is needed to rattle the cast iron cages that contain so much of what people think, barring any new ideas or possibilities.  And cultural revolution is the answer to my current, though not new, frustration.

I am so far beyond tired of the nonprofit sector being treated as the stepchild of society.  The sector that tirelessly caters to the marginalized populations of society that those not marginalized are oh so relieved to have someone else looking after gets marginalized itself.  The sector that preserves the pockets and expanses of nature’s splendor so that all of us can run, walk, picnic, and restore our souls gets kicked to the side like the empty plastic bottle blighting the trail.  The sector that lifts our spirits and plays to our imaginations and creates the possibilities of “what if …” by bringing us museums and theatres and both experimental and tried and tested art, music, dance and more gets no standing ovations or rave reviews, as it wasn’t deemed worthy of sending a reviewer.

Just what am I talking about?  I am talking about the sector that ensures that our society remains human yet receives so little attention—or the right attention.

On the first night of my MBA class on nonprofit management at La Salle, I always ask the students to tell me how many nonprofits they interact with in the course of an average week.  Most tell me none.  But when I ask how many attend a religious service on a weekly basis, or run in a park, or attend a cultural event, or—and this is the one I love—attend this university—then, and only then, does the invisible start to become visible.

I am talking about the many people who put board service on their resumes to attract the right attention for themselves but who don’t have the time, commitment, passion, awareness, to give their right and proper attention to their role as board member.  (For the record, there are some who take their job as board member very seriously.  And to those, I say thank you, and join the revolution!)  I am talking about the people who drop the $25 check in the mail to their favorite charity while on the way to parking ($20), dinner ($110) and theatre ($260).

Mostly, though, I am talking about taking the nonprofit sector seriously and recognizing the contributions it makes to ensure the quality of life in all of our communities.  I am talking about being realistic about the cost of running these businesses and a willingness to pay for the “sexy”—the programs—and the mundane—the lights, computers, mortgage or rent, etc.  And I’m talking about bringing to the board table the same work ethic, level of commitment and intention to do the job expertly as is brought to the paying job.

Employees of the nonprofit sector are, for the most part, highly skilled, extremely capable and absolutely dedicated to doing both well and good.  And though this is great, it is not sufficient if we are to maximize the benefit this sector brings to all of us.  To achieve that, the sector must be embraced in public, not behind closed doors; it must be brought out of hiding and into the light; it must be truly valued as an equal player in the production of goods and services and as a contributor to the economic engine that drives this country.  And those who volunteer in this sector must understand the importance of their job and only take it on if they are willing and able to do so with the level of professionalism that drives them in their day job.

Unfortunately, I am not optimistic that such change will occur—shy of a major cultural revolution.  Marx would like that!

Are nonprofit boards antiquated?  I’ve give a lot of thought to this topic.  There isn’t a nonprofit executive director in this country who, frustrated beyond her/his last straw, hasn’t asked that question.  Or, let me correct myself, hasn’t made that question a statement:  “!#$%^&*!  Boards are so antiquated.  Why do we even need them?”

The reality, however, is that the theory of nonprofit boards is not at all antiquated; it is the practice that that gets in the way. But, truth be told, when boards are practicing as the theory says they are supposed to, they help a nonprofit beyond even the measure that the most gifted executive director could achieve on her/his own.

There really are three key responsibilities that nonprofit boards need to be executing, and executing well.  Unfortunately, most do all poorly—if at all; some do a bit here and there well; and only a handful really do all three and do them equally well.

1. Oversight: this is really clear and simple and yet one that far too many boards do so badly to their own detriment.  How hard is it, truly, to provide financial oversight?  Granted, it does mean that every board member needs to take the time to understand the financial status of the nonprofit at the time s/he joins the board and then how to monitor that status on an on-going basis.  That includes understanding the financials, reviewing them monthly, asking questions when things do not appear right, taking the risk of being viewed as the “troublemaker”, etc.  To do otherwise means that his/her organization could be tomorrow’s headline because the board treasurer, executive director, CFO or any combination of the above or others have embezzled, robbed Uncle Sam, or some other wrongdoing.  And trust me:  it isn’t hard to be the overseer.  The board collectively, and each individual member on her/his own just has to commit the time.

How hard is it to oversee the executive director?  Unlike the executive director who probably has multiple direct reports, each of whom has to be evaluated on a regular basis, the board only has one employee to supervise:  the executive director.  It is far easier to catch missteps or intentional bad behavior if a board is providing oversight of its one employee through the development of a clear and open process for regular performance assessment and development.  And yet, anecdotal evidence tells me that the vast majority of executive directors do not get regularly evaluated by their boards of directors.

I will, however, grant you that overseeing—by which I mean creating it and then on some regular basis reviewing/monitoring—policies is the most cumbersome in the oversight arena, as for most nonprofits there are lots of policies that the boards have created.  But even this doesn’t have to be onerous.  A simple system that sets up a calendar of what year each policy should be reviewed allows a board to spread this oversight responsibility over several years.  This prevents the situation, for example, of being in 2010 using personnel policies that were last looked at in 1999; and that prevents unwanted problems.  And all of this isn’t to say that some times circumstances arise where a policy needs to be reviewed out of its “regular cycle,” such as reviewing investment policies when the economy is crashing all around you.

1. Strategic thinking:  most people join boards because they think they can help the organization and because they really want to help.  Bringing their strategic thinking capabilities to every board meeting is a crucial way to help, and yet it so frequently doesn’t happen.  And quite honestly, most of the time it isn’t the fault of the individual board members but the fault of the way board meetings are structured.  The vast majority of board meetings are not set up to allow for strategic thinking.  Just look at the agenda for, I’ll be kind, 80% of the board meetings around this country.  The agenda is simply a list of reports from committees and individuals (the Executive Director, the Board President, etc.).  This is the mistake that too many boards make.  They equate doing board work with receiving the data (all those reports) instead of understanding that the data is a tool they need to do their real board work.  Board meeting time should be spent questioning the data, making sense of the trends in the data, asking the tough questions the data reveal.  In other words, applying strategic thinking at every board meeting as opposed to doing what so many boards do:  reserving strategic thinking to the once every year or several year strategic planning retreat.  No organization, big or small, profit or nonprofit, will be sustainable if strategic thinking is a tool only periodically pulled from the box.

1. Revenue generation:  yes, one of the key responsibilities of nonprofit boards is to ensure sufficient revenue to execute organizations’ mission promises.  But before a board is ready to engage in this revenue generation, it should have first assessed all of its programs to be sure they are a good fit with the mission, to determine if they are built on a sound business model, to assess whether they are, indeed, delivering on the promises they claim.  Because you cannot be a successful fundraiser for a program that isn’t worth it.  So, step one is to make sure the nonprofit is doing only what it should be doing and doing it well.  Then, the board’s responsibility is to determine how the money will come in—and the only “correct” answer is through a diversified revenue generation strategy.  What combination of raised and earned dollars is the right fit for the organization at this point in its life cycle?  And how will board members make this happen?  Will they bring their friends’ checkbooks to the table? host a gathering? cultivate relationships? support the business planning for a social venture? bring in that large gift?  But, as with the financial oversight, it truly isn’t hard to be successful at generating revenue, but it does take time—and training and practice and knowing the options.

None of these three areas of board responsibility is hard to do.  But two key things are generally missing at most nonprofit board tables, which leads to the lack of execution.  There is an unwillingness to say, “Despite being a superbly accomplished person in my day job, I do not know how to be a good nonprofit board member.  Could you please teach me?”    And there is an unwillingness to recognize that being a board member is a job, albeit one which every board member volunteers for, seeking intrinsic rewards rather than looking for monetary ones.  And like any job, success at the job requires a commitment of time.  When, and only when, these two impediments are overcome will we see nonprofits truly flourishing.  And then no one will waste any time asking the question:  are nonprofit boards antiquated?

Recently, my brother became the CEO of a rather large, international, publicly traded company.  And when I received my first e-mail from him over his new signature, I was a little surprised to see that he was still using the diminutive version of his name.  So, I shot him an e-mail back saying I would have thought he’d now switch to his “real” name.  His response came back equally quickly, stating, “God, no.  Imperious, egocentric corporate cultures are the hobgoblins of hurting companies.”

My brother and I have clearly taken very different career paths, but the worlds in which we travel are not so very different, as witnessed by his comment.  He has spent much of his career turning “hurting [for-profit] companies” around and then handing them off to new, permanent staff.  I have spent a fair amount of my career helping nonprofits become stronger organizations in order to maximize their ability to fulfill their mission promises.  But like my brother, I have found that it is “imperious, egocentric” individuals and the cultures they create that undermine nonprofits’ good work.

When I hear of things having gone wrong at nonprofits—the kinds of things that make headlines—I’m always struck by how incredibly “stupid” the act was:  obvious conflicts of interest, misuse of raised funds, embezzlement, failure to pay the IRS, and the list goes on.  My immediate question, sometimes to myself, sometimes out loud, is:  was this person/board stupid or arrogant?  And the answer always is arrogant.

How do I know this?  Because I have seen too many people, the brilliant ones as well as the not quite there ones, who want to be really successful at their jobs do their homework.  They find out what they need to know to run their nonprofits the “right” way so that they can get on and fulfill the mission work they signed on to do.  They ask the questions about restricted dollars and understand, from the gitgo, what can and can’t be done; they understand the importance of complying with all of the rules and regulations, filing the right papers, paying the right taxes.  They understand that they are responsible to their clients and the public and that earning and maintaining their trust is paramount, and they want to do it all well.  And doing it well has nothing to do with being smart or stupid; it has to do with being honest, understanding the rules and playing by the rules, because you know that no matter how wonderful you are or your organization is, rules must be obeyed.  Smart, not stupid.

But there is, however, a cohort of individuals who have risen to–or put themselves at–the top of their org charts that know all of the rules, know how the game is supposed to be played and yet choose to go their own way.  This is not stupidity; this is arrogance.  This is arrogance that is so consumed with self that it thinks it impervious to being caught or punished and cares not about the consequences of such behavior to the clients and public whose trust has been betrayed.  This is arrogance that is so blinding that it cannot see the eventual downfall to self and the organization.  It cannot see that s/he is leading a hurting company.

I am a huge Jim Collins fan; he got me on my second reading of Built to Last. So, I periodically go to his website to see what new things he might have posted.  The home page currently opens (and may have for quite some time) with a series of four quotes, two of which strike me as key ideas that those who suffer from a large dose of arrogance should ponder, as should those who employ these arrogant leaders or have elected them as their peers at the board table.

Greatness is not a function of circumstance.  Greatness is largely a matter of conscious choice and discipline.

Humility+will=Level 5.

(Level 5 refers to the highest level of leadership.)

Discipline, conscious choice/free will and humility, all present together, are the characteristics of a great leader and, in turn, what will build a strong organizational culture.  Arrogance has no place in that equation.

So, the IRS has added 155 new employees to its Exempt Organizations unit, bringing the total to 921; 100 of these new employees have been assigned to the division that does audits of nonprofits.  Yipee!  Apparently, brain drain has been happening within the Exempt Organizations unit, as many with long service in the unit are retiring.  So, whether this is an overall increase in bodies or not, it is clearly a loss of knowledge, experience and an expertise that comes only with years and years of doing something.

What is interesting in this set of facts is that this announcement was made at the 46th annual Washington Nonprofit Legal and Tax Conference, which is “dedicated to educating those in the nonprofit world responsible for all legal and accounting aspects as they pertain to exempt organizations.”  As the IRS speaker at the conference noted, legal and accounting professionals had complained to the IRS Exempt Organizations unit about the loss of employees with “decades of knowledge,” and she was pleased to announce that the IRS had replaced “some of the knowledge that we’ve lost.”

Phew!  I feel so much better.  I wonder if the IRS had added a series of questions to the new (in 2009) Form 990 about an organization’s succession plans for ensuring adequate expertise at all skill levels within an organization whether such a plan as hiring to replace “some of the knowledge” would have passed muster?  But, really now, who is to say that decades of knowledge is really necessary to answer those who counsel nonprofits on how to complete one of the most public documents used to judge the “goodness” of a nonprofit?

As the director of a management support organization that works very hard to establish high standards of performance and relies only on best practices models when teaching others and working with clients, and rejects, easily, 90% of the people who seek to be part of our pool of instructors and consultants, I am regularly appalled at how little attention and care others pay to the importance of standards, reliance on true expertise and the value of modeling those standards to which they are holding others.

It is true that I might have shrugged off the above statements from the IRS representative with an idle, “What did I expect?”  And, truth be told, I did, initially.  But later the same day, I reread her statements after hearing of one of the truly amazing feats of reincarnation.  This is the phoenix that has risen to teach others how to be a proper nonprofit out of the ashes of a failed—no, disgraced—nonprofit.  How is this possible, you ask?  In the absurdity of whose mind did this idea develop?  That an organization that violated almost every tenet of best practices of nonprofit management, a hydra which had lost control of its heads, should now decide that it will come back as an organization that helps and teaches others to run a strong nonprofit, is a tale that belongs on the stage of the theatre of the absurd and not on the stage of real life.

Nonprofits deserve so much better, and yet, more often than not, it is the nonprofits themselves that consciously make the ridiculous choices to give themselves less than what they deserve.  The subsidiary that almost tanked because of the (lack of) leadership of the parent, now chooses to take advice from that very morphed parent.  A nonprofit turns down the guidance of a skilled strategic planner preferring to do strategic planning with a human resources professional.  An organization that rejects a solidly vetted consultant on the complaint of single board member it never bothered to vet, for if it had they would have discovered the man never worked where he claims to be currently employed.  These are only three of the most recent examples in my twilight zone!

It is one thing if others try to foist their absurdity on us.  It is another if we create our own or accept that of others.  Not only do nonprofits deserve better; we should know better.

Yo, Board Presidents:  put aside your egos and listen up!  Are you really the best person for the job?

How do I dare even ask that question of someone who has been gracious enough and brave enough to volunteer her/his time to lead the leaders of an organization?  The many board members who are relieved that someone else volunteered to be board president so that they don’t have to, must be ready to ring my neck.  How can I suggest rocking the boat?  And how can I seem such an ingrate, challenging those who give of themselves to serve as board presidents and suggesting that maybe ego has driven them to the position?

How?  I’ve been around the block!

Board President is one of the most important positions in a nonprofit’s personnel battalion.  Right up there with Executive Director.  But before the smart organization hires a new executive director, it does a little homework.  It assesses what is needed in the next executive going forward, recognizing that the skills, talents and personality needed for the future isn’t necessarily what was needed in the past.  It understands that what will be important for the organization at this phase in its evolution is likely very different than what was important in the last phase.  Based on a newly developed profile, the board writes a new job description, conducts a search and hires the best candidate possible, where best means a match between criteria needed and qualities of the candidate.

The last time the selection of board president even remotely mimicked such a process will, most likely, be the first.  Normally, the selection process for the next board president goes something like this:  Anyone willing?  No.  Okay, whose arm can we twist most easily?  It is a “process” absent thought and context.  And it is a “process” that allows a person to ascend to this key leadership position without thought as to skills, motivation, agenda, ability, etc.

What should happen is more like this.  It begins with a board conversation to address several questions:  What are our strategic priorities for the next three years?  What kind of leadership will we need to help us achieve those priorities?  What are the challenges we will be facing over the next three years as an organization? As a board?  What kind of leadership will best help us navigate those challenges?   Next comes the writing of the job description for the next president, along with the determination of the time commitment needed to execute this job.  Then, and only then, is a board ready to look around the table at the individuals and ask, not who is willing, but who fits the bill?  Then, and only then, should every individual at the table ask of him/herself, do I fit the bill?  Am I able?  Do I share the collective’s agenda or carry only my own?

Serving as the leader of the board is a huge responsibility.  Filling that position should be given the care and attention it deserves.  To do otherwise defeats the purpose of having a leader.

People need to listen to Nancy Kolb, recently retired President and Chief Executive Officer of the Please Touch Museum.  A highly accomplished individual, who steered the Please Touch Museum through 21 years of growth and accolades, she was able to negotiate not one, but two deals (okay, the first didn’t materialize once the deal was “signed”, but through absolutely no fault of Nancy’s) with the City of Philadelphia (one is not an insignificant feat; imagine what two is!) for a new site for the museum AND pull off the renovation, relocation and grand opening, while the for-profit company supposed to build casinos in Philadelphia, (fortunately) hasn’t even been able to break ground—totally through its own fault.

In a recent interview in Philadelphia magazine, that covered everything from the move to Memorial Hall to negotiating with the City of Philadelphia to the Please Touch Museum compared to other children’s’ museums, Nancy Kolb was asked the following question by her interviewer, Sam Katz, local business man and former mayoral candidate:  “Is it fair to say that much of the really great stuff happening here is the result of the leadership of women?”

Now, contrary to what many of you might think, I am not saying people should listen to Nancy because she said, “Yes, isn’t it?”  She is right, but no news there.  What is important in Nancy’s response to this question is this statement:  “Why has the city—notably the Chamber of Commerce—failed to grasp the incredible economic development role of the not-for-profit sector?”

Why hasn’t Philadelphia understood this? and almost every other city in this country?  The American nonprofit sector’s economy is the fifth largest in the world! That is a pretty hefty economic engine!  And this is not a static group.  By 2005, the latest year for which the National Center for Charitable Statistics has complete data, the number of nonprofits had grown 27.3% since 1995, and had $1.6 trillion in revenue (a 57% increase, adjusted for inflation) and $3.5 trillion in assets (an 84% increase). Do these data pale in comparison to for-profit numbers?  Absolutely.  But that is not the point.  The point is that small percentage or large, the nonprofit sector has a role to play in making cities vibrant and financially sustainable places to live.  (And I don’t mean by taking their assets.  But that is another blog.)

But nonprofits—and not just the mega ones, like universities, hospitals, foundations—cannot play a role in the economic and “vitality” development of a region if they are not at the tables.  We need the small, community-based organizations as well as the mid-sized and large nonprofits at these decision-making tables—and not just when a hot issue arises, but consistently and constantly.  But there are two huge stumbling block to making that happen.

First, there is the ignorance phenomenon of “don’t know, don’t see.”  If I don’t know what I nonprofit is, how can I recognize a nonprofit?  So, nonprofits remain ghosts or shadows in our communities, turned to, everyone presumes, only in desperation and when someone is down on his/her luck.  On the first night of my Nonprofit Management class offered in La Salle’s MBA program, I always ask the students how many nonprofits they interact with on a regular basis.  Most say none.  (At best, I get one, from the one student who works for a nonprofit.)  Yet when I ask the students if they run/walk/picnic in a park, attend regular religious services, frequent any of the cultural spots of the region—or, wait,–where they are sitting, then, and only then, do the light bulbs start to go off.

Second, there is a presumption—false as so many are about the nonprofit sector—that employees of nonprofits are less skilled, less equipped—okay, I’ll say it—less bright—than employees of for-profits.  (I think people’s false logic goes something like this:  if they haven’t chosen to devote their life to the American dream of making money, how smart can they be?)  But the truth is that the nonprofit sector is just like the for-profit sector:  we have extremely bright, creative, talented folks, slackers and everything in between.  What differs, frequently, in these two pools of talent is the perspective each brings to a table.  And each perspective needs to be at those tables and both need to be equally valued.

While Nancy was challenging the City of Philadelphia and its Chamber of Commerce—and both deserve to be challenged—Philadelphia and its Chamber are not alone in ignoring the power and influence of nonprofits.  It is time that the full array of the nonprofit sector is included at the consequential tables of our communities.

Those of you who know me, know that I love the nonprofit sector.  Some might even go so far as to say I’m a missionary for the sector.  But that would be inaccurate, as I am not out to “win” anyone over or convert them to my way of seeing things.  But I have knowingly volunteered and worked in this sector since what we then called junior high school.  In the many decades since then, I’ve held one and only one job in the for-profit sector:  in high school, I sold the mobiles I made to retail establishments and worked one holiday season in a gift wrapping shop.

I have always had reason to be proud of the sector of which I am a part, despite the scandals that are periodically uncovered, recognizing that the for-profit sector has no shortage of scandals.   Despite the stupidity of leaders, as the for-profit sector has its share of those.  Despite the fact that we are not a perfect sector—which no one could accuse the for-profit world of being, either.  Despite all of this, I’ve always believed that the vast, vast majority of people in the sector—those who are paid as well as those who volunteer—want to do good and do it well.  They may suffer from ignorance or egos that blind them; they may think they know what they should do but do not really, but they listen when educated.  They may make mistakes, but they are not evil.

But today, someone in the sector, who I don’t even know, turned my stomach in a way that I have been spared up until now.

It’s been an especially trying day, rife with nonprofit horror stories:

• There was the executive director who failed to pay the organization’s withholding taxes, leaving the organization with an almost $500,000 bill owed the IRS—before penalties and interest.
• There was the consultant leading an organization through strategic planning without having helped (or should I say forced?) the group to focus on what its mission really is, so the planning was going forward with multiple views of the mission of the organization.
• Let’s not forget the board that allowed one board member to skewer plans to hire a consultant who the rest of the board and the executive director thought was awesome.
• And there was the executive director who told the development director to ask the program director what her strategic priorities are.

But none of these are the ones that caused the disgust.

The disgust came when a colleague told me about an email she had received from a  former colleague who was bringing her up to date on his life.  The former co-worker began talking about the holidays and the vacation he and his wife had taken right after the new year, noting that his boss—the executive director—forbids him from taking a vacation in the summer.  His boss also forbids him from hiring permanent help, but allows him to work 11 hour days, six days a week for the summer.    Quoting from the friend’s email, “[My boss] does let me get a temp for six weeks then sends his favorite around to urge me to get everything done in 3 weeks to save money.”  My stomach was still feeling quite fine at this point.

But then it began to churn, and as I continued reading, my stomach reached a crescendo.  In the words of the email’s author:

On Friday 29 January my boss called me into his office at 4 PM. …. Then he told me that my job was being outsourced to an accounting firm.

I asked when this would happen and he said they were coming in on Monday, February 1. I got no severance, no vacation pay and my benefits ended on Sunday, January 31. “Of course I will pay you for today,” he said. I had started that day at 7:30 AM, so by 4:00 PM I had a full day in at work. For once I was leaving before 6:30.

I was numb, mostly from my chronic tiredness. But I was also relieved to be out of there after almost 3 years of misery. The reality of it set in when I woke up on Saturday morning. I will miss the people I worked with and supervised, but I will not miss my boss at all.

I offered to email him my passwords for all the sites we use, but they had me locked out of the network while I was being let go. I have all my passwords in password-protected files and I was going to unprotect the files…

The charity is about to default on a $12,000,000 mortgage and turn a property over to HUD. Cash flow stinks and everyone was worried. [The Excutive Director] likes to confuse the Board (packed with relatives and in-laws) and blame everyone else when the entire mess is his fault. He can’t lead, he can’t manage, and no one likes him. He is vulgar and coarse. The people I worked with fear him because you never know what he will do next.

While I absolutely hold the executive director accountable for his own egregious behavior as a leader and manager, I hold the board accountable for its failure to do its job.  But where to begin on that one?  It was not providing oversight of the executive director, nor taking on the responsibility to strategically build itself as an independent body as opposed to being a stacked body of relatives.  It was not executing its financial responsiblities if it allowed the organization to default on a $12 million mortgage, and probably failed in this arena by taking on the mortgage in the first place.  And the board wasn’t doing very well in the governance arena, at least as far as personnel policies go, and I would only assume other ares as well.

I also hold the employees of the organization accountable as well for their failure to hold the organization to a fair and humane treatment of its employees.  I have no idea what organization this is and, therefore, what its mission is.  But nonprofits have a moral responsibility to treat their employees with as much care and compassion as they treat their clients, as their employees are their most valuable asset.

One of the things that makes the nonprofit sector so special is the recognition that the parts—the staff and volunteers, the executive director and the board—are all equally vital to the successful delivery of the mission.  When that lesson is forgotten, and one person is wrongly empowered to be above and beyond the others, we lose our specialness, and thus we lose our ability to do good.  For in that moment, we have violated the very parts that make us who and what we are.  And that turns my stomach big time.