Administration


Upon joining the non-profit sector, a number of people opined to me that they are happy I’ve decided to dedicate my time and effort towards strengthening the sector’s work. In fact, one of the sound bites I kept hearing is that non-profits – despite their inability to sell equity (and thus raise money through either private investors or the larger public capital market) or the lack of an agreed upon “profit” metric for measuring organizational success – need to behave more like for-profit businesses. So, listen up my fellow non-profit professionals, I’m going to impart some words of wisdom I learned from my days working in the for-profit world (at institutions such as Freddie Mac, UBS Investment Bank, and others).

We need larger pay packages to attract and retain qualified professionals. In order to create the type of fast thinking, innovative companies such as AIG, Bear Stearns, Enron, Tyco and others, we need to increase our compensation packages. Currently, this kind of fast-thinking/innovative executive talent retails for approximately $10.5 million, or roughly 344 times the average worker’s salary ($30,700). Since the average executive director of Southwestern Pennsylvania only makes a mere $96,110, or 3.6 times the average worker’s salary – that’s a lot of innovation we’re leaving on the table! Lesson #1: if we are to attract for-profit executive talent then we must start paying our non-profit executive directors better.

Ignore sustainability and adopt a “do whatever it takes” attitude to exceed your short-term goals. We in the nonprofit sector spend far too much time talking about creating sustainable programs and achieving long-term outcomes. Instead, we need to adopt a more market-centric view of the world, just as for-profit businesses have to when their performance is measured by the market. Take General Motors, for instance. In the late 1990s and well into the first decade of the 21st Century, GM ignored suggestions that the company should rethink its focus on the sale of light trucks and SUVs and instead become a pioneer in the production of fuel-efficient (sustainable) automobiles. However, GM’s short-term focus on becoming the premier seller of light trucks and SUV (its most profitable product line) seemed to be paying off:

In 2002, GM sold more than 8.5 million cars and trucks and was the first auto manufacturer to sell 1.2 million SUVs and 2.7 million trucks in a calendar year. The company set industry sales records in the United States and owned nearly 15 percent of the global vehicle market. And investors took notice – the company’s stock rose approximately 45% over the next year.

Of course, you know the rest of the story by now – fuel prices rose and consumers grew tired of paying for non-fuel efficient vehicles. GM was stuck with a bunch of cars and trucks (mostly trucks) that they tried to “give away” with 0% financing and large rebates – again, focusing on exceeding the company’s short-term sales numbers even at the expense of hurting long-term profit margins – but nobody wanted them. Lesson #2: for-profits rarely practice sustainable planning so why should your organization.

The market rewarded GM's banner 2002 year with stellar market returns in '03. Nevertheless, GM's lack of a sustainable business model finally forced the company into bankruptcy in '09.

Transform your board. Nonprofit executive directors, not only are you egregiously underpaid relative to your for-profit brethren, but also you need to hold more board power. This year’s Nobel Memorial Prize in Economics winner, Oliver Williamson, in a recent article, “Corporate Boards of Directors: In Principle and in Practice,” submits that today’s corporate boards are largely ruled by the CEO and are passive financial stewards. He writes:

The CEO is in de facto control of the operation and composition of the board…most boards most of the time are responding with nodding approval, and boards are beset by inertia, hence are slow to become active when the corporation experiences adversity” (260).

In hindsight, we’ve spent far too much time espousing the idea that nonprofit boards need to be active and chart the agency’s strategy, raise money, etc. After all, when is the last time you heard of a corporate board functioning this way? No, on a corporate board the CEO/Chairperson sets the agenda and the remaining board members are asked to “nod in approval.” Lesson #3: we need to retrain our board members to be passive financial stewards and centralize all power with the executive director (and newly appointed chairperson).

As you read these “lessons,” I hope it is apparent by now that there is an awful lot each sector – the for-profit and non-profit – can stand to learn from one another. I think the three lessons above illustrate areas the for-profit sector should take a cue from the nonprofit sector and consider adopting these practices. Conversely, there are a number of for-profit practices – strategic planning, capital budgeting, using data to inform evaluative programmatic judgments and more – that I believe are beneficial for nonprofits to adopt. However, to think that either sector has a monopoly on best practices is just over simplistic and flawed logic. As Jim Collins’ writes in his monograph Good to Great and the Social Sectors, “We need to reject the naïve imposition of the ‘language of business’ on the social sectors, and instead jointly embrace a language of greatness” (2). Touché, Jim.

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I was supposed to do a blog post yesterday and I missed my target.  But…I have a very good excuse.

All this week, the Bayer Center is hosting The Grantsmanship Center’s Training Program.  I am attending and it is awesome!  I am learning so much about grants and the search/proposal process.  Development is certainly an art form!

The trainer from TGC is excellent as well.  She very obviously has years of experience in development and proposal writing and shares her knowledge as well as lots of real world examples and stories.  Today we start working in groups and will produce a full-fledged proposal by 1:30 tomorrow afternoon!

If anyone wants to learn more about this workshop, here’s the link to the information for it on TGC’s website: http://www.tgci.com/gtptraining.shtml.

soy milkWhen I realized that my daughter was lactose intolerant, I looked into buying a soy milk maker.  But thebeer-mugy’re almost $200…  But, our neighbor has one. We brew our own beer, which is a something she doesn’t make, nor does she want to invest in the equipment.  So we built an exchange. 

 So every monday evening, we exchange a bottle of beer for a quart of soy milk.  Everyone says that she’s getting the better end of this deal, but I need the soy milk!  I’ve always liked the sweet soy milk that you buy at the store, but I wasn’t fond of the unsweetened variety.  But now, my husband and I often look forward to the warm, fresh soy milk to make hot chocolate. (OK, it’s still sweet, but fresh soy milk is good!)

Nonprofits have been good at coming up with creative solutions to difficult problems for a long time. Several nonprofits went in together to share an HR staff member–something none of them could afford by themselves.  POWER, Bethlehem Haven and the Center for Victims of Violent Crime created this joint position to handle the increasingly difficult HR issues that arise.

After I pick up my soy milk, (this time on a Monday morning) I’m headed for my volunteer shift at the Pittsburgh Toy Lending Library–a cooperative started over 34 years ago for families to have a safe place to play with developmentally appropriate toys for children ages 6 and under.  It is open six days a week and has no paid staff.  Because of its proximity to Oakland, there is an incredibly internationally diverse group of families who frequent the “Library”.  Long term friendships are developed between parents.  Babysitting leads are shared, playdates are arranged, parenting advice is easily discussed.  It is one of the unsung gems in Pittsburgh.  It is a major parental stress reliever.  But it is an incredibly creative solution to a lack of funding for staff–and a way to make all families invest because it is THEIR center.

Let’s keep thinking creatively.  Now my neighbor and I are considering bees & chickens… honey and eggs.  Yummmm.

There are many ideas coming out of the nonprofit sector in Pittsburgh–I’d love to hear some more stories!

In the mid-90s, when I was still doing my undergraduate work, my Research class professor told us “at any given time, you have three resources available to you:  time, money, or energy.  When you are working on a project, you have to figure out what you have the most of and use it to your advantage.”

Those words have stuck with me all these years and I still try to live by them.  Some days it’s not all that easy, especially as of late.  I have days that I begin with the best of intentions and my goals for the day all planned out.  A barrage of emails and phone calls later, my day has derailed, I haven’t gotten to half the things I planned and I’m feeling like a exhausted failure.  Raise your cyberhand if you know what I’m talking about.

I know everyone’s tired of hearing about the “economic downturn,” but it’s a reality and the effects in our sector are starting to become more apparent by the day.  Eliminate the “money” piece of the equation above.  That leaves us time and energy.

Time?  Who’s got that to spare right now?  We’re laying off workers, taking on new projects like crazy, and more people need our help than ever before.  Eliminate “time” from the equation as well.

That leaves us energy.  If energy is our resource, we have to be careful to protect it.  I’m talking about prevention of employee burnout here.  Nonprofit leaders, busy as they are, must take a moment to evaluate their staff and consider who’s a potential candidate for burnout (including themselves!).  Employees must equally take the responsibility for themselves and take action against burnout.  Once it’s happened, it’s too late.  Burnout is like the metaphorical snowball rolling downhill – it gets bigger the longer it goes.

To that end, in hopes of helping all of us who are struggling to be idealists in this particular time and place in history, here are some resources about burnout that includes symptoms, factors, and tips for prevention:

http://www.helpguide.org/mental/burnout_signs_symptoms.htm

http://www.livestrong.com/article/14719-preventing-burnout/

http://news.cnet.com/8301-13555_3-9918793-34.html

http://home.vicnet.net.au/~cardoner/uniya/un5su08.html

http://www.friedsocialworker.com/Articles/burnoutinhumanservices.htm

http://www.rci.rutgers.edu/~sjacksox/PDF/PreventingEmployeeBurnout.pdf

http://www.fastupfront.com/blog/small-business-labor/handle-with-care-managing-employees-who-must-wear-multiple-hats/ (source of photo above)


Have a question or something to add to this post? Leave a comment, and you’ll be entered to win a 1 GB USB drive. One winner per week through the end of May.

 

This is what it means to be totally committed to your mission…

Yesterday, Garrett Cooper and I had the pleasure of hearing a talk by Jessica Jackley, co-founder of Kiva.org (and Pittsburgher by birth and upbringing).

Kiva is a fascinating organization and just about my favorite example of social networking. Kiva is a microlender. That is, they facilitate small loans to people in developing countries (soon in the U.S.) to help them build businesses and become kivaself-sufficient. Unlike the typical microlender, however, Kiva is not the source of the capital for these loans – you and I are!

On Kiva’s website, www.kiva.org, stories and photographs of individual borrowers and prospective borrowers are posted. You or I then go to Kiva and select the person or group that we want to support. We lend as little as $25, Kiva aggregates our money with other lenders, and – Voila! – a new business is launched. And when the money gets paid back, as it usually does, we can pick our next recipient. $25 at a time, and in just 4 years, Kiva has passed over $62 million of loans to the working poor the world over.

Here’s Kiva’s mission: to connect people through lending for the sake of alleviating poverty.

 

Read that again. That is a great mission statement. Clear, succinct, specific. No vagaries here. What do they do? Connect people. How do they do it? Through lending. Why? For the sake of alleviating poverty.

 

Some time ago, a company came to Kiva and offered them $10 million of CSR (Corporate Social Responsibility) money. Kiva asked them what they intended. Were they going to distribute the money to their employees so that all of them could log onto Kiva’s website and join as lenders? No, the company just wanted to give Kiva a check for Kiva to lend out. So Kiva referred back to its mission statement. $10 million could alleviate a lot of poverty. $10 million could provide for a lot of lending. But a $10 million check from a corporation wouldn’t connect people.

 

So Kiva said, “No, thank you.”

 

Let me repeat that. Kiva, a nonprofit less than 5 years old, turned down a $10 million contribution because it didn’t fit precisely with their mission.

 

Would you have that much courage in your organization?

 

This is what being truly committed to mission really means.

 

I’m planning to join Kiva’s network of lenders. Wouldn’t you like to? www.kiva.org

Have a question or something to add to this post?  Leave a comment, and you’ll be entered to win a 1GB USB drive.  One winner per week through the end of May.

 

dashboardexample1

On the one hand, dashboards are nothing new.  On the other hand, they’re all the rage.  Dashboards can be on paper or dynamic, on-screen views, but whatever form they take, a dashboard is a snapshot distillation of the current state of key measures of success.

Dashboards are nothing new because organizations that have taken the time to figure out what their key measures are and to collect the data needed to evaluate them have created dashboard-like reports and reviewed them regularly.  There’s a strong strain in strategic planning and outcomes measurement that leads to dashboards to figure out whether the strategies are working and the outcomes are being achieved.  The “new” vibe derives from fundraising packages and Customer Relationship Management (CRM) systems offering on-screen, live dashboards.  In addition to the point-and-click ease of use of on-screen dashboards, the up-to-the-minute nature of the data can create the incentives that have long been needed to get users to update whatever part of the data stream they own.  If the boss may look at the dashboard on any day (not just the last day of the month when the summary report is printed), I have to keep my data up to date in order to get credit for the work I’ve done.

In my first data-heavy job, I realized that the most important ingredient to good data entry was the feedback loop.  Supervising a team of highly capable people with pretty low motivation (workstudy students), I realized that I had to put the data they created back in front of them quickly for two reasons:

1. to show them how their little bits of record-keeping turned into a vitally useful whole for our organization.

2. to show them their own mistakes and make them responsible for fixing and not repeating them.

A dashboard can be a constant expression of the dynamism of our work.  One of my favorite measures that I put on a client’s dashboard (which opens whenever anyone opens the database) is total unique individuals served all time.  Why should we only look at that number at annual report and fundraising proposal time?  It’s fun to watch it grow week in and week out.

The grand irony of this post is that I wanted to include some good examples of nonprofit on-screen dashboards that I could find on the web.  I couldn’t find any.  Do you have a dashboard that you’d be willing to share?  Leave a comment; we can smudge out any data that’s confidential.

This week, the House and Senate sent a law to President Obama reauthorizing the Corporation for National and Community Service and its programs through 2014.  They expanded the national and state support for volunteers and the nonprofit sector’s use of volunteers.  Here are a few Highlights of the Edward M. Kennedy Serve America Act passed into law this week.

  • A dramatic expansion of service opportunities for Americans of all ages, setting a path for increasing the number of AmeriCorps members to 250,000 by 2017.
  • Puts young people onto a path of national service by establishing a Summer of Service program to provide $500 education awards for rising 6th-12th graders, a Semester of Service program for high school students to engage in service-learning, and Youth Empowerment Zones for secondary students and out-of-school youth.
  • Invests in the nonprofit sector’s capacity to recruit and manage volunteers.
  • A Social Innovation Fund pilot program to provide seed money and scale up innovative and evidence-based programs that leverage private and foundation capital to meet major social challenges.
  • Expanding eligibility for the Senior Companion and Foster Grandparent programs, and allows Senior Corps education awards to be transferred to children or grandchildren.
  • Simplifying AmeriCorps program management, including through the availability of fixed amount grants.
  • Increasing the Segal AmeriCorps Education Award.
  • Strengthening agency management to support expansion.
  • Authorizes Nboard volunteersonprofit Capacity Building grants to provide organizational development assistance to small and mid-size nonprofit organizations.
  • Authorizes a Civic Health Assessment comprised of indicators relating to volunteering, voting, charitable giving, and interest in public service in order to evaluate and compare the civic health of communities.

 These changes will be very important in starting the spirit of service at an early age, using the opportunity of young adults to both develop their skills while serving their communities, and by tapping the knowledge and skills of older adults in creative ways.  There is also a recognition that nonprofits need to use volunteers more effectively.  There are some fabulous examples of volunteer management in our community– the North Hills Community Outreachthe Pennsylvania Trolley Museum, and the Greater Pittsburgh Community Food Bank are just a few  of the local examples of great volunteer management.   There are many others. 

Volunteers are important to the vitality of our schools, communities, the arts, our environment, our health and human services.  We need to celebrate and support with action (as this law does) the contribution that volunteers make. 

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