Muhammad Yunus’ book traces the start of the now international Grameen (village) micro-lending program in Bangladesh. It has three vital lessons for nonprofit leaders.
For other reading suggestions see Recommended Reading.
Tuesday, July 27, 2010
Summer Reading: Banker to the Poor
Monday, July 26, 2010
Should Board Members’ Contributions Be Designated To Pay For Their Education?
I was speaking with a couple of colleagues the other day and the subject of board contributions came up. Later in the conversation we transitioned into the importance of ongoing board education and organizations building a sufficiently-large line item into their budgets for this. And then the idea bubbled up: What if one of the expectations of board service was that a portion of each board member’s personal contribution to the organization went to pay specifically for board education?
Such an expectation would do several things. It would communicate to the world that the organization believes an educated board is important. It would provide necessary dollars for such board education, without cutting into dollars dedicated to programming. And, it would help board members value the education the organization provides, because research affirms that people ascribe more value to something for which they pay rather than get for free.
There are some issues to consider. When my colleagues and I were talking, someone arbitrarily threw out $500 as the portion of each board member’s contribution that would go into this board education fund. While a substantial amount, with an average-sized board of 16, that only puts $8000 into the education coffer. True, $8000 is more than most boards currently devote to board education. But, $8000 won’t go far if the money is to be used for a true retreat, conference expenses or coaching, for instance. Asking for a number larger than $500 might be a non-starter for most boards – at least at this stage in the game. And, what happens in those organizations that ask for a personally meaningful gift from each board member instead of a contribution of a specific dollar amount? Yes, the leadership could opt to allot the entire board member contribution to its education fund, or designate a percentage, but how can any organization create an education budget if the ultimate total is an unknown? Perhaps the answer is that the board would still have to assign to the board education line a dollar amount from its general operating funds and use the contributions just to enhance its educational opportunities.
The biggest issue may be that some people will resent this set-aside, either out of principle or the belief that they do not need education – perhaps they’ve sat on many boards over the years and believe they have the job down pat. My guess is, though, this reality may be off-set by those that clamor to join a board that devotes so much attention to its board members and provides leadership training that they can then take back to their jobs or on to other organizations.
As someone who firmly believes in ongoing board education at every meeting, I love what this concept could “buy.” But I recognize it would require a major culture shift in most organizations. What do you see as the pros and cons? Is this an idea with sufficient value to push?
Such an expectation would do several things. It would communicate to the world that the organization believes an educated board is important. It would provide necessary dollars for such board education, without cutting into dollars dedicated to programming. And, it would help board members value the education the organization provides, because research affirms that people ascribe more value to something for which they pay rather than get for free.
There are some issues to consider. When my colleagues and I were talking, someone arbitrarily threw out $500 as the portion of each board member’s contribution that would go into this board education fund. While a substantial amount, with an average-sized board of 16, that only puts $8000 into the education coffer. True, $8000 is more than most boards currently devote to board education. But, $8000 won’t go far if the money is to be used for a true retreat, conference expenses or coaching, for instance. Asking for a number larger than $500 might be a non-starter for most boards – at least at this stage in the game. And, what happens in those organizations that ask for a personally meaningful gift from each board member instead of a contribution of a specific dollar amount? Yes, the leadership could opt to allot the entire board member contribution to its education fund, or designate a percentage, but how can any organization create an education budget if the ultimate total is an unknown? Perhaps the answer is that the board would still have to assign to the board education line a dollar amount from its general operating funds and use the contributions just to enhance its educational opportunities.
The biggest issue may be that some people will resent this set-aside, either out of principle or the belief that they do not need education – perhaps they’ve sat on many boards over the years and believe they have the job down pat. My guess is, though, this reality may be off-set by those that clamor to join a board that devotes so much attention to its board members and provides leadership training that they can then take back to their jobs or on to other organizations.
As someone who firmly believes in ongoing board education at every meeting, I love what this concept could “buy.” But I recognize it would require a major culture shift in most organizations. What do you see as the pros and cons? Is this an idea with sufficient value to push?
Monday, July 19, 2010
Summer Reading 2010 Work Hard. Be Nice.
by Jay MatthewsAlthough they did not start out as a nonprofit, Mike Feinberg and Dave Levin’s work resulted in one: the Knowledge is Power Program (KIPP) Foundation. In 1994, Feinberg and Levin, Teach for America graduates, started an inner-city school program for middle school students. Today, 82 schools in 19 states and the District of Columbia are KIPP programs. KIPP serves 21,000 mostly middle school age children. While many KIPP students begin fifth grade at least one or more grades behind their peers in math and reading, after four years at KIPP, 100 percent of eighth grade classes outperformed their district averages in mathematics and reading based on state tests. Word Hard. Be Nice. tells the story of the early years of KIPP.
What can a nonprofit leader learn from this book? The value of partnerships and perseverance. While the relationships were not always rosy, in fact they were often difficult and challenging, KIPP had to work with local schools and school boards to succeed. If you are faced with a partnership you must make work, Work Hard. Be Nice. will give you insights about how to survive, grow and thrive in this environment and how to hold on to your vision in tough times.
Thursday, July 15, 2010
Should US Nonprofits Adopt a Patron System?
I worked recently in Singapore. While I found many similarities in the ways nonprofits do business both there and here in the United States, I found differences as well. One of the biggest was their use of a patron system. Besides having what we would consider the familiar board structure with a chairman or president at the helm, a large number of organizations there also have a patron. Some even have a patron and a patron in chief. These are powerful individuals who wield tremendous influence. For instance, the patron in chief of Singapore’s Lyric Opera is the President of the Republic of Singapore. Its patron is the Minister for Education and Second Minister for Defense. The intent is that these individuals will provide support – including, in many cases, political clout – and encourage others to support the organization as well.
In the United States, our honorary boards could be considered the closest equivalent to the patron system of Singapore. Some organizations here are able to engage major players, such as the Gerald R. Ford Presidential Foundation which counts among its trustees James Baker, Dick Cheney, Alan Greenspan, Henry Kissinger and Donald Rumsfeld. But the number of organizations with the capability of attracting names of this caliber are far and few between. Would it be easier for nonprofits to attract a single patron? Would a patron help nonprofits that feel they lack sufficient access to affluence and influence?
I do believe that it would be easier to find a single patron than an honorary board. However, I do not believe that it would necessarily be easy. Think of all the nonprofits that have tried unsuccessfully to find a celebrity spokesperson. And, we certainly know how quickly a good name can become a liability. Tiger Woods, anyone? Singapore has experienced this with the patron system as well. The patron of their National Kidney Foundation, the wife of Goh Chok Tong, former Prime Minister of Singapore and current Chairman of the Central Bank, was forced to step down after defending the pay of the CEO, saying that his $600,000 (S) salary was “peanuts.” At least with an honorary board, one would hope there will be others whose reputations remain sterling, even if one of the names on that board turns bad.
As to whether having a patron would be helpful to organizations lacking affluence and influence...I'm not so sure. Singapore is a very small country. People tend to know one another and a patron's name alone carries clout. Here, the individual would have to be willing to actively use his/her influence on behalf of the organization to bring others along. Research done by Herman and Renz suggests that this does not happen as often as nonprofits hope. Besides, the reach of a single individual versus a larger group is necessarily limited, especially in a country the size of the United States.
So, even though I believe nonprofits in the United States can learn much from their counterparts in other countries, I'm not so sure I'd suggest our turning to a patron system here. But, I’m curious as to what others think. Is such a system an answer for us, especially in these difficult times?
In the United States, our honorary boards could be considered the closest equivalent to the patron system of Singapore. Some organizations here are able to engage major players, such as the Gerald R. Ford Presidential Foundation which counts among its trustees James Baker, Dick Cheney, Alan Greenspan, Henry Kissinger and Donald Rumsfeld. But the number of organizations with the capability of attracting names of this caliber are far and few between. Would it be easier for nonprofits to attract a single patron? Would a patron help nonprofits that feel they lack sufficient access to affluence and influence?
I do believe that it would be easier to find a single patron than an honorary board. However, I do not believe that it would necessarily be easy. Think of all the nonprofits that have tried unsuccessfully to find a celebrity spokesperson. And, we certainly know how quickly a good name can become a liability. Tiger Woods, anyone? Singapore has experienced this with the patron system as well. The patron of their National Kidney Foundation, the wife of Goh Chok Tong, former Prime Minister of Singapore and current Chairman of the Central Bank, was forced to step down after defending the pay of the CEO, saying that his $600,000 (S) salary was “peanuts.” At least with an honorary board, one would hope there will be others whose reputations remain sterling, even if one of the names on that board turns bad.
As to whether having a patron would be helpful to organizations lacking affluence and influence...I'm not so sure. Singapore is a very small country. People tend to know one another and a patron's name alone carries clout. Here, the individual would have to be willing to actively use his/her influence on behalf of the organization to bring others along. Research done by Herman and Renz suggests that this does not happen as often as nonprofits hope. Besides, the reach of a single individual versus a larger group is necessarily limited, especially in a country the size of the United States.
So, even though I believe nonprofits in the United States can learn much from their counterparts in other countries, I'm not so sure I'd suggest our turning to a patron system here. But, I’m curious as to what others think. Is such a system an answer for us, especially in these difficult times?
Monday, July 12, 2010
Where, Oh Where are Our Nonprofit Money Trees?
Nonprofit leaders would like to have access to a money tree—a big healthy one.
In truth, they do. Healthy nonprofits grow groves of money trees composed of six* main species. They include these species of trees and yield, on average, these fruits.
1. Earned income: 28- 40 percent
2. Individuals gifts including bequests: 16-29 percent
3. Government: 21- 30 percent
4. Other income, like interest and entrepreneurial income: 10-16 percent
5. Foundations: 2-3 percent
6. Business/Corporate: 1-2 percent
Money trees start, as all trees do, either as a seed like an acorn or a planted seedling. Then nonprofit leaders tend, water and protect them. If you take care of your groves and continue to plant new trees, you will harvest fruit for years.
Which trees have you planted in your nonprofit? Which of your groves need tending? Which new trees are you learning to grow?
For more information about nonprofit income sources see:
How Will We Pay for This? 14 Ways to Obtain Income
Money-tastic #2: Nonprofit Income Opportunities
* A seventh species is the In-Kind Tree, where groups receive resources in lieu of cash.
Wednesday, June 30, 2010
Consultants Must Coordinate Efforts
I have recently been writing about the need for departments within a nonprofit organization to work together as a single team, and for organizations to work with other community entities in true partnership. I’ve been hearing a lot of “Amen,” which leads me to believe that people see the advantages of such holistic approaches and are willing to work toward them. But, there is another area in which this philosophy should be encouraged, yet few organizations even consider it. That is in the use of consultants.
When an organization’s leadership turns to consultants it is typically because that leadership has determined that it requires help with a discrete task such as facilitating a fund raising campaign or a board retreat. The leadership does its due diligence and brings in a person or firm that the group feels has the expertise to move it forward in this arena. The only problem with this is that fund raising, for instance – successful fund raising – cannot occur in a vacuum. It relies on the existence of an infrastructure with policies and procedures, on a board that understands how it can contribute to the fund development process, on the integration of a PR/marketing plan, on research, and so on. The same concept holds true regardless of the identified task. Trying to take one element alone and move the organization forward by committing time and money to just that one element is almost always less than optimal.
Many consultants understand this and try to help the organization see the light. Fine. The only problem with this is if they try to pass themselves off as a Jack-of-all-trades. Such Jacks are often the master of none. Today, as never before, consultants cannot rely on offering up bromides. They really have to understand the trends and nuances of the area(s) in which they consult in order to be of real use to their clients.
This probably means the organization must work with a number of specialists in order to move forward. But, actual damage can occur when the leadership identifies multiple needs and hires an array of different consultants to help the organization achieve its various goals. Why? Too often, while each of the consultants hired may be the best in their individual fields, each is taking direction and offering solutions in a vacuum. The result is that the organization can be pulled in different, if not opposing, directions.
Nonprofits would do well to take lessons from the field of medicine. In the last 15 years it has become the gold standard to go to a Mayo or Cleveland Clinic where the doctors, nurses, therapists, pharmacists, etc. act as a coordinated team, discussing as a team each patient’s needs, treatment plans and physical and mental reactions to the plan. Our sector must start demanding that the specialists they hire work together, creating intervention and accountability plans that are integrated.
Today’s technology, with its ability to promote and enhance communication between far-flung parties, certainly makes this feasible. But, it makes the job of hiring consultants that much more difficult because the organization’s leadership has to ensure that the consultants understand that coming into the organization, doing one’s thing and leaving is no longer sufficient or acceptable. The leadership has to ensure that everyone it hires is committed to the team approach. It has to determine that the chemistry is not only right between the leadership team and the consultants, but among the various consultants as well.
Unless the organization can hire a consulting firm that has the appropriate talent and is built around these principles, the task is daunting. But, it is not impossible. And, the potential for positive impact is huge.
When an organization’s leadership turns to consultants it is typically because that leadership has determined that it requires help with a discrete task such as facilitating a fund raising campaign or a board retreat. The leadership does its due diligence and brings in a person or firm that the group feels has the expertise to move it forward in this arena. The only problem with this is that fund raising, for instance – successful fund raising – cannot occur in a vacuum. It relies on the existence of an infrastructure with policies and procedures, on a board that understands how it can contribute to the fund development process, on the integration of a PR/marketing plan, on research, and so on. The same concept holds true regardless of the identified task. Trying to take one element alone and move the organization forward by committing time and money to just that one element is almost always less than optimal.
Many consultants understand this and try to help the organization see the light. Fine. The only problem with this is if they try to pass themselves off as a Jack-of-all-trades. Such Jacks are often the master of none. Today, as never before, consultants cannot rely on offering up bromides. They really have to understand the trends and nuances of the area(s) in which they consult in order to be of real use to their clients.
This probably means the organization must work with a number of specialists in order to move forward. But, actual damage can occur when the leadership identifies multiple needs and hires an array of different consultants to help the organization achieve its various goals. Why? Too often, while each of the consultants hired may be the best in their individual fields, each is taking direction and offering solutions in a vacuum. The result is that the organization can be pulled in different, if not opposing, directions.
Nonprofits would do well to take lessons from the field of medicine. In the last 15 years it has become the gold standard to go to a Mayo or Cleveland Clinic where the doctors, nurses, therapists, pharmacists, etc. act as a coordinated team, discussing as a team each patient’s needs, treatment plans and physical and mental reactions to the plan. Our sector must start demanding that the specialists they hire work together, creating intervention and accountability plans that are integrated.
Today’s technology, with its ability to promote and enhance communication between far-flung parties, certainly makes this feasible. But, it makes the job of hiring consultants that much more difficult because the organization’s leadership has to ensure that the consultants understand that coming into the organization, doing one’s thing and leaving is no longer sufficient or acceptable. The leadership has to ensure that everyone it hires is committed to the team approach. It has to determine that the chemistry is not only right between the leadership team and the consultants, but among the various consultants as well.
Unless the organization can hire a consulting firm that has the appropriate talent and is built around these principles, the task is daunting. But, it is not impossible. And, the potential for positive impact is huge.
Tuesday, June 29, 2010
Values as Visuals
My new post at PhilanTopic, the Philanthropy News Digest blog, explores the use of new tools for articulating values, vision, and mission.
Imagine using Dialoogle and Picture Your Legacy with non-profit and philanthropic leaders, helping them to articulate their passion for the organizations for which they work or volunteer, and uncovering stories that could be shared when soliciting donations and other forms of organizational support. Imagine using the cards and iPhone app to commence group discussions, and to move into collaborative problem solving.
Imagine using Dialoogle and Picture Your Legacy with non-profit and philanthropic leaders, helping them to articulate their passion for the organizations for which they work or volunteer, and uncovering stories that could be shared when soliciting donations and other forms of organizational support. Imagine using the cards and iPhone app to commence group discussions, and to move into collaborative problem solving.
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