Wednesday, March 31, 2010

10 Simple Things You Can Implement Now to Strengthen Your Nonprofit Board

The Spring issue of PANO's (PA Association of Nonprofit Organizations) features this article by Elizabeth Vibber, MS, Strategic Consultant for Bucks County Center for Nonprofit Management

One of the most frequent concerns we hear from organizations is how to keep board members engaged and motivated. We have created a list of some very simple things you can do to energize your organization’s board meetings:

1. Have your Mission and Vision statement on every board Agenda.
A subtle reminder to all board members that the mission is central to all board discussions and decisions.

2. Start each meeting with a Member Minute where each board member spends a minute explaining what they have done since the last meeting to serve the organization: secured a donation, made an important contact, read an article, etc.
This exercise should only take about 15 minutes of your meeting, but will be well worth it by encouraging your board members to think about and promote your organization outside of the monthly meetings. Board members will learn from one another-and your organization will be the beneficiary.

3. Introduce a By-law amendment that limits the number of other boards your members can serve on.
I am always amazed to hear of individuals who sit on 2 or 3, even 4 Boards. Where do they find the time? How are they able to balance the tasks of your organization with their other commitments? Now if you have a Board Contract which clearly states the expectations for sitting on your board, and you hold your members accountable, this could be a non-issue. For other organizations this may be the nudge the ‘over-committed members on your board needs to move along. At the very least, it should make for an interesting discussion.

4. Create a 'Face page" for each of your board members in your board manual.
Although boards meet on a regular basis, they don’t always get to know one another on a deeper level. A ‘Face page’ or bio page would include more personal information for board members such as hobbies or previous work/board experience. This is another way to build camaraderie on your board, not to mention discovering the hidden talents of your board. These Face Pages belong in the board manual and aren’t for public viewing. Don’t forget the picture!

5. Use a DA or Devil's Advocate card at each board meeting.
Each meeting someone different is given the DA card and their job is to play the devil's advocate on issues before the board. This straightforward yet powerful tool can be used to avoid the pitfalls of those boards inclined to ‘group think’; to correct a flawed decision making process; or simply to give a voice to members of the board who may be less inclined to share an opposing view point.

6. Create a FAQ for new board members created by current board members.
Remember all those questions you had but were afraid to when you first joined the board? Or maybe you did ask them and you saw in the eyes of your fellow members that they realize they didn’t know the answer either. This is also a terrific tool to use when recruiting new members as it provides a glimpse into the culture of your organization!

7. Make sure all of your board members have business cards with the organization's mission statement on the back.
What better way to get your cause into the hands of your board member’s friends & acquaintances?!

8. Decrease the number of your committees and increase the number of your task groups.
Task groups are established to accomplish a specific objective—within a specified time frame. Once the objective is completed, the group dismantles. Task groups give boards greater flexibility, engage members more efficiently and allows issues to be tackled immediately.

9. Create a strategic plan dashboard tracking 3-5 critical indicators to the health of the organization and update monthly showing a 12 month trend for each.
Dashboards are designed to provide a simple visual overview of the health and direction of any organization that has financial statements, i.e. balance sheets, income statements (also known as profit and loss, or operating statement) and cash flow statements. These graphic images give the non-financial persons in your organization a better understanding of the finances..

10. Ask each board member to think of the single most important issue that they feel the organization should focus on in the next year and have them write it on an index card. Shuffle the cards and read them out loud to begin a strategic discussion.
This last tip is pretty self-explanatory and a great way to begin the annual review of your strategic plan.

Wednesday, March 24, 2010

IRS Filing Costs to Form an Nonprofit to Decrease

Currently if you wish to form a nonprofit you are looking at a filing fee of $850 from the IRS, not to mention incorporation fees, legal fees, and accounting fees to assist you with completing the many questions on the Form 1023. If all goes well, you receive your approval. If not, you may receive correspondence from the IRS asking for more details and information. It appears this process will improve in 2010.

Later in 2010, the IRS will be coming out with Cyber Assistant. Applicants who use this online system will only have to pay an application fee of $200. The online application process will probably insure that the form is completed properly and increase the likelihood of approval the first time around. It should also reduce the need for accounting or legal assistance in completing the application.

Direct from the IRS site....

Cyber Assistant, a web-based software program designed to help organizations prepare a complete and accurate Form 1023 application, will become available during 2010. Once the IRS announces the availability of Cyber Assistant, the user fees will change again. 1. $200 for organizations using Cyber Assistant (regardless of size) to prepare their Form 1023, or 2. $850 for all other organizations not using Cyber Assistant (regardless of size) to prepare their Form 1023. IRS will announce when Cyber Assistant is available and the effective date of the user fee change. Sign up for the Exempt Organization (EO) Update, EO’s subscription newsletter, at, to automatically receive an alert that Cyber Assistant is available.

Monday, March 22, 2010

Devil's Advocate

This article was written by Liz Vibber, my associate and strategic consultant with Bucks County Center for Nonprofit Management. It first appeared in Blue Avacado about a year ago. It is a great technique to help your Board make better decisions.

Wouldn’t it be wonderful if all Boards had 20/20 hindsight to assist them in making decisions? If they could clearly see the obstacles a project will encounter in time to make the necessary adjustments?

Absent a few sprinkles of fairy dust, using the Devil’s Advocate technique might assist boards in identifying such obstacles. A Devil’s Advocate is someone who takes an opposing view to test an idea or project the board is considering. Rather than simply participating in a board discussion, the DA’s job is to purposely ask questions and argue against the idea. By responding to these questions, the board is forced into healthy debate as they consider arguments they might never have thought of had it not been someone’s (the Devil’s Advocate’s) specific task to try and challenge the board’s thinking.

Your board can use this technique during every meeting or only when important issues are up for discussion. After explaining the technique, randomly select a board member and place an index card marked DA or Devil’s Advocate in front of them where all can see it. Throughout the meeting, this person should be asking questions to test the soundness of the decisions the organization is considering. A couple of caveats-holding the DA card does not give this board member the ability to block or hold decisions from a vote, nor should the board hold it against the designated DA for asking tough questions. You can’t be annoyed with someone whose ‘job’ it is to question the wisdom of an idea—can you?

For example, a small suburban nonprofit organization was considering expanding their adult program services to include children. This 25 year old agency had successfully been serving adults in accordance with its mission, but lately, at the insistence of one very vocal board member, was wondering if it could better serve the community by expanding its offerings to children. By using the DA card over the course of several meeting discussions, the agency realized that the additional licensure, insurance, and educational knowledge that would be necessary to be obtained in order to offer youth services outweighed the tangible benefit. Using this technique they were able to ask and answer a series of tough questions which ultimately clarified that their goal was ‘increased’ service delivery, not necessarily ‘expanded’ service delivery. The agency was then able to accomplish this by instituting transportation services to a neighboring bus depot. This solution increased their client base by 7% in the first year and their profits by 4% (after factoring in the additional costs). This provided the agency with growth that was acceptable to all, with the added benefit of having a wider geographic service area without the costs of ramping up new programs.

Excited by using the DA technique, board members went out of their way to prepare thoughtful and intelligent arguments resulting in healthy debate. After the first meeting using this technique, the board began to ‘pass’ the DA card around the table giving more individuals the opportunity to offer challenges to the proposal on the table—all under the cloak of security the DA card offered.

Thursday, March 4, 2010

The Realities of the New Form 990

This past Wednesday we had our roundtable on the new Form 990. Most of our attendees were looking at filing the Form 990 for the first time this year. Some of the items we talked about:
• Making sure that the mission description on page 1 and the program descriptions on page 2 fit within the space provided so that the reader of the Form 990 can readily access that information and does not have to turn back to the Schedule O.
• Several of the participants noted that they received contributions from donors who found them on Guidestar, emphasizing the importance of putting your best foot forward with your Form 990
• Reviewing the necessary policies-document destruction, whistleblower, conflict of interest, Form 990 review procedures, compensation setting, gift policy
• Noting that key employees are those with significant management responsibility who also receive more than $150,000
• Compensation reporting also health benefits, the deferral of income-including pension and other retirement pay
• Discussed functional expenses and the importance of reviewing your allocations
• The effect of contributions from special events on the special event income

A few of the nonprofits who do not have to file the new 990 yet, said that they would probably file it instead of the Form 990-EZ because they wanted the extended information available to their stakeholders. Those who had already filed the new form 990 agreed. They noted that even though it was a lot of work to put together, they wanted the information presented.