Strategic Living

Many thanks to the Board Members who spent their Saturday morning at Boot Camp. We really appreciate their dedication to the nonprofit community.

We had two tracks to Boot Camp on Saturday. In the advanced track we looked at Strategic Thinking. How do you take the energy from your Strategic Planning and incorporate that into the Board work throughout the year?

A few ideas:
Stakeholder interviews during the process provided you with feedback from all directions. Keep that going by focusing on a different set of stakeholders throughout the year. The process does not have to be elaborate. It can be a five question survey after a service is provided; a short survey in the newsletter once a year; or a focus group lunch with the employees.

Periodically evaluate the financial condition of the organization to make sure you have the financial ability to continue to pursue the goals of the plan. Revisit funding goals and initiatives to make sure you are staying on track. If planned funds are not coming in, you will need to cut back on programs.

Set aside time at Board Meetings to discuss strategic items in more detail as necessary. The strategic plan will have scheduled times for the completion of certain items. Schedule these time frames on your Board agenda.

Modify the plan as necessary to address identify opportunities or threats. The Strategic Plan needs to be a living document, not a binder on the shelf that you dust off every three years.

Ten Basic Responsibilities of Nonprofit Boards

As I mentioned in the previous post we are getting ready for Board Boot Camp on Saturday. Each participant will receive a copy of the Board Source book-Ten Basic Responsibilities of Nonprofit Boards. In less than 100 easy to read pages, with practical examples and tips, this book discusses the following ten responsibilities:

1. Determine mission and purpose

2. Select the Chief Executive

3. Support and evaluate the Chief Executive

4. Ensure Effective Planning

5. Monitor and Strengthen Programs and Services

6. Ensure Adequate Financial Resources

7. Protect Assets and Provide Financial Oversight

8. Build a Competent Board

9. Ensure Legal & Ethical Integrity

10. Enhance the Organization’s Public Standing

At $19 for members and $29 for nonmembers on the Board Source website, it is an easy decision to make sure that all of your Board Members have this great reference book. And it is also available as a digital download.

Getting Ready for Boot Camp

I am preparing for our Board Boot Camp and I am impressed with the number of Board members who are willing to spend time on a Saturday morning learning skills that will help them better lead their nonprofit organization. On what key areas will we be focusing?

General duties of Board Members
Strategic Planning
Fundamentals of Fundraising
Understanding Capacity Building
Financial Oversight for Boards
CEO and Board relationships

These areas provide a foundation for Board Members to lead their organization regardless of the economy or the challenges facing them.

Board Member Review of Form 990

In preparation for our Roundtable Discussion this Wednesday about the IRS Form 990 I have been thinking about some common issues from this past year related to the form.

One of the questions on the IRS Form 990 is did the Board review the 990 before it was issued. Your Board may be wondering what they should do in that review process. While some of the areas may vary depending on your organization, the following list is a good starting point.

1. Review the statement of program service accomplishments. This is where your strongest story is told. Do you include service statistics and outcome measures?
2. Review the functional expense schedule looking at the % of program expenses compared to total
3. Scan questions on pp. 3, 4, and 5-do you have all the necessary policies? Review the discussion of the compensation policy in Schedule O
4. Review officers, hours per week, and related compensation
5. Read Schedule O. Is everything explained the way you want it?
6. Schedule G-for IRS purposes, these contributions related to a special event, are in the contribution section and not included with the special event revenue—so your event shows a “loss” on Schedule G
7. Review independent contractors as applicable
8. Look at Schedule L and Schedule R if these are applicable. The IRS is concerned about situations where someone with influence over the organization would be paid amounts that exceed the value of the services rendered.

Growing Your Future Board

Board members are typically older-in their mid 40’s to late 50’s. At this stage of life people have developed in their careers, made significant financial decisions, and have developed some “life wisdom”, that brings value to the non profit organization.

However, don’t discount the benefit of bringing younger members on to your Board. Although they might not have the life experience they can bring new insight and energy to your Board. It is generally recommended that your Board include someone with financial expertise and someone with legal expertise. Many Boards have difficulty finding professionals in these areas. They can tap the resources of someone in these areas with 3 to 5 years experience in their field. The expertise they have, even at this stage, will be valuable. As long as the individual knows when they need to research and when to ask questions, they can be beneficial.

Also, consider a “junior Board” for younger adults to participate in. Determine what rights this Board would have and what Board meetings they would attend. This is basically a Board in training from which hopefully you will develop future board members. Make sure, though, that this junior Board has an opportunity to share their suggestions and observations with the Board and that as much as possible, their ideas can be used. Give them responsibility over certain functions (like elements of a fund raising event). This Board needs to feel that their commitment and time is valuable to the organization.

Emotional Issues

The participants in our recent Succession Planning roundtable agreed. The struggle with succession planning wasn’t with the steps involved in the process. Other than the time it takes to document the process, the steps alone are not that difficult. The primary challenge with succession planning is in the emotional issues. The Executive Director might not want to bring up succession planning for fear the Board would think they are planning to leave. The Board might not want to bring it up for fear the ED might think the Board wanted them to leave. You may have staff that you want to train to perform functions in the ED’s absence or in the interim between an old and a new ED but you don’t want them to be the new ED. The staff or key donors may have a close relationship with the ED and fear that the loss of the ED would adversely impact the future of the organization. Navigating the emotional impact that comes with succession planning can be mitigated by focusing on policies and procedures and investing time in fostering open communication. Focusing on policies diffuses the personal aspects. Developing better communication between all the people involved can reduce the tension that accompanies these discussions.

Board succession

We started out at our last roundtable discussing Executive Director succession planning but ended up focusing more on Board succession. Thoughts—

• You sometimes think that it will be hard to find Board members with the same passion for the organization. But new members join and its not long before they are “infected”.
• Create meaningful roles for volunteers. Allow selected volunteers to serve on certain committees. This gives you (and them) an opportunity to see what their role as a Board member would be like.
• Limit terms for all officers to 3 years. Limit terms for Board members to 2 consecutive 3 year terms with a year break before the next six year stretch. But ask your Board member if they would like to stay involved during the one year break—on a committee or helping with a program or a fund raiser. If you don’t limit terms you make it harder for the Board as a whole to get used to working with new members.
• In at least the last year of the President’s term, have a President in training. This does not necessarily have to be the Vice President. This person will spend a year with the President assisting them with their duties so that the transition is easier.

Accountability

At our Thursday breakfast roundtable, our discussion on succession planning moved into Board succession matters which then diverted to a discussion on Board accountability. Namely, what do you do when a Board committee is not keeping up with its responsibilities? A few suggestions:

• Each committee chair needs to report to the President and/or the Vice President of the Board. The President and the Vice President should not chair committees so they are free to mentor and guide the other committee chairs.
• Written descriptions of each committee and what the committee is expected to accomplish within a certain time frame.
• Written reports from the committee as applicable.
• Consider appointing a new committee chair if necessary. Sometimes, someone doesn’t have the time to be the chair but is afraid to let everyone down.