This article by Kate Sphar appeared in our February 2014 Newsletter| Making Nonprofits Stronger

Leslie and I love our jobs.  We work with a lot of really fantastic people at organizations that are doing meaningful work in their communities.  Over time, we have seen nonprofit leaders become smarter and more savvy about how they manage.  In the ten years I have been a consultant to nonprofits, I have seen the level of financial acumen among my clients increase significantly overall. 

Of course, that doesn’t mean there isn’t room for improvement.  Perhaps it is because of the increased sophistication of nonprofit managers that we see Boards “checking out” financially.  Even in this day and age of increased scrutiny on nonprofits, we still encounter Board members who aren’t aware of their responsibility regarding the agency’s financial health and solvency.  They should take notice of the numerous local nonprofits that have faced instances of misappropriation or theft, bringing to light how crucial is it that both Board and staff understand potential financial risks and ensure that their organizations are operating in a fiscally sound way.   Nonprofits of all sizes, from universities, to the United Way, to a small volunteer fire department, face the risk of fraud, from both inside and outside the organization. 

But not all risk looks like these obvious cases of criminal behavior, Boards have to be vigilant as to their financial decision-making in all regards.  As recent events at Conneaut Lake Park and the August Wilson Center illustrate, a Board of Directors can potentially be held liable for a “breach of trust”, in the form of misuse of organizational assets or poor/nonexistent planning.

So let’s debunk the Top Three excuses we hear as to why Board members aren’t more aware and engaged in their fiduciary responsibilities:

1. “There are other people on the Board who are paying attention to the financials; so I don’t really need to.”  You know Jane, the Board Treasurer, who is diligently reviewing the financial statements each month?  Well, you and Jane have the exact same fiduciary responsibilities and potential liabilities.  So it is only to your benefit to review financial statements and ask questions.  There is no such thing as a “non-financial person” when it comes to being on a nonprofit Board.  If you are not comfortable with reading financial statements, ask your other Board members or the Executive Director (or us!) where you can get some help.  There are tons of resources and trainings available to get Board members up to speed.  
   
   
2. “We have a financial policies and procedures manual. So that should protect us.”  Due to the increased requirements of the 990, a lot of nonprofits are putting into place certain policies, like a Conflict of Interest, Document Destruction, or Whistleblower Policy.  But responsibility does not end there.  Every organization should have financial controls that outline how financial transactions are handled – who makes decisions and signs off on all types of transactions, how financial assets and liabilities are valued and tracked, and how data is kept secure.  There are lots of templates available for financial controls manuals on the Internet; but I have found the best source for a sample document can be other nonprofit organizations that are like yours.  Many nonprofits are happy to share their financial policies and procedures as an example to others who need assistance.
   
   Most importantly, those policies and procedures should be reviewed on a regular basis (annually) to ensure they are being followed and are still appropriate for the organization.  As staffing, programs and operations change, your financials controls may have to change as well.
   
   
3. “That’s the Executive Director/CFO/bookkeeper’s job.”  For those large enough and/or lucky enough to have dedicated financial staff, it is often tempting to lay all responsibility at the feet of the staff.  But as I’ve noted, when something goes wrong at a nonprofit, it is the Board that will be held liable first.

Moreover, we often find that Boards don’t actually understand what staff members’ and contractors’ responsibilities are.  I can’t tell you how many times I have heard a Board member say that they were disappointed their contract bookkeeper hadn’t solved their strategic financial issues.  Bookkeepers are hired to keep the books!  Executive Directors, too, are often ascribed financial acumen that many will admit they do not have.  Financial roles are not interchangeable, and just because someone performs a duty related to organizational finances does not mean they have the capability (or capacity) to act as a CFO.  If you need strategic financial guidance, you have to invest in it (or convince it to join your Board).

The bottom line is that every Board member needs to understand all aspects of its financial systems.  Ask yourself some questions:

• Financial staff and Board responsibilities.  Which staff members have financial responsibilities? What expertise or training does each person have?  What role does each person have?  Is the Board playing its role appropriately?
• Financial reporting.  Are we getting timely, accurate and appropriate reports?  Do I understand what they say?  Does the information help the Board make decisions?
• Financial controls.  Do we have financial controls in place that are right for the organization?  Are they being followed?  Are they easy to find?
• Financial planning.  Do our strategic plans relate to our financial reality?

Recently I wrote an article that applied my past experience in “Talent Acquisition” (Recruiting) to the problem of recruiting nonprofit Board members.  In this follow up I attempt to do the same to the problem of engaging (and retaining) nonprofit Board members (“Talent Retention”). Again the similarities between Board and staff talent issues are striking – it just takes a slight twist to apply the research and learnings to the other group.  

A few foundational bits about employee engagement: 

1. From a Wikipedia entry: “An "engaged employee" is one who is fully involved in, and enthusiastic about their work, and thus will act in a way that furthers their organization's interests.” Substitute Board member for employee and this definition works fine.

2. There are well researched links between employee engagement, productivity, retention, and overall organizational effectiveness and  the bottom line. Here are research findings in a quick presentation.

3. The Gallup organization in a seminal study developed 12 questions, which they called Q12, to measure employee engagement.  Below we highlight how some of these questions can be applied to Board Engagement.

In the 2011 Daring to Lead research and brief on Board/CEO relationships, research showed that there is a direct correlation between the amount of time the Executive Director spends on Board related activities and the rates of satisfaction with the Board's performance. In addition, the research showed that the average amount of time that E.D.’s spend with their Board is notably low - possibly because “Many executives struggle to define the ROI of board related activities and don’t understand their position of influence on that ROI.” My takeaway from the study, and through direct experience in working with many Boards, is that Board member engagement plays a large role in Board Member effectiveness and that the ED/CEO is primarily responsible for engaging members. 
 
Unclear Expectations lead to low engagement:  The Gallup Survey as well as a number of other recent studies indicate that clarity of expectations is key to engaging the employee.  The first of the Q12 questions is “I know what is expected of me at work.”  As stated in the research, “If expectations are not clear and basic materials and equipment are not provided, negative emotions such as boredom or resentment may result, and the employee may then become focused on surviving more than thinking about how he can help the organization succeed."  When conducting Board Assessments I often find that Board members are not at all clear about the expectations of the Staff and/or organization – especially when it comes to fundraising, participation at events, or their role in giving direction to policies, programs and employees. This confusion often breeds resentment when the expectations are not met.   

My advice:  Have a clearly written and frequently reviewed Board Commitment/Expectation Document (sample here) that is used during the recruiting process, orientation, and is signed off on by all Board members at least once a year.  The creation of this document should be the responsibility of the Governance Committee and be discussed and approved by the full board. 
 
Focus on Me:  3 of Gallup’s Q12 questions:  “1. Someone at work cares about me as a person. 2. I have a chance to do what I do best every day. 3. I received recognition or praise for doing good work”  are about motivation and adding value. Engaged employees have a manager or superior who understands the  individual's motivations, recognizes their strengths, and gives them praise. Often board members report that they are not sure what real value they are adding to the Board. Or, that their unique experience and strengths are not being used.  
 
My Advice: I suggest to my CEO clients that they take each of their Board members out for lunch or coffee individually at least once or twice a year.  The conversation should result in better understanding of:

• What motivated you to join this Board? Or, what is motivating you to stay on this board? Are you getting what you expected from this Board experience?
• What are the specific strengths, skills, experiences, and perspective that you bring and that we can harness for our cause?
• Given the (now) clear expectations of the Board, the committees we have, and the organization’s needs - what would you like to do?  Where do you see yourself contributing the most?
•  What can I/we do to better engage you?
• What advice do you have for me on (insert current issues problems and initiatives here). 

This last question has a dual benefit, it allows the Board member to really feel like they are adding value by contributing advice and knowledge (almost everyone likes giving advice but not everyone will feel comfortable doing in a group meeting). And, it allows you to understand where their head is at on what may be a future Board vote. 
 
Board Meetings and Making a Difference:  The Q12 question, “My opinions seem to count” and related research on our need to feel that the work we do has a purpose and adds value are also keys to Board engagement.  In my Board work this often comes out in feedback about board meetings. For example,  ”We spend too much time on minutia and not enough time on strategic issues,“  “Board meetings are cursory, it seems as if we are racing through an agenda largely focused on financials so we can get out of the room in under an hour – this isn’t what I expected”  or “The board is not engaged in generative & strategic thinking. At times we are mired down with tactical issues rather than governance issues."  Consider that the vast majority of the board members time and exposure to the organization is only in the board meetings. So if these are tired, tactical, and generally not inspiring then why should we be surprised when attendance and engagement dwindles?   
 
My advice: Overhaul your board meetings. Use committees appropriately, and then use a Consent Agenda to quickly move through the routine tasks of the Board. Use your strategic planning priorities to form the bulk of your board agenda (here is an example). Have the Board Chair steer discussions away from the tactical and back toward the organizations strategic priorities. A Board Chair who is has good facilitation skills is key to keeping a meeting at the strategic level. 

I frequently provide workshops on how to hold effective meetings and one of the key points I make is the need to have everyone understand the expected outcomes of the meeting,  Expected outcomes stated before the meeting begins allows partcipants to focus and the facilitator to steer the meeting toward the declared outcomes.  As this HBR blog post points out there are really only 3 reasons to have a meeting:  To inform and bring people up to speed, to seek input, and to ask for approval.  In my experience Board meetings are usually a mixture of all three. Wouldn’t it be great if in a future Board meeting your Board Chair or CEO said, “Today’s meeting is just a discussion and brainstorming session – we will quickly take care of regular business and then we are going to focus on discussing and seeking your input on this (strategic issue here). 
 
What do you think?  Anyone else have practical advice on how to better engage Board members? Whose job do you think it is to put these ideas into practice? 

Leslie Bonner
leslie@bonner-consulting.com

Today I completed a survey for the Nonprofit Quarterly about what upcoming topics they should cover in their publication for nonprofits. One question that gave me pause was something like, “what trends are you seeing in nonprofits that worry you?” Not wanting to point out the obvious (dwindling revenue and leadership burnout), I answered, “It is increasingly difficult for small and mid-sized community nonprofits to recruit and retain committed and qualified Board members.” Then it hit me – I know something about this that might be useful to nonprofits. 10 years ago, I was training recruiters and writing about creative ways to recruit hard-to-fill positions for companies big and small. First as head of Staffing and Employment at PNC, then as an owner of a staffing and training company, and (when I absolutely had to) as part of the search team at Dewey & Kaye, I’ve spent 10 of the last 15 years dealing with some aspect of what is now called “Talent Acquisition.”

So I thought about the executive recruiting techniques I have used and that could be applied to the recruitment of Board Members and voilà…
 
1. I tell clients that my entire 25 years of knowledge and advice about Human Resources can be summed up by the phrase “Hire Slowly, Fire Quickly.” Let’s focus on the “hire slowly” - no matter how desperate you are to fill a chair with a breathing body; never, ever, ever take the only candidate available or the best of a mediocre group. You will always pay the price. For a nonprofit Board that price could be a member who doesn’t show up at meetings, or that you have to work around until their term expires. Unless you have cultivated a pipeline of candidates in advance, it takes on average 5-6 months to fill an Executive position. Why should you expect that a Board position would take less time? Start Now. 

2. Recruiting always starts with gaining clarity about what you are looking for in a hire. You can’t write a job posting (remember when they were called “want ads”?) without thinking about what qualifications you need. It is the same for Boards. What skills, competencies, and characteristics are you looking for? What demographics will you target? I just helped a small board, using what is now a common tool called a Board Matrix, and we agreed that we needed people with finance, legal, and fundraising skills to round out the existing Board. We also wanted people under 40 since we had none of those on the Board (not unusual in this region). Other considerations included someone who lived in the zip codes the organization served and who had connections to high schools which is the target of the services the organization provides. This exercise allowed us to be very clear about the types of people we would target.

3.  Once you understand your target demographic and needed skills, the next question is, “So where do these types of people hang out or work?” In my sample case above, we started by looking at all the law firms and accounting firms in the target zip codes. We looked at the local high schools for teachers and guidance counselors. We looked at the bigger businesses in the area that employed people with these skills. If not geographically limited, we could try the County Bar Association, the Association of CPAs, or the alumni of local Business Schools – all of them have publications and many have online or social media hubs where you might be able to place a tasteful posting.
 
4.  What’s the sales hook?  Every good recruiter knows that just posting a job ad won’t get you much (they call that technique “post and pray”). Instead you need to focus on the key benefit or motivator for the job that will attract the attention of the best candidates. Look at how Todd Owens writes the headlines or tweets for the jobs he is recruiting for in NonprofiTalent. Not “Executive Assistant needed for the Council on Social Work” but instead he leads with “Without social workers we might not have a nonprofit sector.” What’s the hook for your Board member job? Practically speaking, while some people will take on a Board position because they believe in your mission, there are many great people who don’t know you exist, but are looking for a networking opportunity, to gain visibility in their town, or to develop their leadership skills. What if your headline was, “Build your leadership skills and your professional network while working to stop Domestic Violence in our community as a Board Member of ABC.” That’s far more effective than “Board Member needed for Domestic Violence Agency”. I’d be glad to argue with those of you who believe that “passion for the mission”is the price of entry, but this Blue Avocado article does it better in The Trouble with "Passion for the Mission.
 
5. Every Corporate Recruiter will admit that referrals from current employees are the single greatest sources of hiring (in many companies employee referrals make up 45% of new hires). The thinking is this: you won’t refer a poor candidate (loser) to your employer because it will reflect badly on you. And you will have to work with the person regularly to remind you of your judgement lapse. Companies also recognze that you, the employee, are the best advertisement for why this is a good place to work (you wouldn’t refer a  friend to a place that you hated right?). These same assumptions can apply to recruiting Board members. Your current Board members, if they are engaged and happy in their Board role, will serve as the best spokesperson for the organization and its Board. And, hopefully, they won’t refer a poor board candidate because that will reflect badly on the referring member. Remember that to get good referrals from current members, Board members needs to know exactly what you are looking for and how best to sell the position.

6. Nonprofits have become adept at using social media and direct mail to ask for donations and to increase awareness. These same tools can be used to find potential Board candidates. A nonprofit where I have been a Board member used its annual appeal mailing to solicit Board members, volunteers, and/or donations. Consider using a member list to identify possible board recruits, or make an announcement at your annual event.

7.  Here are 2 FREE places to place your newly written, motivating, and focused Board Job Posting. The first is particularly helpful for those Boards located in PA and OH – with a heavy emphasis on western PA.  Nonprofitalent, formerly Dewey & Kaye’s JobWatch, will list Board openings as well as nonprofit Job openings. Their Board posting is a new service and IMHO not yet as widely used as it should be – did I mention FREE?  Read the other Board postings for ideas on how to write a catchy posting. Other cities may have similar services, often run through a university that has a Board Matching program. Nationally Bridgespan offers a board posting service for a small fee.  

The other little known service is through LinkedIn. If you aren’t signed up for LinkedIn do it today. For the few who are not familiar with this social media, LinkedIn is the professional (work) version of Facebook and is an excellent way to build your network. It has also become the number 2 (after referrals) way for recruiters to find talent. LinkedIn has just recently passed Monster as the go to source for finding job candidates. To get more information about LinkedIn’s service for nonprofits seeking board members go to LinkedIn Board Member Connect.  P.S. While you are out on LinkedIn, connect with me and I’d be happy to refer your Board Posting to my growing network.
 
I'll address keeping and engaging Board members in a future post. If you find any value in these suggestions or have a success story because of one of them, or have a recruiting tip you want to share, please contact me or post a comment below. Happy Hunting.

Leslie

In this last post of the year we gather up some great resources to help you and your organization forge goals and plans for the new year.  We wish you all a peaceful and warm holiday season and we look forward to working with you in 2013.

Growing New Types of Teams

In this article, and new book, on Teaming in the 21st Century, the author makes several interesting points about teams and accountability. The nature of teams and teamwork in changing and requires a more fluid approach. “"We've seen fewer stable, well-designed, well-composed teams, simply because of the nature of the work, which is more uncertain and dynamic than before. As a means for getting the work done, we've got to focus on the interpersonal processes and dynamics that occur among people working together for shorter durations.". Because of this, “people have to get good at teaming"—reaching out, getting up to speed, establishing quickly who they are and what they bring, and trying to make progress without a blueprint. The skill set involves interpersonal awareness, skillful inquiry, and an ability to teach others what you know.”
 
Leaders of team must make sure that people involved in collaboration understand the importance of interdependency and communication.  Leaders must also be careful not to penalize the well-intentioned failure of the group. However, accountability must be present for the team to perform, “But not coming down hard doesn't mean coming down soft. "Psychological safety is not about being nice; it's not about letting people off easy and being comfortable. It's about the courage to be direct and holding high expectations of each other, understanding that uncertainty and risk are part of the work, as is the occasional failure. A leader's challenge is to set a climate where psychological safety, accountability, and pressure to do the best possible work exist together.”

Growing Leaders and Managers

Today’s mailbox brought this great summation from the American Management Association of  how we move through the roles of Doer, Manager, and Leader in our Career (and sometimes by the hour). I think not recognizing these changing roles gets us in the most trouble.  I’d suggest you read the article, but here are a few highlights:

Doers are the PRODUCERS of work. Managers create a positive ENVIRONMENT. Managers exist in a political, competitive universe that is concerned with relationships as much as the work. Leaders invent the FUTURE. Leaders often find themselves alone, going out ahead of the crowd to see what’s coming, to greet the new. Doers coordinate. Managers collaborate. Leaders originate.  Once you get the distinction between the three roles it is important to understand what’s required from each role.

“One: You need to know which cycle you’re in, for you can experience them all throughout your career. Two: All day long, in any one position, you may need to follow, then manage people and projects, and, more rarely, lead. One moment we dig in and work . . . the follower. The next, we direct and motivate .. . the manager. Sometimes we initiate and persuade . . . the leader. Three: No one is a leader all the time. Trying to spend all your time in the leader mode is not much better than missing it altogether. Leadership is not a full-time role for anyone—not even CEOs or presidents. A leader initiates and then propels change forward. Change has an expiration date. No one wants to live in such flux, and no one wants the burden of leading all the time; leaders are happy to revert to managing when they can. Though there are always overlapping duties, each cycle determines what others expect of you and how they rate you.”

While we are on the topic of Management, check out this article Lessons from a Reluctant Manager from Fortune. Where a 20-something provides some excellent lessons she’s learned, the hard way, about being a manager
 
Growing Nonprofits

A new study from the Center for Creative leadership, Emerging Leadership in Nonprofit Organizations: Myths, Meaning and Motivations, tackles a topic near and dear to me.  “The demands of the nonprofit sector have not been matched by investment in leadership talent. Equipping people to lead through change and challenge has been largely overlooked. Nonprofits rarely have the structures or funding for providing development opportunities for employees. Long-established leaders often hold tightly to their roles, and most funders don't place a high priority on building a leadership pipeline.” Because of this, "The sector is beginning to see the implications of this neglect," says Karen Dyer, director of CCL's Education and Nonprofit sector. "We have a capacity gap that will require significant investments and new approaches to attract, keep and grow effective, creative nonprofit leaders." The study provides suggestions for leaders and funders on how to close the gap.

And from the Nonprofit Quarterly we get this article: Beyond Financial Oversight: Expanding the Board’s Role in the Pursuit of Sustainability.  The article includes some key questions to help your board move from the role of oversight to dealing with your financial sustainability. This is a must read for Executive Directors, Board Chairs and all Board members.
 
Faith In Humanity
 
So much heartbreaking news in the last few weeks has left me sad and helpless; fearful that there is so little I can do to tackle such huge issues as gun control, mental illness, poverty, and social justice.  And then I viewed this (warning get out your tissue box): 26 Moments That Restored Our Faith In Humanity This Year. 

Peace to all of you.
 
Leslie Bonner
leslie@bonner-consulting.com
412-427-7033

My latest quarterly newsletter can be found here: http://conta.cc/VxmFV0 and contains a new article on Succession Planning: 5 Steps to Identify and Develop Leadership Talent.

Last Chance to Register for the Succession Planning Seminar

The Forbes Funds Invites Nonprofit Staff and Board Members to Attend
NOVEMBER 1, 8:00 - 10:45 AM
Consol Energy Center, Pittsburgh, PA

 RSVP to Benjamin Hemmings at hemmings@forbesfunds.org

Facilitated by Leslie Bonner and Gay Fogarty,  this workshop will focus on strategic leader development, emergency succession,  and ensuring executive transitions in key positions throughout the organization. 

Cohort Opportunity An application for participation in a Succession Planning cohort will be released at the seminar. Approximately ten executive directors will be identified to participate in the learning cohort designed specifically for Executive Directors preparing to transition out of the organization within the next three years and will entail a diagnostic, coaching plan, peer learning sessions and ongoing follow-up

In the last year I have had more requests than ever before to spend time with nonprofit boards on governance issues. Most frequently I have been asked to help educate Board members on their roles and responsibilities and 
to assess their performance and effectiveness.

The presentation I use for Board Education begins with some attention getting items ripped from the headlines about a Board's failure to effectively govern and steward the organization. Today's Pittsburgh Post Gazette has an article that will surely make it into every future Nonprofit Consultant's Governance presentation.