Archive for the ‘Board of Directors’ Category

Reader Question: Personnel issues at board meeting

February 26, 2010

Photo by Marco Bellucci

I work for a small non-profit for over 5 years. We have an Executive Director and three staff. In the past we have been sponsored by other 501c3’s and fell under their board of directors. As of this year, we have our own 501c3 and a new Board of Directors, 6 people who have never served on an active board. Our Exec. dir. has had some experience with Boards but not enough to guide them as to what they should do.

That’s the background….now here is the problem. The Exec. Dir. recently at a Board Meeting brought up personnel issues and in the notes first and last names given. (Is this a problem with confidentiality?) Also, the problems stated were untrue or misrepresented. Neither person has had a previous conversation with the director either before or after this was discussed with the board. What should be done?

First, I am not an employment lawyer, so I do not know the law surrounding confidentiality.

Now with that being said, the Executive Director can definitely (at least in my experience) bring up personnel issues and state specific names and issues at board meetings. In fact, many do when looking for guidance on issues. Particularly in small nonprofits. With that being said, those names are NOT typically published in the minutes, nor are the specific details. Typically the minutes will say something like “Staff issues discussed.” or something along those lines.

I would advise the staff who feel wronged to do two things. First, I would talk to the ED about having the specific names and issues removed from the meeting minutes. Instead, I would request similar wording to what I suggested above. Second, you have the right to talk to the board or board members. Many nonprofits have a grievance policy that advises staff what to do in the case of a grievance with the ED (typically involves going to the board). Since I don’t know the specifics about the issues, I’m not sure what the best course of action here is. Since you found out via the meeting notes/minutes, you definitely have the right to contact the board members and note you would like to provide additional information to what you saw in the minutes.

Have your own question? Email me – kristen@advancementcompany.com

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Should your organization require board members to give at least $x annually?

February 26, 2010

Photo by Eric Gjerde

No. I don’t agree that nonprofits should require their board members to give at least $x each year.

Let me clarify though, I do completely agree with The Nonprofit Consultant Blog’s recent post, “How Much Should Board Members Give?” that discusses whether nonprofits should require that their board members give. If you are on the board of a nonprofit organization, you should not only be giving an annual gift, but that nonprofit should be one of the top three nonprofits you give to. Plus, you should be helping to friend-raise and fundraise as part of being on the board and having a fiduciary responsibility.

But, I do not agree with organizations that say that you as a board member are required to give $1,000 (or whatever amount organizations say). That is for two main reasons:

1. If you require individuals to give $1,000, those that can’t afford just won’t give and those that can afford it may just give that (when they might have gave $2,000 or $10,000), so either way you are missing out.

2. You are actively reducing the amount of diversity you will have on your board. There are many people (students, low-income, young, etc) that would never be able to afford that, so you are erasing any opportunity to hear their opinions and have them on your board. This is why I am a fan of the you must give and we must be one of your top three nonprofits you give to language.

Eliminating a program: what not to do

February 26, 2010

Photo by neys

An organization that I am familiar with has been dealing with pretty difficult times financially for the past five years or so. Years of operating at a deficit without cutting back on anything have finally caught up with this organization, and they recently cut a popular, but underfunded program. In difficult times, many organizations have had to make similar decisions, but in this organization’s case they did several things wrong. I decided to use them as an example of what not to do when your organization decides to cut a program:

1. Plan ahead and plan wisely
A decision to end a program should be well-planned. It should have taken a lot of thought, and careful preparation- particularly when there are donors in the community that are strong supporters of the program. It also should include discussions with prominent supporters of the program. There should be a transition plan that includes an end of program summary that discusses and highlights what the program has accomplished while it was in existence.
and don’t eliminate a program a week before a site visit – while that grant may not be enough to run the program for a year, it may be enough to keep it going for a few months which buys more time to find additional funding.

2. Involve program staff
Make sure to involve program staff in this decision. Many times they can work with you to prevent the elimination of a program by reducing their hours, fundraising, etc. In this organization’s case, the staff offered to work reduced hours to keep the program going, and that offer was accepted with a promise that the reduced salary would keep the program going at least a few more months. They had even discussed a transition plan if no new funding was found that would include an end of program summary, but before the two months were up the staff were laid off with zero notice. The staff still offered to write up an end of program summary, but that offer was declined! When ending a program, I think it is extremely important to work with that program’s staff to do everything possible to keep it going, but if no funding can be found then the staff are extremely important allies in ensuring that the decision is communicated accurately and the program comes to a smooth end.

3. Communicate the decision effectively
The communication should be one of the most important aspects of the process to eliminate a program. Not only does communication need to go out to your volunteers and staff, but your funders need to be told as well – particularly ones that have given your organization general operating grants or program specific grants for that program. If those grants included the eliminated program, those funders need to know, and should be (if possible) involved in the decision. Also, don’t leave the program up on your website so it appears at first glance like your organization still has the program.

4. Don’t make it personal
This is about the program – not the staff. Don’t make this decision be about the staff and don’t burn important bridges. A few other strange things that happened with this organization, were that the laid off staff were removed from all e-mail newsletters and general public communication (even though the laid off staff are current donors) and they were not included on the email that announced the elimination of the program (and recipients of the email were told not to forward it to the laid off staff) – strange huh? While laid off staff are no longer employees, they probably have given a lot of time and money over the years, plus they probably brought your organization many new supporters. Respect them and their commitment.

Hopefully your organization never finds itself in such a position, but if you do, I hope this example helps show you what not to do.

3 reasons why you should have a twenty something on your board

February 26, 2010

Photo by Leo Reynolds

1. We know more than you think.

We had our own computer in sixth grade, have been on Facebook for years, and know what Twitter is. So, when your organization is trying to figure out how to take advantage of new technology, we are a huge resource. Plus, we are fresh out of college and there are some great tidbits that we get from class. One of my most popular posts this year, came from a Nonprofit Finance course – Want to know how your nonprofit is doing financially?

2. We have more time than most (and so do our friends).

Usually we don’t have kids, mortgages, 80 hour per week jobs, etc. This means we have more time to help you with fundraising, volunteering and more. We don’t have to get home for dinner, and we are willing to help on nights and weekends. Even better, is the fact that we communicate with our friends a lot. We can send out a tweet or a message to everyone in our network when you need volunteers or advice.

3. We can be more committed.

We aren’t typically on a dozen boards and we aren’t professional board members. When we join a board, it is because we really care about that specific organization and its mission, and are willing to go above and beyond to ensure its success.

*I do want to note that these three reasons can apply to anyone (regardless of age), and this post in no way is saying those that are not in their twenties aren’t committed, won’t give their time, etc. It’s purpose is to encourage boards to engage younger generations because they can be an extremely valuable resource.

So, how do you find us?

Well, try one of the many useful social media and networking tools. Send out tweets on Twitter or recruit us via Facebook. Or you can see if you have an organization in your city that recruits young board members. In Minneapolis, there is The LEAD Project. The LEAD Project enlists young people that are interested in serving on a committee or board. Nonprofits contact the Project and the Project matches that nonprofit with young professionals that fit that nonprofits needs.

Organizational Conflict: Blurring the lines between Board Chair & Executive Director

February 26, 2010

Photo by Shyald

I once worked with a nonprofit organization that had some conflict between the Board Chair and Executive Director (ED). The main issue dealt with who should be doing what (defining roles), and founders syndrome. Never heard of founder’s syndrome? Click here and here.

The problem was that the organization had been an all-volunteer organization with a very active board for decades. The organization had grown, and had hired an Executive Director. Unfortunately, the organization didn’t really plan well for defining roles and transitioning from all-volunteer to having paid staff. The result was tension and conflict between the Board Chair and Executive Director about who has the authority to be doing what. Some of the specific questions that came up were:

  • Who should be the media spokesperson?

In most cases, it should always be the Executive Director. Now, that doesn’t mean the Board Chair can’t be trained on how to respond to things, but if there is one person invited to interview about the organization, that person should be the Executive Director. I view the Executive Director’s role as being the face of the organization.

  • Who should be in charge of the finances/who should have the final decision making power?

When you have just one paid staff member, deciding who should be in charge of finances isn’t as cut and dry as with large organizations. Still, the Executive Director should have the final say. For example, with the nonprofit I was working with, there was an independent contractor that was well-liked by the board. The contractor was let go by the ED, and the contractor held the organization’s property hostage demanding a severance check – crazy huh? Well, the ED said not only would they not give the contractor a severance check, but they wouldn’t give them their final check until the property was returned (makes sense right?). Well, the Board Chair overrode the ED’s decision and gave the contractor their check – before they had returned the property – without telling the ED. This is a great example of what Board Chairs should not do. The Board does have the ultimate fiscal responsibility – but the staff is responsible for the day to day finances and related decisions.

  • Who puts together the agenda for board meetings?

Technically, it is the Board Chair’s job to put together an agenda. Although, most organizations rely on their staff to do the agenda. This was totally depends on the organization, and the board.

  • If the Executive Director is salaried, should they have to keep track of their time and tasks in a timesheet (actually write 4-5pm: called donors) for every hour of every week?

No! Please, please don’t make your staff do this. This organization did, and it created a lot of resentment between the Board Chair and the Executive Director. Please trust your staff to get their work done. In my opinion, I think all organizations should move closer towards a R.O.W.E. sort of work place.

These are just a few of the many issues that came up with this organization’s transition. If you have your own questions, please post them in comments and I will do my best to answer them. Or if you organization does these things differently, please share!

8 tasks for board members who hate fundraising

February 26, 2010

Photo by Leo Reynolds

Do you have board members that hate fundraising? Board members that refuse to ask anyone for money or tap into their networks? Well, here are 8 things they can do to help with fundraising: 

  1. Sign thank you letters
  2. Include your organization in their estate plan
  3. Help with prospect research (review annual reports, look up addresses, etc)
  4. Make thank you calls to donors
  5. Research foundation/corporate funders
  6. Write an article for the annual report or newsletter
  7. Help with your events (set-up, take-down, staffing a table, etc)
  8. Volunteer to speak at programs/events about why they are involved with your organization

And if they just don’t want to verbally ask anyone, then they could: 

  • Provide you with their address book
  • Write ask letters for in-kind donations for events
  • Write personal notes for appeal letters
  • Send an e-mail ask to their friends

To see some examples of board commitment forms and board job descriptions: 

Samples Week- Board of Directors   

Samples Week- Board of Directors

February 19, 2010

Sample board member job description here, here, here, and here.

Sample board fundraising menu/board commitment form here, here, and here.

Sample board agenda here*, here*, here, and here*.
*Agenda includes a consent agenda

Sample board minutes here, here, here, here, here, and here.

Sample articles of incorporation here, here, here, here, and here.

Sample bylaws here, here, here, and here.

Some nonprofits list their board members on their website, others go a step further to include full bios and contact information. Here are a few websites of nonprofit organizations and what information they have for their board of directors: here, here, here, and here.

For more information about Boards of Directors, BoardSource is a great resource.

Check out all of the other samples discussed this week!

The Consent Agenda

February 19, 2010

Photo by Office of Governor Patrick

I am a strong proponent of the use of consent agendas in board meetings. They allow boards to have items that do not require discussion or debate to be approved quickly. Consent agendas can help speed up meetings and cut off unnecessary discussion. They allow boards to focus and spend time on the things that require meaningful discussion.

Here are some of the things that should be on consent agendas:

  • Approval of minutes
  • Uncontested board elections
  • Committee appointments
  • Items that have already been discussed via email, or have been discussed at previous meetings and do not need any further discussion – items that have been voted on via email
  • Reports

If your board doesn’t use a consent agenda right now, consider giving it a try and see how much time it saves you!

What is too much when it comes to executive compensation?

February 19, 2010

Photo by kevindooley

An article in the Chronicle of Philanthropy’s October 2nd edition focused on the recent uproar over the Charlotte United Way’s compensation package for its leader, Gloria Pace King. Ms. King was set to receive a $2 million pension upon retirement. This edition also highlighted that a recent survey showed that the median compensation among the 291 organizations surveyed was $326,500.

The issue of what is appropriate compensation comes up frequently for boards trying to determine compensation packages for their leaders. Some believe that nonprofit workers should receive much less than their for-profit counterparts, but I have always wondered why? A CEO of a for-profit $40 million corporation in most cases has the same amount of work as the Executive Director of a $40 million nonprofit. Wouldn’t you think that since the nonprofit is serving the public good they should receive equal or greater pay? 🙂

The issue of the pension package for Ms. King started as an anonymous tip to the media, hinting that they look at the organization’s 990 (for those that don’t know, you can find the compensation of nonprofit leaders on the organization’s 990s). The media discovered a large pension payment and immediately reported on it. Of course, many other media outlets then picked it up and the public outcry began. For those that are wondering, Ms. King’s salary was around $370,000, which is a little higher than the median, but considering that she ran a $45 million organization for over a decade and brought it up to the 18th largest United Way (in terms of revenue raised), the compensation is probably reasonable. Unfortunately, the Board gave in to the public pressure and gave her a month to resign or she would be fired. Oh, and they also said they are going to exercise their option to cancel up to $1 million in promised pension payments.

Unfortunately, these types of situations happen often. So, how to avoid it? Seek independent review from outside experts when determining compensation packages, and make sure to look at what similar organizations (both in size and focus) are paying their leaders.

Reader Question: Can nonprofit board members win the organization’s raffle?

February 19, 2010

Photo by HowardLake

Just to elaborate a little further, this person was asking whether a Director from their board of directors could win the raffle prize at their event. This same question could be asked about whether staff can win the raffle prize at an event.

This is a tricky question. Technically speaking, in most states, the answer is yes- your staff or board members can win raffle prizes. Now, this can vary, so make sure to check your state Gambling Board to see what the rules or laws are in your state.

So, it is allowed, but would you want your staff or board members to win the raffle? I would think no. From the appearance point of view, it may not look good to the donors and volunteers who spent money on raffle tickets if an organization insider won the prize.

I think this is a decision that each organization has to make, keeping in mind any rules or laws that gambling board have.