Archive for the ‘Boards of Directors’ Category

Dear Nonprofiteer, How dare they tell me what to give?

February 6, 2012

Dear Nonprofiteer,

Maybe I’m just being pissy.  It’s possible.  But….

I’m on the board of two smallish non-profit arts organizations, and a regular financial supporter of several others. I’ve noticed a trend in fundraising appeals- in letters that go out to previous funders, the dollar amount they contributed in previous years is named, with a request for a specific increase in the current campaign.  (“Thank you for your generous contribution of $100 in 2011. Would you consider a gift of $125 in 2012?”)

Why should this bother me?  But it does.  It really irritates me, especially from the organizations that I contribute to generously.  And this year, when, as a board member, I was given the fundraising “ask” letters that were going out under my name to my personal contacts, I felt especially irritated to see the request for a specific additional amount.  I would certainly never have written my friends directly with this request.  Now that the dust has settled and our annual appeal has ended, I intend to speak to our director of development about it.But, in the meantime, could you illuminate me as to when this practice started?  Why it started?  And whether I should offer, in a kind way, feedback to the other organizations that are asking for a specific dollar amount increase to my giving?Does this bother anyone else? Or am I just being pissy?

Signed,

Possibly Pissy, But Really Very Generous At Heart

Dear Generous,

The practice likewise raises the hair on the back of the Nonprofiteer’s neck.  There’s something creepy about the notion that an organization is 1) keeping track of what you’ve given, in violation of some notion of privacy and 2) asking for more, as if in reproach, instead of trusting you to give more if you’re able.  But of course they’re keeping track of what you’re giving—how inept would you think them if they weren’t?—and of course they’re always working to raise more—ditto.  So the first thing to recognize is that it’s not the practice so much as the expression that annoys you.

The practice is at least 40 years old, and was pioneered by the universities, probably because it’s natural for those institutions to think of givers in terms of the passage of time: the class of 1960 can reasonably be expected to have more resources than the class of 2010.  It arose, the Nonprofiteer suspects, in response to the habitual nature of many people’s giving: if they gave $100 last year, they go on giving $100 into eternity.  This seems like a great thing and, in fact, is the reason individual giving is such an important source of funds to organizations: while foundations often won’t continue their support unless you do something new and different for every grant, most individuals will just keep on giving unless you affirmatively offend them.

But what you’re saying is that the request for elevated support is just such an affirmative offense.

The problem is that the cost of everything continues to go up, and unless the monetary inflow goes up at the same time the agencies you support will find themselves seriously behind the 8-ball.   Perhaps the agencies requesting your increased support would do better if they reminded you of that—”We haven’t been able to give our actors a raise for five years while their rents and grocery bills just keep on rising”—rather than beginning with a flat-out demand that you do more.

The Nonprofiteer prefers to err on the side of thinking that’s what they meant, anyway, and that the only thing they can be reproached with is their effort to raise money based on need instead of on opportunity.    Most prospective donors, whether offended by an appeal or not, give money to agencies because of what they’re going to do and not because of how much they need.  That, most probably, is the source of your feeling offended by the approach: that what you want to hear is how great they are and how much they can do with your help, not how needy they are and that they’re so desperate for your support as to reach their hands directly into your pocket.

The question of what gets said to people who are getting fundraising letters over your signature—or at least under your aegis—is a separate one.  You are utterly within your rights as a Board member to say “I’m happy to solicit my friends but I won’t send out a letter telling them how much to give,” so that the staff can prepare your letters without the offending terminology.  Those letters are from you, and therefore should represent your own approach to the people you’re soliciting, whether that’s “This group is in desperate need” or “This is the only group I’m supporting this year because of the fabulous new program they’ve launched.”

In other words, it’s one thing to shake off what you consider a slight directed at you, and another to permit the agency to direct that slight at your friends.   In that spirit, it certainly wouldn’t hurt to notify the agencies whose appeals have troubled you that you wouldn’t ask your friends for money with that inflection and that they might consider not asking their friends for money that way, either.

But consider this.  The Nonprofiteer remembers being unable to ask how much something cost in Paris because the straightforward “Combien?” seemed so abrupt and rude but she lacked the syntax skills to soften it, not to mention the language facility to know what phraseology would constitute appropriate softening.  People who ask for money and people who get asked are speaking different languages.  Those doing the asking never mean to be rude—they just lack the skills to determine what constitutes being polite.  Perhaps if you consider the transaction from that perspective you’ll be less annoyed.

Dear Nonprofiteer, Who are they to tell me what to give?

February 6, 2012

Give the people at Komen a piece of your mind . . .

February 2, 2012

as they seem to have lost their own.  Komen’s decision to de-fund Planned Parenthood at the behest of an anti-choice Board member reminds us how ready the right wing is to sacrifice women’s health for political gain.

There’s a petition to sign if you want to want to make your voice heard.  If you’ve been a Komen supporter and you now de-fund the organization, your voice will be heard even louder.

The Nonprofiteer has been wondering what to write about . . .

February 1, 2012

but she’d really have preferred not to have this as an inspiration.  There is no excuse for the decision of Susan G. Komen for the Cure, until now a respected source of information and funding in the fight against breast cancer, to defund Planned Parenthood‘s program of providing breast exams to poor women.

In fact, the decision doesn’t even make sense–unless you consider that a recent addition to the Board of Komen is an anti-choice ex-politician from Georgia.  As another commentator has wisely noted, Planned Parenthood will survive this latest injury–the Nonprofiteer’s determination to support the agency has just been redoubled, and probably her gift will be, too–but Komen may not.

Please join the Nonprofiteer in notifying Komen of your distress at its decision to let irrelevant politics endanger the lives and health of poor women, and of your decision to redirect to Planned Parenthood any support you may have been giving to Komen.

Dear Nonprofiteer, Should I look before I leap, or not leap at all?

January 25, 2012

Dear Nonprofiteer:

I recently joined the board of directors of a small nonprofit (4 staff, $200k budget). Within a month of my joining, our executive director announced she would be leaving as her partner has a new job in another state. In addition, while she won’t move for a couple of months, presumably giving the board plenty of time to find a successor, she wants to study for the bar exam in the new state and requested to work half-time until she leaves.

There are a couple of complications (aren’t there always). I was approached by two board members about taking the ED position. I initially said no, but reconsidered and have let the board know of my interest. I have recused myself from any discussions of the search and said I would resign from the board if selected.

The current ED has said that one staff member is interested in the position as well. Since going part-time, the ED also said this same employee is fulfilling many of her duties, and requested a bonus for the employee equivalent to the 20 hours a week the ED is not working. She said he is, in effect, an interim executive director, and should be compensated. I and other board members doubt that the current person is actually doing the extra 20 hours a week, and/or doubt he can sustain it. (I was present for this discussion, but said nothing and abstained from the vote on his compensation).

I feel I cannot make many obvious suggestions to the board (like that we hire an outside interim ED, either full or part-time) without it appearing that I’m trying to better position myself for the job. It could appear that I don’t want a competitor to have the interim job for fear that it would give him an advantage. There is also the matter of whether I take the interim position. I can’t bring it up, of course, but what if someone else does?

I guess the big question is that having even expressed an interest in the ED job, should I resign until the search is complete and a new ED hired? That means I would stop all my board work for a period that could be months. And if I’m not selected, do I come back on the Board and pick up where things left off? Obviously I’m concerned about all the lost time on major initiatives. Having a half-time ED is bad enough. We don’t need to lose board members, too.

Signed, Conflicted

Dear Conflicted:

The short answer is “Yes.” If you’re going to be a candidate for Executive Director, you must resign from the Board of Directors–not if and when you’re selected, but right now. There is no other way the Board’s search committee can consider you without favoritism, or at least the appearance of it. And in a circumstance like the one you’ve described, in which a current member of the staff is interested in the Executive Director position himself, the appearance of fairness in the process is absolutely essential to the continued functioning of the organization.

Imagine the staff member’s spending the couple-three months minimum required for a search grumbling to his two remaining fellow employees about how unfair it is for you to compete with him for the favor of a group of your peers.  The effect on morale would be disastrous. And if you got the job under those circumstances, you would walk into a hornet’s nest: hostile employees, shame-faced Board members, and thus a host of troubles you don’t need while the agency is working on the new initiatives you mentioned.

You’re already experiencing the extent to which your Board duties and your hoped-for staff duties embroil you in conflict of interest, and it will only get worse. Either withdraw your name from consideration or submit your resignation to the Board chair–-today.

If you don’t get the job, the question of whether you can return to the Board of Directors is one to be decided by the Board of Directors, not including you. That is, you are rolling the dice that your erstwhile colleagues will want you to return after you’ve failed to impress them sufficiently to get the job. And even if they do, won’t you feel awkward under those circumstances? Won’t you be looking around the Board room wondering who voted against you, and why?

So the question becomes whether you in fact wish to become Executive Director enough to make a do-or-die fight for it, knowing that your relationship with the organization will most likely be at an end if you lose the fight. That’s up to you–you haven’t told the Nonprofiteer anything about your current professional situation but it’s presumably unsatisfying if the Executive Director post beckons so strongly–but consider the costs to the agency no matter what the outcome, and maybe think better of it.

If you do think better of it, and decide to remain on the Board, you could do two things that would strengthen the agency immeasurably: first, persuade your colleagues to hire an actual interim Executive Director, preferably someone who’s been trained in the particular tasks of that very difficult role and certainly someone who is not under any circumstances a candidate for the permanent job. A trained interim ED can make sure necessary initiatives move ahead, clear up any personnel issues that may have been festering under the ex-ED (such as, why is she so concerned about his getting a bonus? More favoritism, perhaps?), and relieve the time pressure the Board would otherwise feel while filling such an important spot. In most major cities the Executive Service Corps operates an interim ED training program and will be glad to provide you with the names of candidates. Choose one to spend between six months and a year guiding the agency while you and your Board colleagues figure out what you want in a new leader and how to go about finding it.

Second, whether or not you hire such an interim ED, persuade your Board colleagues not to confer that title on the candidate-staff member. The title makes him heir-presumptive, which if true means you won’t be conducting a thorough and genuine search and if false means you’ll have a justly disappointed employee in a position to do a lot of damage.

If you decide to pay the current ED only half her salary for working only half-time, fine; that has nothing to do with whether any- or everyone else on staff deserves extra compensation. It may be that their burdens are lightened rather than increased by having a less-engaged ED.  That may be why you distrust the ED’s claim about how hard this guy is working.

The Nonprofiteer doesn’t understand at all the concept of bonuses in the nonprofit world. If your Executive Director does a great job, reward her with a raise. If she does a lousy job, don’t. But bonuses are based on outcome metrics, and those are rarely a direct reflection of an ED’s skill. If you tell an ED you’ll give her a bonus if she puts on five concerts this year, she’ll make sure to do so–-whether or not they’re any good. Or if she expects a bonus for serving x number of clients, you can be sure that x clients will go through the agency’s doors; but whether they’ve been served is a whole ‘nother question. A Board which gives bonuses to nonprofit executives is mistaking what’s measurable for what’s valuable.

So, to recap: if you want to work for the agency, quit its Board to level the job-hunting playing field. Be prepared for the likelihood that you won’t be able to return. Consider whether you’d all be better off if instead you withdrew your name from contention and focused on helping to find someone else to provide the able leadership, both interim and permanent, the group requires and deserves.

Staying out of jail and up to technological speed while running a nonprofit

December 21, 2011

Some days the Nonprofiteer is happy to serve just as a pass-through for the good work other people are doing. This is one of those days.

On January 11, look out for the publication of Good Counsel: Meeting the Legal Needs of Nonprofits, Lesley Rosenthal’s guide to every possible legal issue in nonprofits. (The Nonprofiteer urged Lesley, who is Lincoln Center’s general counsel, to call the book “How to stay out of jail while running a nonprofit,” but for some reason she demurred!) Having had a chance to review the book in manuscript, the Nonprofiteer is happy to give Good Counsel her strongest possible endorsement, and not only—not even primarily—for big agencies with their own general counsels.  The lawyers on your Board who are forever being expected to know everything legal that might affect your agency (and who are secretly wetting their pants from anxiety because they don’t actually know all those things) will be particularly grateful for this brief, well-written and comprehensive guide to, well, staying out of jail. And—how moderne!–it’s also available for Kindle and I-Pad.  Publisher John Wiley & Sons/Lincoln Center.

And, in other useful news, elevationweb.org announces that it’s prepared once again to provide free Web development services to nonprofits which can match Elevation Web’s contribution.  Last year this “socially conscious Web design and media company” donated $400K in services to 95-plus nonprofits.  So if you (like most of the Nonprofiteer’s clients) think that upgrading your Website and making it easier to use (i.e. donate from) is of critical importance in the coming year, check out the group and complete the application at http://www.elevationweb.org/one_for_one.php.

Dear Nonprofiteer, Should I face the music, or dance?

December 16, 2011

Dear Nonprofiteer,

If you could stand one more letter asking about Boards of non-profit arts organizations — or even point me in the right direction — I’d be very grateful!  I’ve been the school director for a small non-profit music organization for several months. The organization has two parts — there are performance choirs and then there’s the school.

But maybe it would be more accurate to say that there are two organizations, because I’ve been told that the school is “technically” for profit, meaning that only the performance choirs can receive grant money.  I’m not sure why, or even if, this is so, though I understand that we make more money charging for music lessons than we do sending out the performance choirs, whose members are paid a pittance that nonetheless exceeds the amount companies and civic organizations are willing to pay for being entertained by them.

The main problem: the performance-choir conductor is also Artistic Director of the entire organization, AND is Chair of the Board of Directors.  He is paid $20,000 a year for what’s supposed to be a 12-hour-a-week job, but in fact he doesn’t work nearly that much.  He lives a couple of hours away, so he only comes in once a week to rehearse, and not even that during the summer (or the Christmas holidays, or the Easter holidays, or St. Swithens’ Day!).  And whenever he can he schedules performances near his home rather than near the school, which means we’re not really serving our community.

Meanwhile, I work full-time (theoretically 40 hours a week but actually closer to 90, what with teaching as well as administrative work).  This huge job pays me $34,000 with no benefits.  The Board sees itself as my “BOSS” and reminds me of that often. In addition to the Chair, the Board members are 1.) one of the school’s teachers, who’s also the Board treasurer; 2.) a member of one of the performance choirs who writes the grant applications; 3.) the mother of a former student, who is paid to be secretary; 4.) the mother of a current student, who is paid to be DIrector of Development; 5.) another one of our teachers; and 6.) a lawyer who takes voice lessons from the treasurer.  In other words, NOBODY is without connections to the school and thus a personal agenda.

The school went downhill financially during my predecessor’s tenure, to the point where we’ll probably have to give up half of our space.  But when I say I need help with fundraising, I get, “Sallie Jo managed it.”   I’m expected to do everything Sallie Jo did but with more “Board oversight,” which means micromanagement and no actual help.  That’s not their role, apparently—their role is being my superiors, scrutinizing me, complaining to each other about me, and occasionally sending me a condescending note giving me reprimands and further orders.

As a seasoned professional who is keeping the place together single-handedly, I consider these missives insulting at best. But there is no one I can appeal to. Do you have any suggestions? Advice? Articles you could point me to? (Templates of letters of resignation?)   I’m near the end of my rope.  Signed,

Hanging on By a Thread

Dear Hanging:

This is like one of those children’s puzzles, “Can you spot what’s wrong with this picture?”  There are so many things wrong that even the youngest child can detect some of the problems, while others are so subtle that older children will be challenged.  Or, in other words: what a mess!

Once you’ve said that the Artistic Director is the chair of the Board, you’ve already described an organization in trouble.  One function of an arts Board is, indeed, to support the vision of the Artistic Director, but the other is to counter-balance that vision with business acumen and an awareness of what a nonprofit arts organization owes the community.  Even if every single member of the Board weren’t compromised in the way you’ve described, the organization itself would be hopelessly compromised by having a single person leading both the Board and the staff.

If the Board were independent, the fact that you and the Artistic Director both report directly to it would provide a healthy balance: he would say “I want to do blah-blah-blah” and you would say “blah-blah-blah costs three times as much money as we’ve raised in any year in the history of the organization” and the Board would weigh these competing points of view and make a decision.  In those circumstances, it would be a good thing that the Board knows it’s your boss—that would mean the Board knew that you and the Artistic Director were co-equals reporting to a common authority rather than an inferior (you) reporting to a superior (him).

But with a Board that’s essentially an extension of the Artistic Director’s personality, you have the worst of both worlds: multiple superiors and no equal colleagues.  No wonder you’re feeling besieged and insulted: you were hired with the title of a director and the status of a secretary.

That’s what the salary situation means: they’ll pay you less than half (on a per-hour basis) of what the Artistic Director makes, because he has more than twice your power.  The fact that you’re also earning less than the singing lawyer’s administrative assistant is just icing on the cake.

And now we get into the subtle stuff: what, exactly, is this nonsense about the school’s being “technically” for profit?  It either is, or it isn’t; it either files a Form 990 informational return with the IRS, or pays taxes on its profits like any other business.  It’s hardly unusual for an arts organization to run a school whose earnings help sustain the actual performances: most likely that’s the real function of the School of the American Ballet.  It’s a prestige training program for the New York City Ballet, and as a result it’s also a cash cow for the company.  But the Nonprofiteer strongly doubts there’s any ambiguity in the status of either the ballet company or the school, whether they’re independent or intertwined.  All the hair goes up on the back of her neck when she hears the word “technically;” in the nonprofit sector it almost always means some corner is being cut that shouldn’t be.

So let’s review: you’re overworked and underpaid in an organization where your input is ignored but your grunt labor is expected and taken for granted.  This may also be an organization with a dodgy relationship to the laws of your state concerning nonprofits and community benefit, and the laws of the United States concerning nonprofits and taxation.  Given all this—surprise!  You’re having a terrible time.

The Nonprofiteer ran a small nonprofit herself—a choir, as it happens—back before the glaciers melted.  It was a complete debacle, though it did provide one of the world’s fastest educations in nonprofit management.  It took her nine months to realize that she was on a dead-end path, and to quit.  She urges you to be more expeditious.

It’s a terrible economy and no doubt you want to work in the music world that you love.  But you’d be better off working as a temp and looking for a job with a functional school or music group than staying where you are and having your spirit ground down by fighting against impossible odds.

The Nonprofiteer’s advice: give two weeks’ notice and start the New Year off fresh.  As for templates of resignation letters, the simplest are the best.  Justifiably angry as you are, don’t burn any bridges.  Just write, “Ladies and Gentlemen: I’m sorry that I will be unable to continue as the director of [Name] School.  My last day will be [date].  Thank you for having given me the opportunity to work with you.  Sincerely, [you].”  If you just can’t stand the thought of writing something so polite, write a letter that expresses how you really feel—and then put it under the chestnuts and roast away.

Submit your letter today, and you’ll have yourself a merry little Christmas.  You deserve no less.

How not to handle succession in the arts

November 17, 2011

There could be worse ways to handle succession planning than the one chosen by the Miami City Ballet, but it would be hard to think of one. The Board of Directors, concerned that the ballet company would collapse when its famous artistic director Edward Villella retired, decided to test its own theory by forcing him out before he was ready to leave. Some Board members blame the outcome on Mr. Villella, who apparently refused to greet several of them at the company’s gala; but it’s hard to blame him when one of them called a meeting with him for the purpose of handing him a book on succession planning.

The Times article reaches for the classic suits-versus-artists narrative, saying that Villella’s ouster reflected the Board’s determination to place business stability above artistic product; but that’s unfair. The Board is responsible for the continued health of the company, and a failure to consider new leadership when the current leader is 75 would be a dereliction of duty. But what we’ve got here is failure to communicate.

As Chicago’s Victory Gardens Theatre Board learned back in 2000, you don’t call in the company’s artistic engine and hand him his walking papers–or even the sort of broad hint contained in the gift of a book about succession planning. You’re talking to someone about his life’s work and his passion, and you can’t talk to him as if he were a CEO who had been recompensed all these years in cash and expected to be recompensed the same way in retirement. An artistic director who is compelled to retire–and yes, indeed, some of them need to be–has to be offered a form of compensation congruent with what he’s been receiving up until now, something involving artistic control–even if it’s only the control inherent in leading the search for his own successor.

And even if the artistic director’s retirement creates the opportunity for the Board to step into its proper role of leadership–say, supervising the managing director instead of having the artistic director do so–that’s an opportunity to be pursued once the new artistic director begins. From the Board’s standpoint, having the managing and artistic directors report co-equally is a way to lighten the artistic director’s load while assuring that the Board itself receives comprehensive information. But from the standpoint of the incumbent artistic director, it’s a slap in the face, and suggests that the Board wants to interpose a business person (and a businessperson’s veto) between the artist and his vision.

Of course the Board IS the boss of the company, including the artistic director. But the most effective bosses wear their power lightly, in cooperation rather than conflict with the artists they mean to be serving. By this measure, the Board of the Miami City Ballet just fell on its face.

A word to wise arts Boards everywhere.

The Joyce Foundation, the Independent Sector and the facts

November 2, 2011

Ellen Alberding’s interview with the Chicago Tribune in advance of the Independent Sector‘s meeting in Chicago earlier this week pressed nearly every one of the Nonprofiteer’s buttons.  Ms. Alberding, head of the Joyce Foundation, described the Foundation’s approach to what even she characterizes as a perfect storm of increased need and reduced resources in the nonprofit sector:

We do what any good business person would do when faced with reduced resources. We have become very focused on first maintaining support of our core grantees. Foundations are required to spend a minimum amount — 5 percent of our assets. On occasion, we will overspend that in order to keep our grantees whole.

In other words, business as usual.  Most likely the Joyce Foundation’s governing documents prevent its Board from spending its assets down to zero, but there’s no reason why the Foundation shouldn’t use more than the statutory minimum 5% of its $800 million in assets to sustain the work it exists to support.  Foundations are NOT businesses; they exist to give their money away, and only in some vague theoretical sense is an institution with $800 million facing constraints preventing it from giving away more than $40 million.

If Joyce gave only 6% instead, that would be another $8 million available to nonprofits in its areas of concern—a not-insubstantial 20% increase.   What is stopping the Foundation from doing this, other than a misguided sense that preserving its capital is more important than doing its job?

And then the cherry on the sundae:

It’s the position of the Independent Sector that a cap [on charitable deductions] will reduce charitable contributions across the board and diminish support for nonprofit organizations. I believe it’s the administration’s view that the 28 percent cap might have some impact, but it wouldn’t have a dire impact. (But) I think we have to listen to the organizations themselves, who feel otherwise.

In other words, notwithstanding reality, the prejudices of self-interested parties will dictate the organization’s behavior.    Their minds are made up—don’t confuse them with the facts.  But as President of the organization, doesn’t it behoove Ms. Alberding to make sure her members don’t make their decisions based on fantasy?

Grrrr.

The power of thanks

October 28, 2011

So here’s something the Nonprofiteer heard yesterday: if an agency’s response to every initial donation is to have a Board member pick up the phone and call the donor to thank him/her, the likelihood of a second donation increases by something like 80%.

What’s terrific about that (other than the obvious, donor retention) is that picking up the phone is often the biggest hurdle Board members need to clear to become effective fundraisers.  So if they get used to picking up the phone in a completely non-threatening situation–when their only task is to say, “Hi, I’m a volunteer Board member of agency X and I just wanted to thank you for your gift–we really appreciate your support”–you’re halfway (well, maybe one-third-way) to getting them to pick up the phone and ask their friends to come to a benefit event or a fundraising lunch.

Sounds like the ultimate low-cost high-yield endeavor.  Has anyone tried it?  Is it as good as it sounds?


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