Posts Tagged ‘Executive Director’

Dear Nonprofiteer, When is a Board member not a Board member?

February 28, 2013

Dear Nonprofiteer:

I came across your website as I was searching for information on Board members’ volunteering in programs. I’m wondering if you might have some advice on a situation I’m trying to handle.

I work in a service agency, which relies heavily on volunteers. Recently, one of our volunteers became a Board member. She has continued volunteering in the program and a couple of issues have come up that the program director would normally address quickly and easily with a volunteer. However, because this volunteer is now also a Board member, there is a hesitation because she is somewhat of a boss.

The issue has been brought to the attention of the Board president.  He and the program director have different ideas on how to handle the situation.  The president wants to handle the situation one on one because he doesn’t want to discourage other members from volunteering more.  The program director wants a limit on how much time a Board member can spend volunteering in a program.

I’m the Executive Director and can see both sides.  I’d like for the president to deal with it one on one, but to then adopt a policy/guidelines for Board members as volunteers to avoid conflicts of interest.  I can see where this particular person likes to make decisions and that easily oversteps the program director’s role.

I’ve been searching on line for a policy around this, but have found nothing.I would greatly appreciate any insight or resources that you might have to help with such an issue.

Sincerely,

Clowns to the Left of Me, Jokers to the Right

Dear Clowns:

This is only a problem because of what seems to be a fundamental misconception about the role of Board members, as opposed to the Board as a whole.  No individual Board member is “somewhat of a boss;” in fact, from the standpoint of the program director, the only boss she has is you, the Executive Director.  You, on the other hand, answer to the Board as a whole, and the Board as a whole has the right to hire, evaluate, discipline and if necessary fire you if it’s not satisfied with the job you’re doing.

But there’s a reason the Nonprofiteer keeps repeating “as a whole . . . as a whole.”  Individual Board members have no supervisory responsibility for personnel, even when they’re members of the Personnel Committee.  Personnel decisions belong to the Executive Director, except for decisions about the Executive Director’s tenure which belong to the Board—all together now—as a whole.

So the Nonprofiteer doesn’t see any reason why there should be a policy prohibiting Board members from volunteering in the program, or limiting the amount of time they can spend doing so.  What there should be is

  • a statement by the Board president to the volunteer in question that there seems to have been some confusion, what with her going from volunteer to Board and back again, and that it needs to be clear that when she’s a volunteer she’s not a Board member.  He doesn’t need to go into the subtleties of her general lack of power as an individual Board member.  He just needs to tell her that in the land of program, the program director is king, and thus that she should expect the program director to treat her exactly as she was treated before she joined the Board—that is, to supervise her.
  • another statement by the Board president to the program director reiterating what he said to the volunteer and reassuring  her that she’s not dealing with “somewhat of a boss” and should therefore not hesitate to resolve the problem with this volunteer as with any other.  And
  • a third statement by the Board president to the entire Board at the next Board meeting, leaning again on the “confusion” meme: “We’ve had some questions about the circumstances under which Board members are welcome as program volunteers.  So I thought I’d make clear that each of us is welcome under all circumstances—but when we’re program volunteers, we shed our Board identities like fur in the summertime.  None of us is enforcing policy, or overseeing staff, or evaluating operations—we’re just volunteering.  Which ought to be a great relief for each of us!”  Thus he’ll encourage Board members to volunteer without having them confuse their collective governance role with their individual participation role.

The reason you can’t find any relevant policies is that this isn’t an occasion for policies—it’s an occasion for common sense applied to clearly-understood roles.  Or, in other words, there’s no need for a conflict-of-interest policy because individual Board members have no recognizable interests; their task is to participate in group decision-making about what’s good for the agency.

If you also have a Board Personnel Committee that tries meddling with individual personnel decisions (as opposed, say, to writing policies and procedures applicable to all personnel), then you have a bigger version of the same problem and need to have a bigger discussion about the difference between the Board—what?—as a whole and individual Board members.

But there’s no reason either the problem or the discussion should lead you to limit Board members’ participation as program volunteers.   As a Board member told the Nonprofiteer just last night, the main satisfaction Board members get from their often thankless jobs is contact with the people you serve.  Unless your goal is to produce unhappy Board members and a short-handed program director, you don’t want to restrict or prohibit that contact.

Or, more pithily: damn the Board member!  Full speed ahead!

Dear Nonprofiteer, How do we reach consensus on our Executive Director’s performance while preserving every Board member’s perspective?

November 20, 2012

Dear Nonprofiteer:

What is the best way for a Board to review its Executive Director?  Our current review process involves each Board member’s completing a review of the ED and then our Board president’s “averaging” the reviews (without further debate or discussion from the Board) into the final document.  While this is an effort at broad input, in reality it results in producing only the most general review, with minority viewpoints often dropped.

As  Board treasurer I work with the staff and Executive Director often in different ways than other Board members and this give me the opportunity to see areas of weakness and strength others may not see.    Likewise I’m sure other Board members, due to their unique positions of involvement, are seeing still different weaknesses and strengths but because their observations may not be those of the majority,  they never make it into the final report.

Signed,  Minority Report

Dear Minority:

You’ve put your finger on an important but oft-neglected aspect of nonprofit management: the need (as in the wider political arena) to protect the rights of the minority while preserving democratic governance by a majority.  Nonprofit Board members are often so averse to conflict that they unintentionally shut down opposition—even their own—to preserve the illusion of unity, or at least consensus.

But it’s not consensus if it doesn’t include acknowledgement of minority opinions, particularly when those opinions are informed by special expertise.   Board members are charged with governing agencies, which largely means overseeing the work of the Executive Director.  Many Board members ask how that’s possible when everything they know about the agency comes from that selfsame Executive Director; and the only good answer is to secure information from within the Board itself.

As Treasurer, you know whether the ED is a spendthrift or a penny-pincher; whether s/he manages cash flow well or whether every month is a festival of white knuckles; whether s/he is carrying the appropriate share (or much more, or much less) of the fundraising burden.  If you don’t share these data with the rest of the Board, all the other members are operating in needless dark.

The Nonprofiteer suggests that you propose to the Board president a relatively minor modification of the current approach:  that after s/he’s crafted what’s designed to be a consensus report on the Board’s behalf, s/he bring it back to the Board for final approval.  At that time, every Board member should get to see the comments of every other Board member, which enhances the likelihood that someone will say, “Wait a minute–we can’t gloss over these comments about how the Executive Director abuses the staff in public.”

The Board president probably wants to make sure that the ED isn’t getting feedback from all directions, because that sort of cacophony is to no one’s benefit.  That’s a fine goal, but it should be balanced with the goal of making the ED’s review as comprehensive and nuanced as possible.  Your agency’s decision to gather all the Board feedback gets you half the distance to the goal line; sharing and incorporating that input as a group will earn you a touchdown.

Dear Nonprofiteer, Can a donor dictate the use of her gift? How about if she’s the Executive Director? How about if she’s also on the Board?

October 11, 2012

Dear Nonprofiteer:

I was wondering if it is ethical for an Executive Director to donate to the organization she runs, designating her donation to bonuses or pay raises for the employees that work for her.  She is not paid, thus can remain on our Board.  Seems like a conflict to me.

Signed, Wondering

Dear Wondering:

The Nonprofiteer sees a conflict of interest in the situation you describe, all right, but it doesn’t have to do with the donation.  Any donor can specify the use to be made of his/her gift, and if those terms strike the recipient organization as too onerous it can simply refuse the gift.  A donation from a foundation restricted to paying the salary of a particular staff member—or to giving salary increases to staff members across the board—would be unexceptionable, and in fact would represent a refreshing understanding by the foundation community that people who work for nonprofits need to clothe their kids and pay mortgages, too.

But.

When the donor is the Executive Director, a gift of this kind might be seen as a way of buying (as opposed to earning) loyalty from the staff.  On the other hand, who’s in a better position than the ED to know that her staff members are overworked and underpaid?

But.

It’s the job of the Board to create and implement the agency’s budget, a budget which presumably includes a line item for staff salaries.  It isn’t really kosher for the Executive Director to unilaterally override this governance decision by whipping out her checkbook.

But.

If there’s a consensus on the Board that the staff is underpaid, and/or that it’s time for a raise if only there were money,  the Executive Director’s decision to alleviate that situation (and capacity to do so) should be as welcome as a similar decision by any other donor.

But.

The Nonprofiteer doesn’t understand “She is not paid, thus can remain on our Board.”  The Executive Director, regardless of her compensation status, should serve as an ex officio member of the Board—that is, a Board member by virtue of her position and not in her individual capacity.   If the Executive Director was on the Board first, she should have resigned when she took on the duties of Executive Director.  The Board’s power is concentrated largely in its ability to evaluate, hire and fire the Executive Director, and if necessary to go into executive session to do so—that is, to kick the ED out of the room.  But if the ED remains a Board member, she can’t be removed from the room, therefore she can’t be discussed frankly, therefore she probably can’t be removed, therefore the Board has no power at all.

So the conflict is between the ED-qua-ED and the ED-qua-Board member.  These two roles cannot coexist, and the balance of the Board should demand that the ED choose one or the other.  This is why it’s not even a good idea to permit a Board member to serve as ED on an interim basis—because the “interim” tends to become the “interminable” without anybody’s noticing.

So.

Now we’re back to the question of the gift.  If the ED remains on the Board, her contribution should be counted toward her mandatory give-or-get; but first the balance of the Board should vote on whether to accept the gift with the conditions she’s attached to it.  The ED-Board member, naturally, would recuse herself from this decision on the grounds that she—what?—has a conflict of interest, in this case between her role on the Board and her role as an individual donor to the agency.

By the same token, if the ED leaves the Board but remains at the agency, the Board once again has the right (and the obligation) to vote on whether to accept the gift she’s offered with the conditions she’s attached to it.  Naturally, this discussion would take place in executive session, with the ED excused from the room.  If Board members think this is a great opportunity to enhance compensation, they should accept; if they think this is a sneaky maneuver to undermine their budget authority, they should reject; but in any case the ED has no right to have her gift accepted unless and until the Board approves it.

To review: the question of the ethics of the donation doesn’t even arise unless the Board neglects its fiduciary obligation to evaluate gifts for unacceptable conditions.  The questionable ethics here are those of all concerned—Board members and ED/Board member alike—in permitting one person to fill two roles.

Once you’ve given someone a disproportionate share of power, you can’t be surprised when she makes a play for a further disproportionate share of power, in this case by brandishing a checkbook.  But the power to prevent the gift lies in the hands of the remainder of the Board, and if they fail to exercise it, they’re the ones whose ethics are questionable.

Dear Nonprofiteer, What’s this “shared sacrifice” I keep hearing about?

July 30, 2012

Dear Nonprofiteer,

My mom works for a small nonprofit that recently went through financial hardship.  The organization did everything in its power to keep afloat, including (unfortunately) firing employees and cutting pay, hours, and health benefits for the people remaining. And it has bounced back, for the most part.

Recently managers have given themselves raises based on their own research about pay scales elsewhere. First, is this a conflict of interest? Does it seem unethical to give yourself a raise based on your own research while other employees are not given one at all?

My mom works in the accounting department and has been there for over 10 years. While the company wasn’t doing well she accepted all the cuts while taking on the work load of the people who were let go. Since then, other employees have been given raises, and now make nearly double what she does. She was even promised a pay increase for obtaining her BA in Accounting but it was never delivered.

She has brought these issues up but nothing has been done for her. She’s a dedicated worker, going out of her way to take on more work and more education for nothing more than the occasional cost-of-living increase.

Does this happen often? Is it common to see managers in non-profits overcompensate themselves even though it was their poor decisions that almost caused the organization to go under? Does it seem wrong that the employees who fought to keep it afloat have not been given the same percentage increase?

Have you come across any literature or articles on the subject?   I feel terrible for my mom because I know her work ethic and her commitment to the good the organization does for the community.  She deserves to be paid more than an entry-level accountant and her employer should have recognized that long ago.

Signed, Daughter in High Dudgeon

Dear Daughter:

You’ve asked two separate questions, really: first, is this ethical behavior?  Second, is it common behavior?  The first question is easier than the second.

Of course it’s not ethical for leaders to provide themselves with raises before restoring their subordinates to their pre-emergency level of compensation.  Employees who are considered essential enough to be retained during times of crisis, albeit at reduced pay and benefits, must be considered essential enough to be rewarded once the crisis is through.

However, many managers (and the Boards of Directors to whom they report) assume that employees are working there for the love of the agency and/or that any monkey could do the job those employees are being underpaid to do.  This is the proverbial Catch-22: we pay you so little, you and your work must be worthless; since you’re worthless, why should we pay you any more?

The only way to respond to this is to document how people who do the same job are paid elsewhere.  Your mother should use her financial skills to find out what BA accountants with similar responsibilities are paid at similar-sized agencies in your city or county.  Then she should take this documentation to the Executive Director with a specific demand for an increase in pay and benefits to at least parity with her professional peers.  It’s always harder for an ED to refuse a raise based on outside comparables, whereas if your mother tries to compare herself with people in her own agency the ED can always checkmate her with, “Well, but Ellen works three extra nights a week,” or, “But Josephine has been here since 15 minutes before you arrived.”

The other advantage of seeking outside comparables is that it will give your mother a sense of the job market.  It’s hard to think of moving elsewhere after years of loyal service, especially while feeling committed to the agency’s mission and clients.  But that’s no reason to be treated like a slave.  (And salaries from other agencies may include ones paid to men.   No one ever believes that women are paid less than men for the same work until they encounter the cold hard facts for themselves.)

Notice that the major fault is the agency’s unwillingness to restore your mother’s salary now that there’s money available again.  The fact that managers documented the market for their services, and then rewarded themselves based on that documentation, is more an apparent conflict of interest than an actual one.  If everyone does his/her job it doesn’t really signify who did the research about comparable compensation: only the Board of Directors can give the Executive Director a raise, and the Board is designed to be independent of the ED.

But perhaps the Board isn’t actually independent, which leads to the question about whether your mother’s situation is a common one. It’s very common in nonprofit organizations for the Board of Directors to be utterly in the Executive Director’s thrall and prepared to do as s/he says without any independent evaluation whatsoever. This is partly because many nonprofits are still run by their founders, to whom every Board member is personally loyal, and partly because Executive Directors manage their agencies full time while Board members govern them only part time.

So if the Executive Director of a small nonprofit wants to skim off a raise for him/herself while withholding money from his/her subordinates, it’s easier for him/her to do so than it would be in a larger nonprofit with a professional human resources department, or in a regular business.  (The Nonprofiteer herself once succeeded an ED who had helped herself to a raise: knowing that the Board Treasurer signed checks without paying attention to the amount, s/he simply took advantage of that fact.)

But however easy, or common because easy, such practices may be, they are unethical.  If your mother can’t get the raise she deserves by offering honest comparables to her boss, she should find a new job and, on the way out the door, send a letter to the Board president and treasurer (or the whole Board) denouncing the ED’s shoddy financial practices.  It won’t get Mom the raise she hungers for but she will get to enjoy the dish best served cold: revenge.

Dear Nonprofiteer, Who’s really to blame for bogus job descriptions and pathetic salaries?

April 5, 2012

Dear Nonprofiteer,

I was hoping you might be willing to follow up on your last post on your blog because I felt it was incredibly powerful. I hope it is being reblogged and reposted as much as it should.

What does a professional do when they see a job that sounds amazing but the salary is lowballed? Do you address it in a cover letter, if they gave an insultingly low number outright in the job description? What about when it sounds great and you get an interview and they make an offer and it is $15K less than what’s in line with the position? I know anyone can just simply decline, which I’ve done myself.

But I feel like leaders in the sector have a duty to say something, to help move towards realigning expectations of founders and staff who offer insultingly low pay, especially for organizations that offer critical services that honestly won’t select themselves out of the sector. What are your thoughts on this?

It doesn’t seem like we’re at a transparency point in the sector where we can say, “If you want the best candidate for the position you have to pay competitive wages, if you want the fourth or fifth best or most desperate candidate, you can get away with what you’re offering.”

Of course, I feel particularly stung after two painful lowball offers in the past four months that I’ve had to turn down, but that’s sort of beside the point. I never realized that this was such a pervasive problem. It seems especially bad in Chicago, for whatever reason, compared with my compatriots in DC, SF, and Seattle.

Sincerely, Looking at the Bigger Picture

Dear Looking,

The Nonprofiteer understands there to be two parts to your question.  The first is, “What is a professional to do when faced with an unacceptably low salary offer?”   The answer to this is that you have nothing to lose (but your chains) by responding—in person or in writing—”I realize you may not be as familiar with the nonprofit job market as I am, given that your agency only looks for an Executive Director once every many years; but the amount you’re offering isn’t suitable to the position you’ve described.  The range is more like [and then cite the minimum you'd accept and the maximum you can really envision].”  There are only two possible answers to this: “Well, we don’t have that kind of money and don’t intend to get it,” in which case you know you’re dealing with a Board of Directors you wouldn’t be able to manage anyway; or “Oh, really?  Well, is there any way we can make this work?” in which case you’re suddenly negotiating.

There’s no need to say, or even think, that an offer is insulting: if you can’t assume good faith on the part of agencies, at least recall that they derive no benefit from insulting prospective employees.  Though it feels otherwise, no one is commenting on your qualifications by offering you a low salary.  They’re simply hoping they can get someone great for cheap, which if you think about it is the entire nonprofit model.  So consider yourself someone whose first task is to educate your prospective employer about how things ought to work.  Again, if the employer is uninterested in that education, good riddance to bad rubbish; whereas if it’s interested, you may actually be able to get to ‘yes.’

But your second question is of much broader application: What would it take for the sector to begin to offer wages that are appropriate to the skill level being sought?  And the answer to that, as to most questions about how to fix nonprofits, is ‘more money and more understanding from big institutional funders.’  As long as foundations and social venture capitalists pound the drum for a strict ceiling on administrative expenses, nonprofits will continue to skimp on paying for talent.  The people with money are the thought leaders in the sector (isn’t that always the way?), and they’ve made it acceptable to answer reasonable salary demands with the enraging, “Well, no one goes into nonprofit work to get rich.”

Take a look at Watkins Uiberall’s excellent comparative compensation survey from 2010.  Though it’s from Tennessee and from two years ago, it will provide a basis for conversation about what’s appropriate for many jobs in the sector.  As data like these are spread (including by prospective employees), employers will come to understand the way things really work, vs. their fantasy of hiring President Obama for a community organizer’s stipend.

Nonprofit Boards, meanwhile, should consider the non-trivial possibility that shorting their employees on salary and benefits will ultimately lead to a unionization drive.  The Nonprofiteer is a union girl herself, but most Boards of Directors and nonprofit managers don’t agree.  So somewhere in any conversation about salaries one might gently slide in the question, “If your pay scale is so low, how do you avoid the unions?”  You won’t get an answer but you’ll be providing food for thought, and the longer employers chew on it the less chintzy they’ll be.

Dear Nonprofiteer, Why do nonprofits ask for the moon?

March 23, 2012

Dear Nonprofiteer,

I am a nonprofit professional “in transition” otherwise known as job hunting.  In the course of my job search I have come across two  job postings that have left me incredulous and I was curious as to your opinion.
  1. An executive director position listed for $32K/year. Granted this was described as a half time gig but is there any such thing as a half time ED? Maybe it means you can take weekends off. The job description/requirements were just as detailed as any full time description.
  2. A director of development position for $20-25K.   Again this is listed as 3/4 time. It comes with a very detailed laundry list of expectations but again is this really a job that can be done well with less than full attention?

Something seems really off here. My gut (and review of their 990′s) tells me that these are marginal organizations to be avoided.  Do I seem unrealistically fussy in today’s job market?

Signed, Born At Night But Not Last Night

Dear Born:

You are not unrealistically fussy, especially when “today’s job market” in the nonprofit sector seems to include a number of jobs that are going begging for want of the right candidate.  And you’ve put your finger on why that should be the case: because the job descriptions (and presumably the jobs that accompany them) are a pile of unrealistic expectations held together with the glue of employer entitlement.  This glue is particularly thick in the nonprofit sector, where hiring managers presume that their poverty entitles them to your services for less than they’re worth.  But, as the workplace sign has it, Bad planning on your part doesn’t necessarily constitute an emergency on my part.

And you’ve identified a favorite gambit of those self-entitled managers/agencies: pretending that a full-time job can be done part-time because they know the proposed salary is an insult.  (For what it’s worth, the Nonprofiteer was paid $25K as an Executive Director of a small organization in 1987; if salaries haven’t increased 20% in the past 25 years, they should have!)  As you say, it is virtually impossible for anyone to be a part-time Executive Director, and the length of the list of responsibilities demonstrates that the agency knows this as well as you do.  You could do it simply by specifying the number of hours you’re prepared to work (e.g., 30), but sure as death and taxes would come a grant application deadline which must be met, and your self-imposed part-time-ness (part-time-itude?) would go out the window.

The Nonprofiteer just had occasion to help a client work on a job description for a part-time professional position. The original description had two problems.  First, it specified more than 40 hours’ worth of work for a 20-hour position.  Second, its qualifications included both items that couldn’t be expected from someone willing to work part-time for $20 an hour (such as a roster of contacts in high-profile media) and items that shouldn’t be expected from a professional (such as facility with word processing programs).  If you’re hiring a professional, don’t ask for secretarial skills.  And if you’re hiring a professional, be reasonable about how much professional service you can get for $20 an hour and/or 20 hours per week.

By contrast, another client has recently shifted its budgeting from “How much can we spend based on how much we raised last year?” to “How much do we need to raise to support what we need to do?”  Moreover, one of the things the agency realized it needed to do was steadily increase the salary of the Executive Director so that when the current martyr departs, the group will be in a position to offer a living wage to the next group of candidates.

(Consider, by the way, that the people offering such meager salaries are Board members who probably chafe at being asked to give $1000 a year.  They don’t hesitate, though, to ask you to forego $25,000 or so of income.  This is why the Nonprofiteer doesn’t advocate asking staff members to donate to their agencies: they’re already doing so at a level no other donor is likely to match.)

(Consider also that the sums offered make clear that the agencies are expecting women, and only women, to apply for these jobs.  No one would dare offer such a pittance to a man.  The nonprofit sector operated for years on the unwaged labor of women, but there’s no reason we have to continue to provide this subsidy.)

Thus, your incredulity at the nerve of some agencies is perfectly well-founded.  That won’t help you get a job with them: but hey, why would you want to?  You’re a star, and you’ll find a place that won’t also ask for the moon.*

————–

“Oh Jerry, don’t let’s ask for the moon. We have the stars.”–Bette Davis to Paul Henreid, Now Voyager

Dear Nonprofiteer, Why didn’t I stay a volunteer?

February 22, 2012

Dear Nonprofiteer,

I need some advice.   I have been a paid employee of a non-profit for the last eight months. Before this I was an unpaid volunteer for several years. There are three of us in the office—the ED, the founder, and myself.

The Executive Director

For the last eight months I have been doing most of her job, and my own. As a result I am easily working sixty or more hours each week. Attempts to change this environment have been met with hostility. Despite repeated requests I still have no job description. My working relationship with the ED is close to breaking point. Simply put, I do not want to go into work tomorrow. I have my concerns about her integrity. At the start of the month I was told we were 20K above budget. Last week I overheard her tell the founder we were 40k under budget. I have no proof of mis-, mal- or nonfeasance, and to find that information would be extremely difficult. I would like to prepare a fact laden letter to the Board, but have very little proof.

The Board

I believe the Board has lost confidence in her ability. Their relationship with her appears strained. I also believe they have lost focus on what is best for the organization. A majority of the board are employees or board members of another organization, a non-profit in the same field. We take on the debt. They profit. The cynic in me wonders if there is an element of tax avoidance occurring. Despite repeated requests I am not shown Board minutes. There are open spaces on the Board, but only people friendly to this other organization are accepted. I have nominated two extremely qualified candidates to open positions. Emails inviting them to meetings have been “lost”.

The Numbers

We are a forty year old 501c3. There are three full time employees. During our busy periods we employ around 100 seasonal workers. Our turnover is approximately 300k a year. We provide a service to approximately 1400 children, teenagers and adults. We are four weeks away from the busiest time of our year.

The mission of the non-profit is very important to me. I want to do whatever is best for the long term health of the organization.

I have considered handing in my notice and writing an open letter to the Board explaining my decision. I love this organization though and don’t want to leave it. I have also considered raising my concerns with the state AG, but fear that could spell the end of the organization. Unfortunately I do not have the ear of anyone on the Board that I can speak to in confidence about this.

I am really torn as to what to do. Please advise.  Signed,

Concerned in Carolina

Dear Concerned,

You’ve laid out the central aspects of the situation very clearly: the organization has trouble in the staff, trouble on the Board, and at least the potential for trouble in its finances, which will make it difficult to continue serving this large number of clients and paying this large number of seasonal workers.  As you describe your own position, you are essentially powerless: the Executive Director doesn’t listen to you, the Board is unaware of your concerns, and you don’t want to damage an institution that you care about by involving the authorities.

But that leaves the Nonprofiteer with a question: what, exactly, do you love about an institution with an inept and/or dishonest Executive Director and a Board whose independence may be compromised by its relationship with another organization?  If what you mean is that you love the group’s mission, that’s all very well; but that’s like the Nonprofiteer’s saying she would love her boyfriend if only he were 6’10.”  This is a phenomenon therapists refer to as, “It would be so great, if only it were different.”  It’s not different, and if you have no power to make it so, your only realistic choice is to find another agency to work for: one whose mission you can believe in AND whose governance and management support that mission.

You are best off to find that organization and secure that new job before you leave this one, and certainly before you write any kind of letter to anyone about what you believe and suspect is going on.

It’s rarely worthwhile to burn bridges with that kind of valedictory note—all you get is a reputation as an arsonist, while the people on the other side of the river continue to do what they’ve been doing all along.  But if you feel you need to, you must do some more research to confirm or refute your suspicions.  The Nonprofiteer doesn’t quite grasp the relationship between your agency and the other one for which you think it may serve as a form of tax dodge, so she can’t suggest exactly what you need to find out.  But it would have to be something as clear as your Board members’ being paid by the other organization, which then reduces its own account of taxable profit, for it to be worth taking to the state’s Attorney General.  The very “mis-, mal- or nonfeasance” for which you don’t have evidence is what would be required to cause the authorities to step in.

If you feel you must speak up but don’t have this level of proof, simply write a post-resignation letter to the Board president (with copies to the rest of the Board) laying out only those facts of which you’re certain: that the Executive Director is in the office only 3 hours a week, that she’s using members of the staff to run her personal errands, or whatever the case may be.  If the Board is compromised, though, this won’t make any difference; and if the Board is honest and diligent, it will discover all this about the Executive Director as soon as you leave, because there will be no one available to cover for her by doing all her work.

The Nonprofiteer’s best advice: find a new job, send a one-sentence letter of resignation to the Executive Director, and write an intemperate five-page screed blasting the entire agency, which screed you will then put in your desk drawer or the fireplace.  You’ll have the release of having said everything that needs saying without putting yourself at risk—one of life’s rarest pleasures!

Write again so we know what you do and how it goes.

What should (but won’t) be the last word on the charitable tax deduction

December 20, 2011

The most powerful argument Jack Shakely makes in his LA Times op-ed piece opposing the charitable tax deduction is that it’s a poor trade-off.  The retired foundation executive points out that charities have permitted themselves to be shorn of their ability to influence policy and politics in return for a mess of pottage.  Of course the restrictions on charitable participation in the public arena aren’t as draconian as nonprofit executives (and especially Boards) think they are—but the point is that nonprofits understand themselves to be constrained, and rather than bothering with the details remain quiescent politically.

As strong a proponent as the Nonprofiteer is of the pursuit of individual gifts, in the real world virtually every social service agency needs seriously more government money if it’s going to make any dent in the social problems it faces.  The more social service agencies feel free to advocate for this particular budget bill or that particular provision in a piece of legislation—both prohibited by the current tax-code provisions—the more likely it is that those bills and provisions will pass, which would serve way more of the agencies’ clients than the most blue-sky estimates of their potential for growth in individual giving.

And for someone with foundation cred to say this!  All hail Jack Shakely.

h/t The Nonprofit Quarterly Newswire.

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.


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