Archive for January, 2015

CausePlanet’s Choice Awards–Top Books for nonprofits from 2014

Here they are — our favorites from 2014. We read so many compelling, insightful books last year on a variety of essential topics, but the final choices came down to originality and applicability.

Each of our Choice Book Awards had either a fresh perspective on an imperative competency or broadened our thinking by tackling new territory. Additionally, all the authors brought their content to life through helpful case stories, exhibits, tools and evidence. These favorites are sure to help you work smarter; we hope you delve into them soon.

CausePlanet’s Top Five Choice Awards from 2014:

1) Fundraising the Smart Way: Predictable, Consistent Income Growth for Your Charity + Website by Ellen Bristol


Bristol gives you an innovative, concrete way to track and monitor your donors’ progress toward making donations. No more guessing about a prospect’s ability and desire to give means you can confidently meet and surpass your fundraising goals. Learn more about the author, book and Page to Practice summary.

2) The Money-Raising Nonprofit Brand: Motivating Donors to Give, Give Happily, and Keep on Giving by Jeff Brooks


Brooks shares an unvarnished, refreshing look at how to captivate more donors with accessible ideas that specifically work for nonprofits. He delivers new ways to connect your brand with your donors in a manner they won’t forget. Learn more about the author, book and Page to Practice summary.

3) The Nonprofit Leadership Transition and Development Guide by Tom Adams


Adams establishes an irrefutable link between effective leadership and organizational impact. What’s more, he comprehensively illustrates numerous advantages and opportunities bestowed upon nonprofits that engage in proactive training, succession planning and transition management. Learn more about the author, book and Page to Practice summary.

4) Fundraising with Businesses: 40 New and Improved Strategies for Nonprofits by Joe Waters


The organization of this book is what really caught our attention. Waters gives you specific cause (pronounced “khaz” by Waters) marketing strategies, how to implement them, ideas you’re encouraged to steal and success stories at every turn. His approachable format is chock-full of applicability. Learn more about the author, book and Page to Practice summary.

5) The Abundant Not-for-Profit: How Talent (Not Money) Will Transform Your Organization by Colleen Kelly and Lynda Gerty


Kelly and Gerty reveal a transformational method for utilizing your community’s expertise. At the center of this transformation is a new breed of volunteer—a “knowledge philanthropist.” The abundance model will revolutionize your use of talent, cultivate a renewable resource and be a welcome relief on the budget. Learn more about the author, book and Page to Practice summary.

Thank you to all our authors who give us reading pleasure and professional inspiration every day. It’s a pleasure to promote your smart advice at CausePlanet.

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Kick these tires before you embark on challenging roads ahead

Last week, we introduced Mission-Based Management by Peter Brinckerhoff and his three philosophies that informed his 30-plus years in the successful business of guiding causes. They are:

“Nonprofits are businesses.”

“No one gives you a dime.”

“Nonprofit does not mean no profit.”

He convincingly demonstrates the truth in each of these points throughout the book and in each of the management competencies he explores—from leadership, governance, and finances to marketing, mission, ethics, and more.

But what exactly do these philosophies mean?

It’s worth asking and answering because these “Brincker-isms” are not a passing phase. Brinckerhoff has written three editions of Mission-Based Management—much to the appreciation of the sector. In other words, the nonprofit sector has kicked the tires and liked the journey in this book. So let’s take a closer look at what informed so many other readers’ decisions after reading it:

Nonprofits are businesses. “Your organization is a mission-based business, in the business of doing mission,” claims the author. He adds we don’t have license to be sloppy or ignore a good idea simply because it was originally designed for the business sector. “Using good business skills as a mission-based manager does not, I repeat, not mean dropping services simply because they lose money, nor does it mean turning people away because they cannot pay. But it does mean paying attention to the bottom line, having a strategic vision, and negotiating in good faith and from a position of strength—in short, being businesslike in pursuit of your mission,” explains Brinckerhoff.

No one gives you a dime. Brinckerhoff explains that nonprofits don’t get gifts. If a donor writes you a check for $100 to your social services organization, she isn’t making a donation. Rather, she is purchasing services for someone or some family she will never meet. Brinckerhoff says the business community calls this giving money in exchange for an expectation of outcome. When you purchase concert tickets, you have an expectation of entertainment. When you purchase an airline ticket, you have an expectation of transportation. When you send money to a nonprofit, you have an expectation of service. In other words, “you earn all the money you get,” asserts Brinckerhoff. An interesting paradigm shift.

Nonprofit does not mean no profit. Brinckerhoff encourages you to consider this point. Making money in a nonprofit is legal. Nowhere in the state or federal law does it say nonprofits cannot make a profit. He asks, “If you cannot make a profit, why do you need a tax exemption?” Profit is essential and a key tool for financial empowerment, a subject the Brinckerhoff covers at length later in the book.

As you move forward with your organization, ask yourself if anyone on your team subscribes to the thinking Brinckerhoff tries to overcome in these three philosophies. If so, how is he affecting your decision-making and outcomes? I know, it’s challenging to turn the corner on new thinking but well worth the effort.

Challenging terrain ahead

While I have you thinking about challenges, I’ll add one more. We asked consultant Raylene Decatur what she thought was most challenging about being a mission-based manager today:

CausePlanet: Where do nonprofit managers most commonly find challenges with leading a mission-based organization in your experience?

Decatur: Discipline is the number one challenge. The manager may be a disciplined individual but leading a disciplined department, division or organization is challenging. In a corporation, the bottom-line (profit and loss) creates discipline. Mission-based organizations have multifaceted impacts, which lack the quantified clarity of financial results. The board members, staff and volunteers may each love that mission differently and each be pulling the organization in slightly (or profoundly) different directions. It is the manager’s job to harness that energy and achieve the organization’s stated outcomes, year in and year out.

If you find yourself looking for a comprehensive analysis of how high-impact nonprofits lead their causes, consider Mission-Based Management; it’s grounded in Brinckerhoff’s road-tested philosophies and you’ll benefit from years of wisdom gained from many journeys.

See also:

Building Nonprofit Capacity: A Guide to Managing Change Through Organizational Lifecycles

Do More Than Give: The Six Practices of Donors Who Change the World

Forces for Good: Six Practices of High Impact Nonprofits

Image credits: Brinckerhoff, sikhchick.com, seriouswheeels.com

 

 

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Financial trends affecting your nonprofit in 2015

At Execute Now!, we’re often in the unique position of having a broad perspective on what trends affect financial management in the nonprofit sector due to the wide range of clients we serve. During this time of year, the legislative sessions are gearing up for what’s on the horizon in 2015. Most recently, we heard our country’s State of the Union address.

In the spirit of evaluating the state of affairs, I couldn’t help but share some of my own nonprofit sector insights for 2015 in light of some of the trends I’ve observed in the news. Join me in taking a look forward:

Giving circles and impact funding

If you’re like me, you’ve noticed the growing popularity of giving circles. Millennials have helped make this movement a popular way to give collectively with others. Giving circles are a form of participatory philanthropy where groups of individuals donate their own money or time to a pooled fund and decide where to donate the funds. During this process, they may also engage in activities to increase awareness of and engagement in the issues surrounding the cause or community project. Giving circles can be as informal as a group of friends or as structured as a foundation. Some examples of giving circles can be:

Investors
Nonprofits
Students
Policy makers
Business leaders
Political leaders

An article in The Chronicle of Philanthropy about a Jewish Group launching its own giving circle, called the Natan Fund, reported that studies show people who participate in giving circles tend to give more, have stronger religious and community ties, and are more strategic in their charitable contributions. They are also younger. Most of the members in the Natan Fund are under 45.

Natan Fund’s executive director, Felicia Herman, observes, “Young givers like to do things in a community of their peers.” The Natan Fund has approximately 200 members and has given roughly $9.6 million in grants since its formation in 2002. It launched a website as part of its efforts to offer a resource library that helps potential philanthropists join in the growing movement of collaborative charity. Natan.org is one of many giving circle sites cropping up to make it easier for collective philanthropy. Websites like www.Tilt.com are one of the “easiest ways to pool money with your group and make amazing things happen,” according to the website tagline. Tilt and other giving circle sites abound on the Internet. Enter “giving circles” in the search bar to find 14 million plus results.

Philanthropy and politics

No forecast is complete without acknowledging the uncertainty created by politics and legislative sessions surrounding nonprofit tax laws. According to The Chronicle of Philanthropy reporter Alex Daniels, the Republican takeover of Congress will mean lawmakers will dig deep into the tax code.

Some of the provisions under scrutiny, says Daniels, will be:

Extending the charitable deduction window into April 15 after the calendar year-end

Benefits for land conservation, donations to food banks and contributions to charity made from certain retirement accounts

The IRS considering what constitutes political activity by social-welfare organizations and whether their donors can remain anonymous

Foundation excise taxes (The House passed a measure to simplify and lower this tax to one percent.)

A proposal to require donor-advised funds to pay out at least five percent of their assets each year

The provision of federal support for social-impact bonds that fund “pay for success” efforts at the state and local levels

Pending rules that limit how to conduct federated campaigns (The United Way, in particular, hopes a Republican Congress will remove recently added federal regulations.).

Most of the sector’s preliminary feedback on these issues surrounded the April 15 deadline for charitable gifts. Some large nonprofits don’t like the idea because it diminishes the emotional appeal during the holidays. Lawmakers argue that businesses don’t really know what they have to give until they’ve completed their taxes in the first quarter. Depending on the legislation that passes this year, nonprofits could be making a year-end and April push for gifts.

Light at the end of the tunnel

Allow me to give you a dose of certainty after looking at the uncertain legislative provisions above by sharing some good news I’m confident will positively impact charities this year. The federal Office of Management and Budget (OMB) announced effective December 26, 2014, that “governments at all levels entering into written agreements with nonprofits to deliver services to the public have an affirmative duty to pay their fair share of the costs that those nonprofits incur.” This will require government agencies to reimburse nonprofits for some or all of their indirect costs. Amazing. This report came as a delightful surprise, especially since I’ve written at length about the lack of consistency with government funding and underwhelming support from its agencies.

In Nonprofit Advocacy Matters, Tim Delaney, President/CEO of the National Council of Nonprofits was quoted as saying, “The changes promised by the new rules are a major victory for people who depend on nonprofits every day. If properly implemented, the new rules will finally end the harmful practice of governments imposing artificially low limits on the reimbursement of indirect costs that nonprofits must incur. Those arbitrary caps have essentially forced charitable nonprofits to subsidize government.”

I couldn’t have said it better myself. I hope these observations have given you a sense of what 2015 may hold for your nonprofit. Giving circles are an inspiring movement and demonstrate innovation behind our giving spirit. Politics will always provide a climate of uncertainty and challenge us to overcome bureaucratic hurdles. The OMB’s new requirement teaches us an important lesson: There is always room for optimism—even with the government. Bloomberg Businessweek reported on the economic power of optimism in a January 8 article: Optimistic people work harder, get paid more, get elected to office more often and win at sports more regularly. They even live longer. The effect of optimism spills over into business decisions. Let your optimism impact your leadership decisions this year. You may live longer and have time to start a giving circle of your own.

See also:

Cash Flow Strategies: Innovation in Nonprofit Financial Management

Nonprofit Sustainability: Making Strategic Decisions for Financial Viability

The Nonprofit Business Plan: The Leader’s Guide to Creating a Successful Business Model

Image credits: post-gazzette.com, givingcirclesnashville.org, latinorebels.com, businessobservefl.com, exacttarget.com, mpd.me

 

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CEO Survival: Thou shalt not get (too far) ahead of thy board

It’s the first commandment of nonprofit CEO survival: thou shalt not get ahead of thy board. At least, not too far . . . But you do need to be a little ahead of them . . . Just not so much that they notice and get offended.

If you’re confused, you’re not alone. Most veteran nonprofit CEOs have a sack full of stories about interactions with their board. One of the mistakes that is most frustrating — and potentially damaging — is getting too far ahead of a board of directors. The result is the collapse of a seemingly promising idea or policy change, and possibly a severe dent in the CEO’s credibility.

What follows are some thinking points to help negotiate this always treacherous interpersonal whitewater. The central premise of each approach is simple: Ideas and concepts are easily discussed and changed, and this is the proper role of leadership, including the board. Plans are also easily changed, but the effort that goes into them increases the commitment to their plans. Stick with ideas in the boardroom, plans outside of it.

Too far out on growth (Egos and economics)

Two of the most powerful motivators swirl around the intersection of the CEO and the board: ego and economics. By tax law, neither board members nor executives can have a private ownership stake in a nonprofit. But the executive (and other staff) have a potential economic interest, in the form of salary and benefits, financial stability, and improved systems. They also have an ego investment in the form of pride of performance. Together, these constitute a compelling package. This is one of the many reasons why executives will be more likely to propose growth strategies than will board members.

Board members can only invest their egos, so when presented with plans for growth their biggest ego investment can often be summed up in the question: “What if it fails?” This is one of the reasons why board members will be more likely to oppose growth than will executives.

To avoid getting too far out on growth, the CEO can frame the proposed expansion in terms of organizational ego. This approach might use arguments such as “this is an extension of what we already do well” and “if we don’t do this, [another organization] will, but we’re much better at it.”

Too creative (Divergent and convergent thinkers)

During the 1960s, a researcher named Joy Paul Guilford suggested that people think in two different ways — divergent or convergent. Divergent thinking is creative in nature, while convergent thinking seeks the “right answer.” Most individuals are instinctively comfortable with only one of these approaches.

Nonprofit CEOs, because of the nature of their pro- scribed roles, are more likely to engage in creative thinking. Boards are more likely to prefer discovering the “right answer.” This also tends to be true because the CEO is usually more knowledgeable about the field than the board as a whole, since board members are typically volunteers without extensive opportunities to learn about the sector. This tendency of boards to seek the “right answer” also explains why so many motions are passed unanimously.

The creative (divergent) CEO will sometimes have a difficult time with the board because of this difference in thinking styles. When the CEO is too creative for the board’s taste, outsiders such as authorities, respected peers, and consultants can often be a buffer. Note that the board doesn’t necessarily want to diminish the CEO’s creativity – which they probably respect. They want to find independent reassurance that they’re on the right path. Convergent thinking is often done in stages. We drill down to the first correct answer, then the next one, then the next. Bringing the board along might also need to happen in stages.

Acting before deliberation (Getting it done versus deliberating over it)

CEOs are in charge of getting stuff done. Boards are in charge of deliberating about stuff. The tension is obvious. Putting these two approaches carelessly together can result in wasted time, hurt feelings, and worse.

While taking action and deliberating policies are about as different a pair of activities as it is possible to have, a little role clarity will help things go more smoothly. Translation: with a little mutual candor, the CEO won’t always be trying to jump ahead while the board won’t always be trying to slow things down.

At the risk of oversimplification, boards make choices and executives make decisions. Individuals tend to be good at sizing up a situation, making a decision, and carrying it out. Groups, on the other hand, are simply better at refining and improving ideas, plans, and strategies. The CEO will not get dangerously in front of their board if they build in the opportunity for its members to sincerely try to improve the quality of the CEO’s decisions.

This is not second-guessing. It has been proven that groups  that  emphasize  collegial  conversation  and  can evaluate  themselves  honestly  make  better  decisions than  do  individuals.  The inevitable problem is process and time required to get there. Researchers have also shown that people tend to have an exaggerated sense of their own individual capabilities, which is why the CEO/board split can be particularly intense.

The ideal situation exists when an executive’s approach to an issue is vetted by the board in a supportive way. This fits the expected roles — the CEO by definition has to be the public face of the organization, while the board should concentrate on the quality of the outcome (the choices above).

Too risky (Lead with ideas, not plans)

It will come as no surprise to veterans of nonprofit board rooms that CEOs can get too far out in front of their boards on all matters involving risk. This is a structural inevitability — the CEO (as well as other executives) is almost required by the uniqueness of their position to be the designated risk-taker.

The real challenge from a risk management perspective is how quickly the CEO can bring the board around to their position. Considering the baked-in conservative nature of most nonprofit boards as described earlier, this could take some time.

One good way to gain board support for a strategic risk is, again, to lead with ideas, not plans. This is one of the reasons why good strategies, as opposed to strategic “plans,” are not filled with details such as assignments, dates, and activities. Most boards go through three stages of reaction when confronting new ideas for the first time: learning, analysis, and acceptance. Committing to details too soon disrupts this flow and can waste time.

Leading with ideas also makes it possible to work through various scenarios without committing resources. If the dialog is genuinely open it enables the board to safely explore the risks abstractly before encountering them in real time. Note that all parties must be sincere about this process. It can lead to long board meetings, but the offset is that board members will be more committed and will usually report greater satisfaction in their roles.

Another way to avoid getting too far out front is for the CEO to anticipate and cope with real risk as a regular practice. Dealing with a board’s fear of risk is a different problem. This should happen anyway, but doing it routinely helps the CEO establish their conservative bona fides.

The first commandment of CEO survival is to never to get too far out in front of the board of directors because they too have a responsibility to shape the future. But the CEO doesn’t want to be behind the board, because their job is to lead. It’s a structural dilemma, but most of the pathways to success are based on the second commandment of CEO survival: Lead with ideas, then talk about plans.

See also:

The Practitioner’s Guide to Governance as Leadership: Building High-Performing Nonprofit Boards

The Ultimate Board Member’s Book

Super Boards: How Inspired Governance Transforms Your Organization

Reprinted with permission by The Nonprofit Times and Thomas McLaughlin.

Image credits: newincite.com, scdlifestyle.com, selfrelianceoutfitters.com, discovery.com

 

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Checking in on 10-year predictions for the New Year

Kicking off a New Year seems like a perfect time to recommend our upcoming addition to the CausePlanet summary library. Frankly, any time is the ideal time to pick up this book. Peter Brinckerhoff has written not one, not two, but three editions of Mission-Based Management, which should give you a sense of its value to nonprofit readers.

Author, writer and consultant Peter Brinckerhoff claims it’s an exciting time to be in the nonprofit world. He asserts, “There are more challenges, more opportunities and more ways to respond to the increasing needs in a community.”

The third edition of Mission-Based Management bestows on the reader a comprehensive look at what today’s nonprofit managers should prioritize in order to model the best high-impact nonprofits.

The premise?

The book is based on three philosophies that have informed Brinckerhoff’s entire career of 30 plus years:

  1. “Nonprofits are businesses.”
  2. “No one gives you a dime.”
  3. “Nonprofit does not mean no profit.”

He convincingly demonstrates the truth in each of these points throughout the book and in each of the management competencies he explores—from leadership, governance and finances to marketing, mission, ethics and more.

We invited Raylene Decatur of Decatur & Company to participate in our guest interview about the book. Since 2004, her firm has provided strategy and leadership transition services for nonprofit organizations ranging from start-ups to complex, mature organizations.

CausePlanet: What do you think about Brinckerhoff’s ten-year predictions? Are there any you would modify, emphasize or add?

Raylene Decatur: Brinckerhoff was brave to present his ten-year predictions and prescient regarding the future. From our vantage point in 2015, I would emphasize the following of his predictions:

Role of Government: Brinckerhoff was very accurate in his assessment of the diminished resources that local, state and federal governments would be investing in programs implemented by the nonprofit sector. For many nonprofits, especially in the health and human services sector, diversification of funding streams and reinvention of their business models will continue as trends for the foreseeable future. (Read more in our Page to Practice™ summary of Super Boards: How Inspired Governance Will Transform Your Organization)

The Impact of Generational Change: The baby boomers continue to age and have maintained greater longevity on boards and as organizational leaders than might have been anticipated five years ago. The generational change is much more complex and multifaceted than the compelling math of aging and its impact on the transfer of power. The values of a new generation of leaders and funders are raising questions regarding all aspects of nonprofit sector operations and outcomes. The recession stimulated change, and the generational transfer impact will create new and perhaps more challenging dynamics for the examination of sector practices. (Read more in our Page to Practice™ summary of Cause for Change: The Why and How of Nonprofit Millennial Engagement)

Cost of Services: Brinckerhoff notes the increased cost of providing services to a population of clients who have greater and more complex needs. More competition from both nonprofit and for-profit companies in an environment where it is more expensive to serve will accelerate as a challenge for the sector over the next decade.

Impact of Technology: As Brinckerhoff observes, the nonprofit sector must make the investments necessary to fully utilize technology to accelerate progress on mission. The transformation of client, donor and stakeholder expectations has evolved even more quickly than could be anticipated five years ago. Today, many nonprofits are facing almost insurmountable challenges related to reporting outcomes and results because their investments in systems and technology have failed to keep pace with these new norms. (Read more in our Page to Practice™ summary of Managing Technology to Meet Your Mission)

CausePlanet: If you could consult on a fourth edition of this book, what topics(s) might you envision adding?

Raylene Decatur: Talent is one of the greatest challenges facing the nonprofit sector today and in the foreseeable future. How will the sector transform its capacity to attract, retain, train and reward the people who are essential to achieving mission outcomes? This is not a new topic, but there is urgency in reimagining our assumptions regarding both paid and unpaid staff.  (Read more in our Page to Practice™ summary of The Abundant Not-for-Profit: How Talent (Not Money) Will Transform Your Organization)

In the spirit of Raylene’s final answer about resources—specifically talent—I’ll leave you with one of my favorite quotations from Brinckerhoff: “A charity views its resources as a combination of four things: people, money, buildings, and equipment. … A mission-based business also has the same combination of four resources: people, money, buildings, and equipment. But it looks beyond just those four and also considers business tools in performing mission.”

See also:

12: The Elements of Great Managing

Leaders Make the Future: Ten New Leadership Skills for an Uncertain World

Nonprofit Sustainability: Making Strategic Decisions for Financial Viability

Image credits: thegraphicshouse.biz, en.wikipedia.org, nabswgreaterboston.org. Peter Brinckerhoff, enamabusinesssolutions.com

 

 

 

 

 

 

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