News and Views

HR Without HR, Part 3: Putting the Right People in the Right Place Doing the Right Things

Wed, 16 May 2012 14:02:00 GMT

By Pavitra Menon, Senior Consultant - One very important aspect of a nonprofit leader’s job is to align the organization’s resources in service of the mission. And critical resources in this regard are the people, the staff. When staff’s professional needs are met in meeting the organizations mission, it’s a perfect fit! When an organization is structured to accommodate people, it often spells disaster! This is not to say that people don’t matter – in fact because they matter so much, it’s important to place them within the organization doing the things they are most capable of and motivated to do.

This is so much easier said than done because, in reality, no job is perfect – most jobs have some aspects to them that the people performing them have gripes about. The challenge is in matching a person’s skills, knowledge, and experience to the requirements of the job as closely as possible. Once that is done, it’s about sustaining the person’s commitment and challenging them to do the job as well as they possibly can.

All jobs, though, are not created equal. Some jobs are inherently

more valuable to the organization meeting its mission than others. So once the organizational strategy is focused and well communicated, attention must turn toward finding and placing the right people in the right roles, specifically, in those jobs with the greatest potential impact on results. This should, however, be done without producing a core team of “elite” employees but rather a team of staff who collaborate with one another and leverage each other’s expertise to effectively meet the mission.

In theory this all sounds right, but how does one put this into practice? You first start by identifying the roles that are critical to the organization’s success. Please note, not people but roles. Organizational roles typically fall in one of the four boxes below.

Strategic and Core Roles are where you want to invest most on talent with Requisite roles serving more in a support capacity. Your Requisite roles could be filled by part-time staff, consultants, and, in some instances, interns and volunteers with staff in the Core and Strategic roles backing them up. Non-core roles should be dispensed with as much as possible.

You are now ready to turn your focus to what kind of people you need in each of these roles:

Specify the key accountabilities or “deliverables” that the person in the role needs to produce
Identify the competencies, skills, and experience requirements of the role
Define the behavioral traits and characteristics required for successful job execution

This information will give you all that you need to create a detailed job description for each role. You can now assess your existing talent to see where they fit in and where there are gaps. Some gaps can be addressed by training and developing existing staff. Others will be met by hiring new talent and, in some instances, you may find yourself needing to manage staff out because the role is not relevant to the organization.

Previous blog posts in the HR Without HR Series:
HR Without HR
HR Without HR, Part 2: Tips For Recruiting and Retaining Qualified Staff

For more information on CRE's Human Resources services, please follow this link.

Looking Beyond the Obvious as You Select Your Next Board Treasurer

Mon, 14 May 2012 14:16:00 GMT

By Jeff Ballow, Senior Consultant - Recently I met with a client, an executive director of a small youth development organization, who was concerned about an impending leadership transition on her board of directors. The long-time treasurer, a Certified Public Accountant (CPA), was set to leave the board, and this ED did not see any natural replacements among her current board members. “I guess I need to go find an accountant who can immediately step into this role,” she said glumly.

While I agree that having a treasurer with an accounting background or extensive experience in finance is definitely desirable, the “conversation” shouldn’t stop there. Here are five characteristics to look for as you seek to fill this critical position:

Aptitude: It’s true: You don’t want a self-professed “numbers-phobe” sitting in this role. Some level of facility and comfort with numbers is indeed important. I once worked closely with the finance committee of a Brooklyn-based multi-service agency. The committee had recently welcomed a new member, a lawyer who had limited exposure to financial data in her day job. But the ability was clearly there, and before long she was the committee member asking the best questions. She eventually became treasurer – and a very good one at that.

Transferable experience: Many professionals are exposed to financial information in their jobs. Maybe you have board members that review financial reports, or create budgets for new projects, or work one-to-one with bookkeepers in their small businesses. These types of experience will help ease the transition into the treasurer role.

Willingness to get up to speed: Every new treasurer will start somewhere on the learning curve. This is even true of finance professionals, especially those in the private sector. Your nonprofit with its part-time bookkeeper and $250K budget is probably nothing like your board member’s company. Even if you are lucky enough to have someone with nonprofit accounting or financial management experience, that person will also have to be committed to learning the nuances of your organization’s finances.

Available time: Sometimes an organization’s narrow thinking about this role blinds them to reality – that the obvious choice, the financial wizard who joined the board last year, simply doesn’t have enough time to do the job well. From my standpoint it’s better to have an engaged treasurer without as much formal training than an expert who is uninvolved.

Interest: Above all, the prospective treasurer has to want to be the board’s point person on all things financial. And don’t assume that your board’s resident CPA is interested. Some people want their board experience to be different than what they toil away at during the work day. I once interviewed a candidate for a board position, a finance professional in City government, who told me that the only two things he was not willing to do was 1) sit on the finance committee and 2) be treasurer. He was, as it turns out, much happier and more effective as a member of the program committee.

If you have someone with financial expertise who is ready, willing, and able to move into the treasurer’s role, consider yourself fortunate. But, if this is not the case, don’t feel like to have to go outside your current board to fill the position. Take another look around the room and consider the above characteristics. A stellar future treasurer might be sitting right in front of you.

Click here for more information on CRE's Board Development Services.
Get registration information for CRE's upcoming Fundamentals Workshop on Maximizing Board Leadership.

HR Without HR, Part 2: Tips For Recruiting and Retaining Qualified Staff

Thu, 26 Apr 2012 16:36:00 GMT

By Pavitra Menon, Senior Consultant - One of the most fundamental and extremely critical functions of managing your human resources is recruitment. When a job opens up, it really is an opportunity to assess whether or not this is a position that is needed or is still relevant to the organization. In addition, by hiring the “right” candidate for the job you get an infusion of fresh ideas, perspective, and energy. In order to be done right this function needs to be given the critical attention it deserves. Here are some tips to engage in effective recruiting:

Give up the “let’s just get it over with” mindset - one of the reasons managers do such a poor job recruiting, is that they just want to get done with it. Acknowledge that in order to find the best person for the job you need to invest time and energy to do it right. There is just no way around it and no short cut fix.
Use consistent protocols that all managers involved in the hire are in agreement with. The job description should be revisited and revised as necessary before recruitment activity commences. All individuals involved in the recruitment process must be familiar with what is non-negotiable for a candidate to have (skills, knowledge, experience) to be successful in the position. As much as possible, articulate your important criteria in writing. These criteria should inform how resumes are screened and what questions are asked of candidates during interviews. Maintaining consistency is key; otherwise it becomes difficult to judge how one candidate ranks above another as you make selections. Nothing makes a worse impression on a candidate than managers on the interview panel sending out different messages or candidates hearing differing opinions about what constitutes success from someone who phone screened them vs. someone who interviews them at a later stage in the process. It then presents a poor image of the organization.
Enhance your candidate pool – Do not discount in-house candidates. Get the word out within before going outside. Sometimes, with some training and support, an in-house candidate can be the ideal candidate and can save you precious time and energy. Also, since they are already well-acquainted with the agency culture nothing will be too much of a surprise. If you have to go to market, remember that while it’s important to post the job on job posting sites and listserves, there is a chance that the ideal candidate is already employed and is not looking. Garner the support of your staff, board, partners, funders, and other well-wishers to get the word out. A personal e-mail from someone who knows someone who is not looking alerting them to the job might pique their interest. Develop relationships with university placement offices and alumni networks and get the word out about the job through that route as well. Another commonly used strategy is to reward existing staff when they recommend someone to a position. People within the organization have a unique sense of who can fit in well and are less likely to recommend someone who is a slacker.
Ask the right questions in the interview process – Interviewing properly will get you pivotal information about whether a candidate can actually do the job and if they will fit culturally within your organization. Think carefully about what you want to learn from the candidate. Asking a candidate whether they function well under pressure is likely to elicit simply a "yes." Asking a question that directly applies pressure, such as "what makes you think you are better for this job than all the other candidates?" will likely yield an answer that's extremely telling. In addition, where appropriate, ask candidates to illustrate their answers with examples or give them real life cases and observe how they walk through them. Always follow interview protocols that are pre-determined and vetted by a few people so you avoid asking any illegal questions.
Verify that you have made the right choice – Once you have identified the right candidate for the position through your interview process, make sure you check references, background etc. Candidates are unlikely to give you a list of references that are going to say unfavorable things about them so one strategy to dig deeper might be to tell candidates that you would like to specifically speak with their most recent supervisor or someone who is a direct report. While experts have differing opinions on this, look up the candidate on-line. If their Facebook page, for example, does not have privacy settings installed then whatever is on there is for public consumption. You can find “deal breaker” type information through these very public domains.
Close the loop with candidates you decided not to move forward with. They, too, invested time and energy in your organization and need to be thanked. You never know who could be invaluable to your agency down the line.

Tips for Retaining Qualified Staff

So, now you’ve hired the right person and your recruitment team is heaving a sigh of relief as their job is over and done with. Not so fast! If you don’t want them running right back to the drawing board it’s important that you “on-board” your new hire effectively. On-boarding, otherwise known as orientation, is one of the first steps to retaining your staff.

It’s important to remember that orientation goes beyond the first day. While day 1 is very important, employees usually spend it tying up administrative loose ends – getting familiar with policies and procedures, checking in with fiscal so that payroll and benefits are set up, getting acquainted with their desks and computers, etc. If that’s the end of a new hire’s orientation to the organization it does not bode well, as s/he has not made any deeper connections with the team or the work. Managers should make sure they schedule ample face-time with new hires within the first two days. This is the time to talk about all the nitty gritty details of the work. Ensure that you set expectations for the position and offer support to help them achieve these expectations. Make personal introductions to the rest of the team and maybe even set up a “buddy system” – have someone take the person out to lunch and show them around the neighborhood, especially the good eating spots! Ask pointed questions about how the new hire is feeling and what they think would help them out in their job, and reinforce that you value open communication and are willing to help them ramp up. Looking ahead, managers should check in with a hire after 30, 60, and 90 days. During these check-ins, get a feel of what is working and what’s not, and allow them to ask any lingering questions in a stress-free way.

As employees get settled in the organization, retention strategies take many different shapes and forms. In my next post I will be delving deeper into the next HR function – “putting the right people in the right place doing the right things” – this in itself, if achieved, is great for retention. In subsequent posts that speak specifically to rewarding and recognizing staff and planning for succession, I will be speaking to retention. Keep watching this space!!!

For more information on CRE's Human Resources services, please follow this link.

Previous blog posts in this series: HR Without HR

My Board Member Wants to Work for me. What Should I Do?

Tue, 17 Apr 2012 13:10:00 GMT

By Jeff Ballow, Senior Consultant - You have just posted a new position on a variety of job sites, circulated the position description to colleagues near and far, and among the initial wave of inquiries is an e-mail from a current member of your board of directors expressing interest in the position. You stare at your computer monitor and wonder, “How should I handle this situation?”

There are indeed advantages to hiring board members as staff. Most importantly, the board member turned job candidate knows and, presumably, believes in the organization’s mission. In addition, your board member likely understands the inner workings of the organization far better than other candidates – from programs to fundraising to finances. And, finally, you know this person. While experiencing someone as a volunteer board member is much different than supervising someone as a paid staff person, you will at least have some sense whether that person is reliable, hardworking, smart, or whatever characteristics you think are important in this new hire.

However, there are definitely some potential pitfalls to consider. Most critically, if the person turns out to be a poor fit, then your relationship with that formerly valued board member and organizational friend may be damaged, possibly forever. But, even assuming the fit is a good one, the transition from board member to direct report may be too great a leap to make – even for those board members that subscribe to the latest thinking on the board-E.D. relationship (partner not boss). (The transition also may prove challenging for board members, who now have to relate to their former colleague as a staff person.) You should also consider that in hiring a board member, you are setting a precedent, and others may see the board service as a pathway to employment.

Let’s go back our initial scenario, with you contemplating what to do with this board member turned job seeker. Here are six steps to take to handle this situation effectively:

Assess whether the person has more value as a staff person or board member. Consider the person’s contributions of time and money as a board member and then contrast them with what he may bring to your staff. A person with special expertise (law, finance, as examples) may well be worth the loss in financial contribution and volunteer efforts.
Be honest and prompt in your response. This is not an application that should go unacknowledged for too long. If you feel like this person is better suited to board service, let her know as soon as possible, using this as an opportunity to acknowledge her value to the board. You can also enlist another board member, your chair in most cases, to help you do the cost-benefit analysis and reinforce the message.
Strive for an appropriate level of transparency. Mere interest in a position is not enough of a reason to alert the entire board. In the early stages of the process, it is fine to notify your board chair and, if applicable, the chair of the search committee for this position and/or standing HR committee of the board.
Remove any potential conflicts. The board member-candidate should not be part of the selection process at any stage, even after exiting the process. If the board member advances deep into the process, they may need to recuse themself from parts of board meetings or entire board meetings until their status is determined.
Be fair and consistent with the recruiting process. The board member-candidate should go through the same process as others candidates – same number of interview rounds, submission of writing samples, etc. For their parts, members of the search committee should be prepared to view their colleague’s candidacy objectively. If they cannot, then they should step off the search committee.
Message the decision thoughtfully. If you have decided to hire another candidate, personal calls from you and a board colleague involved in the decision-making are important to retain the relationship. This is another opportunity to underline this person’s importance as a board member to the organization. However, their interest in the job may also signal waning interest in board service, and, depending on their performance to date, you may use this opportunity to counsel the member off the board.

As the old saying goes, good help is hard to find. Hiring a board member as staff is worth considering, but you need to approach this situation with thought and care.

HR Without HR

Tue, 10 Apr 2012 13:12:00 GMT

By Pavitra Menon, Senior Consultant - When nonprofit organizations are created, the emphasis and focus resides on getting the work done, fulfilling the mission by providing programs, and/or services that serve the needs of the clients and communities. Hiring program staff to do the work is priority and, when resources permit, staff expansion happens in the form of hiring fundraising personnel and maybe someone to manage finances. Most nonprofits do not have the capacity to hire a staff person dedicated to the HR function (with the training and skills necessary to manage this critical function well).

However, all nonprofits big and small need to comply with laws and regulations, follow policies and procedures, and manage their staff effectively so that they can fulfill their mission. Recognizing this fact this blog series is CRE’s attempt to share strategies and tools that nonprofit organizations can adopt even if there is no dedicated HR staff person to implement them.

Before getting into the specific sub-functions of HR it is necessary for organizations to adopt some overarching tenets:

Leadership of nonprofit organizations should create a culture where HR is a shared responsibility among all managers. Managers, however, need to be trained first on aspects of HR that will be under their control and then they need to be given the authority to make people decisions
Organizations must develop systems that promote fairness and consistency in all decisions related to people because without them productivity and morale will plummet. In addition, ensuring fair and consistent practices will most likely keep organizations from breaking the law
Know the law: state and federal laws change frequently. Organizations must ensure that legal counsel is available to help keeping abreast with and interpreting the law. Having an attorney with personnel and labor law expertise on the board will help. Organizations like the Lawyers Alliance of New York and New York Lawyers for Public Interest are also sources for a wealth of legal information.

The HR function comprises of the following broad areas of management. Through this blog series we will explore each area some depth.

Recruiting and retaining qualified staff
Putting the right people in the right place doing the right things
Employing fair, consistent, and rigorous practices (from the point of hire to the time the employee exits the organization and everywhere in between)
Developing and sustaining high performance
Rewarding and recognizing staff when operating with limited resources
Planning for succession

My next post will delve deeper into the first area of HR management – recruiting and retaining qualified staff. Watch this space!

Framing the Impact of the Recession on Nonprofits

Thu, 05 Apr 2012 15:10:00 GMT

By Louisa Hackett, Senior Managing Director - Last week, two presentations about the current state of affairs facing New York City’s nonprofits were a reminder that solutions need to come from within as well as from outside of our sector.

Bright and early last Tuesday morning, I found myself at the new Bank of America building at Bryant Park. It’s a green building with recycled air, water, and incredibly comfortable leather seats. The Nonprofit Finance Fund was announcing findings from their fourth annual survey of nonprofits. We were reminded of some hard facts about the economy: nationally, there are 8 million homes in foreclosure; unemployment is hovering at 9%; and we have 1.3 million high-school dropouts and 49 million people at risk of hunger. And, we learned, not surprisingly, that the nonprofit sector continues to be challenged by rising demand for services while coping with shrinking resources.

During a panel discussion about how the sector can respond, we heard recommendations that nonprofits need to: get real clear about their financial situation, be more willing to collaborate, and use data to make smart program investments. The conversation had an internal focus on how the sector can be more strategic and efficient in making an impact. And, hearing how the Pine Street Inn refocused their efforts in Boston to successfully house the chronically homeless and thus reduce the overall cost of emergency housing, made a compelling argument for strategic thinking.

Later in the week, listening to a presentation by Les Leopold, author of “The Looting of America,” the framework was on the outside factors influencing our sector. Leopold asked: Is Wall Street the cause of dwindling resources for urban communities? Using graphs illustrating economic trends, we learned that wages have historically risen in sync with productivity: as the economy produced more, the compensation of non-supervisory workers rose in tandem. This was known as the iron law of wages and until the 1970’s was considered iron clad. But starting around 1975 things started to change: productivity rose and salaries took a nosedive.

What happened? Well, the effective federal tax rate plummeted; the share of the gross domestic product created by the financial industry soared; and the ratio of annual earnings paid to the top 100 CEOs compared to the average worker increased astronomically. In other words, the regressive tax policy and the deregulation of Wall Street happened. One way to comprehend where our economy stands now is to realize the top 25 Hedge Fund Managers earn as much per year ($25 billion) as 658,000 teachers, who teach 13 million students.

What does this all mean for us working in the sector? While nonprofits and their leaders need to react to the conditions of the new normal, we must also collaborate to make systemic changes that will have a lasting positive impact. Looking internally, we need to know where we stand financially, collaborate more to achieve greater impact and, be strategic and align our resources with those programs that have the greatest impact. However, we also have to look externally. We need to understand the causes of widening income inequality, we need to acknowledge a lopsided distribution of wealth is not sustainable for our sector and we need to join together to create an economy in which local, state, and federal governments implement fair share tax reform and fair budgets that contribute to real job creation.

Interested in partnering with CRE to help strengthen your nonprofit? Check out our consulting, leadership development, and training services.

For more information on collaborations and efforts to improve our economy, visit 99percentny.org.

6 Key Reforms to Restore NYS Budget Cuts

Wed, 29 Feb 2012 20:43:00 GMT

By Rona Taylor, Social Work Intern - In 2009, New York State was faced with a $20 billion budget gap due to the weak economy. With the help of stimulus dollars, a personal income tax surcharge on New Yorkers making over $250,000, and new income tax reforms, that $20 billion budget gap has been reduced to a little over $1.5 million. However, the ongoing weak economy, in addition to the slow recovery, continues to undermine New York State’s efforts to restore those cuts. The following blog outlines information obtained from a Fiscal Policy Institute (FPI) briefing.

The Fiscal Policy Institute (FPI) – along with its partners 99% New York, Strong Economy for All, and New Yorkers for Fiscal Fairness – have been working collaboratively on a blueprint for how to move forward in a way that not only raises revenues, but restores cuts. They propose to do this through closing corporate tax loopholes and reforming the corporate income tax, which could provide over $1 billion in revenue for this year’s state budget and provide a start for the Tax Reform and Fairness Commission to continue reforms.

Here is a summary of what is being proposed:

1. Require Real Estate Partnership To Pay The Taxes They Owe
In an examination of just one year’s tax returns (2005), IRS staff estimated that real estate investors underpaid $5 billion in taxes to the federal government and $385 million to New York State. Underreporting or misreporting of capital gains from real estate investments is the main cause of tax underpayments.

New York could recover as much as $1 billion from prior-year audits, with annual revenues thereafter well over $100 million.

2. Reform New York’s Corporate Alternate Minimum Tax (AMT) to the 1999 Rate
The AMT is an income tax imposed by the United States federal government on individuals, corporations, estates, and trusts. Alternative minimum taxable income is regular taxable income, plus or minus certain adjustments, plus tax preference items, less the allowable exemption (as phased out).

Level the playing field between large and small businesses by making sure that large multinational corporations pay a minimum corporate tax in NYS.
Restore the AMT tax to 3.5% where it was a decade ago.

3. Tax Nonresident Hedge Fund Management Fees

Expand the nonresident personal income tax to include income received from hedge fund management fees. This would generate $50 million in additional revenue.

4. Eliminate the Carried Interest Exemption Under New York City’s Unincorporated Business Tax

The New York City Independent Budget Office estimated that eliminating the carried interest exemption for the Unincorporated Business Tax would yield $200 million a year for New York City.

5. Crackdown on Schemes the Create “Nowhere Income”

Institute reforms so that multi-state corporations pay taxes on profits attributable to sales made in states in which they do not have a physical presence.

6. Require Public Disclosure of Corporate Tax Payments for Publicly-Traded Companies

Although this would not raise revenue, corporate tax disclosure for publicly traded firms subject to taxation under 9-A and 32 and any successor taxes makes for good practice.

Thank you to the Fiscal Policy Institute for sharing the information above at their Annual Budget Briefing. For more information about their work, please visit their website.

The Power of Collaboration and Why Evaluation Stinks Part II

Fri, 02 Mar 2012 21:08:00 GMT

By Michael Hickey, Independent Community Development Consultant - Just recently I attended a very compelling conference put on by The Association for Neighborhood and Housing Development, Neighborhood Housing Services of New York City, and my alma mater the Center for NYC Neighborhoods, entitled The Power of Collaboration. The title of the event comes from the very engaging article “Collective Impact,” published by the Stanford Social Innovation Review. Its authors make the argument that only through collaborative efforts can funders and nonprofit providers rise above the fragmentation of their service niche. The lay out a helpful framework include the following four components of effective collective action:

Develop a common agenda: Agreeing upon both goals early on is critical, and this is most effective when all levels of the collective are engaged from the front lines, through nonprofit leadership, to stakeholders and funders. Not only will the agenda have greater depth and strength, but the collective itself will carry greater momentum.
Share measurement systems: Common goals are only as good as the success measures put in place to monitor impacts. Keep the list of data points short, and if you can piggyback on existing data collection protocols to get your information, all the better.
Develop mutually reinforcing activities: It’s not that every collective member needs to do the same thing, but rather that all participants should take up complementary actions and coordinate to provide comprehensive services.
Collective action requires infrastructure: To do the job right, you frequently need a team dedicated to the task of keeping the collective itself, well, collective. Communications, data collection, planning and training are best managed through such a hub.

I love this. Makes complete sense. But here’s the rub: it places the onus for collective action on somebody somewhere taking leadership. And by leadership I mean spending volunteer time and resources to organize partners and engage in planning.

One of the great things about operating on the margins of the economy means that we are very used to taking such leadership and creating “something out of nothing” by aggregating the resources we have in greater abundance: good will, a commitment to mission, the power of the public good, and people who are willing to sacrifice comfort (money, sleep, diet) for all of the above. But there are two basic challenges:

A Thousand Points of Light: We essentially compete with ourselves to lead, to aggregate, to create collective action. We end up competing for good will, commitment to mission, the power of the public good, and so on because those are the resources we do have access to (slim as they are). We mark territories and fear collaboration because we don’t want to lose ourselves or our position in the process.
A Thousand Points of Night: In order to succeed we have to be willing to extend ourselves beyond our usual capacities. The great thing about having a lot of money and resources is you can always compensate someone to do something for you. When you don’t, you have to do it yourself or it doesn’t get done. That means you both push well past your comfort zone, and you probably have to take away from the mission critical work itself to leave room for addressing the bigger picture. In short, things will have to get harder before they get easier.

Why Evaluation Stinks
The problem of creating effective evaluation frameworks goes way beyond the problem of creating effective evaluation frameworks. Competing for scarce resources on the margins of the market subjects all of us (philanthropy included) to the pressures of never quite having enough. It requires leadership, true, but leadership that sees beyond itself to a collective action in which its individual role by definition must be diminished simply because it must be shared. There is no other way to achieve scaled impact when working on the edges of capitalism.

Now, here’s the good news: there’s hope. I would propose the following baby steps:

Instead of trying to create a one-size-fits-all evaluative framework, commit to creating a more open-ended evaluation process that allows individual leaders to share the narrative of their successes. This still means creating goals and objectives, but ones that recognize the individual capacities and challenges of a particular organization, and encourages systematic growth through succeeding hurdles.
Encourage leadership by supporting it wherever you find it. Nascent efforts to build capacity within sectors, communities, programs and so forth should all be encouraged and supported. Heaven knows we need it, and if someone is willing to commit the time and energy it takes then get behind them, lend your thinking and whatever resources you can spare.
Encourage leadership by taking leadership. Bring leaders together wherever possible to discuss their strategies, ideas and goals. Support any effort that connects two or more leaders more firmly to one another through shared goals, measurement, complementary programming or resources.
Push beyond your comfort zone in ceding leadership to others. If someone is on a roll, get behind them rather than trying to outdo them.

Since we have to do this the hard way, it's going to take time. Success is built upon aggregated effort. We must work to always create the environment where good work accumulates.

In Conclusion
Remember: vulnerable, needy, forlorn and forgotten. We are describing not only our clients, our consumers, and our constituents – we are also describing ourselves. But there’s another important term to keep in mind: we’re also the majority. The center is small (and getting smaller), the margins are continuing to widen. In pushing back against the centrifugal forces of the market, we should never forget that we carry the greater mass by far. I mean this to go beyond simple attempts at inspiration. The system will only respond to our ability to throw off the center by creating countervailing forces. Please, I’m not calling for revolution, but the present system will not re-orient itself toward our work until it can see the direct benefits of doing so.

Michael Hickey is an independent community development consultant serving nonprofit, foundation, public sector and corporate partners in project development, strategic planning, and organizational change. Learn more at about.me/mhickey.

Why Evaluation Stinks

Thu, 10 Nov 2011 21:04:00 GMT

By Michael Hickey, Independent Community Development Consultant - Ask anybody, and I mean anybody, about evaluating the effectiveness of nonprofit service providers and you will be greeted by winces, whines, shrugs, groans, gnashing of teeth, sighs, and the burying of faces in flattened palms. And by anybody I don't just mean any nonprofit service provider - I mean as well our beloved philanthropic leaders and public sector partners. After all, we're talking about an industry that in 2009 paid 9% of all wages, contributed 5.4% of GDP, reported revenues of $1.4 trillion, and held some $2.56 trillion in assets. Why can't we find a way to tell how effective this industry is with our money (both public and private dollars)? How hard can it be?

And yet, after spending 10 years in the philanthropic sector myself, then another 4 years running a major nonprofit, I can tell you that overall evaluation strategies remain fragmented and gap-toothed at best, contradictory and bureaucratic at worst. In spite of our many admonitions that the nonprofit sector should better emulate its much more handsome and accomplished for-profit sibling - by being more entrepreneurial, more data-driven, more outcome-focused, more scalable, more leveraged, more replicable - the nonprofit sector continues to behave as if it were, well, more folksy, more grass-rootsy, more (you know) messy. Don't get me wrong: the past 20 years have seen the emergence of many talented and innovative nonprofit leaders, as well as many highly effective and complex nonprofit service providers that have given for-profit competitors in their niche a real run for the money. But if you were to step back and look at the nonprofit industry in toto and ask yourself the dreaded "but for" question, could you really prove that nonprofit service providers are making a difference - or at least the differences that they claim in their annual newsletters? Shouldn't we have hard facts?

Follow the Money
Here's how capitalism works: the parts of the market that generate more market activity get more market resources. That's the point, right? Those folks who can provide a clever solution to a defined need at a good price are rewarded with venture capitalists, IPOs, and highly compensated executive managers. By comparison, most nonprofit providers seem highly inefficient: they are labor- and cost-intensive, and tangible results (higher literacy, reduced obesity, better job-preparedness) are difficult to observe and measure. This is especially true in terms of return on investment: how do you monetize the value of improved attendance in high school, better self-esteem, less street crime?

And here we come to the crux of the matter: most nonprofits do not reward capitalism. Put another way, the goods and services that nonprofits provide make very little money, or cost more than they generate in tangible profits. We make the mistake, therefore, of attempting to apply market driven measurements and evaluative tools to businesses (and nonprofits are businesses) that operate on the margins of capitalism. Any by the margins I mean the parts of capitalism where resources are scarce, fragmented, episodic, or plainly NOT driven by an expectation of direct financial return.

Nonprofits choose to operate at the margins of capitalism. While this should be an obvious fact, I'm impressed by the number of times it seems to go unobserved. Nonprofits tend to define their very role as working with those most vulnerable, needy, forlorn and forgotten by the market’s drive for revenue growth and capital concentration.

Look, I know I'm sounding pretty old school socialist here. Well, too bad. It's the truth. And what's more, in our collective desire for capital efficiency, and in our general distrust for those who are vulnerable, needy, forlorn and forgotten, we fall into the trap of conflating the scale of the nonprofit industry with any other type of profit-motivated industry. Which it is not.

Why Evaluation Stinks
While there are those who make claims to evaluation models that reduce complex inputs to measurable economic impacts, I've seen deep inside those models and (let me tell you) while they are very creative, they are hardly, well, rocket science. There's great talk about counterfactuals and weighted variables, but when it comes right down to it you're still ultimately stuck with making your best guess. There is some value in this, to be sure, but to claim these ultimately define success through apples-to-apples comparison just ain't so.

And here's why: if we were to round up all the nonprofit service providers who, say, assist the poor in accessing public benefits, we would wind up with a list of groups that are all trying to do one thing, but who accomplish that task in widely different ways. Some would focus on grass-roots strategies to engage their service population, while others would access clients through referrals from public agencies, while still others would "cross-market" these supports to clients being served by other programs it operates. Some would combine several of these strategies, along with three or four others I haven't been clever enough to think of. All of them would have multiple funding streams from public and private sources supporting this work (e.g., government contracts from city, state or federal providers; grants from private foundations and wealthy individuals; fundraising events; revenues thrown off by real estate development or building management for housing organizations). Finally, all of them would be working in different communities with tremendous variety in social support networks, economic challenges, and a myriad of other factors.

In short, they would all look wildly different.

The goal may be the same (e.g., to help an eligible low-income person sign up for food stamps), but the capacities for delivering these supports are radically shaped by the supports received to deliver the services. Get it? By operating on the margins of capitalism, nonprofit providers voluntarily submit themselves to the same (cumbersome, inefficient, fragmented, mercurial) process of seeking resources as the very people they are trying to serve.

Michael Hickey is an independent community development consultant serving nonprofit, foundation, public sector and corporate partners in project development, strategic planning, and organizational change. Learn more at about.me/mhickey.

CRE’s Current View of the Nonprofit Sector and What’s Needed Today

Tue, 01 Nov 2011 13:43:00 GMT

By Holly Delany Cole and Valyrie Laedlein, CRE Co-Directors: It’s grim – politically and economically – for nonprofits, including CRE, and more significantly, for the people nonprofits are working with and issues that are important to them and us. CRE sees five key issues facing the nonprofit sector in the Fall of 2011.

1. Changed climate – A changed political climate has led to disinvestment in the social sector. In addition, economic constraints have led to a reduction in all forms of private support – from corporations, foundations and individuals.

2. Need to demonstrate results – Nonprofits’ inability to show results jeopardizes their ability to make a case for resources.

3. Lack of scale – Since the time of Jane Addams, nonprofits that operated within communities were seen a good model as they are closest to the needs of their communities. Today, small to medium-sized nonprofits are often considered inefficient due to lack of scale.

4. Fragile infrastructures – Nonprofits have always operated with lean infrastructures. Further downsizing related to lack of funding has constrained organizational improvement efforts.

5. Board and staff constraints – Leaders struggle with a lack of investment, and are experiencing stress and feelings of isolation.

Here’s what CRE believes is needed for nonprofits right now and what we strive to address with our clients:

A focus on results

See our previous blog postings which describe our Effective Program practice and strategies we use to support clients in shifting to results-based programming

Visibility about results nonprofits achieve
Development of networks to:

Achieve scale and impact,
Supplement infrastructure,
Increase influence on policy,
Mobilize resources, and
Lessen isolation.

Leadership and professional development to support current and future nonprofit leaders

In upcoming posts CRE staff will delve deeper into these topics.

How Answering a Few Questions Can Make Your Organization More Effective

Fri, 02 Mar 2012 20:37:00 GMT

By Louisa Hackett - The following is a continuation of a previous blog post introducing the Five Questions Driving Organizational Effectiveness.

Strategic plans come in many shapes, serve a variety of purposes and always take time.

The effort devoted to planning can be dramatically reduced if two things happen upfront:

First, make sure the reasons for creating a plan are clear and reasonable. And no, creating one just because a funder says you need a plan is not a compelling enough justification to take up a lot of the staff and Board’s time.

Second, the question the planning process is supposed to answer needs to be the right question. Planning presumes something needs to be figured out. And, when you put strategic in front of planning then framing the choices facing an organization (a.k.a. questions) is needed.

Some planning requests arise because an organization needs to revisit their purpose and clarify “why do we exist?” and “do we still need to exist?” (Planning Question #1) Other planning engagements also include a focus on “for whom do we exist?” and “are we reaching, influencing impacting those we intend to?” (Planning Question #2) Once those overall organizational questions are answered, then it is time to move on to program focused questions:

Planning Question #3: What does meaningful success look like?
Planning really comes down to making smart choices given limited resources. How can we make the most of what we have? How can we have the greatest impact? One way is to look upstream and define what success looks like. This is often a fun question to answer. It reminds people why they got into this nonprofit business in the first place. Thinking about what they see when they’ve done a good job can reaffirm that a group is on the right track.

Planning Question #4: What programs and services get us to success?
After defining success, taking a frank look at existing programs and services can help to reveal whether an organization is doing the right thing and focused on the work that is aligned with the organization’s purpose. This can be hard to do because sometimes what an organization does (and maybe is being paid to do) does not line up with what it wants to achieve for whom.

Planning Question #5: How do we manage for effectiveness?
Finally, an organization is able to manage successfully once it is clear what its resources, talent and time are organized to achieve. When the Board and staff know how they contribute to success, it makes it easier to manage for that success.

For more information about how CRE can help you answer these five strategic questions, please visit the Practice Areas section of our website.

5 Questions Driving Organizational Effectiveness

Tue, 20 Sep 2011 18:50:00 GMT

By Louisa Hackett - What makes an organization effective? Sure strong managers, high performing staff, visionary leaders, sufficient resources and up-to-date technology all play a part. But a critical element, maybe the most critical, is clarity of purpose. Without knowing fundamentally what an organization is striving to accomplish and for whom, the chance to have the most effective programs is lost and muddled, diffuse programming can follow.

Nonprofits can lose their way for a variety of reasons. Funding opportunities can determine how an organization grows and funder expectations can drive program design. Too often growth by RFP results in programs operating independently with little knowledge about or coordination with each other. Mission drift can also occur in the face of an overwhelming demand for services. Without direction about who gets priority, people are enrolled or helped on a first-come, first-served basis. But the individuals most in need of assistance may not be coming through the door.

How can answering a few questions make an organization effective? Asking and answering the right questions provides direction. Direction provides a clear focus that enables individuals, resources and programs to be aligned around activities that the organization has determined will produce intended results. In other words, the change the organization wants to make drives what an organization chooses to do.

Planning Question #1: Why does our organization exist?
There can be a long tenuous connection between what an organization wants to achieve and the specific role the organization plays to get there. Given the enormous obstacles nonprofits face in striving to make the world a better place, it is understandable how groups identify lofty and far reaching goals: world peace, full employment, college ready students, etc. The challenge is to be both expansive and focused.

Community Resource Exchange (CRE), for example, has always worked to make New York City more fair and just. That is a pretty big goal. While we have always known the focus of our work is nonprofit organizations fighting poverty and advancing social justice, we recently narrowed our focus even more by confirming our work is to make these organizations both stronger (management wise) and more effective (program wise).

Planning Question #2: For whom does our organization exist?
Defining who is being targeted for an organization’s change efforts can be simultaneously easy and hard. Easy because changing the world means there is a large sphere of impact: lots of people to help and policy issues to influence. Hard because given limited resources, choices need to be made. We can’t impact everything and serve everyone. Deciding who or what gets attention is difficult because it is hard to say no.

Answering why we exist and for whom provides the framework for how to answer the next three critical questions:

Planning Question #3: What does meaningful success look like?
Planning Question #4: What programs and services get us to success?
Planning Question #5: How do we manage for effectiveness?

Look out for part two of this blog post which will share examples of how other organizations have taken on answering questions three, four and five.

For more information about how CRE can help you answer these five strategic questions, please visit the Practice Areas section of our website.

3 Things Coaching Can and Cannot Do For a Nonprofit Leader

Wed, 24 Aug 2011 18:58:00 GMT

By Mohan Sikka - The recent Daring to Lead survey of non-profit leadership reveals some interesting facts about the use and efficacy of coaching as a professional development strategy. While Executive Coaching has the highest effectiveness rating amongst a range of strategies, it also appears to be underutilized -- only 10% percent of national leaders were currently working with an executive coach. In the New York region the utilization was even lower, compared to, say, workshops and conferences, which were attended by almost 90% of leaders.

We at CRE have had a robust coaching practice for a number of years. While the aggregate number of non-profit executives in coaching may be small at any time, the demand for our coaching services is growing. Executives come to us for assistance with everything from selling their vision internally to getting better alignment within their program team, from dealing with a challenging board chair to creating an organizational culture of results and accountability.

Sometimes, however, executives ask for coaching not for themselves, but to "fix" problem staff. That is, they come with the expectation that we can coach away an intractable supervision or performance situation. Such requests have helped us clarify for ourselves, and for the groups we work with, what coaching can and can't accomplish:

In our experience, coaching is a great way to have hands-on trusted support while you, the leader, try new behaviors and practices
A coach can provide valuable, candid reflection about your strengths and challenges as a leader, and most importantly, create a space for self-reflection
A coach can be a partner in dealing with complex situations and in thinking through strategy -- as long as you, the leader, are clear that you still are the "mover" and implementer

Sadly,

Coaching seldom works as a substitute for supervision. We can coach your direct report around trying new skills and behaviors, but ultimate support and accountability rests with you as the supervisor. This is why we do not take coaching assignments without the intensive involvement of the supervisor.
Coaching doesn't work if you're afraid of eating humble pie. To extend the culinary metaphor, if you want to learn to cook Thai food, you can read books, go to a class, and talk to a master chef, but you'll never make progress on your masalman curry until you actually try to make it and fail a few times. Sharing best practices, or talking through situations with your coach -- these are necessary, but ultimately the easy parts. Real change comes from experimentation, from trying something new at the workplace, even if modest; and learning often comes from failure.
Coaching requires real-time data, which involves risk. The risk to ask other people for feedback. The risk of asking other people for feedback. The risk of frankly assessing how much time and energy you spend on things that really don't affect your mission or impact.

The good news is that coaching can be a powerful intervention if you are ready -- ready to face your own strengths as a leader, ready to acknowledge your challenges, and ready to work through and understand what's getting in the way of your organization being as powerful as it could be. Coaching can be a mirror to help you see if you yourself are part of that hindrance.

Visit the Leadership Offerings section of our website for more information on CRE's Coaching services.

Links to previous posts in the Daring to Lead series:
Succession Planning and Performance Evaluations: Two Sides of the Same Coin
What's An ED to Do?
What Works in Leadership Development
Three Key Issues in Succession Planning
One Size Does Not Fit All Boards
A Bone To Pick About Government Contracting
Daring To Lead: A National Study on Executive Leadership

Read the Daring to Lead main report, Brief 1: Leading Through a Recession, Brief 2: Inside the Executive Director Job and Brief 3: The Board Paradox.

Click here for more information about the New York City respondents and interesting facts about their Daring to Lead responses.

Succession Planning and Performance Evaluations: Two Sides of the Same Coin

Wed, 17 Aug 2011 13:38:00 GMT

By Jean Lobell - In an earlier post, I outlined Three Key Issues in Succession Planning. Today’s post is a continuation of the insights I shared on the key elements of a successful succession planning process.

The authors of the 2011 Daring to Lead report conclude that “many boards of directors are under-prepared to select and support new leaders.” The study found insufficient attention to executive transitions and that only 17% of organizations in the survey have a documented succession plan. On the other hand, Phil Buchanan, President of the Center for Effective Philanthropy, in a recent blog, questions whether a documented succession plan is really necessary. He does agree with the value of succession discussions, to quote -- “Should a board be discussing succession? Absolutely. Boards and CEOs should talk regularly about whether there are strong internal candidates and how they are developing.”

I would go a step further than regular discussions. I think it is important that the key elements of a succession planning process as outlined in my previous post are in place. Without those key components, systems, and tools, the discussions about succession will only go so far. The process itself need not be protracted or complex.

When performance evaluations are deemed “of little or no use at all” which to me means it was ineffective, as was the case for 68% of EDs in the national 2011 Daring to Lead report (77% of EDs in the NY sample), the likelihood of having a meaningful and successful succession planning process is low. Not only is the performance evaluation process a vehicle for Boards to get to know the ED’s job more fully, it is also predicated on having had a substantial discussion of goals and expectations. Such a discussion enables Boards to think more generatively about what the organization needs for the coming year or two and what they should expect of the ED’s leadership. This could only increase their readiness to think about succession.

Since true succession planning goes beyond the ED position, it behooves us to think about the quality and effectiveness of performance evaluations for key positions below the ED level. Does it even happen at all? We don’t have data from the 2011 Daring to Lead study that focuses specifically on the effectiveness of performance evaluations below the ED level. However, one finding is indicative that this management responsibility is challenging to say the least. Of four leadership domains, leading others was the domain that leaders assessed themselves lowest (only 35% of respondents assessed themselves as effective in this domain.) In the study, this domain referred to hiring and firing, giving and getting effective feedback, keeping a whole team aligned and high-performing. And more than challenging, they found this area of responsibility “as the most depleting and commensurately as the least energizing aspect of their work.”

The study aside, our many years of experience helping nonprofits on performance evaluation issues tell us that managing staff performance effectively continues to be an area of growth for most nonprofits in NYC. Sometimes it’s the quality of the forms and measures used to evaluate performance; sometimes it’s the manager or supervisor’s ability to conduct an effective performance discussion; sometimes it’s the lack of staff development opportunities; and sometimes it’s an organizational culture that does not support holding people accountable for results.

For true succession planning to work, a meaningful and effective performance evaluation process from top to bottom must be in place. They are two sides of the same coin.

Click here for more information about the New York City respondents and interesting facts about their Daring to Lead responses.

Links to previous posts in the Daring to Lead series:
What's An ED to Do?
What Works in Leadership Development
Three Key Issues in Succession Planning
One Size Does Not Fit All Boards
A Bone To Pick About Government Contracting
Daring To Lead: A National Study on Executive Leadership

Read the Daring to Lead main report, Brief 1: Leading Through a Recession, Brief 2: Inside the Executive Director Job and Brief 3: The Board Paradox.

What's An ED To Do?

Fri, 05 Aug 2011 20:44:00 GMT

By Valyrie Laedlein, CRE Co-Director - I’d been looking at data from the Daring to Lead 2011 study about how Executive Directors spend their time – and how they THINK they should be spending their time – and was preparing to write a blog about what prevents us from focusing on “what matters.” Simultaneously, of course, I was reading articles and analyses about the debt ceiling agreement that has been reached in Washington and finding myself increasingly incensed by how the decisions being made by every level of government are impacting our communities, the nonprofits that serve them, and the impossible quandary about just what should get our attention as nonprofit executives.

After much drama at both ends of Pennsylvania Avenue over many weeks, we now have a decision about the nation’s finances – at least for a while. With nary a whisper about revenues, our leaders have trimmed a neat $2.1 trillion in primarily “discretionary” spending over the next 10 years, and already there is extensive analysis about the number of jobs to be lost as a result. Knowing what the implications will be for communities we serve, one can’t help but feel assaulted by the succession of cuts that all levels of government have taken – and dismay at the choices that we, as a society, seem to be making.

To add insult to injury, the debt ceiling agreement got made just 6 days after the Pew Research Center released its report on the growing wealth gap between white households and those of blacks and Hispanics. Median wealth among white households is now 20 times that of blacks and 18 times that of Hispanic households in this country. These ratios have nearly doubled what prevailed in the two decades preceding the economic recession.

As leaders in a sector that is undervalued – working with clients, program participants and communities who are largely ignored in favor of those whose non-taxed earnings must be preserved – where should we first turn our attention? What should we be focusing on? What’s most important to devote time to? Especially in this moment when we nonprofit leaders have absorbed budget reductions by trimming back middle management, office support and administration, in the interest of preserving much needed services.

In the Daring to Lead 2011 study, the recent releases of Brief 1: Leading Through a Recession and Brief 2: Inside the Executive Director Job describe the pressures that EDs are under in this climate. What is compelling as I look at the data from 3000 EDs is the extent to which they do not feel as if they are doing “the right things.” When asked how they feel about the time they spend on various functions commonly identified as those performed by the Executive Director, this is what the data show:

54% feel they do not spend enough time doing Marketing, Communications or Public Relations
53% say they do not spend enough time doing Fundraising
52% report spending insufficient time on Networking, External relationships or partnerships
47% feel they do not spend enough time on Public Policy and Advocacy work

This strikes me on two levels. First, these are all the functions that are most critical to attracting resources to support an organization’s work. The unfortunate reality is that community-based organizations – those that are closest to the communities in need and best able to reach people most affected by the recession - are also those with the leanest staff and fewest resources. Thus they are least able to devote time to these functions of marketing, fundraising, networking and advocacy. The result is that these organizations, like many of their clients and participants, face a wealth and income gap of their own as government at all levels devotes a shrinking resource pie to such “discretionary” programs as community development, youth programs, job training, and education.

Second, EDs are painfully aware of what they are not getting to in their busy days and are grappling with untenable choices about how to manage their time. CRE sees this among our coaching clients in our leadership practice – and I know that I experience it personally in trying to strike that balance between the internal and program tasks at hand and the time for strategy, perspective and planning.

What this week’s events painfully brought home to me, however, is that the broader role of thinking, strategy, and advocacy that is aimed at working for systemic change is not only likely to get tougher to fit into the schedule, but has never been more critical.

Links to previous posts in the CRE Daring to Lead blog series:
What Works in Leadership Development
Three Key Issues In Succession Planning
One Size Does Not Fit All Boards
A Bone To Pick About Government Contracting
Daring To Lead: A National Study on Executive Leadership

Click here for more information about the New York City respondents and interesting facts about their Daring to Lead responses.

Read the Daring to Lead main report, Brief 1: Leading Through a Recession, Brief 2: Inside the Executive Director Job and Brief 3: The Board Paradox.