Why It’s Important: The Funding Gap

Why It’s Important: The Funding Gap

by Susan Detwiler | Sep 11, 2019 | fundraising, governance, nonprofit, sustainability

WHY IT’S IMPORTANT: Five CEOs of Wealthy Foundations Pledge to Do More to Help Charities Pay Overhead

This article in The Chronicle of Philanthropy is a long read, but hugely important to every nonprofit organization that relies on grant funding for at least part of its revenue.

It’s notable when five of the wealthiest foundations revisit their granting processes and decide that they’ve been underfunding the support (they call it ‘overhead’) that makes it possible for nonprofits to deliver their missions. It prompted them to examine different ways they might change their granting structures to allow more flexibility in the operations and investments in infrastructure of their grantees.

No Reserves!

The foundations are: Open Society Foundations, John D. and Catherine T. MacArthur Foundation,  Ford Foundation, William and Flora Hewlett Foundation and David & Lucile Packard Foundation. After engaging Bridgespan to research the effects of their giving on a subset of their grantees, they learned that 42% of the nonprofits had less than 3-months of operating revenue on hand. While the foundations have agreed that their funding processes need to change, each will make their own adjustments based on their own priorities, and as they experiment with their own grantees.

As my colleague Justin Pollock, has pointed out, restricted funding is not inherently a problem if it actually covers the true costs of a program. But when a nonprofit ACCEPTS restricted funding that only covers PART of a program’s costs, by default they are saying ‘we will restrict our own dollars’ to go towards completing the program’s budget.

These efforts by major foundations to look at their own practices are a welcome sign that change may come.

It may mean more unrestricted funding or it may mean restricted funding that truly covers costs. But it will take time for any change to spread. Wherever you are located, don’t expect immediate change. I doubt that any local foundation landscape will change rapidly. While smaller organizations can often be more nimble than larger ones, larger foundations have the staff and funds to research new methods and their implications. On the other hand, you may find that a handful of your local foundations may read about this research and be energized to make their own changes.

Definitely something to watch.  And you may want to forward this article to your friendly funders, as well.

This series of “Why it’s Important” is meant to keep you abreast of news, research and articles that provoke thought about how we govern and manage nonprofits.

 If this article has started some conversations, or even caused some deep thinking about funding, please let me know.

And watch for more curated articles. If you see an article you think everyone should read, please send it on. Or if you want to talk about facilitation or planning for your organization, I’d love to have that conversation.

More eyes – more articles – more wisdom!

– Susan Detwiler

Can board training be interesting?

Can board training be interesting?

by Susan Detwiler | Dec 9, 2018 | governance, leadership, nonprofit

What a question! The mere fact that you’re asking says that you’ve had bad experience with consultants coming in and telling everyone what they ‘should’ be doing.

That is such a wrong approach, it’s no wonder board training has such a bad rap.  Even the word ‘training’ is demeaning. It sounds like you’re training animals in a zoo or a circus.

The secret to getting board members to know and be responsible for their duties is to

get them to figure it out for themselves.

As with anything else, start with the end in mind. Then you can reverse engineer to find the steps that will lead you there.

You say you need board education. Why? What’s the end result of board education? It’s not having board members know their roles. That’s only a stepping stone.

Board members knowing their role is a means to having a thriving organization.

If you want board members to know and be invested in their role, engage them in a robust conversation around what you need to have a THRIVING ORGANIZATION. not a thriving board.

The conversation will be generative, and include many things. But ultimately, while every organization may be unique, they each need these 3 things**:

  1. An eye on the future and a plan for embracing that future
  2. Resources to conduct business right now and resources to support that plan for embracing the future
  3. A way to ensure the resources are being used wisely

**Note: One of the first things to come up will be ‘money.’ Money is a red herring. Money, just like an effective board, is a means to an end. Counter that with ‘What does money make possible?’ or, if necessary, ‘Besides money…’

The board has a role to play in each of them.

The first is the future orientation – the long view. Board members have a responsibility to watch the world and consider how it will impact the organization.

The second is finding the resources – fundraising, relationships, hiring the executive, ensuring the talent is there. Board members have a responsibility to make sure the organization has what it needs to fulfill the mission, whether it’s treasure or talent.

The third is oversight and evaluation – are we being careful with the resources, are we following the law, are our programs the best way of fulfilling our mission. Board members have the responsibility to ensure that the organization is putting its resources where they’ll do the most good, and not jeopardizing the mission with poor or illegal practices.

Once you have these established, the next step is for the group to generate the HOW. 

How will you make sure you have a future orientation? What will it take to generate the different kinds of resources? What will make it possible to ensure that resources are wisely used, and we’re following the law? In the conversation, you may suggest some recommended practices.

It’s at this point you can tell the board members that they, themselves, have come up with what their roles and responsibilities are. You can present the usual checklist of responsibilities and show them that they’ve generated most of them themselves.

Board education doesn’t have to be deadly – or demeaning. A retreat to engage your board members in the whys and wherefores of a board makes the role of board member meaningful, and uses their passion to generate their own individual roles.

Congratulations!

An external facilitator can often make this retreat flow more easily. Let me know if you want to explore that possibility. To learn more about nonprofit boards and facilitation, you can follow me at The Detwiler Group.

You are Hereby Invited to a Boring Job

You are Hereby Invited to a Boring Job

by Susan Detwiler | Apr 30, 2018 | governance, nonprofit

 “A committee is a group of people who individually can do nothing, but who, as a group, can meet and decide that nothing can be done.” Fred Allen

“A committee is a group that keeps minutes and loses hours.” Milton Berle

Then there’s this rubber stamp I was given, that said,

“Great idea! Assign a committee to foul it up!”

There is an image of nonprofit board committees as the place where ideas go to die a slow and lingering death; where process overcomes inspiration; where group-think strangles innovation.

But if you’re running an organization, it’s really hard to get anything done if you can’t segment off a group of people to work on specific jobs. How do you get people to work on these jobs? You invite them. Nicely.

The problem with committees is that word: “commit”.

That’s especially true in today’s society. Sometimes I feel so rushed and overwhelmed, that the thought of taking on another commitment sends me screaming in the other direction –Noooooo!!!!! You mean, I have to come to meetings and be obligated for two whole years???

But if someone said to me, “Hey, Janay has this great idea; Jim and I are going to help her make it happen. Can you join us?” my answer is probably going to at least lead to a query for more information.

Asking someone to join the Finance Committee might be deadly. Asking someone to help figure out the best way to maximize the dollars we have available for our mission…? Well, that’s intriguing.

Being offered an idea for engaging new supporters and telling them to give the idea to a committee is disheartening. Being asked to explore the idea with others and generate ways to make it work is an invitation.

Committees aren’t inherently bad. It’s how we ask people to serve that creates the deadly atmosphere surrounding them.

Invite people to MAKE THINGS HAPPEN.

Let’s change the conversation.

This is based on a January 2014 post. It bears repeating!

For more ideas for inspiring boards, sign up at The Detwiler Group. Or contact me for a no-obligation conversation.

Stop the Blame! Six questions to get to continuous improvement.

Stop the Blame! Six questions to get to continuous improvement.

by Susan Detwiler | Mar 26, 2018 | Communication, management, nonprofit

“It is crucial….to identify aspects of the process that worked well and why, and changes to the process that will improve success in the future.”*

If you do 10 things in a day, and 9 of them go fabulously, which one do you focus on? Right. The one thing that was a bust. People seem to find it easier to complain than to acknowledge things that are going well.

The same thing happens when we debrief after a program, project or event.  The default feedback I hear from clients seems to be, “well, in general it went well but……” followed by a litany of things that went wrong. “

We focus on the things that didn’t go as planned. Or rather, we focus on the things that weren’t planned at all.  The things that went wrong. The unanticipated malfunctions.

We glide right over the first part of the feedback, “in general it went well…” and dive right into trying to fix what went wrong. Worse, we lapse into the blame game – “who messed up?”

What we don’t do is spend time on what went right.

What if we asked a different set of questions? What if we held off the negative dissection, and first asked these questions:

  1. “What was the  biggest success of the night / event / program?”
  2. “What did we do that made that happen?”
  3.  “What else went right, and What did we do to make that happen?”
  4. “What can we learn from that?”
  5. “Is there anything we did that we can transfer to other programs/ projects/ events?”

Observe, acknowledge, and deconstruct the success.

Only THEN move on to what could have been done better. In fact, avoid the blame game completely by asking,

  1. “What ‘changes to the process will improve success in the future?’”

These words from Barry Lord and Gail Lord, in Manual of Museum Management, offer a positive way to improve on any program or process. It acknowledges that things could be better than they are – no matter what level they start at.

Framing the ‘what went wrong’ question to focus on process instead of who avoids laying blame on a person, and starts the brain working at analyzing procedure.

This applies to every process. From board evaluations to gala events; from personnel reviews to budget analysis; from Thanksgiving dinners to conversations with a partner. It acknowledges that things could be better – more successful – and moves the conversation to developing conditions for success.

Next time you do a debrief, start with the positive. THEN STAY POSITIVE. Watch how much more thoughtful the discussion can be.

Click here to receive more tips and thoughts on board relations, planning and nonprofit management; or get in touch for a no-obligation conversation about how you can improve your board meetings.

*Barry & Gail Lord, The Manual of Museum Management

 

5 ways to build staff – board relations

5 ways to build staff – board relations

by Susan Detwiler | Jan 1, 2018 | governance, leadership, nonprofit

Does your staff know what the board does? Really?

In conversations with emerging professionals, I find they often haven’t a clue what the point of a board is. Frankly, I sometimes get that question from Executive Directors, too [but that’s a whole ‘nother issue].

Passionate people working for you.

Right now, I want to talk about the staff. The young professionals. The people you rely on at the front lines to deliver your mission.

Most of them care about the mission. They care about why you exist. Many of them care deeply and passionately. It’s not just a job. Unfortunately, they often lack a big picture of the entire organization as a unified entity, supported by the volunteer board of directors.

They don’t see how they fit into the scheme of the whole organization. Looking upwards, their view often stops at the program manager, director, vice president, or perhaps the executive director level. They don’t even see the board. If they do see the board, its purpose is hazy.

Worse, that view of the board is often negative.

How do you portray the board to your staff? How often do you say things like,

  • “The board said we have to do it this way.”
  • “We can’t afford it because the board didn’t approve the budget.”
  • “The board retreat is coming up and we have to make sure our presentations are perfect.”
What messages do these statements deliver?

The board is demanding,
doesn’t understand their realities
and is only worried about dollars.

Even if staff members can parrot back the purpose of a board, do they understand the ramifications and significance for their work?

What would be different if the staff knew that board members care as much as they do about the mission? That the board makes decisions with the future in mind?

What would be different if the board was transparent in why certain decisions are made? Not because you don’t have the funding, but because the funding is supporting the mission in other ways.

What would be different if staff understood that board members were doing their damnedest to make sure they had the resources to do great things?

Five ways to start building a better view. 

  1. Reframe how you speak about board decisions. Instead of blaming the board for unpopular decisions, or acting like popular decisions are a surprise success, put the decisions into context, including the considerations taken into account.
  2. Introduce individual board members to the staff. Give staff members an opportunity to meet and get to know the board as a collection of individuals, rather than a monolithic, enigmatic entity.
  3. Include information about the board in employee orientations. Integrate the board into the organization chart, with information about its purpose – not just as the last resort for employee grievances.
  4. Invite staff members to sit in on open board meetings. Board meetings are frequently open, but staff may not believe they would be welcome. Even if employees don’t attend, the fact of the invitation is an indicator of welcome.
  5. Consider mentorships between board members and staff. While young employees are frequently mentored by senior employees, board members often have special skills they may be willing to impart.

Each contact between board and staff builds a greater rapport, and a greater respect on each side.

Its a simple start to a new year of building the trust needed for accepting and working with hard decisions and new opportunities.

May 2018 be a year of harmony, respect and trust!