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, Â 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
by Susan Detwiler | Jun 28, 2016 | leadership
- “We’ve never done that before.â€
- “But that’s the way we’ve always done it.â€
- “I don’t know those people.â€
- “But they’re for-profit!â€
- “Why would those liberals care about this?!â€
- “Why would those conservatives care about this!?â€
Over the years, I’ve heard variations on each one of these statements from nonprofits across the country. Each statement is more a reflection on our own comfort zone than on reality.
When we allow our habits to keep us from trying new things, we keep ourselves from growing.
When we find new board members just like ourselves, we allow our current lives to restrict our future growth.
When we allow our assumptions to keep us from reaching out to a new contact, we allow our assumptions to narrow our view.
Each assumption we make is based on stories we tell ourselves. Because we know one thing about a person, we assume other things about them. We create stories about what they must be like.
- Because she is pro-choice, she must also want to take away our guns.
- Because he wants to repeal Obamacare, he must also be anti-gay.
And since we’re not comfortable with what we believe we know about them, we don’t reach out.
Reaching out to other individuals gives us the opportunity to hear their stories. We learn about a new person and we learn new ways of thinking. Hearing the path they took to their current work gives us points of commonality. They sold encyclopedias door-to-door? So did I! They took their experience with a deaf teammate, and turned it into a new professional path? How inspiring!
When a group of people – your board of directors, for instance – learn each other’s story, they become more open to new ideas. They’ve just immersed themselves in hearing new things, and their minds are open to contemplating new ways of looking at the world.
Stepping out of your comfort zone and reaching out to someone you don’t know is immediately rewarding: you meet someone you hadn’t met before, learning new things you hadn’t yet had an opportunity to learn.
With each step we take, it gets easier to see people as individuals, not ideology.
Most importantly, each time you step out of your comfort zone, your comfort zone gets bigger.
Let’s talk about leading your board to push their comfort zone. Reach me at The Detwiler Group or sdetwiler@detwiler.com.
by Susan Detwiler | Feb 2, 2015 | governance
Why don’t the board members know all the programs you put on?
Why didn’t the board president make the fundraising calls like he promised?
It’s really not hard to understand. The people who volunteer to be on the board have other lives. They do care, it’s just that their daily routines are filled with other stuff and the board commitments haven’t found a place in those routines.
Here’s an example:
Preparing to facilitate a strategic planning retreat, I talked with the executive director about plans for getting board consensus on the way forward. In the middle of our conversation, he commented that he wished he could figure out how to get the board to understand everything the organization does. He said the staff keeps telling them, and it’s as if the board doesn’t take in what they say.
Fast forward to the retreat, and a board member speaks up, saying she can’t work on strategy when she doesn’t have a picture of everything the organization does. Another director agrees. There are nods all around the table. Meanwhile, the staff interjected with where the information was, and that the emails keep them up-to-date.
“Clearly,†I said, “there’s a disconnect.†So I stopped the process and asked the board members how they would like to hear from staff.
Well, it was as if a dam broke loose. Email is good, but make sure it’s set up a certain way. The subject line has to have a deadline if you need us to do something. Let’s have a calendar where we can see at a glance what’s going on. Who’s going to be in charge of the calendar? Who will help the Executive Director translate what he wants to say into what the board will hear? Can we have a one-page fact sheet that has all the information we need? Can you keep it up to date and in one place so we know how to get it? Who’s going to create the fact sheet? When will it be done by?
There was palpable energy and eagerness around the table, ready to work on improving communication.
Both the executive director and the board had been frustrated. Board members really wanted to be good advocates. The executive needed the directors to be advocates. But the system wasn’t in place to make it easy for them. They needed to talk to each other to figure it out. In fact, creating a successful model for internal communications became part of the strategic plan.
A few generations back, most people took in information the same way. Everyone knew exactly what to expect and where the information they needed could be found. But in a world where you might have five generations working together between the staff and the board; a world where our boards need to reflect different views, experiences, and backgrounds; this uniformity is just not going to exist. Board members and staff have to work together to find the best way of communicating with each other.
For the board <-> executive partnership to work, start by talking about communication.
Oh, and why didn’t the board president make the fundraising calls? That was something else we had to make easy. Check it out.
I’d be happy to hear other stories of systems to make it easier for directors to fulfill their obligations. Let me know, at sdetwiler@detwiler.com or 302.463.0327.
by Susan Detwiler | Dec 19, 2014 | Communication, governance, leadership, nonprofit, Standards, Strategic Planning
It’s hard to write a blog post in December without somehow bringing in the winter festivals. They are hard to ignore. Whether we observe a festival or not, we get caught up in end-of-year fundraising appeals; endless staff, neighborhood, organization and family parties; last minute shopping, travel and cooking.
Yet with all this busyness, it is also a time when, regardless of your faith, it is a little easier to see the good will in others.
So today I refer to an earlier essay on Presuming Good Will. Originally written in 2010, the message still resonates.
No one is on a board of trustees because she wants to see the agency die. No one is on a board of directors because he wants to run it into the ground.
There may be strong disagreements, but it’s important to assume the disagreement is based on good intentions, and presume good will on the
part of the ‘other.’
Let’s use this time of year to really see the good will in our colleagues, friends and family. Let’s recognize that we can all agree that we want what’s best for our organization, even if we may not agree on what that best is.
Then let’s bring this perspective with us into the new year, and remember the good will we share as we build towards our respective visions for our communities.
If you are celebrating a holiday this season, I hope that it is warm and meaningful. If not, may you find the time to enjoy the lights and festivities that others provide.
Happy New Year!
Susan
Learn more on building a team out of your board members, and bringing together board and staff at www.detwiler.com or reach me at sdetwiler@detwiler.com.
by Susan Detwiler | Dec 6, 2014 | collaboration, Communication, governance, leadership, Strategic Planning
Congratulations! You’ve built a board with members of every decade of adult life. You have 20-somethings, 50-somethings, 70-somethings, and every decade in between.
Now, how do you strategically take advantage of the fresh ideas while integrating them into existing relationships?
Losing institutional knowledge has dramatic consequences. Leonard, Swap and Barton researched the consequences in corporations, with great lessons for nonprofits. Losing the knowledge of a resident board expert can mean losing key relationships with donors, losing key background on why the community is wary of the agency, not knowing whom to call in important government offices, missing important foundation meet and greets. These relationships were built up over time and the proverbial Rolodex – or CRM – can’t help.
By having a spread of ages on the board, you’ve made these consequences a lot less likely. Since you didn’t wait until all the incumbents retired, you now have a fertile field for collaboration between old and new. Make mentoring a new board member part of the portfolio of existing members and you take a step in the right direction. Ask board members to take new members with them when they meet with donors, foundations and community representatives.
Don’t be afraid that this implies to the world that the older board member is on the way out. Not at all – quite the opposite. It conveys to the community that you have succession planning built into the ethos of the agency. It builds trust. It builds confidence in the longevity of the organization. When the older member leaves the board, the new member already has a budding relationship with the foundation.
Internally, pairing new and returning board members builds trust between them. It’s hard to view an older member as a dinosaur when you’ve spent time with her one-on-one and learned her philosophy of building relationships. It’s hard to view a new member as an upstart when you’ve spent time hearing his new ideas and exchanged thoughts on how to execute them.
The relationships continue when the older board members leave. The trust they’ve built allows newer board members to continue calling on retired members, keeping them engaged. It’s a win-win-win for the organization, the board, and the individuals involved.
Putting different generations on a board together is a great first step. Building a team out of them requires strategic thought, but the benefits are manifold.
For more about nonprofit succession planning, board education and facilitation, go to www.detwiler.com, or get in touch with me directly at sdetwiler@detwiler.com. If you have an experience to share, let me know!
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