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The Right Way to Bring New CEO on Board

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Just hired a new CEO at your nonprofit? Now, the real Board work begins.

Spring is always a time of growth and re-birth in the natural world. It seems the same is true in our local nonprofit sector with many nonprofits transitioning from a retiring or exiting CEO to a new one, and many more preparing to hire the very first staff executive in their organization’s history.

 

Finding a new executive leader is always challenging for a nonprofit board. In fact, it may be the hardest task any nonprofit board must face. To start, the board faces the daunting task of managing the organization until a new leader can be found, which is then compounded by the additional stress and worrying of trying to find the “right” candidate. And the hard work doesn’t end there. The most critical period for a nonprofit’s success comes after the new CEO starts the job as the entire organization acclimates to its new leadership.

One third to one-half of new CEOs, whether they’re hired from outside or from within, fail within their first 18 months, according to some estimates. 

At Spokes, we’re constantly talking about how critical the role of a nonprofit board’s continuing support and guidance is in helping a new CEO be successful. The topic is really nothing new. What is new, however, is an article from Harvard Business Review, “After the Handshake“ by Dan Ciampa, which offers some fresh tips and insights.

  • Nonprofit boards must find and maintain an appropriate balance between being un-involed and over-involved. CEOs routinely report that they don’t get enough transition support from their directors. Boards cannot micromanage, but there is also a danger in being too remote.
  • Nonprofit boards must set clear expectations about how much communication they expect between board meetings or in which decisions or changes they want to play a larger role. Ciampa recommends that board members can start defining clear and appropriate expectations with the new CEO by asking the following questions:
  1. “What information do you need from the board to be able to do the best job you can?”
  2. “What behavior on the board’s part would best enable us to have a trusting relationship at board meetings, between them and in one-on-one conversations?”
  3. “From your experience during the search process and in your first meeting or two as CEO, what one thing about how the board operates would you change to make our relationship all it must be?”
  • Nonprofit boards must help a new CEO build his/her relationships with key organizational stakeholders – including each of the individual board members. Every new CEO will need some help navigating the new culture of your organization.
Ciampa explains that the CEO’s first 6 months or so is a time when nonprofit board members should expect to be meeting, talking and contributing more than they ordinarily do. Read his entire article here to learn more useful insights to help your board and new CEO successfully leap into a bright new future – together.

Volunteer Appreciation

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Dear Volunteers: Thank You for All You Do! 
Did you know that 7.4 million Californians volunteer for their local nonprofits each year to contribute a total of 940 million volunteer hours valued at more than $21 billion (yes, billion!)?

This week is THE official Volunteer Appreciation Week and we want to take a moment to thank the men and women who give so generously, tirelessly, and consistently to support our local nonprofits – and, especially, those who give to Spokes.

If your organization is like ours, you rely heavily on volunteers as an extension of your human resources. The fact is, no charitable organization could exist without at least one key volunteer group – its board members – so it is impossible to overstate the value volunteers bring to the nonprofit sector.

And, it is impossible to over-appreciate them, too. But, for this week, why not try?

We’d like to rise to our own challenge by taking a moment to publicly recognize and thank Spokes’ volunteers, starting with our board members who continuously carve time out of their busy schedules and away from other obligations to champion and shepherd Spokes’ mission:

Erika Schuetze, President     John Buerger, Treasurer     Michael Kaplan, Secretary     Mark Corella                               Jami Fawcett                                 Jeff Franklin                               Lynne Oliverius                             Michelle Starnes

Spokes is also very fortunate to have more than 30 rotating volunteers who offer their professional expertise and counsel to help Spokes members improve their nonprofit management skills, solve tough problems, and achieve their goals. Following are the 22 volunteers who actively contributed to Spokes’ mission this past year. If you know any of them, please join us in thanking them for all they do to support Spokes – and YOU!

Adrienne Harris                           Bob Lucas                                Bob Shanbrom                             Carol Nelson Selby                       Erica Morrison*                          JayMe Phillips                             Jeremy Teitelbaum                        John Buerger                           Kathleen Marcove                        Ken Miles                                 Kim Austin

Leslie Jones*                              Lisa Gonzales                             Mariola O’Brien                             Michael Jencks                             Michael Kaplan                             Michael Simkins                            Rachel Cementina                       Sara LaForest                          Stacey Hunt                          Suzanne Valery                             Yvon Gresser

*Find me on LinkedIn!

We’ve provided links to our volunteers’ professional sites in case you’d like to learn more about them. If you do, you’ll soon see what an extraordinary volunteer corps they are and why we feel so very lucky and thankful! Please join us for a future workshop and you’ll soon see for yourself…

Four Steps To Prevent Stress

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Stress and burnout plague everyone in every sector. Nonprofit employees, however, seem to suffer especially. If we all spent five minutes jotting down the causes of our stress, we’d probably have fairly similar lists: emotionally draining work, constant urgency of needs, limited resources to do the work, low pay, not enough time in the day, etc. And, surprisingly, we’d all miss the only true cause of stress: rumination.

In his article, “Pressure Doesn’t Have to Turn into Stress,” published in the Harvard Business Review on March 16, 2017, Nicholas Petrie explains that the “causes” we would put on our list are actually not stresses but, rather, pressures. We create stress when we choose to react to pressures with rumination – the act of rethinking past or future events while attaching negative emotion to those thoughts.

Different folks can face the exact same pressures but experience very different levels of stress because of their individual reactions. For those who are interested in reducing their stress-levels, this is great news! Your stress-level can be entirely within your control with practice and discipline. Petrie offers the following four steps to help you:

Wake up and be present. Most rumination occurs when we are daydreaming or not focused on our current actions. Try some physical tricks like sitting up, clapping your hands or moving your body to bring you into the present. Get busy and re-engage with tasks at hand.

Focus on taking useful action. Petrie suggests the following exercise: Draw a circle on a page, and write down all of the things you can control or influence inside it and all of things you cannot outside if it. Remind yourself that you can care about externalities — your work, your team, your family — without worrying about them.

Put things in perspective. Petrie suggest three strategies for gaining a healthy perspective of your situation. One is a questioning exercise in which you ask yourself:  “How much will this matter in three years’ time?” and “What’s the worst that could happen?” and “How would I survive it?”.

Let go. Petrie admits that this is the hardest step to take. It has three required components: accept the situation, learn from the experience, and take appropriate action to move through and out of your situation.

Read Petrie’s entire article here and start a stress-free Spring tomorrow!

https://hbr.org/2017/03/pressure-doesnt-have-to-turn-into-stress

Nonprofit Leadership and Politics

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unity-1767663_1920At Spokes, we are having daily conversations with our nonprofit members about the political discourse that is permeating our professional and social interactions. Here’s what we’re learning:

  • Some nonprofits are struggling to properly care for their clients because they are using multiple or different names when seeking services. These clients are too afraid to use their real names and expose themselves to potential raids for suspected illegal immigrants – even clients who are in the United States legally.
  • Nonprofit leaders are feeling a need to create continuity plans (or disaster plans) out of a fear that their organizations may be targeted for an attack (arson, vandalism, or bullying) because they address issues that have become politically charged.
  • Nonprofits that exist to support women’s issues chose not to participate in International Women’s Day celebrations because doing so may align the organization with one political party and alienate donors and volunteers from the opposing political party.
  • Some volunteers and board members who want to support the nonprofits that address the issues that concern most are being turned away because their reputations/identities are deemed “too political.”
  • Large professional associations continually send nonprofit leaders surveys and articles asking us to identify how the new presidential administration is impeding our work and rallying us to “fight” against the administration to defend our causes.

Those who share these stories have asked us for help and guidance. We’ve identified 4 specific tips and want to share them with you, too:

First, re-frame the conversation. Our organizations face the very real threat of program interruptions from fires, earthquakes, dramatic federal budget cuts, economic recessions, political agendas, or poor assumptions about our organizational purpose every single day. We must always be diligent in our stewardship of our organizations – whether in defining a continuity plan or an advocacy policy. If we’ve been remiss in these management areas, the fault is our own and not the fault of a particular president or political party. Let’s not allow ourselves to become “victims” of the current political environment. Rather, let’s allow this turbulent time to motivate and re-engage us in our long-term planning and risk management responsibilities so that we can shore up our organizations to better weather the storms that will inevitably come to us from many different sources and directions. And, most importantly, let’s commit to maintaining our vigilance as we move forward.

Second, remember that all 501(c)3 organizations are legally required to remain non-partisan at all times. Charitable organizations are a “partisanship-free” zone. If a volunteer, board member, or donor wants to participate in our work to help us fulfill our missions, we owe it to the constituents we serve to allow them to do so. For whom an individual votes or which campaign sign may be in his/her front yard is a non-issue. If you’re worried that folks may try to align with your organization with an ulterior motive, you can protect your organization by establishing and consistently applying carefully defined policies and procedures around board member vetting, expectations for board member performance, gift acceptance policies, and donor recognition policies, to name a few. We must apply the same nondiscrimination practices we use for hiring our employees or serving our clients with our volunteers and donors. We need everyone’s participation in the nonprofit sector if we want our communities to be healthier and more vibrant. We have a moral obligation to invite participation and not build barriers to impede it.

Third, don’t make decisions out of fear. Rather, make decisions based on what your organization believes to be true as defined by your mission statement. Borrowing from the example above, if a nonprofit was founded on the belief that woman are entitled to equal rights and protections, then it must participate or promote International Women’s Day or participate in a local march. Not participating out of the fear that a donor may incorrectly view your participation as partisan and become disgruntled is unreasonable and unfair to your clients and that donor. If an activity is strongly aligned with your mission, it is worth doing. Allow your mission to be your guide and organizational conscious, not your fears. Not everyone will support your mission, and that’s OK. Those donors who do support your mission will respect what you do in service to it, even when those activities may be politicized by the media or others. Schedule some time at your next board and staff meetings to review your mission and values statements so that all members of your organization are empowered to communicate and demonstrate them effectively.

Lastly, let’s choose not to respond to perceived attacks on our work defensively. Taking a stance of “fighting back” only increases the amount of fighting that is occurring all around us. Instead, let’s work harder at communicating (listening, specifically) for greater understanding and agreement. We need to ask more questions to identify common ground rather than declaring to defend our territories. After all, a hunting enthusiast and a vegan can both support wildlife habitat conservation. A gun manufacturer and a pacifist can both agree on the need to support our veterans. And, a fast food restaurant owner and nutritionist can join forces to build more playgrounds to help children be more physically active. Let’s find our common denominators, join forces to realize our shared goals, and serve as a model for the rest of our national, state and local communities.

If you need a template for an advocacy policy, board contract or other policies, or if you would like consulting help to implement any of these strategies, please call Spokes at 805-547-2244 or [email protected].

How to Ask for Overhead Funding

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90Many nonprofits who receive government grants/contracts were thrilled when the U.S. Office of Management and Budgets (OMB) implemented its “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” as part of the Council on Financial Assistance Reform in December 2014. More commonly known as “Uniform Guidance,” the program mandates that all nonprofit-government contracts that include federal money cover 10% or more of the indirect costs for the related program or service it is subsidizing. Unfortunately, at least 30% of nonprofit-government grants/contracts in California are currently failing to reimburse at the required 10% or more rate.

It’s not just our federal government that is struggling with the concept of overhead costs – private donors and foundations struggle as well. As part of its Nonprofit Overhead Project, CalNonprofits wanted to better understand donor resistance to paying for overhead costs and engaged Lake Research to study the issue. Specifically, Lake Research surveyed California County Supervisors and donors to measure:

  • How these audiences perceive nonprofits generally;
  • How they perceive nonprofits that are worthy of their contract or donation versus those that are not; and,
  • What “overhead” means to them and how comfortable they are funding it.

And, the results were very interesting. Following are some of the highlights:

County Supervisors Results:

  • Supervisors know that nonprofit overhead is a reality of doing business, and they are not opposed to funding nonprofit overhead in general. They are more concerned with ineffective management than with dishonesty or malfeasance.
  • As politicians, County Supervisors are highly tuned in to messaging, and are resistant to being messaged to. Replacing “overhead” with another term would elicit a strongly negative reaction. Language that comes across as doublespeak—such as replacing “overhead” with another term such as “real costs”—quickly raises red flags
  • Supervisors want overhead and language about overhead to be clearly defined. The phrases “real costs” and “foundational costs” both test well, but they still raise questions about definitions. Supervisors want to know what, specifically, they are being asked to fund.

Private Donor Results:

  • Donors judge nonprofits on a range of intangible metrics, including their gut feelings – but generally like when they are visible in the community.
  • Donors are encouraged to give based on urgent problems that they see in the news or their community, and are highly moved by personal stories.
  • Donors are highly trusting of where their money goes. The focus groups indicated that donors may feel this way partially out of a desire to stand by the organizations that they have decided to support.
  • Donors are not convinced by lofty or corporate sounding messages. For many, donating to a nonprofit is not comparable to investing in a company. Donations to nonprofits aren’t seen as investments. These actions are need- and value-driven.
  • Donors prefer to receive email updates from nonprofits they donate to.

So, what can we learn from these findings? Here are a few tips for your next grant proposal or donor conversation about overhead:

  1. First, use the term “operating costs” rather than “overhead costs,” “real costs,” “full costs” or “basic costs.”
  2. Don’t use words like “top-notch” and “high-quality,” which imply a costly operation.
  3. Emphasize results. Make performance central to donation messaging. Integrate “overhead” into the value of performance, explaining that outcomes matter most, and overhead is necessary to achieve them.
  4. Specify the types of investments included within “overhead,” e.g. training, planning, evaluation, and internal systems.
  5. Talk about how overhead allows your organization to meet emerging needs (rising rents, etc.), a reality donors know a nonprofit – and everyone else – faces.

Additionally, for private donors, include these tactics:

  • Treat giving as a values-driven action.
  • Focus on immediate needs that the organization is meeting.
  • Use words like “effective,” “responsible,” and “viable” when developing persuasive messaging.
  • Demonstrate that you can stretch a budget.
  • Follow through on what you say you will do and demonstrate this to donors.
  • Share with donors the importance of operating costs in your ability to meet your organizational goals.
  • Talk about the community you serve and how your organization’s dollars are reinvested in the community.

And, for County Supervisors, try these:

  • Build on your Supervisor’s existing recognition of the importance of overhead funding.
  • Don’t be afraid to specifically discuss and inquire about the OMB requirements and the problem with counties not implementing that guidance.
  • Reach out to Supervisors with personal backgrounds in the nonprofit world.
  • Reach out to County staffers – Supervisors rely on them to inform their funding decisions.

We nonprofits can’t hope to grow our donors’ understanding of our overhead costs if we don’t adequately and thoroughly explain our needs. Use these tips to start more direct and honest overhead conversations with your public and private donors today.

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