Videoconferencing for Nonprofits

You've thought about it and whether or not it could work for your nonprofit...video conferencing replacing in-person meetings.  How can you properly convey important information when you aren't in the room?  Video conferencing has come a long way in the last few years as broadband has been deployed.  And if you're not videoconferencing at least some meetings, maybe now is the time to take a serious look at its advantages (economic and social) and whether a video conference model is right for you.  Bunnie

Video Conferencing for Nonprofits
by Arron Brown, Editor of Lifesize.com

The downturn in the economy is very much upon us, small, medium and large nonprofits continue to struggle during these drawn-out and daunting times. Nonprofits have struggled particularly, and have come up against their toughest challenges yet. The constant need to tighten budgets and employees has become standard practice within many nonprofits. With nationwide cuts and reduced public activity, many nonprofits have had to act swiftly to ensure that their organizations can carry on with their day-to-day duties as normal.

Many organizations within the nonprofit sector are likely to have their offices spread across Europe and in some cases, the globe. Due to funding and budgets being cut, due to the economic downturn, nonprofits have found it increasingly difficult to travel to their other sectors for important meetings and conferences. However, due to the recent introduction of web based onferencing software this allows the nonprofit to effectively connect with members and donors anywhere in the world, using the internet. This allows them to significantly save on large travel fees, whilst being able to speak to key members of their organization. There are numerous advantages to a non-profit organization when using web based video conferencing, some of which are as follows;

- Cater to the unique needs of staff members; allow staff to be more productive, by being able to work remotely or collaborate with other staff members

- Keep volunteers updated; Train and organize volunteers upon upcoming issues and events within the organization.

- Brief the community; Allow society members to be regularly updated with company news and broadcasts.

While video conferencing is still the most expensive of all electronic conferencing options, costs have decreased substantially since the beginning of the 21st century. This has made it possible for non-profit organizations to use this communication resource more frequently, and still remain within their budgets. This includes the cost of video conferencing equipment, site certifications at conference room sites, and the conference fees that apply during a live conference. In the years to come, more innovations in electronic communications will likely reduce the cost even further, making this resource even more cost efficient for organizations of all types and sizes.

By incorporating video conferencing within a nonprofit organization, they can be rest-assured that their costs will be significantly reduced, not only this but, productivity within the organization will be much more effective. Neighboring communities and societies will also feel much less pressure without the need of travelling hundreds of miles for important meetings and discussions.

Conference Planning, Hotel Negotiations and Avoiding the Dreaded Penalty

by Bunnie Riedel, Host, Nonprofit Conversation

This year I’ve heard more stories about bad conference attendance, being hit with hotel or meeting space penalties and outright cancellations of conferences.  For nonprofits who count on conferences to bring in needed revenue, having a disappointing conference can not only be discouraging but can threaten the bottom line.

Nonprofits, businesses and government agencies are cutting back on travel or eliminating it altogether. A friend told me that even if he wanted to spend his own money to travel to a conference (and take vacation leave) he was discouraged from doing so because his government agency thought it would just “look bad.” I know of two regional conferences that were cancelled because of low registration due to travel bans. One of them was heavily penalized by the conference center because their contract guaranteed room rental and meal expenditures. I also know of two national organizations that received large penalties because they didn’t meet their room night obligation. In these instances, nonprofits who could little afford to pay the penalties were forced to do so because of contractual requirements.

Perhaps it is time for your organization to take a hard look at your conference tradition. While conferences and meetings can mean a lot to your organizational culture; bringing members together for networking and fun; is a conference absolutely necessary and what will it mean to your organization to skip next year’s conference? Are you afraid of disappointing members or losing momentum? Without a conference will you become less relevant? Will you lose members if you don’t host a conference? Do you count on a conference as a source of revenue? And right now, can you count on a conference as a source of revenue or will it become a liability?

Could you achieve some of the same goals without a conference? Many organizations are moving to online meetings and workshops. Others are beefing up their online resources or hosting chat boards to give members a sense of connection. I think your members will completely understand if you take a one or two year conference hiatus.

If you negotiate hotel contracts a few years in advance (which actually is my recommendation) you may not have a choice in whether you host a conference or not. Typically for medium to large conferences, the opt-out period is eighteen months prior to the conference. Which brings up a point for current negotiations, tighten the terms of the opt-out period to at least one year and attempt to negotiate penalties for a nine month and six month opt-out. It is better you pay a flat penalty if you opt-out at nine months than go forward with a conference that causes you to pay conference planners, trade show costs, advertising costs, audio-visual expenses, meal guarantees and room night penalties.

Additionally, be sure to include in the contract a clause that if the hotel advertises a lower rate to the general public than what you have negotiated, your room rate drops to that lower rate. The last thing you want is to have your room rate undercut by online booking sites such as Priceline or Orbitz. Conference attendees will want that lower rate and will book outside of your block and that could cause you to not meet your room night obligation.

As a final note, everything, absolutely everything is negotiable right now. From how much you pay for coffee to what items you will serve for dinner to how much you will pay for audio-visual set ups (usually the most expensive items for conference). The economy has taken its toll on hotels and conference centers in the same way it has affected everything else. Don’t settle for fixed menus; work with the hotels and caterers to design menus that will be appealing but less expensive. You are bringing them business they would not have otherwise, allow them to accommodate you.

Contact Bunnie Riedel at info at riedelcommunications dot com

Conference or meeting tip:  Don't buy tea, hardly anyone drinks it and you will be charged $65 to $85 just for hot water at every break set-up. 

Attack of the Tax-Exemption Killers

Say it again, the economy is bad for state and local government, and legislators, council members and municipal managers are scrambling to figure out how to make up shortfalls and prevent layoffs.  This is going to be another two-part article because of the original length.  Rick Cohen, nonprofit advocate in DC brings a prespective to nonprofit issues that nobody else can quite match.  Nonprofits cannot afford to be nickeled and dimed to death.  Every penny that goes out the door in taxation and fees results in lost services.  Pass this one around.  Bunnie


Attack of the Tax-Exemption Killers
by Rick Cohen

This article is reprinted with permission from Blue Avocado, a practical fast-read magazine for community nonprofits. Subscribe free by sending an email to editor@blueavocado.org or at http://www.blueavocado.org/.

If Congress tried to take away the tax exemption from nonprofit 501(c)(3) organizations, our sector would be united and up in arms. But instead we are besieged with hundreds of local attacks on the tax exemption from cities, counties, and states. In this article we'll briefly look at some of the attacks being mounted by financially starved local and state governments trying to get extra nickels and dimes from financially starved 501(c)(3) charities. And we'll conclude with some thoughts on how we inadvertently give ammunition to these attackers.

How many ways can you balance a governmental budget on the backs -- or finances -- of nonprofits? Nearly every week, all across the country, different levels of government devise strategies -- sometimes ingenious, occasionally pernicious -- to get tax revenue from already-strapped nonprofits. These include taking away property tax exemptions, adding employee headcount taxes, charging nonprofits "streetlight fees," and more.

Creating or hiking fees: Because governments have much greater flexibility in applying "fees" as opposed to "taxes," localities are finding ways to charge nonprofits for streetlights and anything else they can think of. In Yakima, Washington, the Yakima Health District ended the exemption of nonprofit-sponsored food booths at community fairs and church bazaars; this will yield the Health District all of $10,000 per year. And in two Minnesota cities -- Minneapolis and Rochester -- government is increasing the fees it charges nonprofits for streetlight use. In Minneapolis, this will raise an additional $104,000 for the city . . . hardly enough to balance the budget.

Taking off from charging nonprofits for streetlights, other localities are starting to charge nonprofits for police and fire services and even fire hydrants. Localities in Indiana have enacted nonprofit fees for consumption of public services such as police and fire. In Pennsylvania, State Senator Wayne Fontana has introduced legislation that would allow municipalities to charge nonprofits an "essential services" fee. In the village of Pewaukee, Wisconsin, the local government turned the local hydrant tax into a fee which then allowed them to levy the fee against otherwise tax exempt nonprofits and churches.

And think of the effort of the speaker of the New Jersey state Assembly to hit nonprofits in Camden -- only nonprofits and only in Camden -- with a $100 tax on each employee. In a devastated urban center where the nonprofit sector provides most essential services, this reads like no more than a slap at nonprofits and their hard working employees.

Attacks on the property tax exemption

Nonprofit property owners are in theory exempt from paying property taxes, at least on the properties they own and use for tax-exempt purposes. But many local governments are trying to charge nonprofits "payments in lieu of taxes" or PILOTs. Sometimes localities have a formula in mind; in other cases, they negotiate PILOTs on a case-by-case basis.

In a recent example of such attacks, a consortium of 102 nonprofit property owners in Pittsburg is negotiating with the city, to which it has already paid a $14 million lump sum payment in lieu of taxes (PILOT) for 2005 through 2007. The consortium's offer of $5.5 million for the period 2008 - 2010 has been rejected by the mayor as insufficient.

Typically, the target of PILOTS are large institutional nonprofit property owners such as hospitals and nonprofit universities. But not every nonprofit property owner is a Harvard University or Mass General Hospital. For example, a Billings, Montana nonprofit purchased a hotel to be used as a pre-release residential and treatment facility for female ex-offenders. Partly to mollify neighbors who objected to the placement of the facility and likely as a way to raise money, the mayor promised that the nonprofit would pay a $40,000 PILOT on the property.

Even more troubling for nonprofits than across-the-board PILOTS is the make-it-up-as-you-go calculation of PILOTs from community to community. Is Harvard's $2.2 million PILOT payment plus $5.2 million payment for water and sewer to Cambridge fair and proportional compared to Yale's $7.5 million to New Haven or Vanderbilt's $2.5-$3 million payment to Nashville? Shouldn't the PILOT paid by nonprofit hospitals in Pittsburgh, say, be commensurate with the PILOT charged in Lancaster, both localities in the same state, governed by the same nonprofit legislation?

Rick Cohen writes this Washington Nonprofit Insight column for every other issue of Blue Avocado.

Work After Work: Our new Age of Life and the Moral Necessity for Returnment

With so much difficulty in fundraising for nonprofits given the economy right now, there's a lot to be gained by cultivating "retirees" as volunteers.  First, as Jay Bloom, of Bloom Anew, points out, people are living longer and living healthier and have many more years of productivity available even after they have ceased "formal" work.  Second, these volunteers can help your nonprofit sustain itself even after you've had to cut staff and layoff critical talent.  I know for myself when I look ahead at what "retirement" will mean to me one day, I can't imagine not having anything to do.  The old image of the rocking chair is completely unappealing.  There is a wealth of talent and resources out there in the post-retirement community, the "returnment" community as Jay puts it.  What are y9ou doing to tap into these resources? Something to think about.  Bunnie

Work after Work:  Our new age of life and the moral necessity for “Returnment”

By Jay C. Bloom, President of Bloom Anew

“This time, like all times, is a very good one, if we but know what to do with it.” -Ralph Waldo Emerson

“Many times a day I realize how much my own inter and outer life is built on the labors of other men, both living and dead, and how earnestly I must exert myself in order to give and return as much as I have received."  -Albert Einstein

Returnment – n.

1) The act of giving back or returning in some small way what the world has given you.


2) Especially as an alternative to retirement.

At the turn of the last century, the average life expectancy was only 47. Today it is rapidly approaching 80, and our fastest growing age groups demographically are those individuals over the age of 85 with someone in this country turning 50 every eight seconds. More significantly, the average health of individuals over the age of 50 has dramatically increased. This can be attributed to better nutrition, exercise, improvement in our health care technology and generally less physical labor in our formal work.

This increased health has created a new, unprecedented age in our human life cycle. A average 60 year old person today is closer to a 40 or 50 year old health-wise compared to a 60 year old twenty or thirty years ago.

Carl Van Horn, director of the Rutgers Center, was quoted as saying, “Retiring Boomers will have the same sweeping impact as the entrance of women into the workforce in the 70s.”

Our old model of retirement suggested that people essentially worked until the ages of 60-65, and then a person felt fortunate if there were a few years of leisure before their physical health deteriorated and/or death ensued. Now people can retire at age 60 and expect to live twenty or more vibrant years, especially if they have taken care of themselves physically.

The boomers have been described as a much more independent, “live for today” group. They are already showing signs that they will not approach retirement in a traditional fashion. Boomers are going to have great difficulty relating to the terms senior, elderly, old, and mature. In fact, most of them will resist, I believe, the term “retirement” in general.

In the August 25, 2000 edition of the Portland, OR Business Journal, Serge D. Rovencourt, retired general manager of Portland Hilton Hotel said, “I have retired from the Hilton, but I am not retired. I tell you I am going to find another word that is different from the word retirement. Retirement lends itself for people to say, ‘Well, he is tired, that’s the end of it.’ There has to be another word other than retirement.”

As every eight seconds someone turns 50 in this country, I believe there is a great spiritual need and moral necessity for redefining “retirement” with “returnment.” I define “returnment” as “the act of giving back or returning in some small way what the world has given to you.” Other words could be used such as stewardship, trusteeship or husbandry. I like this new word because it captures not only our new age of life but the psychological and spiritual needs of this time of life as well.

The pursuit of the traditional retirement life of primarily leisure and consumption will lead to not only a tremendous loss of talent, experience and resources, but intensified inter-generational economic and resource conflicts and ultimately for most individuals, regret and despair. Hillel challenges us with these words: “If I am not for myself, who will be for me? If I am only for myself, what am I?”

Many people will need a meaning and reason to continue to live. Medical research is also learning that those who have a reason to live generally live longer. My belief is that a large number of boomers with their new age of life and longer life spans will want to be involved in some type of “work.” More importantly, I believe they will want work that allows for more meaning and purpose than their earlier work provided. As Goethe said, “Knowing is not enough, we must apply. Willing is not enough; we must do.” To live the rest of our lives uninvolved and unengaged I believe will be unrewarding and unacceptable. In fact unless you are engaged in your later years you are just dying longer not living longer.

Where is the time, talent, and financial resources most needed? There has been a great shrinkage of nurturance and care available in our society and a growing isolation between the generations and between each other. This is due to a number of factors, including the increased number of working women with children, the total amount of hours worked by both men and women, cutbacks in public funding and the overall frenetic pace of life.

All around us we are seeing the evidence of a shortage of available teachers, nurses and other community caregivers. . The average loan balance of college graduates continues to increase significantly juxtaposed against wages for those in non profit organizations likely remaining flat. Therefore, it is likely that fewer and fewer young people are and will be entering the care giving professions such as teaching, nursing and human services.

We can also expect the increased cutbacks by government in supporting traditional human services to continue. President Obama has called for a new commitment to volunteerism by all age groups. We need to challenge the 80 million strong boomers to step up, get involved and set the example. This growing age group will have more time than any other age group.

This emerging social change is a new and excellent opportunity for nonprofit organizations (NPOs) to fulfill two critical needs at the same time. By offering meaningful employment and volunteer opportunities, nonprofits can meet their own current and growing labor shortage while at the same time tapping into a significant social need of experienced individuals looking for purposeful involvement, engagement, and work. This new human capital can be transformed into new social capital that fosters greater intergenerational interdependence and equity.

As a former NPO executive with over 35 years in the field, I know it will not be easy for NPOs to use this new resource. Too often we see costs and liabilities with this new workforce rather than as an abundant growing resource. We must also transcend the vulnerability of limiting this new energy into mundane or traditional employment or volunteer vehicles. Fortunately, many NPOs have a culture of innovation and thinking outside the box and our funding environment and labor challenges will demand even more creative adaptation. Most of this change will involve new organization development and human resource management approaches in such into areas as job and project design, orientation and training programs for the new workforce, existing employees and managers, and different compensation, recognition and benefit plans. Clearly there will be both the need for technical change as well as adaptive change within the sector.

The good news is that surveys indicate that up to 80% of all boomers expect to work or volunteer part time in their later years and 70% said that they would work even if they had enough money to live comfortably, according to a survey by the Rutgers Community Center for Workforce Development. The care giving professions of teaching, child care, nursing and human services are in great need of replenishment and expansion.

With the emerging need for meaning and purpose being one of the potential primary drivers of the people over age 50, community service through NPOs offers a real opportunity for a win/win engagement and/or employment. We cannot afford for boomers in their aging lives to be perceived as socially useless and only living a life of consumerism. There is a great need, opportunity and moral necessity for tapping into their wisdom, experience, and wealth, finances and time.

Just imagine if only a portion of the 3 million people retiring or changing their work each year now were to pursue a life of “returnment.” What problems could be addressed? How many children’s lives would be different? What new kind of energy would be created? What level of hope?

“Every man’s obligation is to put into the world at least what he takes out of it.”  -Albert Einstein

Since 1983 Jay C. Bloom through Bloom Anew has been providing executive and personal coaching to leaders, managers, and individuals in the private, philanthropic, and government sectors who are experiencing a transition in their lives or desiring to strengthen their professional skills and capabilities. Jay's organizational consulting is also highly sought-after. He provides leadership and management consultation to nonprofit and private organizations, with a special expertise in helping organizations develop effective partnerships. His web site is www.BloomAnew.com.

The Building Blocks for a Successful Nonprofit Merger

Greetings from the snow covered tundra of Maryland!  Just as we have found ourselves in a deep freeze with snow totals over 40 inches, some nonprofits are finding themselves freezing for lack of membership and funds.  This situation can offer opportunities to nonprofits and associations if they resist the temptation to sit back and do nothing or just conduct business as usual.  Brock R. Landry and Lisa M. Hix, of Venable LLP in Washington, DC, give us a glimpse into what it might take to bring two struggling organizations together to create a single but stronger nonprofit.  No doubt it's not an easy thing to merge two organizations who may have similar goals but very different cultures, however, in today's climate, we must all be ready to explore every option.  Bunnie

The Building Blocks for a Successful Nonprofit Merger
by Brock R. Landry, Esq. and Lisa M. Hix, Esq.
Venable LLP, Washington, DC

Financial imperatives, contractions in membership bases, and consolidation in industries have led to an unprecedented period of growth in interest in nonprofit mergers. As a result, many nonprofits are eyeing current competitors as potential partners. However, mergers can easily fail when organizations mistake a central fact: mergers occur between people, not organizations. Mergers can fall apart for a variety of reasons: unexpected discoveries in the due diligence process, intractable issues that have been ignored, and differences in organizational cultures, among others. The following is a list of "lessons learned" from two association attorneys who have handled a broad range of association mergers.

Establish a Core Group of Merger Stewards. Establishing a group of volunteer and staff leaders to act as stewards of the merger is critical to success. The merger stewards will have two roles: 1) to come to an understanding of the merger plan, and to communicate this plan to the association's stakeholders, including the boards, staff and membership; and 2) to work through the inevitable issues that will arise in the due diligence process and/or as the groups integrate.

Ask the Hard Question Early: Which Organization Survives? Strength of negotiation posture can be measured by financial assets, membership base, industry contacts, and depth of operational expertise. Deciding how, and whether, to acknowledge this power disparity can be key to success in the long run. Early on, the organizations should agree on whether one organization should be viewed as the "surviving" entity, or whether both organizations will combine as equals. Although most mergers are described as the marriage of equals, rarely is this, in fact, the case.

Ask the Harder Question: What Are the Roles of the Respective Staff and Officers? A clear understanding of future roles and authority is central to a successful integration.

Jointly Develop a Merger Plan. The merger stewards from each organization should jointly develop a merger plan. This plan should include an outline of the combined governance structure, mission, core activities, membership categories and dues, and a broad staffing plan. A critical component of this plan is identifying board appointment procedures and the key leaders of the combined organization. The merger plan should include sufficient detail on the hard issues, but should be broad enough to allow for revision and elaboration based on stakeholder input.

Understand Approval Requirements and Dynamics. Once the core elements of the merger plan are in place, each organization should undertake a careful analysis of its respective board and member approval requirements. These requirements will be outlined in the state corporate code provisions of the organization's state of incorporation, as well as each organization's governing documents, such as bylaws. Where high approval requirements exist, early and active communication to the board and members is essential, as is a thorough understanding of permissible voting mechanisms.

Coordinate Internal and External Communication. In organizations with overlapping membership, having a coordinated "sell" document for the staff, board and members of each organization is critical. Release of information should be carefully coordinated between the organizations and each party should agree to give the other notice before making any announcements to the public. Nothing kills a merger faster than being blindsided by an unauthorized communication.

Agree on Coordinated Due Diligence. Merger timelines must allow for thorough due diligence. Associations considering mergers face a multitude of legal, governance, financial, and administrative issues that must be carefully explored and coordinated. To facilitate this process, the parties should agree upon a scope of due diligence and a due diligence timeframe.

Culture Matters. Finally, while it may make good business sense to merge, key stakeholders – including members, staff, and volunteer leaders – will not shift allegiances if the combined organization fails to bridge the cultures of both entities. Mergers work only when associations take the necessary steps to build teamwork and a shared vision of the future.

Brock Landry and Lisa Hix have handled a variety of mergers, including the American Bankers Association/America's Community Bankers merger and the American Electronics Association/Information Technology Association of America merger. For more information, please contact or Mr. Landry at brlandry@venable.com or Ms. Hix at lmhix@venable.com.

This article is not intended to provide legal advice or opinion and should not be relied on as such. Legal advice can only be provided in response to specific fact situations.

Leadership

I’ve been collecting “bad nonprofit management” stories lately. They’ve come to me in various forms such as: word of mouth, direct telling and emails. I’ve let them rattle around in my brain hoping to divine a pattern and I think now that I’ve found the similarity. But first, let me tell you the stories.

Story #1: An office manager receives a call from her Executive Director. The Executive Director is away from the office at a board meeting. The E.D. informs her and another staff person that they will have to submit their resumes via fax to the E.D. (away from the office at the board meeting) in order to apply for a new position being created. It seems there are two positions being melded into one and both employees will now be in competition for the one position. But wait! It gets better. Not only will the office manager have to compete against her office mate, but the job will be posted to the general public and the office manager will be competing to save her job against any newcomers.

Fine, in this economy there are lots of tough decisions being made, people are being laid off, jobs are being combined, and that’s reality. However, did the E.D. have to inform the staff via a phone call? Additionally, what is with the exercise of having the office manager submit her resume or having the two employees compete against one another?

Story #2: I get an email from a young man asking for my opinion. It seems he sent an email to a vendor asking the vendor why a certain price was a bit high. He suggested that perhaps the vendor’s supervisor might be able to help bring the price down. Two weeks later the vendor called his supervisor complaining wildly about the email and swearing he would never work with this young man again. Next thing you know, the young man’s supervisor calls him on the carpet, giving him a reprimand and talking about termination.

The young man wrote me and asked if I thought his email was out of line. I read it several times and it seemed innocuous enough, however, I reminded him that email has a funny way of being open to interpretation; it is the recipient of the email that may load it with meaning beyond the sender’s intent. I suggested that he do what he can to sooth ruffled feathers, but be sure to have his resume up to date and make sure he had what I call “go to hell money.” (If you don’t know, that is money you have saved that allows you to step out of a bad situation; whether that situation is a relationship, a job or a landlord).

Story #3: Employees at a certain nonprofit have not had raises for two years. There’s nothing unusual about that in the current economy, many people are not receiving the raises or bonuses they received during the boom times and most employees are very understanding because they recognize that money is tight. However, in this scenario, the Executive Director decides it’s a great time to remodel the office. Walls are knocked down, walls are constructed. New carpet is laid, new furniture is purchased. Things are really spruced up to the tune of tens of thousands of dollars. Everything looks fresh and new and fabulous, but the employees are left feeling a bit pinched. None of them have received a raise in over two years, but money gets spent on an elaborate renovation. What is wrong with this picture?

Story #4: A very prestigious scientific organization holds a board members’ and funders’ reception, all the key employees are present, except the Executive Director. As time goes by, Board members are questioning staff, asking where the Executive Director could be. No one seems to know. Over an hour late, the Executive Director makes an entrance and it’s a dramatic one to say the least. She is not wearing a professional suit or even a tasteful dress, but instead, she is wearing a very mini-skirt, fish-net stockings and four inch spiked boots. There is a complete disconnect between her fashion decision and the staid organization she is representing. Needless to say, board members are not happy, the funders are a bit embarrassed and the staff is whispering and giggling. One might ask, given her generous six-figure salary, might the E.D. have hired a style advisor?

What do these stories have in common besides illustrating human foibles?

I say it’s lack of leadership. Leadership qualities, leadership traits, leadership training and maybe even leadership DNA. We all know people who are in leadership or management positions who shouldn’t be there. You’re thinking of them right now aren’t you? And I think there are an abundance of them in nonprofit management because nonprofits are often so personality driven versus performance driven. Further adding to nonprofit vulnerability is the culture of the volunteer nonprofit board.

What kind of leader would call an employee to inform them that their job was being eliminated and they needed to re-submit their resume in order to compete for a new position? That is a conversation you have in person and you certainly don’t need to require the submission of a resume, the employee has been working for you and if you don’t know their capabilities, then what are you doing at the helm? I think the tactic was an attempt to avoid an unpleasant in-person conversation and I certainly understand that impulse. However, that is what leaders do; they stiffen their spines and have unpleasant conversations, in person.

Story #2 reminds me that often people think leadership is akin to parenting. Step out of line and not only will I “punish” you but I will threaten you with even more punishment. I also found a certain lack of loyalty in that story. One of the most important things a leader can do is be loyal to the people who work for him or her. If you aren’t willing to listen to your employee’s side of the story, consider what your employee was trying to do or accomplish (even if it was misguided), calmly counsel your employee on your expectations for behavior and external interaction, you shouldn’t be in management. Sure, sometimes people deserve to be fired for egregious behavior or lack of performance, but you can’t go into a knee-jerk reaction every time someone makes a complaint.

In the third instance there is a complete disconnect between the management and the employees’ health and welfare. There is also a lack of understanding of what builds loyalty from employees to the leadership. Going without raises or bonuses is something that employees will understand when times are lean. It is their loyalty to the organization that makes the situation less painful. However asking your employees to sacrifice for the good of the whole and then turning around and spending a great deal of money on something the employees view as frivolous, destroys loyalty and weakens morale.

The fourth example just shows bad judgment.

We lead by example. We use the tools of empathy, honesty, forthrightness and self-sacrifice in order to develop those traits in others. We do things to encourage the personal and professional growth of those around us. We exhibit loyalty to those who work for us and we carry ourselves with a modicum of decency. And while it is true that some people are born leaders, I believe that people can learn to be leaders and often that learning begins with introspection.

Ask yourself. “What kind of leader am I?”

Freebie Corner!

The best things in life are free. And if your budget looks like a lot of nonprofit organizations’ budgets, free is absolutely essential.

Recently I was contacted by two people regarding some terrific freebies. The first is Blackbaud’s Conference for Nonprofits being held in Charleston, South Carolina, November 16-18. Registration is now closed as the conference is sold out, however, some sessions are going to be streamed live from the conference.

All you have to do is go to http://www.blackbaud.com/events/bb_conf/video/bbcontv.aspx to stream the following sessions:

Monday, November 16
8:30 – 9:15 a.m. ET, General Session with Blackbaud CEO Marc Chardon
9:30 – 10:45 a.m. ET, Skill Building: Ethics Under Fire, presented by Jay Love, Joy Simpson, and Paul Clolery
3:45 – 5:00 p.m. ET, The Tough Questions We Aren’t Asking Ourselves, presented by Holly Ross

Tuesday, November 17
9:00 – 10:30 a.m. ET, Keynote Session, featuring Derreck Kayongo
11:00 a.m. – 12:15 p.m. ET, Future-Proof: Making Viable Plans in Uncertain Times, presented by Dean Feener
3:45 – 5:00 p.m. ET, DIY (Do It Yourself): Is Your Fundraising Strategy in Need of Makeover? Presented by Richard McPherson

Wednesday, November 18
12:00 to 1:30 p.m. ET, Keynote Session, presented by Steve MacLaughlin
1:30 to 2:45 p.m. ET, Google Analytics® and Search Engine Optimization: Turning Information into Knowledge, presented by Bo Crader and Chris Tuttle
3:15 to 4:45 p.m. ET, Launching the Space Shuttle: Practical Advice to Ensure a Smooth Public Launch of Your Website, presented by Raheel Gauba

I know it’s not the same as “being there” but conference registration runs several hundred dollars and if you can hear some of the same workshops and thought innovators for free, then that’s a good deal.

The next freebie comes from Mark Buzan, at Action Strategies in Canada. Mark is hosting a free webinar called "Yes, Non-Profits CAN build an Energized Fan Base through Social Media" on November 24, 2009 at 1 p.m. Here’s how Mark described it:

Social Media can be an exciting or scary prospect for non-profits and association executives. Carrying on an effective strategy is a crucial requirement if an organization is to form a wide base of popularity for its cause and create a true online community. But with thousands of social networks available, how are you to know which ones will best advance your cause? If you are on the leading edge, you are on Facebook, and maybe even have experimented with YouTube. But is all of this giving you exposure? Are you actually being called by media? And how are you doing in your search engine rankings? There are many strategies required of an effective social media relations campaign. In undertaking your campaign, you need to consider the following - are you effectively:

• Establishing the required "push" versus "pull" marketing tactics that will increase your online fan base
• Linking your current offline marketing techniques with effective online marketing techniques

• Determining who should speak for your organization on social media sites
• Developing an Anchor and Outpost strategy can significantly increase your exposure – and your search engine ranking
• Determining which PR sites you should join – and which you should not?
• Do you know how to use Social Bookmarking to leverage your efforts even further?

Social media is not a one-size fits all response. It requires thoughtful consideration. What strategies are you undertaking?

Mark’s a great guy, you won’t want to miss this one. You can register at http://socialmediafornonprofits.eventbrite.com/

So this also gave me an idea…as I find free resources I will report them to you as a “Freebie Corner!” Cheers! Bunnie

It's Not (just) the Economy Stupid

Eeek! It's tough to shine the spotlight back on your organization and ask the tough questions about why your donations or membership numbers have declined. Brian Reich says it's not just the economy, there are many factors that affect fundraising and involvement and some of those factors have to do more with ourselves than with a slumping economy. Good read. Bunnie

It's Not (just) The Economy, Stupid
by Brian Reich, Managing Director of little m media

Donations to nearly every type of charity are down, in some cases fundraising has hit lows we haven't seen in a half-century. People argue that the economy is the reason people aren't giving -- that philanthropy is a luxury (e.g. you pay your bills first and then start making charitable gifts). And while the economy is a big part of the story, there are other important reasons why people are giving less money to support their favorite organizations and the causes they care most about.

1) Choice Paralysis

There are more than a million registered nonprofit organizations in the United States, and tens of thousands of new nonprofits are created every year. All those groups are communicating about their different activities, adding to the crush of marketing messages that people receive each day. They are also competing for the same dollars from the audience, making it challenging for donors provide the kind of support that will have a real impact. And they are all claiming success, while audiences have trouble seeing the outcomes in terms they can relate to and understand. In short, the audience is overwhelmed. There are too many nonprofits, too many messages, too many options and not enough success. The audience wants to understand what nonprofit organization or cause to support, but they feel paralyzed. When they can't make a decision, they don't make contributions -- especially in challenging economic times -- because they aren't confident they are making the right choice.

2) Nonprofits and charities are not doing enough to earn their donations

People make contributions to nonprofit organizations and charities for many reasons -- and whatever the motivation, every person has their own expectations of what the organizations they support will do, and what value they will get out of the relationship. Unfortunately, many nonprofits are now focusing more of their energy on growing and sustaining their organizations and not as much on improving the way they do business or deliver services. Organizations send millions of emails but settle for ridiculously low open rates, failing to talk about issues that resonate with their audience. People sign petitions online every day, with one click of a mouse, but audiences are beginning to realize those petitions rarely (if ever) change minds or impact the outcome of a vote. Put another way, organizations are serving their causes instead of solving their causes - and we are letting them get away with it. Or we have, until now. The audience knows and they increasingly feel as if their support is not appreciated, and that is reflected in less giving.

3) People believe they can do more to support an organization than donate money

The internet has empowered audiences in new and powerful ways. Technology gives each of us direct control over our information and the choices about how we spend our time and focus our energy. And we can use these tools to help organizations and address causes in ways that go well beyond donating. But most nonprofit organizations haven't embraced these new and different ways to engage and mobilize their audiences. Nonprofits invest much of their focus and energy on directing action behind a single, centralized agenda, instead of expanding their reach and looking for the best way to tap into the community (online and offline) to help address issues. Nonprofits seek short-term fundraising gains, often at the expense of developing deep relationships with their audience and providing the necessary education and support to keep them engaged. And audiences simply aren't interested in helping groups to sustain organizations in that kind of focus when they know individual efforts can have results as well.

Make no mistake about it, there are lots of incredible nonprofit organizations, focused on serving a particular community in need or addressing an important cause, and doing so efficiently and/or with an innovative approach that drives real, meaningful, measurable impact. But there are just as many, if not more, that operate inefficiently, that are duplicating efforts of other groups, or that are prioritizing talking about action over actually having an impact. In the past, the audience couldn't easily tell the difference. Today, with more information available, its easier -- and the audience is paying closer attention. The economic slowdown may have attracted new attention to the struggles that nonprofit organizations are facing in terms of fundraising, but it should not be assigned all the responsibility for the problem. The challenges that nonprofits have had in convincing people that they are worthy of support, and sustaining that support, have been brewing for a while. Addressing those issues will be even more important as the nation emerges from its economic downturn and audiences are even more determined not to make the same wasteful mistakes they did in the past.

Everything about how we communicate, get and share information, engage each other -- online and offline -- has changed because of the role that technology and the internet play in our lives. Information moves faster, people are more closely connected, and the expectations we all have for where we will donate, who will we trust, and what kind of relationship and support we want from an organization is changing. That means how organizations operate, educate, engage, and look at directing supporters and donors to take action must change as well.

We can use the tools that are now widely available online to conduct campaigns, and send notices, raise awareness of issues or solicit funds, and do so more efficiently and cost effectively than ever before. But, that doesn't mean that work should take priority over developing relationships and providing value to our audiences. We have prioritized telling a quick story that suggests progress over investing in long-term impact that both changes the world and drives people towards deeper commitments to organizations. We have become too accustomed to measuring success based on the size or popularity of an organization and not the value that the audience, who we rely on for support and donations, places on the work that groups are doing. As long as groups continue to focus on these wrong efforts, or blame the economy for its larger issues, nonprofits will continue to struggle.

Brian is the Managing Director of little m media. He provides strategic guidance and other support to organizations around the use of the internet and technology for communications, engagement, education, and mobilization. Brian is also the author of Media Rules!: Mastering Today's Technology to Connect With and Keep Your Audience (Wiley 2007).
He is also the Director of Community and Partnerships for iFOCOS, the media think tank and futures lab that organizes the We Media community, conferences and awards and Managing Editor of WeMedia.com. Contact Brian at brian@littlemmedia.com

The Cat Network Finds New Ways to Thrive

There must be a special place in heaven for people who rescue animals. I asked the question, "What are you doing to cope with financial challenges?" Jill Steinberg, Secretary of the Board of Directors of the Cat Network, Inc. wrote back. Often, here on Nonprofit Conversation, we feature big Nonprofits with big ideas and every so often, I like to feature small, local Nonprofits who are tackling the world's problems one person, animal or issue at a time. The Cat Network in Miami rescues cats, provides spay, neuter and adoption services. And they are amazingly creative in their fundraising efforts! If you are in the Miami area, give them a hand, donate to this cause or adopt one of their lovely foster cats. Bunnie

The Cat Network Finds New Ways to Thrive

by Jill Steinberg, Secretary of the Board, Cat Network, Inc.

Bunnie,

The Cat Network, Inc, http://www.thecatnetwork.org/ is using social media to promote our mission to spay/neuter feral and stray cats as well as to adopt cats.

We have helped the public spay and neuter over 50,00 cats and have adopted out over 6500 cats to the public.

Without the use of Facebook, Twitter and Linked In, I could never achieve getting more members giving as easily as we have in the last 4 months. With two challenges, we will have raised over $4000 in 4 months and added about 100 new members to our non profit group. We also have added JustGive Donation buttons and are currently working on adding PayPal and Signing up for Mission Fish/Giving Works to do EBAY auctions. I have also been able to connect to other people in small non-profit animal welfare groups and we have shared ideas on grants, donations, and web presence.

We have also partnered with the Humane Society of Greater Miami and Miami Dade Animal Services to get maximum penetration to our target audience

Since we are so hands on as a board and we have no Executive Director, only volunteers, we do everything except the vetting ourselves.

We have a van, known as the Miami Meow Mobile which is manned by local vets as well as using certificates for our Spay/Neuter Program

We have various fund raisers during the year, Toast to Cat Network(for our large donors); Pet Fest(for the public) and various small fundraisers at our adoption venues.

We have recently partnered with a retail chain that will give us 10% of the proceeds of the day we are there showing our cats. It averages about $250 each time we are there and we can go once a month thus hopefully netting about $2000 for this venue and also hopefully being able to adopt more cats to the public

We have also partnered with the cities in Miami Dade County for more exposure.

One of the things, remarkably that has helped us was the Cat Killings in Palmetto Bay and Cutler Bay, here in Miami. We were involved in disseminating information to the public and we received numerous amounts of publicity around the world for our involvement.

Jill can be reached www.thecatnetwork.org

or info@thecatnetwork.org

An Unconventional Nonprofit Stays Afloat

"Meat and potatoes" kinds of nonprofits don't have a lot of trouble finding foundational or conventional support. But what do you do with a nonprofit that isn't so conventional? You diversify, diversify, diversify. Amy Sananman tells us how the nonprofit she runs, the Groundswell Community Mural Project, manages to not just stay-afloat, but survive. Even though what they do is unconventional, it is important to the health and well-being of the community. Bunnie

An Unconventional Non-Profit Stays Afloat
by Amy Sananman, MPP, Executive Director

Groundswell Community Mural Project

I started Groundswell Community Mural Project at 26 with no major connections or seed foundation money.

I wanted to bring professional artists, grassroots organizations, and youth together to create public art in under-represented neighborhoods. But while I saw the cross pollinating of these communities as a strength, from a fundraising perspective, it posed a major challenge that to some extent still exists today.

Groundswell Community Mural Project’s mission doesn’t sit squarely in established foundation program areas. This was particularly true over a decade ago. Arts funders didn’t see our work as “art” because of the community involvement. And the idea that art could play a part in youth or community development was not popular among funders who supported youth development and community organizing.

We had to be strategic about how we grew and managed our budget. With no seed money and a mission that fell outside of traditional foundation guidelines, we devised a number of creative fundraising strategies--strategies that have now left us in good standing and positioned us to hopefully withstand the current economic crisis.

We currently have a $650,000 budget. While we are not planning any major expansion in the next few years, we are not furloughing or laying off any staff (in fact, our staff is expanding). Here are some factors that we can attribute to our position today:

Diverse Funding Stream: Groundswell didn’t start with seed money or any major foundation connections; we patched together a lot of smaller grants. As the grants from these funders grew, we developed a very diverse funding stream (33 government and foundation sources comprise 50% of our income). Individual donations (via campaigns, mailings and events) brings in 15% of our budget for unrestricted purposes.

Integrated Earned Income: Groundswell partners with community groups to create murals with a social mission. Having youth create work that actually serves a real-life need for the community partner is inherent to our mission. We have integrated our program and business models. All community partners pay for a component of the budget. Certain projects we can only do if the funding is there. Having an earned income stream gives us another tool to confront the economic crisis. If and when we are in need of additional funds, we can always do more projects. Earned income comprises 30% of our budget.

Program Profitability: Groundswell’s budgets are fairly detailed and broken down by program. We project and track income and expenses by program . This helps us understand of the finances of each major program and determine which programs are operating at a profit or loss. That information provides us with a clear framework for strategically prioritizing programs and enlisting board and other key employees to improve finances. This is an emerging tool now called the Program Profitability Model (for more info: /www.nonprofitfinancefund.org/details.php?autoID=189#profitability)

Investing in Program: aka Staying Frugal with Operating Expenses. Groundswell began just by doing projects with very little to overhead. We didn’t have an office, a full-time staff, or insurance for many years. We are accustomed to doing a lot with a little and this has become part of the culture of the organization. Groundswell also utilizes the Americorps program to to expand our staff (we currently have one full-time and two part-time employees paid by AmeriCorp). The economic downturn has been terrible for young people entering the job market, but for non-profits hiring through Americorps, it can be a gold mine.

Living within Our Means and the Reserve Fund: Each year Groundswell projects its income and expenses so that each year’s budget balances without carrying any of the prior year fund balance over. We set aside our cumulative fund balance in a reserve fund.

While these strategies have put us in a good position, we never stop thinking about what could happen. Plan A, Bs and C contingencies are part of our on going conversation among senior staff and board. Like fundraising and development, organizational stability is a daily practice.

You can contact Amy at www.groundswellmural.org

The Economy's Impact on Decision Making

It's easy to throw up your hands and just blame everything on the economy. But, can you? Debra BenAvram tells us that it's a little more complicated than that. Why donations are down or conference attendance is off may require a bit more research, investigation and introspection. Bunnie

The Economy’s Impact on Decision Making

by Debra BenAvram, CEO, American Society for Parenteral and Enteral Nutrition

One of the more subtle effects of the economic downturn is its impact on analyzing and using data to make strategic decisions. You can’t necessarily compare facts and figures from today with years past – 2009 is an anomaly. Without having meaningful statistics to rely upon, determining the direction of an organization can be extremely challenging. This is true of any organization, but the lack of comparable statistics has significant repercussions for non-profits.

Many non-profit organizations may find themselves blaming the economy for dwindling membership or light attendance at events. And in some cases, that may very well be true. It’s worth digging a little deeper, though, to see if there is another root cause.

More Art than Science

If you can’t rely solely on data and you can’t just write off issues to the downturn, what do you do? The truth is, due diligence around decision making is far more art than science. Organizations must carefully examine data not only from 2009, but going back several years to identify possible trends and norms. This information will then need to be filtered through the lens of:

· The Board and its vision for the organization;
· Environmental issues and factors that may affect any given program; and
· What members seek to get out of their relationship with your organization.

Here’s a real-world example: at the American Society for Parenteral and Enteral Nutrition (A.S.P.E.N.) - an interdisciplinary organization whose members are involved in all aspects of clinical nutrition therapies - we experienced a drop off in attendance at our annual conference, Clinical Nutrition Week. It would be very easy to blame the situation on the economy. There are probably very few, if any, organizations that have not faced the same issue this year. But it’s important to validate or disabuse that rationale.

Through data analysis, we determined that driving attendance at CNW has been an historic issue and is not just specific to 2009. By digging a little deeper, we learned that we lose a large percentage of attendees each year. Could it be the content? Or because a competing organization’s conference was held at the same time? Or that we didn’t offer enough networking opportunities? These are questions that a combination of quantitative and qualitative data can help to answer.

Simple Steps to Making Good Decisions

In 2009, how do you know if a program is less successful because of the economy? How do you know it’s not the topic or even the day of the week? Here are a few ideas to help you make decisions in the current economic environment:

Use what’s available to you. Make an effort to reach out to industry peers. Each conversation adds up to your own qualitative data gathering mission. It seems so simple, but the feedback you gather from these conversations can be invaluable.

Refer to existing studies. There is a lot of available research that can help paint a picture of what is happening in the non-profit space and how to effectively use data. For instance, the American Society for Association Executives (ASAE) provides a number of resources on its web site including The Winter 2009 Impact Study - Beliefs, Behaviors, and Attitudes in Response to the Economy (http://www.asaecenter.org/AboutUs/newsreldetail.cfm?ItemNumber=39061).

Engage members. If a program isn’t working this year (or any, for that matter) start by going back to the group or committee within your organization that planned it. Casting a wider net to help solve problems and make decisions will provide you not only with more arms and legs, but fresh ideas and insights.

Understand your members. This is a year where people are evaluating every dollar they spend. Members can be fickle, especially if forced to whittle down the number of industry affiliations they have. Gaining insights into what your members really want is key to keeping them on board.

Ask questions. Maintain an ongoing dialog with members. Quantitative data is one thing, but going straight to the source is absolutely imperative. This can be accomplished by hosting open conference calls or Web-based discussions or by conducting focus groups and Town Hall meetings. And, of course, there is always that old stand-by, the membership survey. Whatever option – or mix of channels – you choose; the most important thing is to be sure to ask questions.

Everyone has been hit by the economy – I don’t want to undervalue its impact. But don’t assume that it is the cause of all organizational woes. By drilling down and using both a qualitative and quantitative approach, you may just find your organization has come out ahead by 2010.

Debra BenAvram, CAE serves as the chief executive officer of the American Society for Parenteral and Enteral Nutrition. She is a certified association executive with areas of expertise including strategy, organizational culture, and volunteer management. She enjoys the balance of working with internal staff, the Board and others to shape the organization. Working with these partners, she works to facilitate the articulation of and movement toward the organization’s vision of its future.

Multi Organization Collaboration

The old saying "two heads are better than one" is most often true. I find collaboration not only stimulating to my own creative thinking but also empowering. Norman Olshansky talks about organizational collaboration. This is a theme I have been hearing more and more of lately. Foundations and grantors are seeking organizations that are leveraging their strengths through collaboration with like-minded organizations. The days of turf wars are gone and each individual organization becomes stronger as they work together. Bunnie

Multi Organization Collaboration

by Norman Olshansky, President of Nonprofit Consulting Resources

For many years, funders of charitable organizations have encouraged nonprofits to address more of their time and resources towards:

A. Articulation and implementation of a clear vision and business plan

B. Capacity Building

C. Achieving a better return on investment on their charitable dollars

D. More focus on long term sustainability

E. Avoidance of unnecessary duplication with what is offered by other similar nonprofits

F. Collaboration with other organizations wherever possible

G. Increase Board/Staff Leadership development

Given today’s grim economic environment, poor investment performance and limited resources, funders are even more focused on ways to maximize the impact of their limited resources.

Nonprofits, have already been impacted by the declining economy and know that the conditions are likely to get worse before they get better. They are looking for ways to address flat or declining campaigns, the need to cut costs, increase efficiencies and find new ways to address total financial resource development.The current environment can be used as a catalyst for funders and nonprofits to work together to address their mutual interests. The following are a few examples of areas of potential collaboration:

Facilities

Management

Accounting, Bookkeeping and Auditing

Investing and money management

Fundraising – especially for capital and endowment

Staff and Leadership Development

Purchasing

EnergyFuel/Transportation

Insurance

Marketing and Public Relations

Human Resources, and staff Recruitment

Safety, Security and Risk Management

Information systems and Technology

Many attempts to bring nonprofits together on collaborative initiatives have failed due to initial lack of trust between and among participants and a feeling that participation could result in a loss of control over their own destinies.How collaboration is developed is the key to success.

Implementation Process

We recommend the following steps and are available to act as consultant/facilitators/project managers to the process. (Hereafter identified as “professional”)

The initial introductory process becomes critical to the creation of collaborative ventures. There needs to be a funding organization or group of funding organizations which agrees to be the initiator of the process and take on this project. They need to be a significant player in the community and be respected by the organizations which will eventually be involved. The funding organization(s) provide initial seed money to retain a professional who will be the point person to work with participants. They provide the umbrella of legitimacy, seriousness and importance to the venture. They oversee the work of the professional.

A “professional” needs to be engaged who has experience working on collaborative ventures with nonprofits and is seen by potential participating organizations as highly professional, empathetic to their needs and impartial.

Initially, a group of organizations, which have shared characteristics, should be identified by the facilitating organization with input from the “consultant”. Those similarities could be mission, size, location, relationship to facilitating group and/or type of service provided.

The first group could be seen as a pilot or test group which, if successful, could expand at a future date. The facilitating organization must be willing to step back and let participants determine if and how they want to proceed.

The “professional” initially meets with recommended organizational Executives individually, to float the general idea that the facilitating organization(s) have proposed to encourage collaboration. Examples of what has been done in other communities is shared and a request is made for them to attend an initial meeting with other agency execs to determine if such an effort makes sense and the best focus area(s) for such a collaboration. It is important that the top professional executive of each organization be the initial contact and participate in the collaborative process with his/her peers from the other organizations. During the initial private meeting, the “professional” answers basic questions about the process and assures the agency director that there will be no requests for commitments from agencies until or unless a plan has been developed by the group that has the approval of each of the participants and their leadership.

An initial group meeting of the organization Executives, who are willing to explore the idea, is convened by the facilitating organization(s) and led by the “professional” with no hidden agendas. Care must be taken that no one organization take over the process or become the “gorilla in the room”.

Patience and time is required to make sure that all questions, concerns and details are addressed and processed with each of the Executives and that they are given the time to review the ideas proposed with their own leadership.

Anything that is proposed must pass the test that it will benefit all participants, will be implemented in a fair manner, that all parties will have a say in the project and that there will be a large enough return on investment on time and resources to warrant going forward.It is critical that whatever is agreed upon also include the need for all of the participating organizations to have “skin in the game”, including financial and human resources commensurate with their size and abilities.

Ultimately, whatever is agreed to must be formalized in memorandum of understandings between the facilitating organization(s), participating organizations and each other. These agreements will need to be approved by each of the participant boards. The initial collaboration should be one that is not too complex/complicated and has a high degree of potential for success. Once organizations have participated in a successful collaboration they are more willing to consider ventures that may contain more risk but which also can provide greater reward.

Contact Norman at http://www.nfpconsulting.com/

Layoffs Should be Last Resort for Nonprofits

I hate sounding like a broken record but we are in tough economic times. Which makes me curious about human resources issues. When should you layoff employees? Can you do other things to avoid laying off employees? How do layoffs affect nonprofits? Larry Ladd of Grant Thornton offers some sage advice to nonprofits regarding layoffs. Bunnie


Layoffs Should Be Last Resort for Nonprofits

By Larry Ladd, Grant Thornton LLP

While layoffs seem to be the preferred solution to control costs in the traditional business sector, layoffs in the nonprofit sector tend to have a deep and long-term impact on the viability of the organization and the services it provides to members and constituents. At its basic core, nonprofits are dependent on a cadre of good people interacting with other people to meet their needs. Laying off people sends a negative message that people are not important in the equation, and could result in a ripple effect that further reduces income sources.

We are counseling nonprofits to use layoffs as a last resort and instead, completely reconsider any non-salary expenditure decisions. Start by instituting incentives for cost savings and cash conservation. For example, cut back on travel expenses and operational expenditures. This seems to have been embraced by many organizations. Just consider industry data that shows that attendance at trade show meetings is off by 1/3 over previous years.

If more cuts are required, institute salary freezes, leave vacant positions unfilled, make benefit cuts, or perhaps use furloughs so that the head count can be maintained. People would rather be working and drawing a salary, even a reduced one, than be unemployed. Tough decisions are better understood within your organization in a time of financial difficulty. Use objective criteria focusing on the best interests of the mission.

The one initiative we counsel against is across-the-board employee cuts, which will likely reduce the quality of every program or service. Particularly in tough times, your organization needs to maintain or enhance the quality of its most mission-critical or strategically critical programs. Keep in mind that across-the-board cuts are politically the most palatable, but strategically, the most damaging.

When they are made, most cost reductions have a tendency to bounce back when the budget starts growing again. The real challenge is to make permanent cuts, i.e., ones that reduce work tasks so that existing staff can handle the newly defined workload. For example, if five people handle a department’s work load and one person is let go, don’t ask the remaining four to do the same tasks the same way. Re-engineer the tasks to create efficiencies, or automate some tasks to reduce labor-intensive activities. In my experience, permanent cost reductions actually improve morale and allow for funding new programs or services when the economy gets better.

It may seem counter intuitive to suggest that eliminating an employee can improve morale, but in many cases, the first people to be let go aren’t terminated just to save money, but there are deeper issues involved. Usually, the first cuts are directed against employees who have demonstrated an ongoing lack of productivity or contributions to a team. When that person leaves, those left behind suddenly find that they are getting more done more quickly and efficiently.

While most nonprofits are feeling the pain of a down economy, nonprofits currently hit the hardest are those that are endowment dependent (museums, universities, etc.) and human services organizations (foundations, government programs, etc,). Capital giving, especially large donations by big givers, is significantly down.

I wish I could predict when nonprofits will see their financials improve, but funding and the economy are interdependent. When the stock market goes up, endowments go up. When GDP improves, the government can restore some funding.

No matter what happens with the economy, nonprofits need to remember that people make the difference.

Larry Ladd serves as a business advisor to Grant Thornton LLPs’ not-for-profit clients and provides his professional expertise to the firm’s not-for-profit practice. Before joining Grant Thornton, Mr. Ladd had served in academic administration for a number of leading colleges and universities. You can reach Mr. Ladd at: larry.ladd@gt.com

Recruiting and Retaining Board Members

It can be tough to recruit new board members. Everyone is very busy and finding the right match can be challenging. Wayne Pinnell, Chair of the Board of Directors for Laura's House offers some practical and good advice. It's a good quick read that should be shared with your Board! Bunnie

Recruiting and Retaining Board Members

By Wayne R. Pinnell, CPA
Managing Partner
Haskell & White LLP
Irvine, Calif.

Chairman, Board of Directors
Laura’s House
Ladera Ranch, Calif.

Membership on a nonprofit board of directors can be a rewarding experience for individuals who have the both the desire to serve, and a passion for the work that the nonprofit organization is doing within the community. Yet, with nonprofit board membership comes great responsibility, which most often requires the board member to commit not only their time, but also their financial resources, to benefit the nonprofit organization.

As Chairman of the Board for Laura’s House (http://www.laurashouse.org/), a nonprofit organization whose mission is to change the social beliefs, attitudes and behaviors that perpetuate domestic violence while creating a safe space in which to empower individuals and families affected by abuse, part of my responsibility is to help recruit new board members. I am also there to ensure that current board members remain committed to our organization’s mission and purpose, and continue to support our organization through whatever means they can.

The current economic climate has made the job of recruiting and retaining board members somewhat challenging. Personal finances, as well as the ability for board members to meet the various “give or get” goals set by a nonprofit organization’s board of directors, have been impacted. For example, board members who once relied on their employer or their business to supplement or meet their entire financial commitment to the nonprofit may no longer be able to do so, and may determine that they can no longer individually meet the minimum financial requirements of board membership.

Yet despite this reality, I would encourage the board of directors to avoid downplaying or overlooking that member’s contributions and service in other areas, such as volunteering with the organization or serving as a community advocate. A financial reversal of fortune often can be temporary, and if the board member remains committed and enthusiastic about serving the organization, the board of directors should make every effort to work with that individual to ensure their continued involvement. Likewise, the board member may very well be able to draw other folks to the organization as volunteers, donors and or future board members.

In the event that your board of directors finds it must replace individuals who have left the board for any reason, including financial hardship, or if a board expansion is in the works, there are key factors that should be taken into consideration when it comes to recruiting and retaining board members.

First of all, remember that the recruiting process is an opportunity not only for you to get to know the prospective board member, but for them to get to know you as well. Do not assume that because they show up for the interview, that they want the job. Make sure that they understand the mission of the organization, and that it aligns with their personal values. Determine how they want to serve your organization. Do not assume that a marketing professional will want to help market the organization or that an accountant will want to help with finances. Nobody wants to be pigeon-holed and this is a sure-fire way to burn out what could be a great board member.

Another important element to evaluate when recruiting prospective board members is personal motivation. After the prospect has learned more about your organization, are they still committed, or simply looking for an opportunity to “network” or build their own business? If it is the latter, you are in trouble because the board member will only stick around long enough to get what it is they want, and will not likely contribute to the long-term success of your organization.

Once the board member joins the organization, make sure that they are put in a position where they are allowed to thrive. Do not set them up for failure. If the board member is tasked with a project for which they simply do not have the talent or skillset, find something more appropriate for them to do. In the long run, they will be much happier and successful in their service to your organization. Also, make sure that they are acknowledged for their service in a way that does not embarrass them, or make them feel slighted. Keep in mind that some board members love the huge fanfare and recognition, while others prefer to remain “unsung heroes” through quiet recognition.

Finally, encourage periodic feedback from the members of the board as to their level of participation and ongoing enthusiasm, evaluation of the organization’s goals and the progress toward those goals, and the member’s interests in participation in other areas. A little bit of self-evaluation and reflection may be all that is needed to boost a member’s participation – or have them realize it is time for them to make their seat available for someone else.

For more information on Laura’s House, visit http://www.laurashouse.org/.

More With Less

My friend, the CEO of a national nonprofit, was quite stressed. She was facing the prospect of layoffs and cutbacks given reduced membership renewals and a less than stellar annual conference. Dealing with the numbers wasn't really the stresser, it was managing a board that had increased expectations despite the reality of the organization's reduced capacity, that had my friend at her wit's end.

And there was the rub. How do you tell a group of well-meaning people that they might be out of their minds? Or do you tell them?

Now is the time for frank conversation. According to experts the economy isn't poised for a turn-around any time soon. And while we've heard plenty about the retail and housing sectors, the damage being suffered by nonprofits barely rates a peep on the nightly news.

Folks I know say their organization's revenues are down by 30% to 40%. And many nonprofits that rely heavily on conference income report staggering losses in registrations, resulting in the inability to meet room night and meal requirements and incurring the attendant hotel fines. Memberships are slow in coming, sponsorships and trade shows are weak. Yet, especially given the economy, the need for nonprofit services are greater not less.

I think the conversation starts with the Treasurer of the organization. A close relationship with your Treasurer is always a good idea, in lean times or in flush. Often times board members skim through the financial report and if there's money in the bank they are satisfied to move on to other more exciting topics, like legislative policy or who the keynote will be at the Miami gathering. It is the Treasurer who has a vested interest not only in how the organization is faring today but what the numbers will look like six months from now. No one wants to be the "Treasurer" who ran the organization into bankruptcy.

Express your concerns to the Treasurer. Provide projections for the next three, six and twelve months. Clearly lay out the financial obligations of the organization; the lease, the payroll, the equipment rental. Can you sustain the level of service you currently provide? And if not, what has to go? Is it possible to re-tool your services by cutting some and increasing others? Once the Treasurer has a crystal clear understanding of the financial challenges, ask him/her to communicate those challenges to the rest of the board.

And, let it be the Treasurer that tells the board "no." Nonprofit executives who constantly say "no" to the board usually don't last long. But a Treasurer saying "no" carries greater weight and gives the exec cover.

An added bonus is that you as the executive won't have to feel alone, you now have a partner to share the burden. You may not be able to do more with less but you certainly can move the organization toward sustainability in these rough times.

Bunnie can be reached at info@riedelcommunications.com