What Are Boards For?
A Discussion About Governance
Ellen Bristol, President, Bristol Strategy Group
 What is the job of the board? Board members tell us that their boards are "volunteer," or "advisory," or "working" boards. These terms beg the question. All nonprofit board members are volunteers, all boards advise, and all do (or should do) work. What we rarely hear, unfortunately, is the term "governing board." Too bad, because governance is the most important job of any nonprofit board. Yet it seems to be the least understood. In this issue we discuss what governance means, and highlight the critical issues that boards address and manage when they govern well. Whether your organization has a large professional staff, a single paid professional, or no professional staff at all, good governance is still the single most important task the board can shoulder. ...
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What We Can Learn From Non-Profit Mailings
Lois K. Geller, President, Mason & Geller Direct Marketing |
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When Labor Day rolls around it makes me think of the Muscular Dystrophy Telethon. As a child, I would watch solemn faced, call in my pledge and eagerly wait to hear my name on the local TV feed of the show. The operator taking the call would ask if you wanted your donation to be announced on the air. My real emotional connection was to see if "Jerry?s kids" from last year were on again this year. And the fear was that some of them hadn't made it. Seeing the faces of the children and hearing their stories made my sister and me gather up our allowances and dial the number.
It seems to me that Muscular Dystrophy's Telethon works because they really put a face on the disease. It stopped being abstract and became something much more personal and real. Then doctors would describe the strides they were making to cure the disease, and that added credibility to the cause.
I decided to devote this column to charitable non-profits because I think they offer many lessons that can make purely commercial mailings more effective.
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Converging Mindsets: How For-Profit and Non-Profit Thinkers Help Each Other
Sherry Giordano, VP Business Development, Nonprofit,
Bristol Strategy Group |
After many years in the corporate marketplace, I decided to transition into the field of nonprofit. I expected to encounter many differences, especially in the basics such as organizational operations, how success is measured and even how it is achieved. Does the ?bottom line? mean the same to a corporation as it does to a community service agency? Are the definitions for success the same for the two entities? ...
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Focus on Development:
Fundraising Day by Day
Jane Henzerling, Executive Director, Teach For
America
- Miami-Dade
As leaders of social enterprises, we tend to be very mission-driven individuals, committed to realizing our organizational vision and, therefore, laser-focused on designing, implementing, and managing highly effective programs. In an ideal world, this would be sensible, and would make for a challenging but specialized and satisfying workload. Given the realities of the non-profit sector, however, we are obligated to raise the funds necessary to support and sustain our efforts. Whether we rely primarily on public dollars, private donors, contract fees, or benefit dinners, we must make development a daily priority, and we must create and employ annual donor-centric strategic plans to drive that endeavor. ...
Avoiding Liability in Grants Management
Brian Misiunas, CPA, Pinchasik, Strongin, Muskat & Co. PA
Financially speaking, there is no greater exposure that a nonprofit organization has than potential liability associated with administering grants and restricted awards. Failure to properly administer grants or awards could have negative consequences such as noncompliance findings in the annual audit report, refunding unspent monies or unallowable costs or even non-renewal of funding in the subsequent year. ...
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* Governance Training and Board Development
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Leadership training for board members
*Strategic Plan Development and Implementation
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* Fund Development
Fundraising the SMART Way? - Our Flagship Methodology for
Creating A Sustanable Fund-Development Process
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Major-Donor Campaigns | 
What Are Boards For?
A DIscussion About Governance - Continued
Governance is a specialized form of leadership, and it is the one single task that cannot be delegated to any other body or individual. Board members can and often do participate in activities like fundraising, advocacy, and event planning. But those tasks could conceivably be delegated to staff members, assigned to volunteers who do not serve as directors, or outsourced to contractors. Governance helps the board to ask itself two important questions, and get appropriate answers:
Governance starts with proactive boards who set direction for the agency, and act as representatives of the "owners" or constituents for whose sake the agency operates. It requires that board members make collective, collaborative decisions about the way the organization should serve its constituents. It is the means by which members of the board represent those who do not have a seat at the table. In fact, the word "fiduciary" means acting on another person's behalf, and is not limited to taking care of the money. Nonprofit boards act on behalf of those who truly own the agency, or in whose interests the agency operates, just the way that boards of for-profit corporations act on behalf of shareholders. Good governance makes it possible for an agency to sustain good operations, but the two are very different animals. Even if an organization has no paid staff, members of the board must be clear about the difference between operational activities and governance activities.
When was the last time your board talked about governance? If you haven't done so for a while, start now. Raise the level of your dialog above the conventional review of budgets and ratification of requests from staff. Ask yourselves on whose behalf you serve, what direction you would like to see the agency take, whether your agency's mix of programs and services is the right mix for your constituency. Here are several additional areas where good governance is critical.
Hiring and firing authority. Boards have the legal right to hire and fire the CEO, which means, in plain language, that the Board is The Boss of the CEO. Having hired the CEO, the board would then be well advised to give direction and expectations to him or her; after all, that is part and parcel of being The Boss. Too often, boards hire their CEO, and then wait for the CEO to tell the board what to do. Who is bossing whom?
Defining the
Mission
. Since the board is The Boss, then it stands to reason that the board can, and should, define the outcomes it wants the CEO to achieve. The board can establish the mission by defining the results to be achieved, the recipients who should receive those results, and the cost parameters within which the agency should operate. This approach suggests that the board spend a good chunk of its time deliberating on how to define recipients, results, and costs parameters, and probably less time lookingi over the CEO's shoulder or waiting for instructions.
Establishing Strategic Direction. It's difficult, if not impossible, to achieve a mission without some high-level direction. If the board expects the staff to do all the direction-setting, then the board is letting the employee be the boss. On the other hand, when boards establish meaningful strategic direction, they can then hold the CEO and staff accountable for results.
So what about fundraising, event planning, advocacy, and all those other tasks? Somebody has to do them. Board members can and should engage in these activities, especially fundraising. But these are not governance tasks. They are "optional" That is, they are tasks that board members purposefully assign to themselves above and beyond their governance obligations.
Good governance deserves time, attention and effort. We can help your organization establish effective governance practices, processes and policies. For more information, send an email to us at info@bristolstrategygroup.com and include the word "Governance" in the subject line.
What We Can Learn from Nonprofit Mailings - Continued
It's powerful when your direct mail piece- especially your letter - comes from a real person.
Disabled American Veterans sends out amazing direct mail. I'm looking at a letter from the campaign chairman. It shows a picture of him in his wheel chair. The letter begins with his story and how he was shot in
Vietnam
. The tone is very conversational; he writes just as I imagine he'd speak if you were sitting next to him. The typeface looks like a person's handwriting. There is even a post-it-note, personalized to the recipient on the front. The P.S. is very emotional: "No other organization does more than the DAV for all disabled veterans. They may be paralyzed like me... or blind. They may have lost a leg... or the ability to hear. And what about those who left their minds on the battlefield... we must do all we can." I was just so touched by this appeal.
At the agency, we incorporated a similar execution in a mailing to solicit donors for Cystic Fibrosis. We made a little boy with CF, Robbie, the spokesperson and the letter was from him. It beat the previous effort from a celebrity.
Explain who you are and what you do.
Charities are terrific at explaining who they are and what they do. Non-profits could benefit from being as straightforward in communicating their purpose.
Takeaway. In "for profit" mailings we can't assume that people know what our company does. Be direct and tell them in your letters and brochures who you are and what you can do for them. If there is something unique about your history or why you can afford to offer discounts, or your services, share it. We recently had some people from a jewelry company in
Bahrain
come in to talk about direct marketing programs. Their biggest product was a necklace based on the "The Tree of Life." I had reviewed all their materials and catalogs and I asked them how they came up with a "Tree of Life" necklace. The president of the company looked a bit shocked and explained that there's an ancient tree in
Bahrain
, perhaps 3,000 years old. It stands all on its own in the desert with no apparent source of water. However, nowhere in their mailings did they ever say anything about the actual Tree of Life; they just assumed that everyone already knew about it and knew it was in Bahrain! Review your appeal copy and ask yourself if peoplel easily understand who you are and what you do.
Consider front-end as well as back-end offers.
When we were working with PBS's Channel 13, we always gave a "Channel 13 tote bag" to donors who gave over a certain amount. Even though it was just a tote bag, it was very prestigious. Carrying that particular bag means you gave to 13, and that somehow imbues all kinds of great qualities on the person -- you're smart, special, and care about important causes. That little tote packed a real big marketing punch.
But front-end offers, "freemiums," can play a major role in non-profit mailings. Why do you think so many mailings include those personalized address stickers? Well, it's because they work.
Takeaway. When mailing a "for profit" we always carefully craft our back-end offer, but maybe we need to consider the possibilities for a front-end offer as well. A while back I received this amazing catalog of clothes from
Peru
and in the front of the catalog was a swatch of the beautiful fabric. We did a program for 3M and we included a few of the non-stick acetates for overheads that we were selling. Another time, I did a program for "The War Papers" and we included copies of newspapers from World War II.
Create an envelope that demands to be opened.
UJA mailed a great piece over Passover. The OE looked like Matzo. The teaser copy read, "How does a tradition begin?" The design and the teaser copy are just irresistible - it stands out from anything else you?ll see in your mailbox.
Takeaway. Think about how to make your envelope one-of-a-kind. It might not be possible to be as unique as UJA's "Matzo Mailing" but you can always find ways to push your creative to new levels.
Please send me your own non-profit mailings so that I can share them with my readers.
LOIS K. GELLER is President of Mason & Geller Direct Marketing, a full service direct response agency in NYC. Mason & Geller creates direct marketing plans, direct mail campaigns, direct response commercials and other offline and online strategic services for many blue chip businesses as well as smaller companies. Lois is the author of the new revised and updated edition of ?RESPONSE! The Complete Guide to Profitable Direct Marketing? published Fall 2002. Lois is the developer of the popular corporate training seminar ?Direct Marketing Boot Camp? which she has delivered to over 100 top organizations. If you have any direct marketing questions, email Lois at mailto:loisgeller@masongeller.com. |
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Fundraising Day by Day - Continued
To make an admittedly daunting task a bit less formidable, we can work through specific steps that should set us and our organizations up to establish diversified, sustainable funding bases that will ensure we can continue our core programming without financial fears. I find that it?s helpful to engage in this planning process one month before the start of our fiscal year and then plug the outcomes into monthly, weekly, and even daily action steps on my calendar.
Step 1: Collect and organize relevant data
Gather all current and historical data about existing donors and prospective funders and capture it in a database or spreadsheet in a consistent, systematized way. Start by going through all your donor files and then seek additional information online to fill in any gaps. For each current and prospective donor, you should note:
a. What type of prospect are they? (committed donor, probable, possible, hot prospect, cold prospect, future prospect)
b. What are their funding priorities?
c. What is their history of giving to our and other organizations (dates, amounts, projects funded)?
d. Who are the key contacts? What relationships do I have, need, or can I leverage to garner support?
e. What is the process for requesting financial support?
f. What is the funding cycle? What deadlines apply?
Step 2: Assess your development landscape
Once you have the above information organized, conduct an analysis to determine on a broad scale where you should focus your development efforts. You may use a SWOT analysis (internal strengths and weaknesses; external opportunities and threats) and/or a cost-benefit analysis that evaluates dollars, potential risks and rewards, and organizational capacity.
Step 3: Map out a plan for each donor
Based on your assessment, lay out a series of action steps that you will take to cultivate each donor, solicit funds, and manage the relationship over the course of the year. Literally, create a schedule that includes communication touch points (calls, letters, newsletters), meetings, grant proposal and reporting due dates, site visits, invitations to events, and so on. This is where the donor-centric concept takes hold.
Step 4: Merge your donor-centric plans into your development strategic plan
All of those individual funding prospect plans collectively are your long-term development plan. You can compile them chronologically to create a day-by-day, week-by-week series of action steps that will keep you focused on development in a strategic, purposeful manner throughout the year.
Within this planning structure, keep in mind that development is a dynamic enterprise. You will have an action plan that anticipates the future environment, but your decisions are made in the present. This means you will need to stay abreast of changes and allow your plan to be a living document so you can re-prioritize as new opportunities and challenges arise. This will ensure you make the best decisions for development day by day.
Contributing author Jane Henzerling is the award-winng Executive Director of the Miami-Dade Region of Teach for America, a national teacher-training organization that recruits high-performing college students into the teaching professions. Ms. Henzerling joined Teach for America as a program director in 2003. The following year, she relocated from Phoenix, AZ to Miami to lead the Miami-Dade Region. For more information about TeachforAmerica, visit the TeachforAmerica website or email Jane directly at jane.henzerling@teachforamerica.org.
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Converging Mindsets: How For-Profit and
Non-Profit Thinkers Help Each Other - Continued
Certainly, there is the difference of language, organizational process, and guidelines of financial behavior; however, as I experienced these differences in my new environment, I quickly noticed the strengths of each discipline. As importantly, I began to realize the significance of convergence ? taking the best traits of each discipline and incorporating them as fitting. In spite of the differences between these two venues, they are amazingly interdependent. For example, the staff of a nonprofit organization has traditionally held jobs and received degrees in the nonprofit space and has had little opportunity or need to practice for-profit methodologies. The Boards of many of these same organizations are comprised of for-profit individuals. A majority of the Board members have realized a level of success and now give their time and talents back to the community through board participation. But do they recognize that what may work in a corporate environment could be catastrophic in the nonprofit world?
The Staff needs to focus on the strength of the services offered and ensure that growth is intrinsically linked to the mission of the agency. Funding is critical so the services can be offered but the goal is really the service and the clients of the service. Members of the Board may come from a mentality that says the funding itself is the goal and that the services follow. There are instances in the corporate world where the focus on revenue can change the customer priorities and even the product mix. As disparate as these two concepts are there is a great sense of synergy when all agree on the specific roles of the Staff and the Board.
Experience shows us that when the roles are well defined and strategic plans are well executed, then the differences in perspective between for-profit and nonprofit can converge, and complement the organization?s mission. But first, the Staff should not take on the Board?s responsibilities and the Board should not act as a Staff member. This simple rule can be leveraged with great success.
Yes, the differences can be leveraged. The organization will be stronger and the mutual respect of two worlds can be realized.
Sherry Giordano is the Vice President for Business Development, Nonprofit, for Bristol Strategy Group. She also serves as Executive Director for ITWomen, a nonprofit dedicated to the advancement, advocacy and development of professional women in the information technology industry. Email Sherry at sherry@bristolstrategygroup.com
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Avoiding Liability in Grants Management - Continued
Unfortunately for nonprofit organizations, funders are placing more and more restrictions on the money they give out. Common restrictions include time restrictions, strict adherence to budget line items or results reporting. As the number of grants or awards with restrictions grows, so does the complexity of properly managing the funds.
However there are procedures that can be followed to ensure compliance is met and that the dollars awarded are fully utilized. Some examples are as follows the master schedule of grants, the net asset schedule, master state or federal restrictions guide, and adequate oversight of prepared schedules.
First and foremost a master schedule of grants should be maintained by the organization. This list should include, but is not limited to the following: name of grantor, contact person, CSFA or CFDA number if applicable, amount of grant award, time restrictions and allowable expense by amount and category.
Once the grant or award has been identified the activity must be monitored on a monthly basis at a minimum, or more often if necessary. An easy way to monitor the activity on an organizational wide basis is through a net asset schedule which is easily designed and maintained on spreadsheet software such as Microsoft Excel. The columns of the spreadsheet consist of the various funders and the rows represent the activity in a format such as; beginning net asset balance, current activity, net asset released from restriction and ending balance.
Even though the organization may have met the time and amount restrictions associated with the grant or award, there also could be additional restrictions on the category or budget amounts. Additional restrictions in this arena are often placed by the federal or state awarding agency. For instance the federal government and state government has restricted per diem amounts which may be different than amounts prescribed by the IRS. There is a myriad of these type of restrictions and having a federal and state restrictions guide is imperative for compliance.
The final and most important ingredient for grant administration is competent and adequate oversight. Management should have a thorough understanding of all restrictions and limitations placed upon the organization by the funders. Communication and training on these limitations and restrictions to the applicable staff is the key to successful grants or restricted awards.
Contributing author Brian Misiunas is a CPA who specializes in nonprofit accounting and audits, with the firm of Pinchasik, Strongin, Muskat, Stein & Co., Miami, Florida. Brian's email address is BMisiunas@PSMS-CPA.com.
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