How often do we hear the complaint, "my board doesn't do enough to help our nonprofit organization succeed"? Too often. Must we just live with this situation? After all, nonprofit boards are, by definition, made up of volunteers and we all know they can't be counted on, right? Wrong.

The biggest factor in low-functioning boards is that board members don't know what being a good board member means in the nonprofit. And sadly, nor do many executive directors (ED). Or if they do, they aren't skilled at conveying this to their boards. So, boards end up doing their best, usually a far cry from what is really needed.


But the board role is different from that of the staff. And this really must be clear to both the board and the staff to avoid problems (micro-managing and apathy chief among them) and to achieve the nonprofit's true potential.

A good general guideline for the essential difference between board work and that of the staff is "if it's a matter of what to do, that's the board's work; if it's a matter of how, then it's staff." But, of course, the devil is in the details: the actual figuring out what's a what and what's the how. This is why the most important role in the nonprofit organization is the ED, because its primary responsibility is to bridge between the board and the staff. To be effective, the ED must understand the difference between board and staff work in their particular nonprofit and act to make the delineation clear to all.

Consider these steps to get both the board and the staff working optimally:

1) The board's big job is to set the destination for the nonprofit organization - where is it headed, why and by when? These questions should be asked and answered about once a year (things change!) by the board collectively, in a facilitated process that also includes key staff members. But it's the board perspective that should prevail in this setting, meaning that the facilitator should guard against the tendency to make laundry lists of new program ideas. There's nothing wrong with this, but programs tend to be more about how and so should be considered in staff meetings/retreats.

2) The ED and the board chair should plan this session together with a seasoned facilitator so that the session is productive, engaging and results in simple, clear answers to these important questions.

3) Then the staff should be tasked with creating a work plan by which the organization will make progress toward its chosen destination. The board can review this plan and should officially approve it, along with the annual budget to make it happen. But the board's work is to ask is this plan likely to get us where we want to go and for a cost this organization can afford? If the answer is no, the board doesn't fix the plan, they send it back with comments to the staff for revision.

4) When the year's planning is complete and the implementation is set in motion, then what do board members do? 

Act as expert advisers on issues that arise and decision-makers on important policy decisions

Act as key resources and ambassadors for networking and fundraising

Monitor progress on both the work plan and budget, and offer counsel on course correction where needed

If all this sounds like an unrealistic ideal, it's definitely time to do some leadership development within the organization. It can be challenging for an ED to "train" their board - especially if the board has been functioning in the "old way" for a while. But transforming the board into a meaningful contributor, one that serves the nonprofit wherever it is in its life cycle, and one that fulfills its governing role is the responsibility of the ED (and of board leadership, when the understanding is there).

The best place to start is the ED's own understanding of the board/staff roles: are you clear about what this looks like in your nonprofit? Once the ED is clear, initiating a conversation and process with the board chair to facilitate the board's understanding and then working through board orientation, governance, and meeting processes/standards are excellent places to begin.

And remember, EDs that routinely complain that their boards aren't functioning optimally are essentially wearing a sign that reads "I don't know how to do my job." Boards do what they are cultivated, asked and supported to do. Getting this right is a big job for any ED, but it is indeed the job.

Nonprofit-KnowHow is designed to aid EDs and boards in the important work of redeeming their leadership roles. The two-volume set explains the fundamentals of board/staff roles, accountability, relations and  governance (and much more) - and provides a range of implementation tools, such as board and officer job descriptions, board orientation materials, and more. Many EDs use Nonprofit-KnowHow as the first step with new board members to help them get started on the right foot from the get-go!

People want to be inspired by a grand destination and clear about what they will do to get there, just as they want a say in both.

By Rebecca Reynolds

Vision - Mission. These two little words could hardly be more misunderstood. It's odd. And worse, it's debilitating for the organizations suffering under the misunderstanding. Here are some of the common misapprehensions:

1) "Vision and Mission generally mean the same thing." Nope. I frequently hear people refer to their "vision/mission" or sometimes their "mission/vision." While it's true that an organization's vision statement and mission statement rely on each other so fundamentally that the organization should have both and should use them together, the two statements are quite different. We'll get to how below.

2) "We only have a mission statement." Not good. This implies that the vision statement isn't really important, but to me signals that the organization simply doesn't know what a vision statement is (and why it's important) so, of course, they don't have one.

3) "Vision - mission, whatever." Yikes. This world-weary attitude signals that the organization has given up entirely on expressing the two most fundamental aspects of itself - and usually this is for one of two reasons: either the organization is too busy (read, too in the weeds) to make time for them or because it has no idea how to express them in a meaningful way. Past attempts have likely resulted in something more like slogans, which haven't had the gravitas to last - so they gave up all together.

All of the above result in an incredible amount of busy-ness - lots of running around doing, or maybe just lots of running around, but without meaningful result. How can two little words - vision and mission - amount to the difference between effective and not in an organization? How can that be possible?

It is possible. Eminently so. Here's why.

All organizations (dare I say, all groups of people) operate best when everyone involved understands the answers to the two fundamental questions the vision and mission statements answer:

1) Why does the organization exist, for what desired future condition?
2) What is the specific and perhaps unique way the organization has chosen to work toward this future? Or more simply, what does the organization do and for whom?

Without clear answers to these essential questions, the people in the organization may work hard, but without the larger context that gives meaning to that work. This is like saying "let's get ready for a trip," without specifying where we're going. And obviously, saying "we're going to be the best prepared travelers in the world" doesn't help much. The question still is "where are we going?"

In many organizations, the vision statement describes what the organization will look like at some future point. Being "the greatest coffee company in the world" may inspire the owners or shareholders of said coffee company and may be an important thing to make clear to employees, but a real vision statement speaks to what the world will look like in the future as a result of the organization's work. This is what attracts people to an organization - especially nonprofit organizations.

The vision statement describes the desired future that inspires its work, which hopefully is more than simply being the best at what it does. The vision statement speaks to our hearts and to our imaginations. And a good one is so easy to recognize that it can never be forgotten. That's a vision statement doing its job.

The mission statement, on the other hand, grounds us. It speaks to the head. When we first learn of an organization (just like when we meet a person), we want to know what does it do? What's its job? No fluff, no hyperbole, just get to the point.

What. Why. - Head. Heart.

This is so simple, many organizations seem to have forgotten how important it is to answer these questions. And not just in a small room with a few leaders. Although even that's better than nothing. In fact, this is how these questions have been answered for eons. Someone got the inspiration for a grand destination and chose a course of action to get there. Everyone else follows the appointed leader. But since we are changing to a society that more and more wants to be involved in choosing our destinies and what we do to reach them, it's increasingly important to answer these fundamental questions in an open forum with as many people as will be affected.

Ironically, the nonprofit organization is a model for this since it has needed to operate this way forever. The reason being simply that its livelihood depends on people choosing to support it and become involved rather than simply be paid to do a job. This paradigm is the way all business will be done, since it's no longer good enough, for most of us, to be told what to do. People want to be inspired by a grand destination and clear about what they will do to get there, just as they want a say in both. This is collective leadership in action.

In the end, it's not about being able to define vision and mission. What is important is being able to clearly express the answers to the questions they represent. In this way, everyone that comes into contact with the organization can easily understand its importance in the world - which enables them to choose to be a part of it or not. And for those leading their organizations, opening the process of answering these questions to those who will be affected means a more robust, aligned and synergistic organization. What could be better than that?

By Rebecca Reynolds

The idea of term limits for executive staff leaders in nonprofit organizations came up in a LinkedIn group. It's a provocative concept, one that incited a range of comments and got me to thinking.

For the most part, nonprofits take for granted that board governance should specify term limits for its member and officers. There's more than ample evidence that organizations without board term limits eventually experience problems: stagnating board involvement, decreasing vitality and innovation, and, in some cases, a leadership strangle-hold by a few individuals.

But should terms apply to executive staff positions as well? The idea was considered radical and to some, threatening, and I can understand why. One person explained that in smaller communities where the pool of qualified candidates is small, it would be onerous and even risky to the nonprofit's health and stability to observe staff terms. Another suggested that he saw no reason for terms if the executive was still performing well. Others felt it was in some way insulting to a professional to assume prescribe his/her tenure.

As I considered the proposition, I realized that a leadership staff lifecycle occurs organically in all organizations. In other words, all nonprofits at some point outgrow their leadership staff and need to address this eventuality. Some address it more directly and strategically, others - tragically - only when the situation has become dire. In fact, consultants are often called in to help in just these situations.

Organizations that are attune to the signs of staff leadership "terms" expiring, consider and plan for leadership succession as part of their strategic planning and executive leadership evaluation processes. Those organizations that are not explicitly attune, will instead be faced with the symptoms of leadership that is "beyond its expiration date," such as declining mission relevance, morale issues, financial problems, etc. The more aware organizations are that all things have a lifecycle - boards, staff, the nonprofit organization as a whole - the better they can prepare for change.

For example, the most challenging leadership transition in any organization is from the founder to the organization's first executive leader after the founder. This transition comes for all organizaitons, and yet, too often, it's left unspoken until things turn for the worse. This is because few organizations are able to overcome the emotionality surrounding the transition, least of all the founders themselves. And yet, this transition is a critical one for organizations to foresee and prepare for well in advance. Just having the conversation makes a huge difference.

But, while I find the concept of leadership staff terms useful, I think that may be too prescriptive a solution given the huge range of circumstances in nonprofit organizations. One organization's appropriate executive leadership tenure will be another's stagnating yoke and yet another's "blink and you missed it" time period. For example, a mature and stable organization will likely be benefitted by longer terms for their executives than younger organizations that are growing and changing rapidly.  The bell weather then for when leadership should turn over has everything to do wtih what the nonprofit currently requires - and less to do with an arbitrary number of years. 

So, instead of prescriptive term limits for executives, I endorse that nonprofit organizations build into their planning and evaluation processes explicit conversations about this issue - and this should apply to all major executive staff, from executive director to development director, adminstrators, CFOs and program directors. Evaluation processes for these positions should be developed with criteria defined to drive optimal performance by the nonprofit - this too will change over time, and so must the evaluation process and criteria for each executive position. Bringing aboard all executive staff with full awareness of the nonprofit's values and process around leadership succession will make clear that leadership lifecycle is a reality, not personal to them, and the nonprofit is proactive in defining how it will address such predictable aspects of its business.

The biggest problem in the area of leadership succession is that too many nonprofits just plain get comfortable when things are working well - the "don't rock the boat" mentality kicks in. Perhaps setting term limits would help ensure this doesn't happen. But even better is remembering that the only constant is change and having as the nonprofit's standard procedure being prepared for those changes that are predictable. Executive staff turnover is one. Not only does it make sense to plan for it, it's one of the smartest ways for the nonprofit to avoid highly charged, disruptive, and, at worst, litigious situations.

Guest Blog Post

By Denise McMahan

Many of us recall David La Piana’s The Nonprofit Strategy Revolution, which pushed past our traditional notion of strategic planning and brought more time-sensitive, relevant thinking to the forefront. La Piana acknowledges that even while Revolution was being published, clients began to raise the common questions surrounding the economic and operational implications of strategic decisions. Specifically, how could they effectively connect their strategy with an execution plan that would truly grow the organization? Answering this question involved developing a rigorous methodology for connecting mission, strategy and execution. 
 
The methodology described in The Nonprofit Business Plan roots strategic decision making in a strong financial analysis. Known as
“DARE2Succeed,” the principles in the methodology have been repeatedly tested in La Piana’s consulting practice to ensure the book represents practical and workable approaches to improving your organization’s outcomes. I asked coauthor Lester Olmstead-Rose about the most common reasons for pursuing a new business model. I loved his answer so I’m sharing it with you.

McMahan: You explain every nonprofit should engage in ongoing strategic planning but the “deeper dive” of business planning
depends upon your circumstances. What is the most common reason nonprofits should consider formulating a business model? 

Olmstead-Rose: The most common need for business planning is when you know or discover your business model is broken. An obvious example of this is when you can’t pay for what you are doing and you need to come up with a new approach to pay your bills. 
 
We had an executive director come to us who had a really descriptive phrase about why she wanted to enter into a strategy
development process followed by business planning. She said, “I can’t keep raising a million and spending a million!”Isn’t that what so many nonprofits do, living right on the edge all the time and under constant threat of collapse? It means their economic logic isn’t working; they haven’t created a good mechanism to pay for the extent of work they have taken on. But in considering a broken or
stressed business model, don’t forget it is not just a question of money. Any part of the scope of your program or organization may be challenged–for example, the population you serve has changed dramatically or your geographic reach is too big or too small.  
 
Beyond addressing a problem in the business model, business planning is also a great tool to use when thinking about  expansion. We get organizations coming to us saying, “We do this great work, now we want to take it to scale.” Business planning can identify the avenues for doing that and let you know if it’s viable, or if you’re going to lose your shirt and undermine the good you’re already doing. 
 
We’ve had an organization approach us that wanted to start a capital campaign to build new facilities and then use those new
facilities to both expand current programs and start new work. Business planning is a perfect approach for them to make sure they can sustain those programs in the long run.  


Denise McMahan is founder and publisher of CausePlanet, a thriving one-of-a-kind professional development website for busy nonprofit leaders who want to stay informed about essential reading through Page to Practice™ book summaries, author interviews and relevant discussion by peer contributors. Denise dedicated much of her early career to fundraising in academia and experiential education where she was twice recognized for innovation and model account, raising millions of dollars and surpassing client goals. McMahan equally enjoyed working on client side, coaching major gift volunteers and mobilizing unrestricted giving to reach unprecedented participation. In addition to overseeing CausePlanet, McMahan is a writer for nonprofit and corporate clients.

You can read the complete author interview with Olmstead-Rose and learn more about what’s inside The Nonprofit Business Plan: A Leader’s Guide to Creating a Successful Business Model by downloading a Page to Practice™ book summary at CausePlanet.org. Download this book or dozens of other titles by visiting our summary store or subscribing to our summary library. Or try us out by printing a free sample.
 
Image credit, AustinArtist, via iStockPhoto.com