Reflections on BLF14: Post #14 – Governance By Design

Reflection on 2014 Board Leadership Forum, is the first of two reviews submitted by Kent Castleman. The session on executive transition was also reviewed by Carrie Minnich.

Attending the Big Leadership Forum by BoardSource was a great experience for me as a non-profit executive director, founder, board member and Get on Board Committee Member.

We are very blessed to have the level of training and non-profit board governance we have in Fort Wayne and Allen County which has been led by the Foellinger Foundation, but supported and embraced by many other funders and supporters.

GOB in Washington, D.C. at the Board Leadership Forum last autumn.
GOB in Washington, D.C. at the Board Leadership Forum last autumn. Kent Castleman is on the far left.

The theme of the conference was Governance By Design which allowed for an overwhelming focus throughout the conference on being intentional about nonprofit engagement and intentional about your role as a board member/leader.

So many times people are asked to be on a board without doing their own homework to understand the culture and environment of that board or organization. The conference speakers focused on this point throughout the conference….. “Intentionality leads to success. “

Leadership Transition and Succession…

As the founder and Executive Director of the Cornerstone Youth Center serving youth in Southeast Allen County, I have many worries when it comes to the time I might move on past Cornerstone.So I spent several of my workshop sessions reviewing leadership transition and succession planning. Continue reading

Reflections on BLF14: Post #13 – For Us, By Us Governance

Reflection on 2014 Board Leadership Forum, submitted by Donald Gage.

The conference was a great learning experience since I am new to the non-for-profit world. I learned a lot but it was not until I sat down in the Holmead room at 3:00 p.m. on Tuesday October 9, 2014 that I realized I wasn’t alone.

GOB in Washington, D.C. at the Board Leadership Forum last autumn
GOB in Washington, D.C. at the Board Leadership Forum last autumn. Donald Gage is on the far right.

I went to this particular break out session thinking I was going to get the answer to a few questions I had been struggling with but in return I realized I was not the only one struggling with these questions such as:

  • Where are minorities when it comes to board service?
  • How does the conversation get started about diverse board service within the community?
  • How do I speak for the African-American community?
  • How do we recruit and engage minorities?

None of my questions were answered. Others in the room were asking the same questions.

Recruitment, engagement and sustainability of a diverse non-profit board and/or committee is a nationwide struggle. It reassured me that I was not alone.

Many minorities have walked away from board service for one reason or another. Individuals in the room discussed the importance of current minority board members mentoring potential members.

An individual in the room asked me how would he recruit me?

My answer to that gentleman is that most likely our paths would not have crossed.

I have lived in Fort Wayne for over ten years and it was not until I came across Get On Board two years ago that I had the opportunity to sit down with non-profit organizations to learn how I can make a difference in my community.

I found comfort in knowing that Get On Board is providing the opportunity for community members to receive training and access to local non-profit boards whose mission resonates with them.

Governance by design is not easy but well worth it.  Does your board reflect the community that you serve?

Reflections on BLF14: Post #12 – Executive Succession: Don’t Leave it to Chance!

Reflections on 2014 Board Leadership Forum, submitted by Carrie Minnich. This is the last review by Carrie.

GOB Washington
The GOB in front of the Washington Monument. Carrie Minnich is standing on the right.

Executive Succession: Don’t Leave it to Chance! (Tom Adams)

According to Mr. Adams, 67% of nonprofit executives plan to leave in less than four years.

  • (10% in less than one year,
  • 24% in one to two years,
  • 33% in three to four years, and
  • 33% in more than five years.

With the increase in the number of retiring executives, nonprofits need to plan for succession to ensure organizational sustainability.

Not only will planning for the departure of the organization’s leader mitigate risk but will also increase the transition success.

Three approaches to succession planning were discussed.

  1. Succession essentials – Having an executive backup plan and succession policy.
  2. Leader development – Developing the talent pool of possible replacements; internal succession.
  3. Departure-defined – An executive director has decided that he/she will leave in two to five years. The organization does not publicly announce the executive director’s intentions but uses the next two to three years to plan for the transition.

It was recommended to combine succession planning and sustainability planning.

In addition to a succession plan for the organization’s leader, sustainability planning includes intentionally looking at the organization’s focus, asking if the right people are involved, how much cash is in the bank, and who does the organization need to work with to be successful.

Many boards are currently or will be facing the need for executive transition in the near future.   Your board should be proactive in planning for the transition in your organization’s leadership so that your organization can have a smooth transition.

Reflections on BLF14: Post #11 – Nonprofit Fraud

Reflections on 2014 Board Leadership Forum, submitted by Carrie Minnich. This is the sixth of several reviews by Carrie and the session on Fraud was also reviewed by Laura Boyer.

GOB Washington
The GOB in front of the Washington Monument. Carrie Minnich is standing on the right.

The Anatomy of a Fraud (Lawrence Hoffman)

Working in public accounting, fraud seminars and especially those that give specifics as to how the fraud was initiated and how it was caught, always interests me. This session was based on an actual fraud investigation by the speaker, Lawrence Hoffman.

Nonprofit fraud is in the spotlight.

More and more we see in the news that fraud has occurred in a nonprofit organization. The IRS redesigned From 990 (the nonprofit organization tax return) in 2008 to add additional governance questions. It even added the question “Did the organization become aware during the year of a significant diversion of the organizations’ assets?”   In other words, did fraud occur?

The case described in the session included a CTO (Chief technology Officer), who during his tenure at the organization (7 years), paid a related company for a significant amount of IT equipment and software that could not be located.

It was determined that over 150 servers were “purchased” and multiple copies of the same enterprise-level software. After the CTO returned back to Russia citing “personal reasons” the new CTO (the whistle-blower) could not locate many of the equipment purchases.

It is important for nonprofit boards to be aware of the possibility of fraud occurring within their organization and how to prevent it. Often times, nonprofit organizations have an atmosphere of trust and a focus on the mission, rather than making sure proper controls are in place.

 Some of the steps organizations can implement to deter fraud are the following:

  1. Implement a whistle-blower policy.
  2. Good tone at the top.
  3. Proper internal controls/segregation of duties.
  4. Request multiple quotes from different vendors.
  5. Perform background checks.

Reflections on BLF14: Post #10 – Sustainability and Income Streams

Reflections on 2014 Board Leadership Forum, submitted by Carrie Minnich. This is the fifth of  several reviews by Carrie.

GOB Washington
The GOB in front of the Washington Monument. Carrie Minnich is standing far right

Open the Floodgates to Sustainability: Seven Income Streams, Endless Variations (Karen Eber Davis)

Nonprofits need money to survive. Some people hear “nonprofit” and think it means the organization does not make a profit; however, that is not true. Nonprofits need to raise funds to support their mission. Often times, the task of seeking out new funding sources falls on the board.

Here is a list of seven revenue options discussed during the session that your nonprofit may be able utilize:

1. Mission revenue – Fees charged for services.
2. Individuals – Individuals provide the largest source of donated income through contributions, fund raising events, telephone solicitation, special events, bequests, major gifts, online giving, lead trust, match, mail campaign, endowment, charitable lead trust, year end giving, sometimes memberships.
3. Governments – Nonprofits help governments to achieve their goals and in return governments (federal, state and local) provide funds to nonprofits.
4. Foundations – Foundation giving actually makes up less than what most people think.
5. Corporate – Contributions and sponsorships.
6. Unrelated income – Income that is not related to the organization’s exempt purpose.
7. In-kind – Non-cash goods and services or the use of facilities.

Your organization should utilize a mix of funding sources in order to sustain your organization. Relying on one source of revenue may have a detrimental effect on the organization.

Reflections on BLF14: Post #8 – Nonprofit Collaboration

Reflections on 2014 Board Leadership Forum, submitted by Carrie Minnich. This is the third in a series of several reviews by Carrie.

GOB Washington
The GOB in front of the Washington Monument. Carrie Minnich is standing far right

Nonprofit Collaboration: Is it Right for You?  (Thomas McLaughlin)

The demand for nonprofit services continues to increase while funding decreases and competition for what funding there is increases.

In addition, baby boomers in executive director positions are retiring. These conditions are causing more nonprofits to consider merging or developing other types of collaborations.

Both mergers (legally merging two nonprofits together) and alliances (nonprofits sharing joint programming or administrative services) were discussed.

  • Mergers require an actual corporate change requiring strategy and resulting in one board of directors.
  • Alliances do not include a corporate change and are only operational. Each nonprofit still exists with its own board of directors.

Continue reading

Reflections on BLF14: Post #5 – Creating a Culture of Intentionality

Reflections on 2014 Board Leadership Forum, submitted by Megan Hubartt.

GOB Washington
The GOB in front of the Washington Monument. Megan Hubartt is on the left in front.

The nonprofit I work for has had a lot of conversations on the staff and board level about creating a culture of intentionality — ensuring what we do on a daily basis truly furthers our mission. So the opening session with Daniel Forrester at the 2014 BoardSource Leadership Forum in Washington, D.C. this October seemed providential.

Forrester is the founder and managing partner of THRUUE Inc., a company that consults organizations on leadership, strategy and culture. So naturally, he focused on those topics during his talk.

His points on culture resonated the most for me — both the culture within our organizations and the culture we live in, which helps shape all our behavior. Forrester argued our fast-paced culture has an ever-growing penchant for immediate gratification and therefore a biased toward immediate action. And these behaviors are often to the detriment of our organizational culture and our leader’s decision-making abilities.

So then how do we create a space for decisive thought in an action-biased culture?

Leaders are called upon to make decisions, which require attention and focus. Forrester said leaders must take control of this process by design and act intentionally. He then went on to make suggestions on how boards and organizational leaders can create this intentional culture. Forrester suggested a good leadership must:

  1. Get big ideas right
  2. Strengthen the organizational culture
  3. Engage in dialogue

First, Big ideas, he argued, take time and reflection. Leaders must first clearly communicate the ideas within the organization; then oversee and implement those ideas; and finally, refine the ideas to become a learning organization.

I found the point of becoming a learning organization key in understanding the culture of intentionality.

Being intentional about decisions does not mean an organization must sacrifice innovation or creativity. The process of slowing down, thinking and discussing  before taking action can actually ensure an organization is fostering visionary ideas with tangible results.

Continue reading