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Dear Friends and Colleagues: I recently had the pleasure of conducting a Bailey House-sponsored technical assistance workshop with my colleague Michael Davidson entitled, “It Takes A Few to Tango: The Partnership of the Board and the Executive Director in Organizational Leadership.” Facilitating the event was a wonderful experience, and the afternoon started me thinking about how much the role of the board has evolved since I started working in the nonprofit sector over twenty years ago. There may once have been a time when executive directors (EDs) could get by ignoring their boards. Today, that is rarely possible and seldom desirable. Building a strong partnership between board and executive director is critical for healthy nonprofits. Doing this is not as hopeless as it might sometimes feel. The workshop made me reflect on a few key lessons I have learned about how nonprofit leaders have been able to improve this relationship and foster boards that actually make their jobs easier. 1) Board members are increasingly receptive to problem solving. Expectations for board members have changed dramatically in the past two decades, and many members are eager to step up to new challenges. When I began working in the nonprofit sector, boards usually only had a vague sense of their responsibilities under the law. Today, the issue is discussed much more frequently and even appears in the mass media; recent corporate scandals have resulted in an increased focus on accountability in both for-profit and nonprofit groups. The issue may be getting even more attention in the near future: Eliot Spitzer has proposed legislative reforms for nonprofits in New York that would require greater board oversight of organizational finances and audits. In addition, boards are encountering new expectations from executive directors. When I started in the sector, there were very few graduate management programs for people working in the public interest. The expansion of these programs and the greater availability of nonprofit resources have professionalized the field. As Michael Davidson says, “We no longer see as many organizations run by a charismatic leader who does everything. Today’s EDs are looking for the board to be their partner.” While board cultures often lag behind these new realities, many board members are willing to work to catch up. They want to know about their legal responsibilities, about appropriate governance roles, and about best practices for boards. The response to our workshop showed how hungry people are for this knowledge. When we started planning the event, which was designed to include both board and staff members, I thought that about 30 people would attend. In the end, we made room for 70 participants and had to turn away 50 more for lack of space! Perhaps even more remarkable, the audience for the workshop was made up of as many board members as executive directors. In many cases, EDs brought one or more board members with them to the workshop, which allowed for an extremely valuable exchange. Even a short while ago, it would have been inconceivable to predict this level of board engagement. Having board members and executive directors take part in the same conversation gave them a common language to talk through organizational dilemmas. We witnessed a great willingness on the part of these teams to devote new energy to problem solving, rather than just wallowing in long-standing difficulties. The bottom line for many leaders is that rejuvenating your board may be more feasible than you might expect, and that many members may be ready to work with you to create change. It is worth looking again at steps you can take to foster a board that is an ally rather than a headache. 2) You’re not alone. The more times change, the more the fundamental issues facing board members and executive directors remain the same. The questions Michael and I heard from participants at the workshop were tried and true: “How do we create a functioning board, as opposed to a pro forma board?” “We’re nowhere close to 100% board giving. How do we get our board members more involved in fundraising?” “How do I find more good people—people with the right skills—to serve on my board?” “How can we bring new board members into our established culture, and how do we deal with old members who are no longer contributing?” “How can we get the ED, staff, and board to understand their distinctive roles and to interact accordingly?” “How can I get my fellow board members excited about engaging in a long-term planning process for the organization?” Do these questions sound familiar? We could have spent a whole day discussing any one of these topics. But just hearing participants raise these common concerns was valuable. One of the most important things staff and board members can take away from any workshop is the knowledge that they are not alone in dealing with organizational difficulties. In some cases, people learn that the problems they face are actually relatively minor. One participant said to me after the session, “I don’t mean to boast, but it was really helpful to me to hear all the problems I don’t have.” If you are confronting some of these issues, know that there are resources available to assist you. Two particularly valuable resources we shared with workshop participants are www.BoardSource.org and www.GovernanceMatters.org. But more importantly, know that perseverance in working with your board to address issues can pay off. 3) Organizational change comes one step at a time. Whenever we talk about the plethora of issues facing nonprofit boards today, it is easy to lose sight of a critical question: What is your one main goal for your board this year? At the workshop we covered a wide range of issues, but we frequently reminded participants of the need to focus on a small number of key changes they wanted to implement in their own organizations. Identifying one or two main goals—and planning the concrete actions you will need to take in order to reach them—is central to making long-term progress in improving board relationships. Both Michael and I are practitioners, not theoreticians. So, we were pleased to see board members and EDs leaving the workshop with plans for a next action step. These included the following “real-time” commitments made by some of our 70 participants: “Devote a board meeting to a conversation about the expectations for serving on the board and about the ED’s responsibilities.” “Work with the Lawyer’s Alliance to update program procedures and manuals, including a governance manual for the board.” “Ask my board chair to discuss moving board members who aren’t meeting expectations to a more casual role on an honorary board.” “Reorganize the fundraising committee to include functions beyond annual pledging.” “Invite board members to special events, sponsored by my program department, to re-engage them in the organization’s services.” “Invite our key stakeholders to a meeting to garner recommendations for board members and donors.” None of these steps represents a silver bullet. Taken together, they won’t solve all the issues a board is facing. What is important is that each workshop participant applied lessons from the broader discussion to the specific reality of his or her organization—and then planned a strategy for change. I would encourage you to think about one step you can take with your own board in the coming months. At LAPA we focus on fundraising services, but we also provide assistance with management issues that affect your ability to successfully raise money and to become a leader in your service area. Working with your board is one such issue. To hear more about the take-aways from the workshop, or to talk with me about specific dilemmas you are facing in negotiating a productive partnership between board and executive director, feel free to call me at 212-868-4800 x1. In the meantime, I hope that the articles in this edition of LAPA News & Views can help to foster, one step at a time, real organizational change. - Laurence A. Pagnoni, President END OF YEAR PLANNED GIVING OPPORTUNITY: Breaking News for Fundraising Professionals For Those Over Age 70 ½ with an IRA: A Charitable Planning Opportunity * In a new tax law enacted this year, someone who reaches 70 ½ before year-end and has an IRA is now allowed to make a transfer directly from his/her IRA to a qualified charitable organization of up to $100,000 for the 2006 and 2007 tax years. To be eligible:
All you need to do is contact your IRA custodian and instruct him or her to make a payment directly from your IRA to the charity. Custodians are not required to comply with the rules, so check with them in advance if they allow this. If allowed, the distribution won’t be counted as taxable income, nor could it be used for an itemized deduction. The true value of this technique is with a Regular IRA, not the Roth IRA. Why? It really is not that advantageous to use tax-free dollars while not having an allowable deduction at the same time. The trick here is if, in the past, you made a charitable contribution out of regular IRA funds, this would need to be recognized as taxable income first. And with that, an increased adjusted gross income could lead to higher stealth taxes. For example, a higher percentage of Social Security could be taxable, fewer itemized deductions on specific items (such as deductible medical expenses) could be deducted, or aggregate itemized deductions could be partially phased out. Or you could become subject to the alternative minimum tax. In addition, this technique is available for those who are already maximizing their deduction limits for charitable contributions. It could also benefit someone who wasn’t able to benefit in the past because they didn’t itemize deductions. This IRA contribution is also included as part of your annual required minimum distribution for the year. So there are many cases where the individual is better off in the end because the contribution isn’t included as income, even without the deduction. For the right person who is charitably inclined, this may be a great opportunity to give in a tax efficient manner. * We are grateful to the Staff and Volunteers of CharityChannel and to Jeff Bogue, an independent financial planner with Bogue Asset Management, LLC, who provided this content. "ASK LAPA": ANSWERS TO YOUR QUESTIONS ABOUT MANAGEMENT AND FUNDRAISING ISSUES Q. What’s working in board giving? A. Board Giving is an ongoing concern, so thanks for asking about it. Nonprofit governance has emphasized the three T’s (Time, Talent and Treasury) as the basis for what it means to be an active member of a nonprofit board of directors. Generally, the theory is well received; but there has been one major problem: it does not apply to reality. These three elements—Board attendances at meetings (Time), Board members sharing their skills and professional training (Talent), and Board members sharing their personal financial giving and influencing others to give (Treasury)—generally have episodes of success, but as a whole, they rarely come together when evaluating each and every board member. The reality is that even in high functioning boards, most board members cannot be evaluated successfully as fulfilling the mandate the three T’s sets out. Why is this? Well, notice how all three T’s are about what a board member gives, not what they themselves receive. What kind of relationship is that? It’s a one-sided relationship, and I think that is why the emphasis on enforcing the three T’s often produces lack-luster results. My colleague Terry Axelrod, whom I admire and learn from, has this to say about the subject: “Let go of any written or unwritten rules you may have about the "right" way for board members to participate in fundraising. Above all, let go of the notion that all board members must ask others for money. Accept the 20-60-20 rule when it comes to fundraising and your board. That is, 20% of the board will enjoy being involved in fundraising, 60% will be neutral about it, and the remaining 20% will want nothing to do with it. Stop thinking that every other nonprofit organization's board members do more fundraising than your board members do. It's irrelevant (and highly improbable, anyway). Recognize that your board members are volunteers who are giving you the gifts of their time and attention. In today's world, those gifts are more precious than money. They are not paid staff nor, in most cases, do they wish to become paid staff. Know that your board members are looking to you to steer the fundraising process and to make requests of them as needed. Do not assume that anyone on your board wakes up each morning worrying about the fundraising needs of your organization.” All that being said, and solely focusing on the third T, Treasury, what is working in Board Giving? From my view, the following approaches are working best to stimulate board giving at this point in time. Please Note: The points are listed here in order of how we recommend that you address them.
I hope this helps. Please contact me and let me know what you are seeing with your board’s giving. If your board giving is not what you think it could be, give me a call to discuss what could be done to address that dilemma. Keep your questions coming. Thanks. - Laurence A. Pagnoni, President, MA, MPA LAPA Welcomes Barrier Free Living and Dads & Daughters! Barrier Free Living (BFL) is the pre-eminent organization helping the disenfranchised disabled in New York City learn how to help themselves. For more than 25 years, Barrier Free Living has provided a wide range of services as well as links to other community resources, enabling disabled individuals to defeat the many problems that prevent them from having an independent and productive life. LAPA is working with Barrier Free Living to increase its revenue from foundations, corporations, and individual giving. Dads & Daughters (DAD) is a national advocacy organization that provides men with tools to help them actively engage in the lives of their daughters, and galvanizes the public to eliminate pervasive cultural messages that devalue girls and women. LAPA is working with DAD to increase individual giving, cultivate new donors, and attract major donors. Our work also includes a comprehensive feasibility assessment, cultivation events, and a phonathon targeting individual donors. Melissa Shurkin joins Board of Dancewave. In January 2006, Melissa Shurkin, LAPA's Senior Associate, joined the Board of Directors of Dancewave. Dancewave provides Brooklyn children and youth with high-level dance education, performance training, and opportunities to work with renowned choreographers. In her role on the board, Melissa is helping to shape the organization's strategic direction, diversify revenue sources, and build fundraising capacity. Click here to contact Laurence A. Pagnoni, MA, MPA. To reach a LAPA associate, click on the name below: Sheldon
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Laurence A. Pagnoni & Associates |
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