Useful Past Tips: MANAGEMENT: One Mission, One Strategy Small Is Beautiful Style And Substance Matter Merge, Land Ahead You Did What? What's Material - Government's definition differs from yours Insurance and minimizing risk Leadership is life-long Growth can be a good thing Outcomes measurement can be a pip Strategy Vs. Strategic Planning Leadership comes in many forms Is your organization poised to grow? Be flexible and adapt Taking action is leadership Endowment campaigns require special skills It's style AND substance Setting balanced performance measurements Keeping a scorecard Maximizing what you already have Disaster planning is vital Effectiveness builds capacity Investing in high risk businesses Management - Setting clear goal for staff Do Analysis Before The Disaster Five misunderstood techniques to managing Influencing Your Upper Managers Disaster teams spring into action Having the stomach for failure Balancing politics and strategy Be ready for change Check your group's "environmental" health Mapping A Course Of Action Dealing with issues before whistleblowers Disaster recovery sites will keep you running Establishing outcome measurement basics The making of a leader Sharing outcome information with staff

1. One Mission, One Strategy
The choices of strategies set before you to accomplish your organization's mission can sometimes be a dime a dozen. But, be wary of choosing a multitude of ingredients, because if they don't blend well your organization will suffer.

Thomas A. McLaughlin, a management consultant with Grant Thornton, wrote in a recent "Streetsmart Nonprofit Manager" column about so-called "split strategies." These are times when a nonprofit's mission is clear, but it uses two or more distinct and contradictory strategies to accomplish it. That can lead to trouble for an organization, he warned.

McLaughlin spelled out some valuable advice about developing a unified group of ideas used to make daily decisions, and how to identify split strategies.

• Strategies are what the organization plans to become, and work planning helps an organization define how to carry out the strategy;
• The strongest strategies are explicit and well thought out;
• Ideally, an organization will have a single, all-encompassing strategy, such as a historical society that aims to position itself as the primary source for Irish genealogical information in a heavily Irish region;

But many split strategies go unrecognized and can be difficult to detect, McLaughlin wrote.

• One place to see symptoms is in the adequacy and effectiveness of the financial and administrative systems because they can't serve twin strategies equally well;
• Split strategies waste time, energy and money;
• Their symptoms are often unmistakable in back-room systems.

2. Small Is Beautiful
Small nonprofits are constantly asked to do more with less. But they can use their size as an advantage, according to speakers at last year’s Fund Raising Day in New York.

Small organizations can be more personal within the community they serve that means they see donors more often, which requires a handshake approach.

Small offices with one or two professionals or a part-time support staff might have an advantage in spreading the word about the agency. A small organization must get people onto their site, so they can see the organization and you can get an idea of how they feel, said a representative from South Muskoka Hospital Foundation in Bracebridge, Ontario, Canada. And, a good way to get out in the community is through area chamber of commerce meetings or business groups.

Knowing your network of donors may lead you to mutually attend events to meet them.

Here are a few other techniques for a small office provided by Gordon H. Durnan, CRFE:

• Cut down on paperwork, or find reasons why you should not be at your desk.
• Make it a point to call donors to thank them, which can strengthen a relationship in 10 minutes.

3. Style And Substance Matter
Symbolic dialog is the largely unspoken language that most people engage in every day, according to columnist and management expert Thomas A. McLaughlin of Grant Thornton LLP.

It’s usually mastered by public figures to varying success.

Nonprofits can use it as a powerful management tool that can determine success, according to McLaughlin. Symbolism can be effective in the nonprofit culture and happens all the time.

Most of the symbols are mundane, but McLaughlin lists the following:

• Psychic energy deposits. An executive has only so much personal energy to devote. Whether the person devotes time to external advocacy or internal management, details are of a different nature.
• Work effort. Staff workers often monitor the intensity of the executive director’s work time. Work habits of the leader are usually noted quietly.
• Personal pacing. Does the executive director communicate a sense of urgency or complacency?
• Personal choices. Legislators can be ranked to the four S’s: Sign, Say, See or Be Seen. Signing letters, laws and regulations was of the utmost importance, but if that wasn’t going to happen the next best thing was for them to state their position. Alternatively, you’d hope that simply seeing something provided for them would change their position, or that at least being seen as leaning helpfully. All of these are largely symbolic personal choices.

4. Merge, Land Ahead
When Vikings set out to tackle a New World a bit of fear might have gripped their stomachs, but they went. So what if a bunch of them died and got a little closer to the throes of hypothermia. They eventually found land.

Nonprofits can learn from their pioneering spirit.

Eugene Tempel, executive director of the Center on Philanthropy at Indiana University in Indianapolis, cited a National Center for Nonprofit Boards (now BoardSource) report that lists fear of the unknown as one reason nonprofits may shy from restructuring and banding together with other nonprofits.

But Erik the Red, wouldn’t be such a valiant figure if he found out about hypothermia at home while riding a horse out back. Still nonprofits have some valid concerns about consolidations. Consultant David La Piana, pointed out that mergers may produce nonprofits with solid administrations, but may undermine the strengths that diverse, grassroots approaches bring to complex issues.

Columnist Thomas McLaughlin offers a model for agencies to work together in his book “Nonprofit Mergers and Alliances.” It embraces four aspects.

• Corporate: This is the legal structure of an organization with whom rests governance and financial responsibilities;
• Operations: This is the program level or heart of the nonprofit’s existence;
• Responsibility: This is the administrative tasks within the organization;
• Economic: These are the costs of doing business.

Alliances formed around the economics and responsibility issues usually involve back office functions such as joint purchases, according to McLaughlin. These process-oriented operations are ongoing as long as they prove useful to all parties. They also offer many advantages to nonprofits seeking collaboration without giving up control.

5. You Did What?
There is a thin line between risk and failure, but to most nonprofits failure is an alien idea, according to NPT columnist Thomas A. McLaughlin of Grant Thornton, LLP in Boston.

He suggests nonprofits get familiar with both, and that the sector needs to find ways to make risk and failure an accepted part of nonprofits’ activities. Organizations should strive for an atmosphere in which anyone can accept ownership of a mistake without fear, according to McLaughlin.

Organizations should:

• Get something out of mistakes. The adage “learn from your mistakes” can be vague. McLaughlin recalls one person at a national organization who inherited a botched foundation grant when she started a new job. The program was in shambles and the organization didn’t deliver on its promises. She and the organization came clean, and offered to write a case study. That preserved the foundation relationship, the nonprofit avoided an embarrassing lapse, and it turned into a full-length book.
• Have an exit trigger point for new ventures. Know when to say when and stick to it.
• Educate the board of directors. The board can be a major source for misbehavior in handling mistakes, especially if they come from a culture where mistakes are punished.
• Get your systems in order. A nonprofit manager or executive’s first duty is to ensure good financial health, which can’t be done without good systems.
• Be profitable. Risk-taking is easier with some back up.

6. What's Material - Government's definition differs from yours
Bet you never thought knowing Jimmy the glad-handing and suddenly popular politician soiled his pants as a teen-ager would ever come in handy. It could if your organization faces a government audit.

Government auditors often operate with a zero threshold of materiality, according to NPT Contributing Editor Thomas A. McLaughlin in his "Streetsmart Nonprofit Manager" column The Materiality principle is a way for auditors to avoid getting caught up in irrelevant details, McLaughlin explains.

Government auditors carry out their work for political reasons, not financial purposes, according to McLaughlin. They know they're measured by how many findings they produce, not whether those findings reach a certain threshold of materiality. McLaughlin provides a few pointers if your organization faces a government audit.

• Bulk up your political connections. Government audits have a large political component. Your connections may serve you well someday.
• Accept it. Put your energy into coping with it.
• Expect bad news. Government auditors must find something wrong or they may be accused of not doing their jobs.
• Focus on the Future. If a finding is correct, put some energy into a corrective plan.
• Have a plan. Your plan for reacting to a government audit's findings should be external (media and funders) and internal (staff and board members). Do what you said you'd do in the plan.

7. Insurance and minimizing risk
Sexual abuse is again in the headlines and as a nonprofit executive, you need to check your organization's coverage for such a situation.

Fortunately, sexual abuse isn't common at youth programs, but if a nonprofit doesn't face the possibility with an unflinching eye, it could spell disaster.

The first step for a nonprofit is minimizing the risk, according to John Patterson, who has written extensively on the subject. Minimizing risk goes beyond screening employees and volunteers, because a potential abuser may not have a prior record of abuse.

Limiting opportunities for one-to-one contact staff or volunteers and children is key to reducing risk, according to Patterson.

The Nonprofit Risk Management Center in Washington, D.C., published Patterson's "Child Abuse Prevention Primer for Your Organization" in 1995, which he co-wrote with Charles Temper and Pam Rypkema.

• Patterson advised organizations maintain policies and procedures that are intended to make it difficult for incidents to occur.
• Insurance providers would likely insist on such policies as a condition for coverage.
• A nonprofit needs to know whether it's covered for sexual abuse cases and to what extent, according to a representative from Markel Insurance Co.
• Abuse cases may or may not be covered under general liability; a special, possibly expensive, rider may be necessary.

8. Leadership is life-long
Every organization would like a good leader. But to develop an effective leadership it takes more than hiring one person. According to Rhea Blanken, president of Results Technology, Inc., to serve its members an organization must erect an effective leadership development initiative. She advised that organizations should behave as if:

• Each member is a leader. Interact and communicate with them from this base point.
• Leaders attract leaders.
• Structure changes behavior. Be mindful that people act differently depending upon whom they are interacting with and the environments that surround them.
• Common purpose, mutual respect and a shared vision bring leaders together. Leadership developments wants to be attached to a larger purpose by delivering economic, social, educational, spiritual, and ethical connections.
• Collaborating with members from younger generations is key for future leader development.
• Developing three-dimensional leaders is your organization’s business.

Effect all aspects of members’ lives simultaneously. Leadership development is life long. Members will stay loyal to their association when they identify these ongoing multi-dimensional opportunities within it.

9. Growth can be a good thing
Giving shouldn’t be difficult, so organizations must make it easy. Simple advice, but time consuming to follow.

NPT Columnist Thomas A. McLaughlin lists three simple steps for nonprofits to have successful marketing and get more donations.

• Make it easier to get information.
• Make it easier to donate.
• Read the two previous points again.

For example, Fidelity Charitable Gift Fund has grown into one of the largest fundraising organizations quickly by making donating as easy as clicking a mouse, according to McLaughlin.

McLaughlin gives the following takes on marketing.

• A marketing strategy can be either push or pull. In a push strategy, the producer pushes the product to the wholesaler, who pushes to retailer, who pushes to the consumer. (Think of the grocery store flyers in the newspaper as an example of push marketing.) A pull marketing strategy relies on advertising and promotion to create consumer demand.

Generally, nonprofits have to push information and pull donations.

• It’s easier today than ever to push and pull than it has ever been partly because of enhanced or new information distribution methods.
• The essence of a pull is to motivate a consumer to take a step on his or her own.
• The major prerequisite in a successful donation-pull strategy will be good branding.This is what will motivate donors to push a button to get more information or seek out an agency to donate, according to McLaughlin.

10. Outcomes measurement can be a pip

Outcomes has become an overriding concern in the world of nonprofits, as philanthropies seek to prove their worth to an often-skeptical public, sometimes against standards utilized by for-profit companies. More and more people are demanding measures of results -- CEOs, donors, watchdogs, even academics.

Speaking at a national conference on the nonprofit industry, David Williamson of The Nature Conservancy offered several caveats about the problems of measuring performance in nonprofit organizations. He noted that there can be several barriers to measuring nonprofit performance:

• The organizational culture of nonprofits creates multiple obstacles to measurement.
• Inefficient capital markets in the nonprofit sector do not punish weak performers.
• Many nonprofit missions are inherently not measurable.

There are several yardsticks that may make the entire of measuring more equitable. They are:

• The Balanced Scorecard, which employs a customer perspective, an internal perspective, a financial perspective and a learning and growth perspective.
• Goal-driven Measures, by which success is defined in terms of measurable, mission-derived outcomes.
• The Family of Measures, that is, impact (progress toward mission/vision), activity (progress toward specific goals, strategies and programmatic objectives) and capacity (progress toward mobilizing sufficient resources to achieve the mission).

Although strategic planning is an obvious necessity for any nonprofit, James G. Dalton of the Wharton School of Business elaborated the concept of changing from strategic planning to strategy making at an international conference for the nonprofit industry.

Strategy making involves four key elements:

• Maintain a "radar screen" of strategic issues and select top issues for analysis.
• Identify the guiding principles (policies) that should influence the determination of actions and outcomes.
• Describe the desired outcomes, but realize it may change as new information is discovered.
• Lay out a preliminary action plan, but realize it will change as new information is discovered.

As far as determining what an issue is, Dalton offered this two-part definition: 1. An issue is the interaction of two forces impacting each other in a way that demands your attention and 2. An issue is expressed in a single sentence statement that identifies the two forces and the arc of tension that exists between them.

There are also five strategy-making questions:

• What are you doing that addresses the issue?
• What don't you know that you need to know to address it more effectively?
• What would an ideal outcome look like?
• How night you get there?, or
• What will you do next to figure out how to get there?

12. Leadership comes in many forms

It is no surprise that leadership is important to any nonprofit and that leaders can take different approaches to their job. Charlotte Rhodes, senior director of development at Baylor College of Medicine, outlined her five approaches to leadership at an international conference on fundraising.

1. Strategy. Leaders who use this approach create, test and design the implementation of long-term strategy; devote 80 percent of their time to matters external to the organization and value employees to whom they can delegate.
2. Human-assets. Their primary job is to impart to their organization certain values, behaviors and attitudes by closely managing the growth and development of individuals, and they spend a majority of time in personnel-related activities.
3. Expertise. These individuals disseminate within the organization an area of expertise that will be a source of competitive advantage and spend a majority of time on continual improvement on that expertise.
4. Box. These leaders create and manage a set of controls that ensure uniform predictable behaviors for customers and employees; spend time dealing with expectation to controls and value seniority.
5. Change. These people create an environment of continual reinvention and spend as much as 75 percent of their time in the field to motivate members and organizations to embrace change.

13. Is your organization poised to grow?
Getting a handle on your organization may be a task that can be made easier by determining what kind of organization you have, specifically taking stock of whether your operation is bureaucratic or entrepreneurial.

There are several differences of style in the two types of organizations, and understanding these differences may help highlight the way organizations conduct themselves and may even shed light on how your organization operates.

• A bureaucratic organization is position-centered, based on authority. An entrepreneurial organization is person-centered, with authority derived from expertise.
• A bureaucratic organization is repetition-oriented, doing the same things the same way over and over on the premise that results are then predictable. An entrepreneurial organization is creation-oriented, seeking both efficiency and innovation, on the premise that results can be improved.
• A bureaucratic organization focuses on rules. An entrepreneurial organization focuses on results.
• In a bureaucratic organization pay is based on status in the organization. In an entrepreneurial organization pay is based on contributions to the organization.
• In a bureaucratic organization formal structures exist that may restrict and control the flow of information. In an entrepreneurial organization there is free-flowing communication using all available media.

14. Management - Be flexible and adapt
Your old building is a wonderful local landmark. It's reminiscent of a storied past. But is it becoming a money pit sucking funds from the community you serve?

The YMCA of Metropolitan Denver found itself in such a situation in the late 1990s. Funds that could have supported day care and youth activities were going to preserve 94-year-old infrastructure. Its officials found themselves developing programs to use the building instead of the programs to help the people it served.

When a capital campaign didn't generate the type of funding or support, the organization faced difficult decisions. Taking a page from the San Diego County YMCA's template, it considered some options:

• Shake up management
• Arrange interest-free loans
• Sell property
• Develop a long-range plan to build financial strength.

With a new chief executive, the Denver Y built a task force of community and business leaders to reposition the organization and consider options. It decided to sell the central Denver Y property and seven other properties, issuing requests for proposals on use for the facilities.

What was a challenge for the Y became an opportunity for another local nonprofit: the Colorado Coalition for the Homeless (CCH). CCH bought the building for $5.45 million, which was $3 million below the asking price. The arrangement allowed the Y to retain a portion of its building for administrative offices and the fitness facility.

CCH was able to run an expanded residential area and renovate the building. It stabilized living situations for the people it serves and also reduced rents. The Y cut its debt in half and allowed it to maintain a downtown presence, while transferring the landlord role to a nonprofit with greater expertise in that area.

15. Taking action is leadership
In her book "Discipline" -- part of the HR How-to series published by CCHKnowledgePoint -- Joyce B. Gentry advises the person who receives the report of a sexual harassment allegation to act like a "LEADER":

Listen: Create an atmosphere in which employees feel comfortable raising their concerns by taking their report seriously. Listen for code words when someone tells you about someone else's behavior, such as "feel uncomfortable" or "uneasy" in another's presence.

Encourage: Thank the employee for coming forward with a report and try to make the employee feel uncomfortable by acknowledging the employee's feelings. Reassure the employee that the information will be kept as confidential as possible and that no retaliation will take place.

Ask questions. Get answers: Who did what to whom, when, where, how, and why. Find out what the employee would like to see happen.

Document: Immediately create a written record of the employee's statement. Ask the reporting employee to review and sign your documentation to reflect its accuracy.

Explain: Explain the harassment policy and answer any questions the employee may have.

Respond: Immediately report the conversation as outlined in your organization's harassment policy. If you are charged with the authority to initiate an investigation into the matter, take the necessary steps to do so.

16. Endowment campaigns require special skills
The finance officer faces several large challenges as part of the team in an endowment campaign. The position entails a few major responsibilities as part of this campaign that may not come with another, says Edward C. Schumacher in his book "Building Your Endowment," published by the Fund Raising School at the Indiana University Center of Philanthropy.

The main responsibilities of the finance officer are:

• Recommend endowment policies and investment practices;
• Maintain all documents related to the establishment of endowment funds, endowment investment practices and endowment allocations;
• Report regularly on the status of endowment funds, the allocation of returns and the use of those returns.

Additional tasks coming with the finance officer position in an endowment fundraising campaign include:

• Ensuring to the furthest extent possible that returns on restricted endowments are used as directed by the director;
• Overseeing the creation and modification of endowment accounts with the auditor;
• Preparing donor-stipulated reporting documents using the official records of the organization;
• Reviewing the investment manager's performance and working with the endowment investment committee to secure the best possible return on investments for the institution;
• Depositing all endowment-fund cash for investment;
• Selling all other donated assets of tangible property.

17. It's style AND substance
Good leadership is a pillar of any organization, but it should be remembered that each leader has a personal style. Charlotte Rhodes, director of development for Baylor College of Medicine, noted at a conference on fundraising that there are personal style indicators that may help leaders learn more about themselves.

There are three main areas in which to begin self-exploration.

• Focusing attention? Those who gravitate toward extraversion are attuned to the external environment, communicate by talking, learn through doing or discussing, have a breadth of interests, speak first and reflect later, are sociable and expressive and take the initiative in work and relationships.
  
  Those who prefer introversion communicate by writing, learn best by reflection or "mental practice," have a depth of interest, reflect before acting or speaking, are private and contained and focus readily.
  
  
• Taking in information? One way is by sensing, which means: focus on what it real and practical, value practical applications, notice details or be factual and concrete, observe and remember sequentially, be present-oriented, want information step by step and trust experience.
  
  The other way is by intuition, meaning: focus on "big picture" possibilities, value imaginative insight, be abstract and theoretical, see patterns and meanings in facts, be future oriented, leap in anywhere and trust inspiration.
  
  
• Making decisions? The thinking type is analytical, is a logical problem-solver, uses abstract cause-and-effect reasoning, is "tough-minded," strives for an impersonal objective truth and is reasonable and fair.
  
  The feeling type is sympathetic, assesses the effect of a decision on people, is guided by personal values, is "tender-hearted," strives for harmony and individual validation and is compassionate and accepting.

18. Setting balanced performance measurements

Performance measurement and management are hot topics for nonprofits, with an increasing amount of scrutiny becoming an important factor.

In his book Balanced Scorecard: Step by Step for Government and Nonprofit Agencies , Paul R. Niven offers suggestions for improving performance.

Nevin describes the Balanced Scorecard as a selected set of quantifiable measures derived from an organization's strategy. It retains financial measures but complements them with three other perspectives:

• Customer perspective. Two critical questions must be answered here: Who are our target customers? And What is our value proposition in serving them? Rather than trying to focus on many values, a more practical approach may be to choose one discipline in which the organization possesses particularly strong attributes.

• Internal process perspective. This is used to identify key processes at which the organization must excel in order to continue adding value for customers. To satisfy customers, an organization may have to identify new processes rather than focusing on improvement of existing activities.

• Learning and growth perspective. These are really the enablers of the other perspectives. The measures designed in this perspective will help the organization close the gap between organizational infrastructure and employee skills, information systems and organizational climate. In addition, closing that gap will help ensure sustainable performance for the future.

19. Keeping a scorecard

The concept of balance is important as a measurement system in nonprofits, according to Paul R. Niven in his book Balanced Scorecard: Step-by-Step for Government and Nonprofit Agencies . Also known as performance management system or scoreboard, among other terms, the balanced scorecard describes the strategy of an organization and offers clear and objective performance measures.

For Niven, the concept of balance is vital, relating to three areas:

• Balance between financial and non-financial indicators of success. To overcome the deficiencies of a reliance on financial measures of performance. This is the principal tenet of the system.
• Balance between internal and external constituents of the organization. To recognize the importance of balancing the often contradictory needs of all the groups involved with a nonprofit: financial stakeholders such as funders (and even legislators) and customers, who are the external constituents, and employees and internal processes, which make up the internal constituents of an organization.
• Balance between lag and lead indicators of performance. Lag indicators generally represent past performance, such as customer satisfaction or revenue.

Lead indicators are the performance drivers that lead to the achievement of lag indicators. They often include the measurement of processes and activities. Lag indicators without leading measures don't communicate how an organization is going to achieve its targets. Leading indicators without lag measures don't identify whether improvements have led to better results for customers.

20. Asset Management - Maximizing what you already have

Focusing on assets when the statistics are overwhelmingly negative and the long-term outlook bleak might be a daunting task. In her book Smart Communities: How Citizens and Local Leaders Can Use Strategic Thinking to Build a Brighter Future , Suzanne W. Morse suggests that such a time can be perfect possibilities and opportunities.

Morse maintains that the assets and capacities that already exist in communities must be the foundation for community development, and that starts with individuals and the strengths and abilities that they have. To determine what these strengths are, she suggests an asset map to build a community inventory.

The asset map is constructed by asking people a series of questions. These questions should center on four main areas, with a group of questions in each section. The four sections are:

• Skill information, which is concerned with the skills people have learned at home, in the community or at the workplace.
• Community skills, which is concerned with what kind of work people have done in the community and what kind they would be willing to do.
• Enterprising interests, which is concerned with where people have considered starting a business or if they are involved in a business at the time.
• Priority skills, which deals with personal information, asking people to say what they are best at doing.

21. Disaster planning is vital

Although many nonprofits exist to help people in time of disaster, those organizations can be susceptible to natural or man-made calamity. In his book Disaster Recovery Planning for Nonprofits, Michael K. Robinson offers tips for organizations about being prepared for disasters.

Robinson suggests conducting audits to identify every system and process in the daily operation of a nonprofit and then writing a Standard Operating Procedure for each activity.

The SOP should contain five pieces of information:

• How to perform the particular activity.  
• Who the responsible party is to perform the given action?  
• What equipment is necessary to perform the procedure? Who has access to a custom database, the nonprofit's stationery/letterhead, bank deposit slips, that are necessary to perform work.  
• The level of importance of the activity to the organization.  
• The date the SOP was created and by whom.

In addition, because writing SOPs can be an overwhelming task, they should be prepared by different people throughout the organization. An SOP should give enough guidance so anyone in the organization would have the general framework to begin work in that role.  

Some points that may be found in a good SOP are that the steps in the recovery process are outlined but not to the point of giving specific instructions (this will increase its longevity); the instructions provide enough detail to be clear; the responsible party is identified by title and not name (since these could change over time) and the required systems and materials are identified.

22. Management - Effectiveness builds capacity

The issue of effectiveness is a growing one in the nonprofit world. Organizations are striving to operate as effectively as possible, both because of increased scrutiny and to more successfully carry out their missions.

Barbara D. Kibbe, in the chapter on investing in nonprofit capacity that appears in the book Funding Effectiveness: Lessons in Building Nonprofit Capacity, writes about both organizational effectiveness and organizational capacity building.

Organizational capacity building is the application of knowledge to the enhancement of those factors that contribute to organizational effectiveness. Organizational effectiveness is the ability of an organization to define a meaningful mission, generate the tangible and intangible resources required and deploy those resources efficiently and well in the accomplishment of its work.

Four organizational capacities significantly contribute to and sustain organizational effectiveness over time:

• Technical capacity to define, deliver and evaluate programs consistent with promising practices in the field.  
• Management capacity to align policies, processes, and resources with desired outcomes.  
• Resource development capacity to assemble adequate physical and human resources as well as a diverse, reliable and sustainable flow of income assets.  
• Leadership capacity to build support among varied constituencies, participate in social and policy dialogue and govern the organization in such a way as to continuously renew its position in a changing context.

Investing in high risk businesses

Many private foundations have decided that charitable purposes may be carried out more effectively by making investments in high-risk businesses. As explained by Doug Mancino in the book Foundation Management, Congress recognizes such investments as program-related investments, but they must possess three characteristics:

The primary purpose of the investment must be to accomplish one or more charitable purposes. An investment meets this description if it significantly furthers the accomplishment of the private foundation’s exempt activity and if the investment would not have been made but for the relationship between the investment and the accomplishment of the foundation’s exempt activities.

No significant purpose of the investment may be to produce income from the appreciation of property. Satisfaction of this requirement is determined in part on whether investors solely engaged in investing for profit would be likely to make an investment in the business or project on the same terms as the private foundation.

That an investment produces significant income or capital appreciation is not, in the absence of other factors, conclusive evidence of a significant purpose involving the production of income from the appreciation of property.

No purpose of the investment may be to influence legislation or to support a candidate for public office.

24. Management - Setting clear goal for staff

Strengthening the nonprofit sector requires the hard work of many parties, including both those giving and receiving funds.

Janine E. Lee, vice president for youth development of the Ewing Marion Kauffman Foundation, has outlined some of the lessons the foundation has learned during its years of contributing to the sector. This information is contained in the book Funding Effectiveness: Lessons in Building Nonprofit Capacity.

First, Lee writes, the foundation learned that success in the field relies on clear goals and expectations between funders and nonprofits. Further, the work to create these clear goals was guided by three core lessons:

• Clearly articulate your values, beliefs and core purposes and develop relationships with nonprofits that are aligned with those beliefs. For example, the mission of the Kauffman Foundation is to research and identify the unfulfilled needs of society and to develop, implement and fund breakthrough solutions that have a lasting impact and offer a choice for the future.  
• Communicate with nonprofits what you are hoping to accomplish through your grantmaking strategies in capacity building. This can be enhanced by identifying key attributes of effective nonprofits, based on input from nonprofit leaders from around the country.  
• When working to improve effectiveness, create clear criteria to which nonprofits can aspire. Language makes a difference; make sure people's perceptions of terms and concepts are the same.

25. Do Analysis Before The Disaster

It is a fact that nonprofit organizations must be prepared for disaster and that fulfilling a mission often means being ready for any eventuality. In his book Disaster Recovery Planning for Nonprofits, Michael K. Robinson offered advice on how organizations can prepare for the unspeakable.

There are several key areas that Robinson identifies as worthy of consideration when drawing up a plan. They are:

• Starting points. Instead of focusing on a million different horrible scenarios, a nonprofit should begin by identifying those threats internal and external that are more likely to occur than others. By examining the threats that are most likely to occur, a nonprofit can focus its energy on specific systems.  
• Procedure. The risk-analysis procedure needs to be thorough, organized and insightful to be effective. After potential threats have been identified, the probability of each occurring should be ascertained. Finally, the severity of impact of each potential disaster should be evaluated.  
• Computer systems. Knowing how and why they fail will be very helpful if preventative measures are to be developed and the risk of data loss to be minimized. A backup is essential, but avoiding loss in the first place is preferable.  
• Revenue impact. In addition to maintaining contact with the donor base, it may be necessary to secure new revenue to counter the expenses associated with downtime and repair. A plan should include sources that can be tapped in the event of a crisis.

26. Five misunderstood techniques to managing

Managing knowledge to get the maximum benefit is an important tool for anyone in a leadership position. Niko Canner and Jon R. Katzenbach, in their chapter about managing knowledge in the book Leading Organization Learning by Marshall Goldsmith, Howard Morgan and Alexander J. Ogg, offer five promising approaches to managing knowledge that they maintain have been under-appreciated.

The five are:

• Expanding the boundaries of automation. Where it is possible to automate knowledge work fully, there are tremendous returns to doing so. Too little creativity has been applied to the question of how software can be used to replace providers of professional services, inside or outside the organization.  
• Sharing expertise fact to face. Where transfer of expertise is very valuable, the limitations of technology should not be allowed to become constraints. Nearly all organizations have groups involved in parallel tasks. See if the gap between these performance functions can be narrowed.  
• Connecting people with people. Much professional problem-solving and nearly all innovative problem-solving involve the perception of analogies rather than the straightforward application of a process or rule.  
• Folding knowledge management into process management. Wherever possible, systems designed to access knowledge should be integrated with systems designed to support business practices.  
• Recognizing the value of simple affirmation. Where behavior change generates business value, there is often more impact from affirmation and reinforcement than from discovery of new information.

27. Influencing Your Upper Managers

Knowledge is, of course, a valuable tool. Using knowledge effectively, so that it makes a difference, is really where the importance lies. Marshall Goldsmith refers to this utilization as “influencing up” when it is used to bring ideas to an organization’s upper levels.

In the book Leading Organizational Learning, which he has edited with Howard Morgan and Alexander J. Ogg, Goldsmith offers 10 guidelines to influencing upper management.

• When presenting ideas to upper management, realize that it is your responsibility to sell not their responsibility to buy.  
• Focus on contribution to the larger good, not just the achievement of your objectives.  
• Strive to win the big battles. Don’t waste your ammunition on small points.  
• Present a realistic cost-benefit analysis of your ideas. Don’t just sell benefits.  
• “Challenge up” on issues of ethics or integrity. Never remain silent on ethics violations.  
• Realize that your upper managers are just as human as you are. Don’t say, “I am amazed that someone at this level ...”  
• Treat upper managers with the same courtesy that you would treat partners or customers. Don’t be disrespectful.  
• Support the final decision of the team. Don’t say, “They made me tell you” to direct reports.  
• Make a positive difference. Don’t just try to win or be right.  
• Focus on the future. Let go of the past.

28. Disaster teams spring into action

Although many nonprofits are meant to help people in the wake of disaster, it is a fact that aid organizations can experience disaster themselves. In his book Disaster Recovery Planning for Nonprofits, Michael K. Robinson suggests having disaster recovery teams in place as part of planning for an emergency. This team approach should feature several key aspects:

The disaster recovery team should have a leader. The team approach will allow the organization to divide activities, allow for internal checks and ensure that the entire organization is covered. Having a leader, as opposed to a committee approach, will ensure that a knowledgeable person will be equipped to begin executing the plan if necessary. The team leader should be someone who commands enough respect in the organization to get things done.

The rest of the team should be comprised of representatives from various departments who can identify the critical systems that are essential to the functioning of the nonprofit. A balanced team is important because no individual can be familiar with the day-to-day operations of every department.

Information throughout the organization will not be available to all employees. This fact will dictate that certain people from various departments be included on the team.

The entire plan should not be turned over to IT, even if there is a need for efficient and reliable technology. If it is, the plan will most likely not be complete or entirely reliable. Look at the rise and fall of the dot-coms.

29. Having the stomach for failure

There is a thin line between risk and failure. But, failure is an alien idea to most nonprofits, according to NPT columnist Thomas A. McLaughlin, a senior manager with Grant Thornton, LLP in Boston.

McLaughlin suggests nonprofits get familiar with both risk and failure, and that the sector needs to find ways to make both an accepted part of nonprofits' activities. Organizations should strive for an atmosphere in which anyone can accept ownership of a mistake without fear, according to McLaughlin.

Organizations should:

• Get something out of mistakes. The adage "learn from your mistakes" can be vague. McLaughlin recalls one person at a national organization who inherited a botched foundation grant when she started a new job. The program was in shambles and the organization didn't deliver on its promises. She and the organization came clean, and offered to write a case study. That preserved the foundation relationship, the nonprofit avoided an embarrassing lapse, and it turned into a full-length book.
• Have an exit trigger point for new ventures. Know when to say when and stick to it.
• Educate the board of directors. The board can be a major source for misbehavior in handling mistakes, especially if they come from a culture where mistakes are punished.
• Get your systems in order. A nonprofit manager or executive's first duty is to ensure good financial health, which can't be done without good systems.
• Be profitable. Risk-taking is easier with some back up.

30. Balancing politics and strategy

In his book Private Sector Strategies for Social Sector Success, Kevin P. Kearns offers the advice that strategy can be politics as well as strategy, not in an electoral sense but in terms of dealing with people and contingencies. Kearns offers several considerations about strategy that he argues should be remembered.

• Strategy as policy. Formulating strategy is formulating and even advocating policy. It is necessary therefore to develop a strategy from your mandate and the organization's mission, use all of your mandate when necessary, balance being an entrepreneur with due process, link strategy to perceived public needs and engage key stakeholders in the formulation process.
• Strategy as advocacy. Having crafted a strategy, you must sell it. Identify stakeholders, their values and their power; define problems, opportunities and choices; use others to advocate your position; use data judiciously and ethically and balance principle with flexibility.
• Strategy as negotiation. Because it can play such a big role, select those with whom you are willing to negotiate, decide when to negotiate, understand precedents and know your tolerance for compromise.
• Strategy as planned organizational change and innovation. Strategy may involve change or modification, so develop empathy, share ownership of the strategy, overcome resistance and create a learning organization.
• Strategy as accountability. Organizational strategy puts leadership on the firing line, so understand the rules by which you and others are held accountable.

31. Be ready for change

Any industry is subject to change, even that of philanthropy. Rather than reject change or hide from it, nonprofits can adapt to change and even get in position to cause or influence change.

In her book Creating Philanthropic Capital Markets, Lucy Bernholz encourages the idea of nonprofits involving themselves in change in such a way as to define and affect the direction of such changes. The reasons for this:

• Change is certain. Philanthropic practice, benefits and structures will not stay static simply because someone wishes them to do so. For example, changes in federal tax law might herald the end of new foundation creation as early as 2010 if estate taxes are not re-implemented.
• Market forces will begin to shift from those present in an emerging industry to those of a mature industry. Market forces will begin to drive the development of outcome measures, indicators of effectiveness, research and aggregation.
• Left undirected, the current forces on the industry push more strongly in the direction of fragmentation than aggregation. Further fragmentation of resources reduces the chance that any individual actor will accomplish goals, limits the overall impact of the industry and increases the regulatory threats as philanthropy ceases to demonstrate a return on the public tax exemption that underlies the industry.
• Community needs and opportunities will continue to demand more effective application of financial, human, technological and intellectual resources.

32. Check your group's "environmental" health

Environmental scanning, or industry analysis, refers to a systematic effort to learn about external factors that can affect an organization. In his book Private Sector Strategies for Social Sector Success, Kevin P. Kearns wrote that an environmental scan should ask four questions about an organization:

• What are the economic characteristics of the strategic environment?
• How intense is the competition (if any) in the strategic environment?
• What forces drive change in the strategic environment?
• Overall, what are the prospects for the organization's portfolio of programs and services?

To answer those questions, Kearns offered four steps:

• Identify the key economic characteristics of the organization's strategic environment. Those key economic characteristics include size, growth rate and life cycle of programs and services and programs, significant barriers an organization encounters and the overall economic health of an organization.
• Describe the level of competition in the strategic environment. This includes ascertaining the number of organizations competing in the environment, the basis and intensity on which they compete, opportunities for collaboration, likely next moves of competitors, possible threats and the bargaining power of consumers, donors and stakeholders.
• Identify and assess driving forces in the strategic environment. Generic forces that can have an effect on an organization include demographics, societal attitudes and values, consumer experience and knowledge, economics, technology and product innovation, public policy and regulatory influences and international forces.
• Assess threats, opportunities and prospects in the strategic environment. Synthesize and interpret all the information gained in the previous three steps.

33. Mapping A Course Of Action

Just as anyone would agree that strategy is important for a nonprofit, Kevin P. Kearns, in his book Private Sector Strategies for Social Sector Success, argued that strategy formulation is essential.

Kearns identified three approaches for strategy formulation:

• The analytical approach. This seeks to improve the alignment between an organization's strengths and external opportunities. This approach is data driven and accommodates discussion of the interpretation of data. It can be institutionalized in the management practices of an organization, and it can utilize many people.
  
  Conversely, the gathering of data can mask an inherent subjectivity and it can become overly conservative.

• The visioning approach. This starts with a goal or performance target, with the organization working backward to determine what strategies, tactics, actions and resources are needed to achieve it.
  
  It is characterized by a spirit of entrepreneurship and capitalizing on opportunities. It can be inspiring and motivating, but it depends heavily on the vision of the leader, who may be wrong or blind to outside threats. It cannot be taught or institutionalized.

• The incremental approach. This approach suggests that the strategic environment of any organization is complex and that strategy evolves slowly from fragile and often temporary agreements between political factions, coalitions and stakeholders.
  
  This approach can encourage leaders to focus on partnerships and alliances. Its drawbacks include a lack of clarity leading to a rudderless ship, a possibility of compounding errors by nibbling at them and dealing with symptoms and processes instead of causes and solutions.

34. Dealing with issues before whistleblowers

Managers at nonprofits like to consider their organizations so clean and well run that they face no harms from whistleblowers, (usually) employees who report wrongdoing to either the media or law enforcement.

Regardless of the purity of an organization's mission, however, any operation can slip and find itself in an embarrassing situation if a disgruntled worker takes a complaint to a newspaper. Accounting and management consulting firm Grant Thornton LLP offers tips for creating internal controls and minimizing risks that may come from whistleblowing.

• Internal control starts with good corporate governance. The board and executive director ultimately decide how well internal controls will function and these controls must apply to everyone in the organization.
• Assess how to control risk. Ask questions, such as if the board has developed policies and procedures for high-risk areas and if there is a system to test them.
• Focus on what is material and significant. Don't try to do everything at once. Think in terms of crawl, walk, run.
• Don't treat internal controls as a one-time shot.. They require continual monitoring and improvement.
• Adopt best practices. Consider hiring a second accounting or business advisory firm to provide non-audit services, including internal audit co-sourcing and outsourcing and internal control evaluation.

35. Disaster recovery sites will keep you running

Disaster is the raison d'etre of many nonprofits, but occasionally even those organizations are victims of some kind of natural or man-made event.

In his book Disaster Recovery Planning for Nonprofits, Michael K. Robinson deals with the issue of emergency sites, places that can be used to continue operations when a disaster disables a nonprofit's facility.

Robinson details several kinds of emergency sites, the usefulness of which may depend on factors such as an organization's mission.

The types are:

• Hot site. This is a business location that is ready to be used immediately upon the need for it. Everything required for the site to be fully operational has been arranged in advance. Data is synchronized on a frequent basis so it will be nearly identical to the nonprofit's.
• Cold site. This is a site requiring some setup work before it is operational. Employees will not be able to walk in and immediately set to work as they could with a hot site.
• Mobile site. A large coach, bus, RV or tractor-trailer equipped with the necessary equipment can serve as a mobile site.
• Alternative emergency sites. Many nonprofits cannot afford the expense of an emergency site or will not be willing to expend the time and effort to plan one. A nonprofit that can't afford its own site may be able to assemble a makeshift one at a local chapter's office, the national headquarters, a hotel conference room or even an educational facility's computer lab.

36. Establishing outcome measurement basics

Assembling, analyzing and making the best use of outcome information are important considerations for any organization.

As part of its Series on Outcome Management for Nonprofit Organizations, The Urban Institute suggest four steps in a basic approach not only to gathering outcome information but also to making the best analysis.

The steps are:

• Calculate overall outcomes for all clients. This is the natural first step. It provides a basic summary overview of a program's results. The usual way to summarize the findings is to use tables, sometimes referred to as frequency tables.
• Compare the latest overall outcomes with outcomes from previous time periods. Comparisons help provide the context in which organization officials and program managers can begin to interpret outcome information. Each comparison provides a benchmark against which the latest values for any outcome can be measured.
• Compare the latest overall outcomes with pre-established targets. Programs that regularly collect outcome data are also likely to establish annual targets for each indicator. This comparison will indicate the extent to which the program is meeting, exceeding, or falling behind expectations.
• Compare the latest overall outcomes with outcomes for clients in other, similar programs -- and to any outside standards. Unless a program is unique, another agency somewhere is working to help clients with similar problems, and with at least similar services. It can be useful to compare outcomes if the other program collects similar program data.

37. The making of a leader

Leadership is a word that usually gets attention, one that grips people at the gut level. Everyone professes to admire good leadership, but not many people know exactly what makes good leadership.

As nonprofits move into the new millennium and try to cope with changing and increasing demands, first-rate leadership becomes even more critical.

In a chapter from a volume titled Cutting Edge Leadership 2000, (edited by Barbara Kellerman and Larraine R. Matusak) David Chrislip proposes concepts of leadership that some readers might find new or startling but that he maintains are quite essential. Some of these ideas may run counter to the ideas that many people, including those in leadership positions, hold dear.

Intimidation, control and self-containment are seen by many as not only the most basic but also the best characteristics for any leader. Chrislip's ideas differ, offering a new way to approach the concept of leadership.

The aims are inclusivity, management of a constructive learning engagement, information provided for good decisions, building of coherence in the group and negotiation for agreement that leads to action. This includes:

• Getting people to the table and keeping them there.
• Subsuming one's personal desire for a specific outcome or solution and focusing on the larger good.
• Ensuring the participation of others.
• Helping others solve problems without having to know or provide the answers.
• Acknowledging and celebrating the successes of others without taking credit.
• Leading as a peer rather than a supervisor.

38. Sharing outcome information with staff

Managers and supervisors are often considered the primary or sole users of outcome information, but The Urban Institute, in its Series on Outcome Management for Nonprofit Organizations, maintains that staffers and volunteers also can make good use of such material.

According to the Institute, service workers can use the information in the following ways:

• Adjust services for individual clients or groups of clients while clients are still in service. For example, mental health workers can obtain periodic data on an individual patient's progress via an assessment or look at aggregate data to discern patterns.
• Adjust service delivery approach for future clients. Aggregate data can help identify potential problems and modify services. For example, if many former clients report trouble reaching a certain worker, a change in schedule may be needed.
• Work with other staff to identify service delivery approaches related to particularly successful or unsuccessful outcomes. Service-workers-only meetings may help facilitate this.
• Make a case for additional training, particular equipment or other changes. Outcome data can provide evidence of a need and document improvement after a change is made.
• Experiment with new procedures. Nonprofits should encourage individual service workers to identify new procedures and try them out systematically. Data on outcomes for new and old procedures can provide strong evidence to the service worker about the relative effectiveness of new vs. old procedures.

Copyright © 2006 The NonProfit Times.