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Nonprofit Organizations
University of Iowa School of Law
Boyd, Willard L.

·      What is a charitable nonprofit?
·      publicly open and accountable
·      must be well managed
·      must continually build trust with the public by appropriate financial reporting, communications with the public about significant contributions to the community with the charity‟s funds and programs, and strongly evident commitment to ethical behavior.
·      How are charitable nonprofits different from for-profits?
·      for-profit corporations exist to earn and distribute taxable business earnings to shareholders, the nonprofit corporation exists solely to provide programs and services that are of public benefit. Often these programs and services are not otherwise provided by local, state, or federal entities
·      How are charitable nonprofits the same as for-profits?
·      Sustainability
·      Nonprofit organizations must cope with increased competition, more diversity among constituents, higher expectations from the public and from funders, increasing costs, declining support, rapidly changing technology, and substantially different ways of conducting business.  Surviving in such an environment (sustainability) depends upon the ability to adapt
·      Sustainability Challenges
·      Identity crisis, increased demands on nonprofit managers, decreased funding, competition with for-profits and loss of the public trust
·      In short, effective executives boundary-span to seek and act on opportunities in the environment to help shape the future health and direction of the organization
·      The “Robust” Nonprofit Organization
·      High performing nonprofit organizations strengthen “their organizational capacity to withstand the uncertainty ahead”
·      Four pillars of “robust” nonprofits:
·      Alertness to what lies ahead
·      Agility – recruiting, training and hiring a flexible workforce
·      Adaptability
·      Alignment of operations with mission
·      Ten Symptoms of a Dysfunctional Organization
·      A narrow fundraising base
·      Lack of strategic planning
·      Productivity slowdown
·      Staff-Board breakdown
·      Fear of change (Threat/rigidity response)
·      Poor communication
·      Declining staff morale
·      Financial instability
·      Unhappy audiences and clients
·      Loss of key people
·      Ways to halt organizational Decline
·      Get involved in fundraising
·      Empower people
·      Create a strategic plan
·      Open lines of communications
·      Commit to change
·      Prepare a communications policy
·      Promote teams
·      Review finances
·      Survey audience (Marketing plan)
·      Take a flexible approach to staffing
·      The Importance of Leadership
·      The complexity and unpredictability of the world in which nonprofit, charitable organizations operate is great and seemingly continually increasing.  Such change and unpredictability of integrating mission, resource acquisition and strategy even greater and require that chief executives effectively engage in leadership
·      Leadership Defined
·      Leadership is defined as a social influence process in which the leader seeks the voluntary participation of subordinates in an effort to reach organizational goalsSource: Kreitner and Kinicki, Organizational Behavior (2001)
·      What do Leaders do?
·      truth tellers and direction givers
·      help people make sense of experience and they offer guidance for coping with the present and future by helping people answer these questions:  What’s going on here?  Where are we heading? and How will things look when we get there? 
·      Bryson, Strategic Planning for Public and Nonprofit Organizations (2004), pp. 309-310
·      What is the source of a leader’s power?
·      Expertise: skills that are essential, scarce, critical, or non-substitutable
·      Track record: relevant experience
·      Attractiveness: attributes that others find appealing or identify with
·      Character: dependability, trustworthiness, integrity
·      Rapport: connection with the group
·      Relevance: Relationship between tasks and organizational objectives.
·      Autonomy: amount of discretion in a position
·      Attributes of a Successful Leader
·      A life-long love of learning
·      Persistence
·      Self-knowledge
·      Willingness to take calculated risks
·       Commitment
·      Listening
·      Leading from the future – “think ahead to see what’s coming”
·      Unwarranted optimism
·      Personal responsibility
·      Source:  Lee Clancey, Past President/CEO, Cedar Rapids Area Chamber of Commerce
·      President Skorton on Leadership
·      Communication skills – more listening than talking
·      Having a “customer” focus and placing that focus first
·      Emphasis on the value of persuasion rather than “direct order”
·      President Boyd on Leadership
·      “The nonprofit leader has to pull multiple constituencies together, know where to go and how to get there.  In reality the nonprofit leader’s most important powers are those of persuasion and motivation.  There is no perfect leader so everyone should remember that effectiveness – not infallibility – is the standard by which to judge the nonprofit leader”
·      President Mason on Leadership
·      collaborative’ leadership – building a strong team of talented people and empowering them to do what they do best.  Hire the best, then get out of their way.” 
·      The Leadership of Nonprofit Organizations
·      Board of directors, board chair and executive director
·      The board chair must be a “team builder”
·      “The board chair and the executive director are the intersection between the board and staff”
·      “The executive director has the responsibility to carry out the policies, procedures, and strategic plan adopted by the board”
·      Source:  Iowa Principles and Practices for Charitable Nonprofit Excellence, Section V. BOARD OF DIRECTORS and Section VI. EXECUTIVE DIRECTOR
·      Attributes of Leadership in a Nonprofit Organization (Wolf, pp. 335-337)
·      A clear and inspiring Vision
·      A “strong and abiding” commitment to the nonprofit’s mission
·      A “well developed knowledge of the community in which the organization is active” – Community Engagement
·       Knowledge of constituent needs
·      “[R]ecognize and respect change in their communities and their work both reflects and causes change”
·      “[G]enerate excitement among board and volunteers” and motivate staff
·      A “commitment to mutuality”
·       An ability to oversee “all areas of management” – Organizational Management
·       “Good instincts about the extent of risk that is desirable for the organization” (Risk Management)
·       Personal Attributes – a personal vision, authenticity, comfortable with change/ambiguity and creativity
·      Non-Profit Management
·       The “distinctive character of nonprofit management” – “managing toward the morality of the mission” (HNLM, p. 735)
·       “[A] nonprofit board is ultimately responsible for the affairs and conduct of the organization” (HNLM, p. 155)
·      Nonprofit executives are “centrally responsible for what happens in nonprofit organization” (HNLM, p. 156)
·      A “Board-Centered” Nonprofit Executive
·       “…[E]ffective executives provided significantly more leadership to their boards…took responsibility for supporting and facilitating their board’s work…[and] value and respect their boards”
·      Facilitate interactions in board relationships, show consideratio

·      Providing useful and helpful information to the board
·      includes all the normal things a CEO would give a board but is more in that it gives things about strategy as well as sifting through info for the important stuff
·      Initiating and Maintaining structure for the board
·      Work to maintain consistent procedures  including ojectives, budgets etc
·      Promoting board accomplishments and productivity
·       set and maintain high standards
·      Leadership across teh Boundries: Impact on the External World
·      Spend time on External Relations
·      Learn to delegate much of the management of internal affairs and focus on the external
·      Develop an Informal Information Network
·      gather information that will help outline and predict the future outcomes of the organization – this includes a lot of mettings and getting to know people etc
·      Network stronger and more useful when the parties have more than an acquaintance relationship
·      Face to Face is perferred
·      Sucessful network is built and maintained when people are willing and able to understand and accept the interests of others and it requries exchanging reliable information without violating confidentiality agreements
·      Know your agenda
·      Have an agneda of actions based on the strategic plan ofthe organization
·      Having an agenda will help you process the information you get from your informal information network
·      HUFF says that three strategies effective executives employ are
·      Dramatizing events
·      calling attention to relationships between networking events and the executives agenda
·      Example: Agenda is to expand spanish speaking classes so you get clippings about the need for the spanish classes and growth of area spanish population and send that info to the board members
·       Essentially focuses attention
·      Laying a bread crumb trail
·      over time through various communications a CEO points the way to an important decision
·      HUFF organization action requires than a CEO edit his or her concerns into a smaller number of items that can be comprehended by others
·      CEO has to repeat these small issues over and over for the board to percieve them as important
·      Example: CEO of agency that operates group homes for the mentally ill
·      Original facility was old and in need of repair
·      Operations at the house did not break even
·      Surpluses from the operation of other facilities covered the shortfall
·      CEO knew that upcoming changes would likely cause the organization to operate original facility at an even larger loss
·      CEO lais the bread crumb trail both formally and informally
·      In this approach instead of just saying that the old place had to go (and fight the baord members who loved it) he would merely point out the problem as part of larger problems, then would point out other aspects that would make building a new place sound better
·       Basically by doing it this way when the decision came up it was a foregone conclusion