I quit

This post orginally appeared at connection cafe on January 20, 2012. Two words a board chair never wants to hear from their ED. Few things can be as disruptive to an organizations success as an Executive Director transition. The staff may be crushed. Your board chair will likely feel horrible this happened on their watch. Mine did three years ago when I told my board chair that after 12 years at the helm I was leaving the organization. 

I’m not alone. According to the 2011 Daring to Lead report, 34% of nonprofit executives will depart within 2 years. You might be surprised to learn that your for-profit leadership peers were pegged at lower attrition, only 25% according to the Corporate Executive Board.  What’s really shocking is only 17% of organizations have a documented succession plan. 

Winston Churchill said, “I am always ready to learn but I do not always like being taught.” Leadership transitions are painful but they can teach us a lot. People change jobs; it’s a fact of life. How can you be prepared? 

5 simple steps to take now:

1. Keep up to date job descriptions.
2. Make sure key internal process are accurately documented: passwords,  signing authority, key documentation and procedures, etc.  
3. Have an airtight communications plan to thoughtfully communicate your change to the appropriate groups, moving from your inner circle of closest supporters outward. Leverage this important time to show gratitude to your outgoing leader, your positive outlook on your future and confidence in your temporary or incoming leadership. 
4. Develop an Emergency Succession Plan that addresses your temporary staffing structure in case of emergency, including authority and restrictions of the Executive Director.
5. Considering hiring an Interim Executive Director. Times of transition are critical opportunities for reflection and growth. With the expertise of a seasoned external leader to come in and provide leadership and assess the organizations health, priorities sand opportunities the staff and board can get an unbiased impartial look crucial for making decisions about what kind of leadership and direction are needed. Even better? It’s already budgeted!  Learn more about Interim Executive Director programs from my friends at Greenlights. 

5 reasons to donate to a charity's overhead

I'd like to restrict my donation to pay for salaries, rent, professional development, health insurance, a bonus, a staff retreat, or fundraising.  In sum, if it's "overhead" I'd like the charities I support to spend 100% of my donation on it. Most people want the exact opposite.  Funder after funder, foundation after foundation, all caught in the same trap.  A vicious trap.  A trap called out by a highly controversial and timely advocate: Dan Pallotta, author of Uncharitable: How Restraints on Non-profits Undermine Their Potential. I wish you could see the amazing presentation he gave at the Texas Non-Profit Summit last month, but sadly the "content was removed by owner", whatever that means.  Kudos to Greenlights and especially the brilliant Kim Wilson, for bringing Dan Pallotta and his provocative message to our industry.  I'm halfway done with Dan's book.  The first half of the book tackles an argument around non-profit compensation that seems to trump and polarize people into a complete bottleneck of an argument that renders them useless for getting to what I believe is most important issue at hand: an arbitrary meaningless yardstick destroying the effectiveness of non-profit industry and the very fabric and essence of philanthropy.

What's the yardstick?  A societal obsession that's led to the institutionalization of the belief that a non-profits percentage of spending on fundraising and administrative is an indication of effectiveness AND worthiness of a funders donation.

Hogwash.  Here are 5 reasons to donate to overhead.

1) How much money a charity spends on administrative or fundraising expenses is arbitrary and meaningless.  It says absolutely nothing about what matters: how effective the agency is at fulfilling their mission.   Some agencies rent space.  Some get it for free.  That doesn't matter: what matters is how is the charity impacting the lives it's trying to change?  If it can't serve its clients because there's no parking at their "free" in-kind office space then they aren't very efficient and my gift is more likely to make a bigger impacting at at agency paying rent.

2) The "ratio" of general and administrative expenses to program expenses is a fabricated number to start with.  Charities decide what expenses are allocated to programs and what are allocated to overhead.  There isn't one way to do it.  There are many.  One ED entered every expense into Quickbooks, regardless of the charge, to 90% programs, 3% fundraising and 7% administrative.   I would estimate she is in good company and many charities, especially larger ones, follow her formula.  At the non-profit I started and led for twelve years I took a different approach: expenses and timesheets were billed directly to the programs they were spent on or served (i.e. summer camp, after school etc).  To put it simply, "overhead" is in the eye of the beholder.

3) Helping ensure that people are compensated fairly for their talents and dedication, that achievements are rewarded, that staff can live comfortably, that workers have the technology infrastructure to thrive and efficiently serve clients and raise money, and work in facilities that are fully operational, optimal and safe is aGOOD investment. It's money well spent.  End of story.  Nuff' said.

4) Whatever happened to the joy of giving? To the spirit of philanthropy? Do we really think so low of people at charities that we honestly can't trust them with the very dollars we want to give?  Hmmm...if we feel that way have we really spent enough time getting to know them?  Or do we have trust issues?  If so, why are we giving?  Are you a bitter, cave-dwelling, catlike creature with a heart "two sizes too small," living on snowy Mount Crumpit, just north of Whoville, home of the merry and warm-hearted Whos?  If so, please stay on Mount Crumpit and stay away from charitable ventures in Whoville.  A true philanthropist is made of many admirable traits and after generosity come equal parts of faith and trust.  If you don't have that, don't give.  Sadly, non-profits are courting enough grinches already and don't need another.

5) Focus on what is important in the first place:  that Headstart is giving kids a headstart to succeed.  That adoption agencies are getting kids adopted into safe, loving homes.

What's the overhead in your house?  Paper towels?  Toilet paper?  Could you live without that?  I hope you wouldn't try.  Should we judge you for spending on that?

Give and stay classy,

Rachel

The hidden cost of free

Times are lean but even when they aren't, in the non-profit world 'free' is the gold standard.  Free trumps everything.  But free has a price tag.  Ever heard the phrase, "as free as kittens"?  Earlier this summer I blogged about the cost of being cheap. Here's what's can be even more expensive:  free. If your office space is free but you have no parking for clients or donors and your staff are crammed in one room where they have to wear ear mufflers to hear themselves think, is your space really free?  Not when you calculate your lost productivity, lost revenue from would be clients or would be donors who can't engage in your services or in supporting your mission.  How about that "volunteer webmaster" that is supposed to be building your new site or managing your existing one but hasn't responded to your emails or calls for the past 6 months?  How much is it costing you to unsuccessfully track them down and hobble along with a subpar online presence with dated information, graphics and content that doesn't engage your constituents?  Now add to the cost of your time  what you could be raising if you had a top notch site that did engage your visitors with compelling opportunities to give.  Who knew cheap could be so pricey?  Let's talk about that social media intern who is supposedly building your Facebook page, tweeting for you and setting up your blog?  Really?  Would you hand that intern over the mic at your annual gala in font of hundreds of your key stakeholders?  Because you might as well be.  Are they qualified to serve as the spokesperson for your agency?    What would it cost you if they weren't?  In a word: everything.

Every non-profit is stretched thin.  So, how can you not break?   Here are three things you can't afford to be "free":

1) Your technology

Your database shouldn't be managed by anyone but you.  Whether its a donor database or software tools you need, you can afford a reliable, cost effective solution and these solutions are all around you.  With so many affordable solutions, there's no excuse for not investing in your infrastructure.

2) Your brand

You get what you pay for, plain and simple.  Brands don't come free.  if you need a new identify system, shop around.  You may find many generous vendors who will donate a portion of their services but PAY SOMETHING because when you pay nothing you often get one opinion and your identity is too important to take the first logo you get.

3) Your social media

Social media is one of the only things that is free but it is a time investment.  There are plenty of examples of non-profits and companies who do  this right and do this well.  follow them to learn!  Don't delegate this to someone on the fringe of your agency, your messaging is too important for that.

Everyone is stretched thin but by prioritizing and spending your dollars wisely, you'll stay ahead of the curve and ensure that you take your agency to the next level.

Stay classy,

Rachel