power Steering: Sustainable Growth
March 2009
- Investing in the Board
- The Nonprofit Board's Role in HR
- “Sustained Growth”: Nonprofit Recovery and Reinvestment
- Nonprofit of the Month: Easter Seals Central Texas
Investing in the Board
By Kimberly Caldwell, Greenlights
In these uncertain economic times, what’s commonly referred to as the “bottom line” is a big deal. Every investment a nonprofit makes should be clearly tied to achieving organizational goals. As nonprofit leaders scour budgets for every possible savings opportunity, the question related to each proposed expense is “what’s our return on investment?”
While Return on Investment (ROI) may not be part of the typical nonprofit nomenclature, it should be. As a sector, we are obsessed with accomplishing more with fewer resources. We accomplish as much as we can with less, which often translates to a lot more ROI than some for-profits can offer.
Part of an ROI strategy is deciding what you need most. For some organizations in this volatile funding climate, that might be something as fundamental as keeping the electricity on, or making payroll for the rest of the year.
In terms of “bang for the buck,” however, investing in your Board of Directors can also make a big impact. That’s why Greenlights is launching the Board Excellence Toolkit this spring. This new and easy-to-use resource is designed for boards that want to increase their capacity to serve their mission, but may not have a lot of money to invest in outside help. The five primary topic areas include:
- Board structure,
- Recruitment,
- Orientation,
- Relations with staff, and
- Sustaining success
The Board Excellence Toolkit is designed to help Board Chairs and Executive Directors leverage the time of a busy board. So what can the Toolkit help you and your board do?
Let’s take the topic of board recruitment. Many boards rely on an Executive Director to help the board fulfill this key role by identifying board prospects and even starting conversations with those individuals. Ideally, a Board of Directors can be self-sustaining, and with the Executive Director’s support, manage the recruitment process all on its own. The Toolkit provides practical tools, tips and concepts that can be applied to the board recruitment. For example, the Toolkit has a new board matrix to help track the skills, resources and connections of your board members. It also has a step-by-step process to help identify potential board members and then pursue them strategically. There is also a frank discussion on diversity and what it can mean for your board. All of this and more are in just one of the five sections that your Board Chair and Executive Director can use to empower individuals and committees. And with a stronger, more engaged board, who knows what your organization can accomplish?
The Board Excellence Toolkit packages together hands-on help with ideas and concepts that can help stretch your board’s understanding and interest in serving your mission. The topics have been market-tested and agreed to be the most common areas of need for nonprofit board leaders in Central Texas.
Perhaps the greatest advantage to buying the Board Excellence Toolkit over any other book is that while the information pulls from nation-wide best practices, the toolkit is rooted in the experience of Greenlights consultants working with local boards like yours to implement successful practices in real-world situations. It focuses on building towards action. And, if you need some help understanding a concept or taking the board to an even deeper level of understanding, you can work with Greenlights in a way that will build on, not duplicate, the toolkit resources while also building your board’s capacity to serve.
If this type of high-ROI investment sounds like the kind of resource (or just kick in the pants) that your board needs, you won’t have to wait long to access the information. Greenlights will unveil the Board Excellence Toolkit at the Board Summit on April 29 and have available on the website for purchase by May 1, 2009.
The Nonprofit Board's Role in HR
By Jan Masaoka, Blue Avocado
This article is reprinted with permission from Blue Avocado, an informative and irreverent onine magazine for nonprofit folks. Subscribe by sending an email to editor@blueavocado.org.
I once served on the board of a group whose executive director adamantly insisted that managing staff was her responsibility, not the board's. We stayed hands off until we started to hear rumors of favoritism. After we prevailed in a battle with her about getting a listing of staff pay, we were shocked to discover that her assistant was paid $20,000 more than the program director and nearly as much as the development director. A lesson - actually several lessons - learned.
The role of the board of directors in personnel or human resource administration is frequently a sticky issue for nonprofits. Should the board approve all salaries, or just the executive director's? If a staff member has a grievance, should it come to the board? How can the board's finance committee members, for example, be helpful in hiring accounting staff, but not usurp the hiring role of the executive staff? How can a board member appropriately give feedback to the executive director on the behavior of a staff person?
Boards tend to be at one extreme or another: some insist on approving every raise for every staff member, while others never see a salary report. This article proposes specific guidelines for board oversight that don't take away from the chief executive's authority or responsibility. The board can approve various policies such as salary ranges while not interfering with the staff's ability to manage. However the board structures its oversight, it needs a formal process to exercise that oversight. These guides provide such a process, and follow the principle that the board as a whole governs the organization, while individual board members can be helpful advisors to staff.
Guidelines for the Board's Role in Human Resource Administration
1. Committee(s): The board establishes a board-staff committee that works with matters related to paid staff. Only board members have votes on the committee. This committee makes recommendations to the board for approval (rather than deciding matters on its own). Following are the areas for this committee's scope of examination.
2. Personnel policies and employee manual: The executive director is responsible for ensuring that personnel policies and procedures are disseminated and implemented, and that the policies are reviewed as appropriate by the board. Individual members of the human resources committee may be able to bring their human resources expertise to make suggestions. Every two years or so, the human resources committee (or a task force) reviews the policies with staff and, if appropriate, drafts changes or a complete revision.
3. Salary scales: The executive staff draft a rate schedule (salary ranges for each position or category) of salaries, which is reviewed by the human resources committee or task force. This ensures that the board has considered the strategic matters related to salaries: whether the schedule is in line with the organization's values, whether there is appropriate internal equity or differences among positions and departments, whether specific positions are appropriately placed on the scale, whether compensation is in line with that at similar organizations, and/or whether the compensation supports (rather than hinders) the organization's ability to recruit qualified staff.
The salary schedule is sent by the committee or task force to the whole board for approval. In this way, the executive staff are still responsible for salaries, but the range of salaries is one approved by the board.
4. Salary scale compliance: Once a year, the human resources committee or task force reviews the specific salaries of the staff (by name and position) against the salary schedule, to ensure that no individuals are being paid outside the range for that person's position. The committee's job is to protect against favoritism and ensure compliance with the salary schedule, NOT to review whether any specific individual deserves a particular salary.
5. Benefits: The benefits schedule - health insurance, long-term disability insurance, 401(k), and so forth - is reviewed annually as part of the budget process, with costs projected for the coming year. The human resources committee should review the benefits package at least every two years and suggest changes (additions or subtractions), and their financial implications, to the executive director, the board's finance committee, or both.
6. Hiring: In some cases, at the request of the executive director, one or two board members may help with hiring. A common example is the board treasurer helping to interview and select the chief financial officer (CFO) or accountant. It should be made clear to everyone involved that the final decision is made by the staff person to whom the new hire would report. In these situations individual board members are acting as advisors to staff.
7. Diversity: If an organization has established goals or principles regarding a staff that is diverse in race, ethnicity, gender, age, disability, or other characteristics such as client status, there will be an HR role to play in implementing the policies and goals. A board-staff diversity committee, or the board or board-staff HR committee, can assist with making sure that recruitment efforts reach out effectively (for example, through the ethnic press), be on the alert for indicators of weak management of a diverse workforce (such as a string of resignations from Latina nurses), and with monitoring progress towards goals.
8. Layoffs: A management decision to lay off staff usually reflects a financial situation that should already have been shared with the board. In this context, the steps that management is taking to deal with that financial situation -- whether layoffs, paycuts, new income strategies, or others -- should be discussed with the board and the board should bless or put a hold on management actions. Although in most staffed organizations the decision of who to lay off and when and how are management decisions, it's critical for the board and management to be in sync about how the organization is responding to financial problems.
9. Grievances: Grievances on the part of employees must first go through the written procedures outlined in the employee policies manual. If an individual has exhausted the grievance process and that process has been documented, individual employees may be permitted (if it is so written in the policies) to raise a grievance to either the board chair or the board's human resources committee, which then acts as the final arbiter. This may be especially appropriate where the complaining employee reports to the executive director and has an unresolved complaint about the executive director.
10. Serious charges about the organization's management: Sometimes a staff member has a serious charge against management, such as the illegal or improper use of funds, sexual harassment, discriminatory behavior, or improper accounting methods that cannot be taken up in the grievance process. To provide an outlet for such matters (other than a complaint to the state attorney general), some organizations allow staff members to raise such concerns with the board chair. When other board members hear such complaints, they have a responsibility to direct the staff person to the board chair. By making the board chair the sole recipient of such charges,the board can prevent a disgruntled staff member from trying to develop allies on the board against the executive staff, and can provide a way to bring an organizational matter to the attention of the board as a whole.
Delegating Personnel Work
The board can choose how to delegate personnel-related work. The most common choices are:
- a standing (permanent) human resources committee,
- a human resources task force (that is, a temporary committee),
- a board-staff standing committee, or a
- board-staff task force.
Committee members might include the staff human resources director (if there is one) or executive director, and/or non-board volunteers such as a human resources attorney. (Note that if non-board individuals are members of the committee, either they should be as non-voting advisory members of the committee, or the committee's recommendations should come back to the board for approval.) In some cases, the human resources committee is also responsible for developing plans and strategies for appropriate recruitment and utilization of volunteers, while in other organizations the human resources committee looks only at paid personnel.
Each organization will want to choose its own guidelines on these sensitive and important issues. Striking the right balance between board and ED authority may initially be challenging, but it's far from impossible. In the end, sorting this out will strengthen your organization while making life easier for board members and staff.
“Sustained Growth”: Nonprofit Recovery and Reinvestment
By Ann Starr, Greenlights
When President Obama speaks about the American Recovery and Reinvestment Act, he often uses the phrase “sustained growth.” The reality that, in order to recover from an economic downturn, we need to spend great sums of money may seem a bit counter-intuitive. But that kind of investment is exactly what our country needs so that we may achieve the long-term, sustained growth.
Although on a much smaller scale, the same reality confronts non-profit organizations who face dwindling resources. In order to spark the recovery of our non-profit organizations, each of us must explore the ways in which we can invest in our own sustained growth.
Now is the time to invest in your organization’s single greatest resource: its people.
Instead of simply cutting “professional development” from your budget, talk with your team about ways to ensure that staff and key volunteers get the skills they need to do their best work. Perhaps an organization similar to yours exists in a nearby community that would meet with you to share solutions they’ve found to common problems. Encourage staff to set aside time to find helpful articles on the Internet that are shared with others at regular meetings.
At Greenlights, we strive to make every workshop, Board Summit, Sector Connector and Crossroads Conference an accessible, productive and inspiring opportunity for you to discover ways to have a greater impact through your work. So as you explore ways to reinvest in your people, remember that Greenlights is always here to serve you.
Take a second look at the many course offerings and other resources available to you via Greenlights’ web site. And if you don’t find something that meets your needs, please let us know. Because in this time of economic downturn, the most important investment you can make toward your organization’s recovery is an investment in you.
Nonprofit of the Month: Easter Seals Central Texas
Founded in 1937, Easter Seals Central Texas supports children and adults with disabilities through three programs: Early Childhood Intervention (ECI), Outpatient Rehabilitation, and Workforce Development. In 2008, their ECI program experienced an unprecedented growth of 50%, despite an increasingly unstable economic environment. Because of this great example of growth and for what they do in the community, Easter Seals has earned recognition as Greenlights’ Nonprofit of the Month.
Although they have been an affiliate of Easter Seals National since 1985, Easter Seals Central Texas is a completely locally funded and governed nonprofit that serves 21 counties in Central Texas. They serve individuals with all forms of disabilities, including developmental delays, learning disabilities, physical disabilities, autism, and more. Through their programs, they serve all ages as well, from newborns to adults. Their Workforce Development program helps adults with disabilities find work and live independently. The Outpatient Rehabilitation program provides services such as physical, occupational, and speech therapies for children three and up as well as adults. In this program, clients come to an Easter Seals site for regular services, and recreational camps are offered at various times during the year. A day camp engages children in activities all over Austin, and an overnight camp for adults offers a full week of respite for caregivers. Finally, the Early Childhood Intervention program offers assistance to children under three with disabilities or developmental delays. In this program, a specialist visits the child’s home to provide services and meets with the family two to four times a week (depending on the child’s needs).
The unprecedented growth in the ECI program was fueled by an increased need for services, expansion of outreach services to additional area hospitals, and an awareness campaign around autism. The campaign brought attention to the fact that there has been a huge increase in the number of children with autism over the last two decades – today, around one in 150 children are diagnosed with autism. As the demand for the services offered by their ECI program went up, Easter Seals hired on more staff to meet the growing need. They’ve been able to fund this growth in staff and services through private donors as well as state funding, which is tied to the number of children served.
Greenlights congratulates Easter Seals Central Texas on their continued growth and is happy to highlight them as March’s Nonprofit of the Month.
For more information about Easter Seals Central Texas, visit their facebook page or website, or contact Jen Leaman at jleaman@eastersealstx.com.