31 March 2009

Exectuive Compensation and the Board of Directors

Welcome back!

At our workshop I pointed to new IRS reporting requirements and California Nonprofit Accountability Law requiring boards of directors of nonprofit organizations to set executive compensation and monitor that expense. In the context of smaller nonprofits we often don't worry about overpaying. But is can be and is a problem. The recent corporate scandals involving the financial sector demonstrates that and the Wall Street Journal says nonprofits need to watch out too!

". . . the IRS has signaled more aggressive oversight of charities as various compensation scandals crop up among nonprofits." Wall Street Journal, Pay at Nonprofits Gets a second look

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29 March 2009

BBC reports Obama agrees with me

Welcome back!

The chief executive and chairman of troubled US car maker General Motors will step down at once, at the request of Barack Obama. --BBC

In my workshops with board of directors of community and faith-based organizations I often use boards of equity corporations as examples of both good and bad behavior of boards, CEO's and to illustrate the concept of ownership.

Recently I have been commenting that the CEO's from US automakers and financial institutions who are sitting in front of Senate hearings explaining why their companies have failed to produce a profit or even enough money to sustain ongoing operations demonstrated that boards of directors are not achieving accountability on behalf of stockholders. My understanding that a CEO should lead an equity corporation to achieve increased value of equity for stockholders would be the only criteria for continuing employment.

So, the boards didn't live up to their responsibility, stockholders didn't act at a stockholders meeting, therefore, the Whitehouse took some kind of action. GM's CEO will be stepping down at Barack Obama's request. I'll post more news as I find it. BBC is reporting it here.

Los Angeles Times General Motors CEO Rick Wagoner to step down.

Wall Street Journal: Chrysler CEO Not Likely To Follow GM Wagoner's Fate.

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Books I Recommend to You as a Community Nonprofit Leader

Welcome back!

I made these book recommendations to the group on Saturday:

On board governance model as presented:

The 24-page introduction to the 10 principles that I presented: CarverGuide, Basic Principles of Policy Governance (J-B Carver Board Governance Series) (Vol 1)

The larger text book on Policy Governance: Boards That Make a Difference (J-B Carver Board Governance Series)

The Q & A book with short chapters that answer a bunch of basic questions: Nonprofit Board Answer Book: Practical Guidelines for Board Members and Chief Executives

On business and organizational theory by Jim Collins:

This is a popular book that helps successful companies become more successful: Good to Great: Why Some Companies Make the Leap... and Others Don't

A short follow up, stand alone chapter where Jim Collins addresses some specific issues for social sector organizations: Good to Great and the Social Sectors: A Monograph to Accompany Good to Great

I appreciate complements whenever they come: Colleen Marks told me that our session was "dope" and "out-of-the-bun." So, there you go!

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25 March 2009

Twenty things to do through the crises (and all the time for that matter)

Welcome back!
A panel of nonprofit and community organization leaders got together last week and talked about what people need to know and what they are doing and consider the way through the current situation and beyond. Here are some highlights:

  • Assess where you are today—board, staff, programs, think strategically
  • Evaluate things you already have available volunteers, clients (can help solve problems), board members, donors, who else?
  • If already in trouble, don’t panic, get help
  • Make changes
  • Communicate and increase donorship and stewardship
  • Get everyone involved in fundraising—get everyone at the table
  • Focus on mission (production of ends) and beneficiaries
  • There are no problems that are new or unique—someone has survived this problem before you.
  • “Credit is a ghost, dead and gone” –Merrill Lynch (Bank of America)
  • Transparency and accountability—have a communication policy and plan
  • Siloing and adversarial relationships are not helpful.
  • Be proactive, not reactive
  • “Shop outside of your own closet” encourage communication
  • Ask why board members endorse your organization—do more of that (hedgehog)
  • Demonstrate credibility with consistent and clear marketing and market position.
  • Crisis is an opportunity. Get the message out how now is the time for your donors, volunteers, and others to engage
  • New opportunity for volunteer service—new funding coming down for National Service Corporation
  • Be aware of new IRS accountability and reporting. Changes on charitable giving
  • Make a plan for planned giving
  • Use this as a mobilizing moment—how important is it that we will keep doing what we are doing? Engage others in this passion.
Capacity Partnership Group can help you negotiate your way through this.

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23 March 2009

Free Board Governance Workshop in Whittier on March 28

Welcome back!

This is the first time I have offered this free of charge to participants. Three and a half hours of board governance introduction and it includes lunch! Thanks to the great people at Whittier Area Community Church and their Serve Weekend project.

Good Governance--Leadership Excellence
Trainer: Glen Peterson
Whittier Area Community Church
Saturday, March 28, 2009
9 am - 1 pm
Lunch included

We can bring this workshop and
others to your geography.
Let's work on something together.

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19 March 2009

House Passes Bipartisan Legislation to Expand and Strengthen National Service

Welcome back!

Washington D.C. – The U.S. House of Representatives today passed the most significant overhaul and expansion of national service programs in 16 years, acting on President Obama’s call to increase service opportunities for Americans of all ages to help address the economic crisis and usher in a new era of service and responsibility for our nation.

For more look here.

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17 March 2009

Board of Directors or Booster Club?

Welcome back!

Last week I was at an educational event for leaders of nonprofit organizations where I heard that the fundamental work of a board of directors must now be that of fundraising because some nonprofit organizations may fail because of recent adjustment of the worldwide economy. In an environment where support and resources will be in short supply, it seemed that some are saying that boards no must become booster clubs to attract diminishing sources of support.

There is a foundational disconnect with this idea that dismisses the reality that the board has real work to do that is really governance and is an essential value added to the organization.

Board fundamental job remains the same.

  1. Articulation of board level values that describe what difference the organization will make in the world, who will benefit from that change and at what cost that change will be worth the investment
  2. Hold the organization accountable for achieving that change without violating prestated situations and circumstances that are unacceptable
  3. Linkage to the moral ownership or membership or the community on behalf of which the organization accomplishes #1 above.

It is clear that the above tasks may require certain skills of individual board members who may or may not also possess those characteristics required to be a part of this new requirement of promoting the cause to prospective funders and supporters. I highly recommend that within operations, and that may include people who also serve as board members, as many people with the right skills and attitudes be empowered and encouraged to apply all of their skills and energy into efforts that will bring the required resources to the table for organizations to continue their important work of creating a difference in the communities where they work.

The fundraising efforts and the board governance work both must be done and one cannot be achieved without the other. Capacity partnership Group provides training, assessment and evaluation and technical assistance for implementation of a complete system of board governance that equips boards of directors to accomplish the 3 job outputs listed above. These job outputs work for nonprofit organizations and for equity corporations. If boards of directors had done this work, in the financial sectors, there would be much less news about bailouts and bonuses today.

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12 March 2009

Madoff Affect

Welcome back.

Today, Bernie Madoff pled guilty for some outrageous criminal behavior related to other peoples money. This will have a deleterious affect on anyone who is in a business that requires trust and transparency. Fundraisers who raise money for very many worthwhile causes may be looked at with a more wary eye in the Madoff aftermath.

Nonprofits should practice transparency in their reporting far beyond what is merely required in difficult time such as these. Donors should pay attention to where their dollars are donated and invested into projects, programs and organizations that make communities and the world a better place.

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Two day Tax and Election Law Training for Nonprofits

. . . is offered in San Francisco, March 19-20.

The Alliance for Justice is offering:

Tax & Election Law for Nonprofits

What Every Nonprofit Lawyer or Accountant Needs to Know About Advocacy

More information is here.

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