Archive for June, 2012

Jim Collins, Right People on the Bus or More Fundamental Issue for Non-profit Boards?

Posted on June 13, 2012. Filed under: Combined Federal Campaign - CFC, Fundraising, Leadership, Non-profits |

On the philanthropy.com website, Rick Moyers of the Meyer Foundation posted an interesting piece about the importance of getting the right people to serve on a non-profit’s board.  Below is my response to his column.

Rick,

I’m glad you cited Jim Collin’s work regarding leadership and excellence, for the non-profit world it’s important to read both his book Good to Great (for businesses) and the accompanying monograph Good to Great and the Social Sectors: Why Business Thinking Is Not the Answer, where he describes how the non-profit sector is more complex than the business sector, and that the model of the “economic engine” that works well in the business environment is inadequate for the more complex non-profit sector.   For the non-profit sector he modifies the concept of the “economic engine (which is one of the key points of the for-profit model) to one of the “Resource Engine” that includes Money, Time and People.

I think one of the problems is more fundamental than not getting the right people on the bus, there is confusion about which game is actually being played.

To use a sports analogy, using RFK Stadium in DC as an example, it has had three types of professional teams play in it, baseball (for which it was originally designed), NFL football (the Washington Redskins in their glory days), and professional soccer, the DC United.  Just because the personnel making up one type of team are excellent, it doesn’t mean that a NFL football player would be a good candidate to be on the soccer team or to play professional baseball, especially if he or she hasn’t been told that what’s being played is a different game!    The non-profit sector tends to gloss over this reality and is attracted to all the glitz and money that the NFL has (business envy from the non-profit sector), which is more like professional soccer – not enough money, players work harder and longer for less money, they don’t get all the fancy endorsement deals, etc., and are continually “doing more with less.”

So the non-profit now recruits business people that they believe will be an asset to the non-profit, including the important responsibility of a board of raising funds.  So, what’s the first thing we tell board members is:

A. You need to raise money, and

B.  In the non-profit world it is unethical for development staff to be paid commissions for any fundraising results they achieve.

The first fundamental disconnect is with commission sales – no business owner thinks this is an inherently unethical way to do business, regardless of whether or not they pay commissions in their own business.   The non-profit sector says not only we don’t do business this way – we add that it’s unethical!   I know and understand the AFP position, and my point is that when you recruit successful business leaders, and you don’t tell them why and how the rules are different, while it may appear that the wrong people are on the bus, it can also be that you have not explained the differences clearly, e.g.  “You’re an All-Pro pro quarterback, how come you can’t hit a home run?”

This is an area where I think the non-profit sector has not done a good job in general, that of explaining and celebrating the differences among all three sectors of our society.

The commenting software doesn’t allow graphics, but here’s the description.

Non-profit Diagram by Bill Huddleston, MPA in Non-profit Management:

Modern societies need three components to function:  government, businesses, and non-profits.  Non-profits are the glue that holds society together, and while in the USAwe have a market economy, our society is bigger than the economy.  Non-profits are inherently different than businesses.   Governments are inherently different than businesses.  Here is a diagram showing the fundamental difference between businesses and non-profits.   It is astounding how many non-profit leaders (and political leaders) don’t do a better job of communicating to the American public about the value of all three components of society, all of which are critical.

   DIAGRAM –  Comment software doesn’t display graphics:    My diagram that shows these differences is being used in universities, and I’ll be glad to send it to anyone that sends me an e-mail at BillHuddleston at Verizon dot net with NP diagram in the text.          

The fundamental difference is that in the business example, the provider of the funds is also the direct recipient of the benefits of goods and/or services provided.   On its face, the diagram on the right is more complex than the one on the left, and this is what non-profit leaders have done a poor job of communicating this fact to the American public.

We don’t explain how different the game really is, and then we’re frustrated when the newly recruited board member doesn’t live up to expectations.

Regards,
Bill Huddleston, The CFC Coach

Showing Non-profits how to generate unrestricted funds with the Combined Federal Campaign, billhuddleston@verizon.net.

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