Staying flat, staying thin, staying effective. (Thesis Part V, Innovative Governance Structures For Small Nonprofits)

So... I’m only two months late getting to my thesis “grand finale” blog post. That’s pretty horrible... all work and no blog makes J-me something something. -

Here’s a brief recap, since it’s been so long:

1) Nonprofits, especially small nonprofits, are facing hardships. 2) The traditional hierarchical model doesn’t cut it. It can leave volunteers and board members feeling disengaged and disempowered. 3) However - people keep retreating to tradition. The nonprofit industry is by no means perfect, nor is it’s traditional structure, either. 4) We need:

• Nonprofits that rely on and engage the top part of the pyramid less and the bottom part of the pyramid more.
• Nonprofits that engage their volunteers more than they use them.
• Nonprofits that network and collaborate, rather than compete.
• Nonprofits that are flatter, thinner, and as a result of all the above – more sustainable.

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And now we come to my call:

More organizations need to move to role based, non-hierarchical shared-power board models.

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I believe strongly effective boards will have the following characteristics:

• Non hierarchical (one member, one vote!)
• Specific roles for EACH board member (no warm bodies)
• Board chair = project manager (not a “default boss”)
• Annual board reviews compulsory
• 2 to 3 year commitments (for each role, no rotating governance positions)
• Built to transform
• Built to change

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I posit that strong, role-based boards

• Can do more with less
• Are more effective
• Can better engage volunteers
• Can flexibly respond to changing needs
• Can retain, sustain, or grow an org.

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The following myths are still prevalent in the nonprofit community:

• You need an E.D. to get things done.

-------Neighborhood organizations, cooperatives and collaboratives disprove this continually.

• You need paid staff to be accountable.

-------*The board* as a governing body is by default accountable! You can operate a nonprofit without paid staff forever, but you MUST have a board.

• Hierarchy is the best way to organize.

-------Apache/ Apache. Napster. Amazon - to name but a few.

• Nobody actually wants to work if they join the board.

-------People join an organization because they are drawn to it’s mission. If they aren’t in sync with a mission, why would they join? If they don’t want to engage - why would you want them to join?

• Collaboration is too idealistic; it sounds great but you can’t get anything done.

-------Individual and committee autonomy for board is often more efficient than running things through a strict hierarchy or bureaucracy.

• Consistency is better than change.

-------The definition of insanity: doing the same thing over and over again and expecting different results. Communities change and evolve; nonprofit services and programs should flex and flux as well.

• Prior board membership automatically equates to valuable experience and knowledge.

-------Not if you bring to the board bad habits or a fear of innovation and experimentation. Sometimes green is keen, especially when it comes to fresh ideas and energy from board members! -

In my experience implementing them, I’ve had the following results with Role-Based boards:

• Sustainable
• Preserves resources
• Clear expectations
• Engages board members
• Stimulates innovation and creativity
• Curbs personal “AGENDA”
• Aids board reviews and individual assessments
• Requires a greater contribution and commitment from board members.

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A General Role-Based Board

Though specifics will vary from nonprofit to nonprofit, the following roles seem to be generally needed across the spectrum.

Board Chair: more of a “project manager” than default boss. Helps guide board members, rather than instruct them. Makes sure resources are allocated appropriately.

Secretary: traditional. Manages corporate documents, tracks minutes and agendas. Maintains and updates board role descriptions.

Treasurer: traditional. Helps maintain fiscal transparency and accountability. Contributes to universal board understanding of accounting practices and procedures.

Communications director: A board position dedicated to being the voice and press liaison for the organization.

Client Liaison: While most board members are focusing on the nuts and bolts of the organization, one person remains a continual and constant touch point for those being served.

Development Director: All board members should have some role in fundraising. This person oversees and plans for annual development procedures, such as overseeing a fall appeal, outgoing grants, reports, etc.

Program Services: Depending on the extent and variety of services, a person to oversee the continuity and integrity of that which an organization provides.

Volunteer/Board Recruitment: A person on the board dedicated to tracking the board role tenure list, recruiting board members and volunteers, volunteer and board orientation and training.

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Recommended Default Committees (all with open enrollment)

• Executive or Management Committee: for strategic planning, installing grievance procedures, etc.
• Recognition Committee: donor, volunteer and board member appreciation.
• Fundraising/Development

I presented the preceding and above information last Friday at the Minnesota Council of Nonprofits’ Annual conference, along with two case studies. To my delight, the presentation was very well received. I’ve embedded a copy of the powerpoint below.

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Staying Flat, Staying Thin, Staying Effective

View more presentations from purenoumena.

Realizing my personal blog is being continually sprinkled with may-or-may-not-be-boring nonprofit research, I’ve started a different blog where that can live self-contained.

Feel free to visit (or welcome, if you’re here): strongboards.org

Nonprofits - please stop wasting your resources. (Thesis Part IV, Why Nonprofits Need to Change)

For my thesis, I focused largely on volunteer driven community organizations. Partially because that’s where I have a passion, but also because I believe that’s where we have an opportunity to make lasting change, resolve some heavy issues, and set great examples for the rest of the nonprofit world. I’ve had a few conversations in the past week that have been about these very issues - it’s almost as though the *world* is pushing me to BLOG about this again! (har.) A question that came up yesterday:

Why are there so many groups of one or two people out there doing the exact same thing?

We discussed already that volunteers and workers often go to a nonprofit because they support the mission of the organization. Even in the case of volunteers that are forced to do community service hours, there is occasionally some choice involved in where they serve.

However, because of the innately hierarchical structure of most nonprofit organizations, volunteers and workers often are literally disengaged from the mission. This is especially obvious when you have executive directors that are not willing to share responsibility, relinquish power, or do not value the ideas and contributions of their staff and volunteers. So volunteers and staff go elsewhere, stop volunteering, or start their own nonprofit. (Repeating the cycle).

We wind up with a lot of nonprofits led by a lot of “visionaries,” much duplication of services, more competition (for the fewer resources that are available), and a community that still has needs not fully being met.

Have you ever volunteered or worked at an organization where your voice wasn’t heard? If you’re being fairly compensated, sometimes it’s easier to overlook when you’re being overlooked. However, if a person is being paid in hugs and high fives - as is the case with volunteers - sometimes it’s harder to overlook disengagement. Some volunteers are also just so used to that system that they grin and bear it -- they are just happy to help.

We can do so much better for people than that.

It’s also wasting one of the best resources nonprofits have.

I think we need:

• Nonprofits that rely on and engage the top part of the pyramid less and the bottom part of the pyramid more.
• Nonprofits that engage their volunteers more than they use them.
• Nonprofits that network and collaborate, rather than compete.
• Nonprofits that are flatter, thinner, and as a result of all the above - more sustainable.

Next week, I’ll cut it down to brass tacks and talk about the structure that I believe does just that. Stay tuned.

We’re wasting all your donations. (Thesis Part III, Nonprofits in a Modern Society)

Hey - did you know there are over a million nonprofits in the United States? Heck, I can think of at least two right now. .....

Shameless plugs aside, there are a lot of nonprofits, and the count is on the rise. The number of nonprofits increased 30% between 1998 and 2008 - to about 1.5 million.

It must be contagious.

In the states, nonprofits employ 11 million people and engage 5.7  million volunteers annually. No small beans.

But how do nonprofit organizations work, essentially? A couple of folks get together and resolve issues for the greater good, right? Nonprofit businesses are permeated with warm fuzzy feelings where there is no workplace drama, everybody has a voice, and women are paid equal wages for equal work, right?

No, not really.

Nonprofits have a lot of the same problems for-profit businesses have, and a few extra ones too.

“Nonprofit organizations are working in an era of heightened scrutiny, greater demands, fewer resources, and increased competition.” - Adams and Perlmutter.

Women are also often paid less for similar work - and not by a little, either.

I'm kidding, right? Nope.

“Among those with annual budgets of more than $50-million in 2000, the median salary for male chief executive officers was 46 percent higher than that for women.” - guidestar.org

Even scarier? According to some recent studies, it's getting worse - not better.

Point being: the nonprofit industry is by no means perfect, nor is the business structure of nonprofits, either.

So - what is the structure of nonprofits, anyway? Here's a quick review.

Traditional nonprofit structures are innately hierarchical. In nonprofits with a paid staff the nonprofit governing board, led by a board chair, hires and supervises an executive director.

Let’s start with the board. A federally recognized nonprofit board is required to have a minimum of three officers - a chair, a secretary, and a treasurer. Most boards have more. Some small orgs have just three.

The rule of thumb for nonprofits with paid staff is this: the board sets the mission, the executive director fulfills it. However, in a hierarchical working board with no staff, or in an organization with a paid staff, this situation can leave something to be desired. Nonprofit board members are often constrained by traditional roles: they are skilled and willing to help the organization, but due to the nature of their roles (or lack of them), situationally unable.

Moving to the organization: the executive director, hired by the board, supervises and hires the remaining staff. But even in institutions with an active board, both board and staff still receive most information filtered through an executive director.

So while the purpose of the board is intended to be one of governance as a checks-and-balances to the system, all too many nonprofits really operate as a hierarchy with the ED guiding both the organization AND the board.

So - what questions am I asking here? Ohhhhh so many. A few key ones:

• Do traditional executive directors have too much power?
• Is the current board/org structure of nonprofits as effective as it could be?
• Could we be doing more to engage board members?
• Why are nonprofits -committed to various aspects of the greater good- not setting better industry standards for employee, board, and volunteer engagement as well as fair pay?
• How are nonprofits going to survive this “era of heightened scrutiny, greater demands, fewer resources, and increased competition?”

Stay tuned. I’ll answer all those questions and more! Thanks for reading.

In other news:

I've been asked to present at this year's Nonprofit State Fair. Woo! Here's the skinny on what I'll be presenting:

Innovative Governance Models: Staying Flat, Staying Thin, Staying Effective

Over the past years, nonprofits, including volunteer-led grassroots organizations, have faced a growing number of challenges. In the context of a changing environment, where nonprofit leaders are expected to do more with less and nonprofit volunteers are often expected to do more than before , is the traditional hierarchical form of nonprofit governance still relevant? In this session, we’ll explore a governance structure for volunteer-led, grassroots organizations that offers shared power and decision making, greater flexibility and ability to innovate, and potential for greater organizational sustainability. Attend this session to discover an alternative for volunteer-driven organizational governance models, learn how you can effectively engage volunteers, board, and staff utilizing the model and see if it’s a fit for your grassroots organization. Jamie Schumacher, Executive Director, Northeast Community Development Corporation

In short: it's going to be neat, and you should totally come. :)

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More super fun resources for you:

Nonprofit statistics: http://nccsdataweb.urban.org/PubApps/profile1.php

Salaries: http://philanthropy.com/article/Gap-Between-MensWomens/52648/

Cameron, H. (2004). The nonprofit phenomenon. Searcher,12(2), 33-41.

Cornforth, C. (2001). What makes boards effective? An examination of the relationships between board inputs, structures, processes and effectiveness in nonprofit organisations. Corporate Governance: An International Review, 9(3), 217.

Gangl, W. (1998). Creating and maintaining effective governance for nonprofits and foundations-I. Directorship, 24(8), 10.

Hackler, D., & Saxton, G. D. (2007). The strategic use of information technology by nonprofit organizations: Increasing capacity and untapped potential. Public Administration Review, 67(3), 474-487.

Anonymous. (2004). Invigorating bored boards. Credit Union Directors Newsletter, 28(9), 3-4.

Light, P. C. (1998). Sustaining innovation: Creating nonprofit and government organizations that innovate naturally. San Francisco: Jossey-Bass. _____

I hate everyone’s boss. (Thesis Part II, The hegemony of hierarchy)

Okay - for the record, I don’t actually hate everyone's boss. I do get some pretty defensive reactions when I start talking about non-hierarchical structures and why I think they can be a good thing, though. Here’s the scoop.

Hierarchy has been the dominant model in business and organizational structures for several hundred years - and for good reason. Time and management studies helped increase efficiency, something particularly necessary in an industrial age.

Get those kids back to work!

Hierarchy has since remained the industry standard. It has persisted as a hegemony - we assume it’s the right way to run a business, because it’s the way businesses run. As resources get tighter, many organizations simply refer to the known. Who wants to get experimental with business structures in a shaky economy?

This gal! (More on that later.)

Unfortunately, hierarchies can be emotionally and unnecessarily intense workplaces. (Ask anybody that has had a strict, unreasonable, or micro-managey boss, has ever been laid off, fired, etc.)

In his book Social Intelligence Daniel Goleman discussed the ramifications positive and negative workplace interactions can have on health. He argued that rigid hierarchical models can significantly (and negatively) effect the emotional well-being of subordinates. In other words - the stricter your boss, the crappier your job, and the less emotionally healthy you might be.

But we’re managing people, not machines - right? Shouldn’t we be paying attention to this? I think so.

This doesn’t mean that hierarchies are all bad. Gerald Fairtlough outlined some of the (assumed) advantages of hierarchy as reasons why the structure persists: - Hierarchies provide familiarity - In an ideal situation hierarchies prevent chaos by systematically avoiding conflict - Hierarchies can provide clarity of roles and positions (um, that’s not in my job description Dov) - Workers can be more personally motivated (they personally identify with their specific role)

But should we assume that a hierarchy is the best model all the time? Are there alternative models we can and should be exploring? Are the advantages above (or any others) really unique to a hierarchical system?

You never know until you try.

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Thanks for reading! Next I’ll be talking about alternative organizational structures and the move away from hierarchy. (::yawn::) No - I promise, it’s actually pretty neat.

A few sources for you:

Britan, G. M., Cohen, R., & Institute for the Study of Human, I. (1980). Hierarchy and society: Anthropological perspectives on bureaucracy. Philadelphia, Pennsylvania: Institute for the Study of Human Issues.

Code, J. B. (1940). Dictionary of the American hierarchy. New York, New York: Longmans, Green and Co.

DiMaggio, P. (2001). The twenty-first-century firm: Changing economic organization in international perspective. Princeton, N.J.: Princeton University Press.

Fairtlough, G. (2005). Three ways of getting things done: Hierarchy, heterarchy, and responsible autonomy. Bridport, Dorset: Triarchy Press

Gabriel, Y. (1998). An introduction to the social psychology of insults in organizations. Human Relations, 51, 1329-1354.

Goleman, D. (2007). Social intelligence. New York: Bantam.

Hesselbein, F., & Johnston, R. (2002). On high-performance organizations. San Francisco: Jossey-Bass.

Lynch, J. (1979). The broken heart. New York: Basic Books.

Thayer, F. C. (1981). An end to hierarchy and competition: Administration in the post-affluent world. New York : New Viewpoints.

Von Bertalanffy, L. (1969). General system theory; foundations, development, applications. New York, NY: G. Braziller.

Von Bertalanffy, L., & Laszlo, E. e. (1972). The relevance of general systems theory; Papers presented to Ludwig von Bertalanffy on his seventieth birthday. New York: G. Braziller.

Weber, M., & Andreski, S. (1983). Max Weber on capitalism, bureaucracy, and religion: A selection of texts. Boston: Allen & Unwin.

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Image one: Pupils at a primary school in the Philippine capital, Manila (Source: AP)

Image two: Me with my head in a box. (Source: Jenn Rose)

Image three: n/a (Source: I have no clue, I found it on google. Help me out here)

Was my thesis a ginormous waste of time and money? (Thesis Part I, Introduction)

Quite a few folks have expressed an interest about my thesis. Some, in fact, even ventured to read it. ::gasp!:: Perhaps they are just humoring me.

Even if that’s the case, I think my thesis does cover some important ground for small nonprofit organizations, and there is some information I would really like to share.

What’s the Problem?

Nonprofits everywhere are struggling and buckling down. It doesn’t take graduate level research to prove that. People are volunteering and engagement in philanthropy is increasing, but due to corruption and scandal, some people have also lost a little faith in the nonprofit industry. Donations are down. Societal needs are changing. Nonprofits need to adapt to these needs and continue to provide services while they undergo change. To put it simply, nonprofits are also expected to do far more with far less.

How, exactly, are we supposed to do this?

My thesis:  I came to the conclusion that a heterarchy is an exceptional alternative model for volunteer driven nonprofit organizations particularly in an innovation society. I demonstrate this by first showing that hierarchies are a hegemonic standard, one that does not fully satisfy the needs of volunteer-driven nonprofit organizations. Alternative models can be introduced, and by evaluating an actual heterarchical model I show that a heterarchical structure is possible in practice, as well as in theory.

Over the next few weeks I plan to write about:

• Why the traditional structure (the hierarchy) is not adequate, particularly for small, volunteer-driven organizations
• The current landscape for nonprofits
• New types of non-hierarchical business structures
• Why new models will work better today than the traditional hierarchy
• Why this is particularly important for arts organizations
• Implementing this at my own organization
• How implementing this structure helped us both survive the recession and improve our services.

I’ll follow up to all of this by posting my full thesis, in case anybody is included to read further.  Please - feel free to ask questions as I go. Disagree with me at any point? Please let me know.

I think this is a huge issue and nonprofits aren’t talking about it or planning for it enough.

I think there will be a crisis in leadership if large nonprofits do not soon begin to change ageist and gender biased practices.

--- Years ago, a lot of young people (like myself) were the advocates for technology and innovation in our organization. We were the natural online social networkers. We suggested our organizations do a better job online. We were largely ignored.

Nonprofit journals, organizations, and magazines must do a better job of giving a voice to small nonprofits and really embracing innovative ideas - before the curve instead of after.

Altered Esthetics - Board Sustainability Presentation

After doing research about leaderless organizations and writing the Ae Case Study, I had to present a new structure to the board. This is the simple presentation I used. I outlined the past structures of Ae, our goals, the new structure and my proposal for implementation.

Altered Esthetics - Structure and Sustainability Presentation

View more presentations or upload your own. (tags: altered esthetics)

Altered Esthetics Structure and Sustainability Board Presentation by J. R. Schumacher is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License.

My research and writing

I spent a good deal of time last fall writing two rather extensive papers that, while well researched academically, are also quite practical in both business and academic settings. My original intent was to submit these papers for publication. Instead, I'm posting them here and sending them out and about.

I'm doing this for several reasons.

1) I believe knowledge should be shared. Seriously! I believe this sharing of information falls in line with my own personal goals. Don't get me wrong, I do hope to write something for publication in an academic journal at some point. (In fact, hopefully I will have many of those opportunities in the future!) However, the process for submission, review and publication is quite lengthy, and much of this information might be of use sooner rather than later. This also isn't to say that "I know everything" about these topics by any means - only that I've done quite a bit of research along these lines and I'm putting these out there freely on the off chance I am able to help some non profits get some insight.

2) I want to introduce folks to "Creative Commons" licensing. "Creative Commons is a nonprofit corporation dedicated to making it easier for people to share and build upon the work of others, consistent with the rules of copyright. (They) provide free licenses and other legal tools to mark creative work with the freedom the creator wants it to carry, so others can share, remix, use commercially, or any combination thereof." In other words - their mission is to foster and promote learning, sharing, and creativity. Anybody that knows me well knows why I'm all over this.

3) I hope to get feedback. That means from you, from anybody you share this with - I would love to hear your thoughts and feedback. Innovation in global philanthropy, especially in terms of new media communications, is an area where I'll be working and researching for a long time now. This field is a unique junction of academia, business, and media. There are no hard boundaries and anything you have to contribute to this dialogue is much welcome and much appreciated.

4) I could not have written this without the research and work of others for me. At this point in my career, I believe this is the best way for me to continue and contribute to this ongoing academic dialogue.

This may not wind up being a good idea - only time will tell. In the meantime...

My writings and research page - a list of academic articles and case studies.

Useful Links Creative Commons.org