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  • 08/15/2017 1:11 PM | Ed Graziano (Administrator)

    By: Bob Campbell, Campbell, Smith & Associates  


    While there are many definitions of leadership, probably my favorite is: “Leadership is inspiring others to pursue your vision within the parameters you set, to the extent that it becomes a shared effort, shared vision and as a result a shared success.” (Zeitchik, 2013) Before getting into further discussion on this subject, let’s make sure we understand and accept the fact that management and leadership are two entirely different things. Often times these two terms are used interchangeably but, as writer and consultant Peter Drucker once stated, “Management is doing things right; while leadership is doing the right things.” Where we start to run into organizational challenges is when we look at leadership styles and how they may or may not fit with the environment in which very specific results are expected. For the purpose of this discussion I would suggest that there are probably at least six different leadership styles that can be used as the situation requires

    >The “Follow me” leader. This style works best when a new direction is needed. It focuses on the end goal and depends on the team to provide the means of getting there.

    >The “Do as I do now” leader. This style is usually a good match to an already motivated and skilled team where quick results are needed. In the long term, however, it can overwhelm team members and frustrate individual motivation.

    >The “People come first” leader. This style usually works well when healing is needed within the group for any number of reasons. It depends on building relationships with the team and convincing them that they belong to a family of folks seeking a common goal.

    >The ”Let me help you improve” leader. This uses a coaching style to help the team develop long-lasting skills that will serve them in the future. It is the least effective in situations where the team is unwilling to learn and/or doesn’t trust the skills of the leader.

    >The “I’m the boss” leader. This style follows a “just do what I tell you” philosophy which works in times of crisis. Unfortunately, it also can alienate team members and block individual incentive and creativity.

    >The “Consensus” leader. This style enlists the input of all team members on solutions for the challenges being faced. It encourages team members to take ownership and become a part of the solution. This style doesn’t work well in emergencies or when team members are not informed enough to offer creative suggestions.

    It is incumbent upon the true leader, who is seeking long-term effectiveness and therefore success, to be able to adapt to any and all of these styles based on the situation and the need of the team members individually and collectively. Teams are destined to be made up of different personalities, different skill sets, different individual goals and different needs in terms of what motivates them. It is the leader’s responsibility to assess and fully understand the different elements of the members of their team and as a result be able to maximize the potential of   the team. That’s why we have many more managers and fewer great leaders.

  • 04/09/2017 11:28 PM | Ed Graziano (Administrator)

    By:  Bob Campbell, Campbell, Smith & Associates  

    We make the comment on our web site that “an organization without a Strategic Plan is merely running around putting out fires every day”. While possibly somewhat of an exaggeration, it’s really more accurate than you might think. Strategic Planning (SP) is defined as “The science of defining and using resources to accomplish a specific purpose”. That seems pretty simple! The reality is, that for an organization to move to a Strategic Plan environment it will require outside professional assistance, commitment of a planning team and a fair amount of time to initially get the plan and all of its tentacles established.

    The Planning Team (PT) needs to be made up of three or four people from your Board, your top level operational leadership team (probably three or four) and an outside professional to facilitate and help guide you through the process. The PT must initially define or visit and redefine in writing the purpose for which the organization exists (Mission Statement), a sense for the ideal future of the organization (Vision Statement) and the tenets which are important to and serve as enduring principles which guide the conduct of those who are part of the organization (Core Values). The Mission Statement and Vision Statements should be kept short and very definitive – two or three sentences. The Core Values of your organization will probably require a much broader listing of those things expected of those employed by the organization which will also guide how you do business.

    Once this is complete the PT must take on the job of SWOT analysis of the organization and the market it operates in. The term SWOT is defined as follows:

    S = Strength Those elements of the organization that make it effective in the accomplishment of its mission/vision and fulfillment of its operational mandates.

    W = Weaknesses Those elements of the organization which may hinder it from effectively accomplishing its mission/vision and fulfillment of its operational mandates.

    O = Opportunity A combination of external and/or internal factors and/or circumstances which could affect the organization in a favorable manner.

    T = Threats A combination of external and/or internal factors and/or circumstances which could affect the organization in an unfavorable manner.

    The outcome of the SWOT analysis will be the primary driver as the PT then goes about establishing the

    Strategic Initiatives (SI’s). These will propel the organization in the direction of fulfilling the Vision Statement of the organization within the context of the purpose for which it exists and the values by which it operates. As a rule of thumb you will probably only want to establish four to six of these, from an organization capacity standpoint. These will then be followed by Action Plans (AP’s) to accomplish the SI’s with assigned responsibility. The planning horizon for the AP’s should be no more than three years. In our opinion it’s virtually impossible to predict accurately beyond a three year horizon. The PT will review and report to the Board every six months on the SP status along with any impediments that have been encountered on the AP’s and what is being done to overcome them. In this way the document becomes a living document that is driving the organization. Each year a new year is added to the planning horizon.

    What I have done here is to provide you with a very abbreviated outline for a very encompassing scientific business process. The SP will allow your organization to stay on goal while at the same time staying flexible enough to respond to the daily emergencies and requirements. The SP will drive your staffing, your financial planning process and even departmental and individual goals. It gets your whole organization pulling in the same direction which usually translates into great results. 

  • 02/22/2017 8:46 PM | Laura Stokes-Gray

    By: Laura Stokes-Gray, Stokes-Gray Consulting
    Bridging The Gap

    During my 20 years serving the third sector, four as a CEO and more than 16 as a consultant, I have seen dozens of nonprofits struggle with a leadership transition. The departure of a chief executive, especially if unanticipated, can result in a lack of momentum, direction, and stability. Staff morale is likely to plummet, funders and partners may be inclined to withdraw support, and critical services and community outreach efforts could be impaired. Unfortunately, there is often a knee-jerk reaction on the part of the board of directors, with some boards experiencing an outright sense of panic.

    The worst strategy is to be in a hurry. Rather than taking the time to evaluate the organization's priorities and complete a thoughtful search for a new executive director, many boards rush ahead to get a warm body to fill the vacancy. Sometimes the board chair decides to fill in on a temporary basis, which is a remarkably bad idea for many reasons. Another approach is to promote the second in command, which might be the CFO, COO, or program officer. The finance or HR person might be very good at their respective jobs, but may be a fish out of water as the CEO. Expecting a senior staffer to take on the additional role of "Acting Executive Director" places an undue burden on an already stressed individual. Asking someone to double up and work 50 or more hours a week just isn't wise. Even with a temporary bump in salary, resentment is liable to build. I've seen board members hire friends, pay unscrupulous search firms or staffing agencies to find a likely unqualified candidate in record time (the principled ones won't comply), or try to do an unassisted search with little or no plan or focus. The person who winds up in the chief executive's chair under any of these circumstances is what we call the "Unintentional Interim".

    The promotion from within, the board member acquaintance in need of a job, or the poorly interviewed and vetted candidate almost invariably fail. The cycle starts again and the door keeps revolving. I remember one nonprofit who had four executive directors in three years. It was no surprise, after several donors pulled out, that the organization closed its doors for good.

    Some nonprofits choose to leave the position vacant, on occasion for as long as a year, with the misguided objective of saving money. Then, predictably, entropy moves from order to chaos. Turns out it wasn't such a great idea, after all. To quote the poet Yeats: "Things fall apart; the centre cannot hold". Laying low and hoping things will just "work out" usually isn't the best strategy, either.

    What is the best strategy? How can a nonprofit safeguard and even improve its current operations and service delivery while taking the time required to conduct a thorough search for effective new leadership? A professional Interim Executive Director. An experienced nonprofit consultant with advanced training in transition management. Hiring an Interim ED creates the time and space a board of directors needs to recruit the best candidate for permanent leadership. It also gives an organization the opportunity to step back and reassess its mission and grasp the bigger picture. Using a qualified Interim ED ensures uninterrupted workflow and continuity for programs and services, stabilizes relationships with key funders, keeps revenue streams on track, creates a calm and morale-building atmosphere for staff, and bridges the gap with an unbiased senior leader who specializes in managing extraordinary and difficult situations. A change agent who removes the burden of a steep learning curve or impending crisis from the new permanent ED, giving that person the ability to hit the ground running.

    When should a nonprofit consider using an Interim ED? The unexpected exit of an Executive Director would seem to require an Interim. The departure of a longtime or founding leader and/or the lack of an identified or prepared successor would also call for professional interim leadership. Not every nonprofit needs an Interim ED. Some executives announce their retirements well in advance. Some nonprofit boards have taken the initiative to put a succession plan in place. Some nonprofits are so extraordinarily well-run that they may function like a well-oiled machine, though even in that case, an Interim would help keep it that way.

    How long do Interim ED engagements typically last? Engagements usually run 4-12 months with a 24-40 hour per week on-site commitment. The schedule depends on the complexity of the situation and assignment, and may increase or decrease as appropriate. It should be noted that Interim EDs are never to be considered a candidate for the permanent position. The success of the Interim largely depends on their ability to remain unbiased.

    Can my nonprofit afford an Interim ED? Can you afford to hobble along on a wing and a prayer? Compensation to Interim EDs is usually in line with what you would pay a permanent ED. If your current financial situation is holding you back, consider approaching your key funders for assistance. Those who have invested in your organization want you to succeed. This is not an unusual request.

    If your nonprofit is facing a leadership transition, don't struggle unnecessarily. Consider engaging a professional Interim ED. The health and well-being of your nonprofit is at stake.

  • 12/14/2016 1:03 AM | Ed Graziano (Administrator)

    By: Debbie McCann, W4Sight LLC
    One of the services that ACN offers to nonprofits is distributing notifications of Requests for Proposals (RFPs) to its members.  Through ACN’s process of distributing RFPs, W4Sight has both  successfully secured new business and gained some insight about the RFP process. Last week’s post focused on advice for consultants on going through the RFP process. Today, we’re addressing some advice to nonprofit organizations, from a consultant’s perspective.

    Why submit an RFP?

    An RFP describes a specific project for which an organization would like to hire a consultant, and provides a set of instructions for preparing a bid. Organizations use RFPs – rather than simply interviewing several consultants gathered from recommendations of friends or colleagues – to provide additional formality to the process and to avoid favoritism or lack of competition.  Some funders, particularly public funders, require a competitive process designed to foster a broad range of choices for the agency.  Organizations compare RFP responses on price, qualifications, and the proposed approach to the project.  Most funders do not require an organization to select the lowest bidder when the RFP is for consulting services.

    While going to the trouble to put together an RFP and select a respondent does take time, it also has some advantages:

    • The process of putting together the RFP forces your organization to establish internal consensus about the project before engaging a consultant
    • The RFP allows you to attract a wider range of potential respondents than you may have personal connections with.
    Why use ACN?

    As a professional association of career consultants, ACN distributes your RFP to a core group of high-quality, reasonably-priced practitioners with a wide array of experience and – just as importantly – a professional network of potential colleagues. For projects of larger scope, ACN members can connect with one another to develop a proposal that meets an organization’s needs: according to the most recent member survey, 19% of ACN members have collaborated with one another on projects in the last year.  Essentially, submitting an RFP through ACN is the fastest way an organization can get their project in front of a variety of specialists.

    What goes in an RFP?

    1. Know what you want.  Recently, a colleague of ours encountered an organization that distributed four versions of a single RFP in three months’ time, each with a slightly different scope and project description. This is a red flag – if your staff and leadership aren’t comfortable with an RFP going out, then it needs to be revised internally until they are.
    2. Be clear.  In our experience, many organizations have little experience in preparing RFPs, and their initial project description may not be a clear description of what they are really looking for.  For example, many projects include the term “strategic planning” to describe anything from a board-level strategic plan to chart the future of the organization to a more tactical plan for executing existing organizational priorities or initiatives.
    3. Be specific. If your RFP is only 2-3 pages, it’s a good bet that consultants will have a lot of unanswered questions about the project. If your work plan depends on conducting interviews, for instance, but it’s not clear how many interviews the consultant will need to conduct, it will be difficult for them to provide you with an accurate price.  In order to help consultants prepare an accurate work plan and pricing, provide the detail they need.  An organizational chart and explanation of which parts of the organization are affected by the project is extremely helpful.  Also, be as specific as you can about the timeline you are expecting and any special constraints that will affect the project – such as a special event that will be a major factor for staff time for the 2 months prior and 2 weeks after the event.
    4. Set a budget. In our experience, pricing in RFPs is sometimes like a game of “chicken” – no one wants to set the price first. Organizations worry that consultants will develop a project plan that uses the entire budget, while consultants are leery of doing the work of putting together a proposal until they know that an organization has budgeted an adequate amount.  But by being explicit about their budget, organizations will attract the most qualified candidates who can do the work and stay within your budget. If a proposal comes through that seems as if the consultant is “padding” the scope of work to meet the budget – it’s easy enough to put their proposal in the “no” pile!
    5. Be open and fair.  Independent consultants may not have graphic designers to polish their proposals – but that doesn’t mean that the quality of the work is any different.  Stay focused on the substance of the expertise you are looking for.  Also, remember that independent consultants don’t get paid for writing proposals, so please be mindful of the time you are asking them to put in.  There are occasionally situations where the client asks for so many revisions to the proposal that they are essentially looking for a good portion of the project work to be done as part of the selection process.  This is an unfair expectation, and can make for a difficult start to a relationship.

    Thanks for taking the time – Best of luck on your next RFP!

    – Debbie McCann, W4Sight

    Want to submit an RFP through ACN’s portal? Click here.

  • 12/14/2016 1:00 AM | Ed Graziano (Administrator)

    By: Debbie McCann, W4Sight LLC
    One of the benefits of ACN membership is receiving notifications of Requests for Proposals (RFPs). Through ACN’s process of distributing RFPs, W4Sight has both successfully secured new business and gained some insight about the RFP process. We’ve written two posts about the process from a consultant’s viewpoint – this post focuses on our fellow consultants. Next week we’ll follow up with a post geared toward nonprofit organizations.

    Every time we receive an email from ACN announcing an RFP, I take a quick look. If the project description that appears in the ACN “cover email” piques my interest, I take the time to read the entire document as soon as possible. The first thing I look for is whether the services needed are in our area of expertise. Many are not, but it’s important to read carefully. Here are a few tips we’ve learned:

    Be mindful of timing: RFPs coming through the ACN pipeline may have been released a week or two earlier, leaving a tight deadline to respond. If you are receive the RFP only a few days or a week before the deadline, some organizations are willing to grant you an extension if you are a qualified respondent. However, you do need to contact them immediately to explain the circumstances and let them know when you can submit a proposal.

    Timing is also important because organizations with larger projects also sometimes hold a bidders’ conference, and the date and time are listed in the RFP. It’s important to check right away so that you don’t miss the opportunity to attend. Some bidders’ conferences are mandatory if you plan to respond to the RFP, while others are optional. If you plan to respond to an RFP and there is a bidders’ conference, it’s a good idea to attend. The organization walks through the project expectations in some detail, and explains the response format required along with any other special requirements. If you think you may need to partner with another consultant to provide the whole range of services needed, leverage ACN’s network to find collaborators.

    Decide if it’s worth responding: Many consultants avoid RFPs because of the time commitment and/or the inherent risk involved. Consultants often believe that they have a much better chance at securing a contract when they have had a chance to cultivate a potential client and get to know their organization.

    However, unless you have reason to believe that the open bidding process is just a sham, it may be worth your time if the project is a good fit for your skills. A few factors to consider before deciding to pursue an RFP:

    • Are the services requested comfortably within your area of expertise? If it’s a stretch, be careful about spending time writing a proposal for a project you’re not really a good fit for.
    • Does the RFP provide enough detail to put together a solid proposal?
      – If it’s vague (a good bet if it’s only 2 or 3 pages), reach out to the primary contact to ask some key questions.
      – If the RFP clearly says “no emails/calls”, then don’t harass them. However, make sure that the assumptions you make about your approach that impact your budget and timeline are clearly documented. Make sure you indicate that changes to these assumptions may require an adjustment to the budget/timeline.
    • Does the project have strategic value?
      One of the benefits of responding to an RFP is that it gets you in front of an organization that you might otherwise not have encountered or had a reason to contact. Ask yourself if the organization or project could add strategic value to your practice – either because of the potential network it presents, or because the project would provide you with a key type of reference you don’t already have in your portfolio.

    Develop a Solid Proposal: Of course, no RFP is perfect, so consultants need to find creative ways to create useful proposals. For example, we won one project from a client, despite the fact that the organization was unresponsive when we attempted to ask questions prior to the deadline. Because the project was substantial, and an excellent fit with our expertise, we went ahead with the proposal – though with many documented assumptions. Even though some of our assumptions turned out to be incorrect, the clearly documented work plan was enough to convince them that they should meet with us. We were able to collaborate on the revised scope and come up with a more appropriate statement of work after meeting with the organization. In the end, it was a successful project, and an important credential that we could reference later.

    If the RFP contains detailed instructions about the response format they want, then follow what they’ve asked for. However, if they don’t, here’s a suggested outline:
    Project Understanding – summarize what you think you understand from the proposal, in your own words.

    • Approach – provide a detailed project plan in narrative form. For each step or phase of the project, clearly indicate what the major tasks are, what resources the client is expected to provide (type of staff and approximate time commitment), and expected deliverables.
    • Assumptions – as you are writing up the approach, pay close attention to how you are formulating your work plan. For instance, if the project is to help the client develop a stronger board, and one of your tasks is to identify candidates, make sure you are clear about how many screening calls you are prepared to have, how many interviews you are prepared to do etc. The actual numbers can be updated later, but it’s important for the client to know what your pricing is based on. Another example might be the responsibility for generating materials for a training. You might want to indicate that you will prepare the materials and provide them to the client in electronic form, but making paper copies is their responsibility.
    • Pricing – provide a summarized version of your pricing that follows your work plan. If your project approach is in three phases, explain what each phase will cost. Be clear if you are providing a fixed price for the whole scope (assumptions are critical for these projects), or if your pricing is on a time and materials basis at an hourly rate.
    • Qualifications – describe your previous experience that’s relevant to the project. Detailed resumes may not be necessary, but the client should definitely get a clear understanding of why they should choose you over others.

    Best of Luck!
    Debbie McCann

  • 12/11/2016 10:00 AM | Ed Graziano (Administrator)

    By: James Reeves, Do Well Do Good, LLC.
    This guest post, from James Reeves of Do Well, Do Good LLC, highlights some of the great discussion from ACN’s February 25th program. A special thanks to James and our other participants!

    This morning I had the honor of speaking on a panel for the Association of Consultants to Nonprofits, along with Bill Bonner of Bonner of IMPR and Leah Bradford of the Kraft Foods Group and the Kraft Foods Group Foundation. In addition to being really impressed by ACN as an organization, I really enjoyed the lively and engaged crowd that had thought provoking questions and great contributions.

    My task was to answer two questions:

    1. How are companies using consultants to develop corporate partnerships related to Corporate Social Responsibility (CSR) or sustainability?
    2. Does this market have potential?

    CSR Defined
    First, I think it’s important to start nearly every conversation about CSR by defining it. The simplest definition I give is that CSR is managing and organization’s business operations in a way that is good for people, profit, and the planet. CSR deals with a wide range of issues: supply chain & human rights protection, lobbying, workers’ pay and benefits, product life cycles, investments, public disclosure practices, diversity and inclusion, and carbon emissions to name just a few issues.

    A very key point is that CSR includes philanthropy, volunteering, and community relations, but as I pointed out, CSR is much more than that. Don’t conflate the two terms.

    For the purpose of this article and this morning I treated the terms CSR and sustainability as being synonymous.

    A Nonprofit’s Role
    For the most part, nonprofit organizations tend not to engage with companies – specifically in helping them with CSR. For the most part, most nonprofits are geared to work with companies in the community relations or cause-marketing spheres. However, occasionally a nonprofit can help companies fulfill their goals related to the social or environmental impacts of their business.

    A great example is Aspire, a Chicagoland nonprofit that helps differently abled adults attain meaningful jobs (as well as many other services). The nonprofit partnered with OfficeMax and the Kessler Foundation to develop a training program to help Aspire’s constituents thrive in a retail or warehouse work environment. (Full disclosure: years ago, I worked and consulted for OfficeMax, but I had no involvement in this program). This program helped OfficeMax with its diversity and inclusion efforts while also servicing Aspire’s constituents.

    The Difference: A CSR or Philanthropic Role
    So how is this not just a company sponsoring a nonprofit? The key distinction for me between a philanthropic program versus a nonprofit helping a company with CSR is as follows…

    For cause-marketing or community relations programs (philanthropy/volunteering) a nonprofit’s role is primarily focused on using its assets to help a company. This could be the non-profit’s brand or logo to be put on a product’s packaging to increase sales and support a cause. Or a nonprofit using its Board of Directors to help a company’s executives create relationships in the community and build their leadership capabilities.

    A nonprofit is helping a company with CSR when it is primarily focused on using its expertise to help a company. In this case, Aspire has a unique and differentiating skill set that few organizations have: insights into the employment of adults who have a different set of abilities.

    Tough Love: A Role for Consultants? Not really.
    While I have helped some of my clients with their relationships with nonprofits, I do not see it as a major market for consultants to dive into. So my tough love advice is: will it put food on your table? Maybe. But if so, it’ll likely just be a side dish.
    The central question for any business and especially consulting is whether you offer products or services that solve a problem so that people are willing to pay money for it. Companies rarely need help from consultants for match-making services, as an example. There may be some services where consultants are needed for facilitating group meetings with nonprofit organization, but in my experience this hasn’t been a huge market. (I do think, however, that there is a much bigger role for consultants to play in helping non-profits with their cause-marketing, volunteering, and philanthropic capacity.)

    However, things aren’t so bleak. The projects I have worked on for my for-profit clients include facilitating such meetings and benchmarking existing and not-existing relationships against future needs related to CSR strategies. Yet, this wasn’t something I specifically “sold” as a service to my clients. Rather, I received these projects because I was already a trusted adviser, known for excellent research, writing, analytical, and facilitation skills. So while those were the services I provided, they just happened to be on the subject matter of relationships with non-profits or Non-Governmental Organizations (NGOs) related to specifically to CSR programs.

    Sponsorships between nonprofits and companies dealing with CSR are so closely ingrained with a nonprofit’s core abilities that bringing in consultants would be redundant. In fact, one could argue that it would be a warning sign that a nonprofit may not be as strong of a partner if they have to bring in non-ancillary help.

    So my honest advice to consultants is to focus on your core competencies rather than trying to become the central hub of nonprofit and for-profit relationships. If such projects arrive, treat them as welcome appetizers rather than regular entrees.

  • 12/11/2016 9:59 AM | Ed Graziano (Administrator)

    By: Carey Freimuth, Caritas Financial
    In our last post, we discussed the importance of nonprofit Boards creating and maintaining an Investment Policy Statement (IPS). This article discusses the role of an IPS in the relationship between boards and their financial advisors.

    A recent survey found that among private foundations with $1 to $10 million in assets, 30% did not have an IPS and additionally, 35% were not working with an advisor.[1] These lapses can lead to a breach in fulfilling one’s fiduciary responsibility.

    What is the role of the board vs. financial advisors?

    The Board: it is up to the board to actively oversee an organization’s financial performance. According to the Prudent Investor Laws, the board or organization needs to adopt investment policies, thoroughly vet its financial advisors, and regularly review performance to fully fulfill their fiduciary responsibilities. While this sounds daunting and time consuming, board members can delegate some of those responsibilities to an advisor. This increases the investment oversight, especially if the board members lack sufficient time to dedicate to this responsibility. This protects both the organization and the board members: if followed, the individual members of the board and the organization are less likely to be liable for the actions of investment underperformance. While it seems straightforward, many boards are lax in updating or reviewing the IPS (or even creating one!), reviewing performance, and monitoring their advisors.

    Financial Advisors: Advisors can help provide board members with confidence they are doing good while acting responsibility. The board can delegate investment decision making to an advisor to help with faster decision-making, implementing a more goals focused strategy to improve risk management, and better track progress against goals. Moreover, many officers and trustees welcome additional education on the standards of care that they must follow as fiduciaries of the organization.

    Like many people in their role, board members can be uncomfortable with all of the responsibilities and processes that need to be addressed in order to protect the organization and their position within the organization as a fiduciaries. An IPS lays the foundation for an organization’s overall governance structure to ensure that fiduciaries are fulfilling their obligations. A good IPS should clearly define the relationship between the advisor and client right from the start. These expectations give advisors a better sense of what the clients expect in terms of volatility and returns, while helping to educate clients on realistic outcomes and the importance of staying the course in challenging markets.

    In sum, this division of labor that allows boards to supervise third-party advisors and the advisors to do the work of actively investing an organization’s assets creates a solid check and balance. And once your organization has an IPS in place that is reviewed regularly, you can feel more confident you are fulfilling your fiduciary responsibilities.

    Best of Luck,
    Carey Freimuth

    [1] Source: Association of Small Foundations 2013

  • 12/11/2016 9:56 AM | Ed Graziano (Administrator)

    By: Carey Freimuth, Caritas Financial
    A primary responsibility of board members is to serve as trustees of the organization’s assets by exercising due diligence to ensure that its financial situation remains sound. But while fiduciaries need to protect an organization’s assets, they also need to ensure that aversion to risk doesn’t compromise the mission of the organization over the long term.

    The old adage ‘cash is king’ doesn’t always apply in the world of investments. While many fiduciaries believe they are being prudent by conservatively investing all the organization’s assets in cash, this can actually lose them money in real dollar value. Simply put, the compounding effect of inflation over time results in erosion of the organization’s purchasing power.

    What is an IPS?
    The board needs to weigh the options and establish guidelines and policies that minimize their exposure to identified portfolio risks such as a lack of diversification or a level of volatility that is mismatched with the IPS’s stated goals and time horizon. This is where the Investment Policy Statement (IPS) comes into play as an important document by which investment decisions are based. In its most basic form, an IPS is a document which sets forth in writing how an institution’s money is to be managed by presenting financial objectives in the context of how much risk the fiduciaries are willing and able to bear. While an IPS should be customized to meet the needs and mission of the organization, the document should include:

    • Asset allocation: What types of investments will meet the organization’s goals and risk tolerance?
    • Time horizon: When will the funds be needed or will they be held into perpetuity?
    • Rebalancing and spending policy: To what degree does the organization depend on the funds to support their operating budget?
    • Moral or ideological convictions of the organization: Are there any restrictions on holdings based on these beliefs or is socially responsible investing a priority?
    • Responsibilities and roles: What is each party’s involvement in the investment decision making process and is this clearly defined?

    Why have one at all?

    An IPS is essential to an organization’s strategic and financial growth. They offer three major benefits:
    1. Provide financial discipline in tough times. An IPS instills discipline in times of market volatility by clearly defining the goals and objectives of the portfolio while outlining a specific plan and strategy to manage the funds in order to reach those goals. It can also be used as a tool to manage and minimize any risks identified throughout the process.
    2. Maintain strategic intent. A sound, thoughtful IPS is crucial to advancing the strategic intent of the organization while helping fiduciaries mitigate potential risks to the assets. It helps everyone focus on the mission of the organization and provides continuity in decision making.
    3. Reassure donors. By maintaining discipline during tough times and staying true to your organizational mission, you can demonstrate to potential donors your commitment to managing the assets with care, skill and prudence. When a donor contributes money, they do so with the expectation that the board will invest wisely and use that money to further the mission of the organization.
    The best way to give donors confidence in this is through the creation and regular review of an IPS[1].

    Example of IPS template:

    Best of Luck,
    Carey Freimuth

    [1] While the document is not meant to be changed frequently, it should be periodically reviewed to ensure all language is up-to-date reflecting current fiduciary standards and long-term objectives. For example, the Uniform Prudent Management of Institutional Funds Act (UPMIFA) of 2006 replaces the Uniform Management of Institutional Funds Act (UMIFA) of 1972. It is important to review an IPS to ensure it fully captures the updates of such legislation.

  • 12/11/2016 9:55 AM | Ed Graziano (Administrator)

    By: Delia Coleman, Forefront
    I’m really excited to be a part of ACN’s Annual Meeting and celebration of the sector – this has been a tough year for the nonprofit sector and any day spent sharing our successes and learning from each other is an important one. But our successes don’t exist in a vacuum. Our gutsy wins exist in an openly hostile budget environment, a competitive field, and within a city and state struggling with big problems.

    And that’s the environment we already know about. What about the issues the sector is only just barely aware of? How are we supposed to get ready for those? What are the strategic decisions our sector, and individual organizations, are going to be forced to make?

    And what if we could anticipate those decisions and prepare now?

    While the primary external factor for Chicago nonprofits today has been around funding and budgets, there are other issues looming in the distance: the further privatization of services, nonprofits losing out to for-profit providers, the cultural taboo against talking publicly about mergers & acquisitions (or other types of strategic partnerships) while outside pressure mounts for the sector to do more work with fewer resources.

    These outside pressures force a moment for our sector. It’s not a moment to rethink our purpose, no. We are still here to turn places into communities through education, healthcare, arts and culture, youth development, protecting our environment, or caring for the most at risk. But perhaps it is time to think about what place-making and community-strengthening need to look like in a future that is rapidly approaching. Our programs, our partners, our business models – all of this may need to look and perform differently if we are going to remain the invisible hand holding up our communities.
    Maybe we won’t be so invisible, then. And then things can really start changing.

    These success stories at your Annual Meeting are more than success stories – they’re bellwethers for a sector that needs to find a way to move nimbly from mere Survival and Sustainability to Thriving in a highly competitive environment.

    I can’t wait to see these stories grow and take root. I hope I’ll see you there.

    Delia Coleman Vice President, Strategy & Policy Forefront

  • 12/11/2016 9:52 AM | Ed Graziano (Administrator)

    By: Catherine Seibel, Impact Assessment for Foundations and Nonprofits
    Without question, the most rewarding part of serving on the Board for ACN has been the relationships I’ve developed with fellow members. During my tenure I have met dozens of smart, professional and engaging consultants who are committed to social justice. I am proud to call these folks my colleagues and my friends.

    But more than that, I’m lucky to have a “team” behind me as I navigate the world of running a small practice. As an independent consultant, it’s imperative that I can turn to peers with all sorts of questions. In the past year alone, I’ve sought advice from ACN members on contract negotiations, finding a good insurance agent, how best to respond to RFPs, and the ins and outs of social media engagement!

    In short: I consider my ACN membership to be a core part of my business. And it is with this in mind that I am excited and proud to announce a remarkable opportunity for consultants to nonprofits and foundations. ACN and the Donors Forum have recently announced a new partnership that allows those who join or renew with both organizations to take advantage of an array of complementary Member benefits, as well as discounted dues to both organizations.

    I believe that this partnership provides an exceptional opportunity for members of both organizations to develop their consulting practice in meaningful and strategic ways. Or, as Robin Berkson, VP of Membership at Donors Forum put it: ACN supports consultants as they navigate their profession, and Donors Forum supports consultants as they navigate the sector. With complementary access to four professional development seminars per year, a profile on our website’s “Find a Consultant” page as well as a host of members-only web resources, ACN members enjoy a host of benefits to assist in the everyday world of nonprofit consulting. Donors Forum, meanwhile, provides free reference services by Donors Forum’s professional Librarians, updates on public policy developments, and the latest research on nonprofits, philanthropy, and the sector as a whole.

    In addition to these benefits, this dual membership also expands our members’ network of colleagues. Beyond the questions about insurance agents and social media, we’re well aware that “you never know where your next lead will come from” – and so it only makes sense to for members of both organizations to expand their network to include peers from across the sector who can both share insights and provide collaborations.

    To both new and renewing members of ACN and Donors Forum: I invite you to take advantage of this fantastic opportunity. I look forward to getting to know you.

    For more information, contact Zach Korotko at Donors Forum, or 312-327-8948; or Michael Long at ACN, or 815-621-1150.

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