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Top Ten Social Sector Trends

By Judy Alnes, executive director and Amy Wagner, associate director at MAP

We spend no small amount of time trying to stay on top of the trends we believe are having the biggest impact on the social sector. At a recent board retreat, our board members joined us in considering the trends and discerning how MAP can best serve the social sector in the coming year. Here are the trends we identified. We’d love to hear your thoughts on these trends or additional trends we may not have spotted.

  1. We are all getting older
  2. We know as a whole our population is aging. Thanks to Minnesota Compass, we can get some facts and insights on what this means for our community. For example, between 2010 and 2030, the number of adults over the age of 65 will double. This has implications for volunteerism; nearly half of Minnesotans between 65-74 volunteer and almost a third age 75+ giving their time each year. This will also have an impact on service delivery. As Robert Egger wrote in a recent blog post, “No matter who your group serves now, you’ll be serving seniors soon.”

  3. We are becoming more diverse
  4. Again, Minnesota Compass provides some helpful data. Between 2000 and 2010, Minnesota’s population of color grew by 55 percent. It’s important for us to recognize and address that data also shows that these members of our community are more likely to live in poverty, less likely to graduate from high school, less likely to own their own home, and more likely to suffer from chronic illness. Clearly, the human services sector will be stretched to provide help where it is needed.

  5. Income gap continues to widen
  6. Among other things, the Pew Research Center’s tabulation of recent United States census data shows that higher income households have received a growing share of a growing aggregate household income pie. In 1967 the top 5 percent received 17 percent of the income pie. In 2012, their share increased to 22 percent. As this income gap widens, so widens the gap in our social fabric and our cohesiveness as a community.

  7. Philanthropy is flat
  8. According to GivingUSA, while giving is slowly increasing, donations are still down 8 percent from their peak in 2007. Most nonprofits can’t count on an increase in contributions to carry the day in the next several years.

  9. Government is tapped
  10. The Nonprofit Finance Fund 2013 State of the Sector survey reveals that one in three organizations received less government money in 2012 than in 2011. Unless we experience a marked uptick in the appetite for larger government budgets, there’s no reason to expect this trend will change.

  11. New investment forms like crowd sourcing and social impact bonds are emerging
  12. Minnesota is no stranger to these new funding approaches with a pay-for-performance pilot underway. The experimentation is to be applauded. We will need new ways to fund the work done by the nonprofit sector.  Yet, we also need to be mindful that these emerging tools are experimental and won’t turn the tide in community needs anytime soon. And check out this local crowd funding site – a winner of the 2012 Minnesota Idea Open.

  13. Threats to nonprofit tax exemption and individual charitable deduction
  14. In a recent feature in Pollen, Jim Toscano detailed what he sees as the 10 biggest threats and distractions for nonprofits. Number 1 was creeping taxation and number 2 was limitations on tax deductibility. We’ll be keeping an eye out for more pressures on the tax system to encroach on nonprofits.

  15. Increasing call for nonprofit accountability and evaluation
  16. There has been an increasing call for nonprofit accountability and evaluation over the past several years – from individual and institutional donors, the government, the media, and in many cases from the social sector itself. Charity Navigator, for example, continues to work towards “CN 3.0”, incorporating results reporting into their evaluation methodology. This isn’t surprising; all of us want more results for the dollars we spent on the social sector. Yet so few want to pay for the true costs of evaluation.

  17. More complicated organizational structures and new types of organizations
  18. Through our work at MAP, we are privileged to work with over 500 organizations and thousands of individuals each year. Individuals and groups interested in starting a nonprofit organization are increasingly considering whether they could be most effective as a nonprofit, for-profit, or some type of hybrid entity. And as organizations merge, acquire and work through other types of organizational realignments, more complicated organizational structures can result.

  19. Changing technologies for communication, service delivery and client management
  20. As we noted in our research report, “Unleashing Innovation: Using Everyday Technology to Improve Nonprofit Services,” nonprofits are increasingly seeking ways to meet their business needs through technology. Whether it’s becoming more mobile, connecting with constituents via social media, improving data collection, access to data or using data differently, the social sector is now thinking about and using technology in much more strategic and sophisticated ways.

So, what does this mean – for you, your organization, and the community?  What are we missing?  We’d love to hear your thoughts.

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But It’s My Baby!

Nonprofit organizations do not belong to individuals, not even to their founders.  They belong to their legal and moral ownership community and are beholden to that community. Founders, however, sometimes feel otherwise.

Imagine you’re a founder; you’ve created a concept and an organization; you’ve poured your blood, sweat, tears, and money into this entity. As a result of your passion and entrepreneurial drive, extraordinary social benefit has accumulated.  As the founder, you and perhaps members of your board of directors sometimes feel you are the organization.

But nonprofit organizations were never designed to exist on the breath of a single person or group. The structure of a board is partially mandated to ensure this: to ensure that the nonprofit organization is something a community wants, something that understands and addresses the community’s issues, and something that it is “owned” by that community.

How do founders disengage? How can you disengage from your baby? And how can your board of directors assist?

With executive director transitions increasing —67 percent of nonprofit CEOs anticipate leaving their jobs in the next five years—thousands of founders and boards are trying to figure out how to anticipate and manage the transition.

Here are some tips.

  1. Celebrate the work and investment of founders. Without founders, many organizations critical to our society’s health and vitality would not exist. Their legacy deserves to be feted and they deserve to be recognized for what they have accomplished.
  2. Ensure that “ownership” is not held by a single entity. Transitioning ownership beyond the founder has myriad benefits but it may feel risky to founders. Owners may have different ideas from the founder and may require the organization to move in a different direction.  Nevertheless, the board must do the hard work of defining and building ownership if the organization is to uphold its moral obligation and legal status and be viable over time.
  3. Acknowledge that leader transitions and ownership expansion are inevitable, necessary, beneficial, and healthy. Demystify the notion of “founder’s syndrome”; talk about it often and transparently.
  4. Ensure sound policies and governance systems. Strong systems can carry on no matter who serves in chief executive roles.
  5. Make it standard practice to look outside the organization. Activate the ownership linkage function of the board. Look for opportunities to define, expand, and connect with community so that when transitions occur and changes are implemented, the board and leadership can communicate effectively with community owners and listen to their wants and needs.
  6. Be proactive and positive about the transition. When it’s the “owners’ baby,” not the “founder’s baby,” a wider door opens to positive outcomes that honor the legacy the founder had surely intended to create: a legacy of social good.

This post is a condensed version of the article, “But It’s My Baby” written by Judy Sharken Simon of MAP and published in the May-June 2013 issue of Policy Governance in Action. The newsletter publishes articles based on merit, and consistent with Policy Governance principles.

Judy Sharken Simon is a strategic and board governance consultant for MAP for Nonprofits and responsible for MAP’s Best on Board and board training programs.  She is the author of “Five Life Stages of Nonprofit Organizations: Where You Are, Where You’re Going, and What to Expect When You Get There” which explores the transitions nonprofits go through as they move from one life stage to the next and how nonprofits can navigate from one to the next.  Judy can be reached at jsharkensimon@mapfornonprofits.org.

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Nonprofit Innovation and the Cloud

Originally published on NTEN Connect Blog

There’s no doubt that many organizations are using cloud technologies in innovative ways. But, more specifically, what links might we find between the unique aspects of cloud technology, and the conditions and success factors for innovation?

Recently NTEN posed an interesting question to us: Is there a connection between cloud technology and innovation in nonprofit organizations? There’s no doubt that many organizations are using cloud technologies in innovative ways. But, more specifically, what links might we find between the unique aspects of cloud technology, and the conditions and success factors for innovation? This article explores that question.

In the past two years my organization, MAP for Nonprofits, has focused intensely on innovative uses of technology in the nonprofit sector. In 2012, MAP and Idealware completed an exciting research project to pave the way for nonprofits to use technology for service innovation in a manner that advances their missions. By surveying 180 Minnesota nonprofits and doing in-depth interviews with 13 of them, we identified a “Framework for Innovation,” describing the conditions and success factors for innovation. The research report Unleashing Innovation: Using Everyday Technology to Improve Nonprofit Services presents details of our findings and is available for download.

The research and the pilot program could not be happening at a better time, unfolding against a backdrop of cultural and technology changes. These include:

  • A general shift from enterprise-centered technology to consumer-centered technology, resulting in a more satisfying and empowering end-user experience. This is positive for innovation because it increases individuals’ expectations for how technology ought to serve them.
  • Moving away from command-and-control management, toward organic/network organizational structures, which means innovative ideas can originate from outside of leadership, and have the chance to catch on through networks.
  • Abandoning the 9-to-5, Monday to Friday work day for a blend of work, family, social and civic life throughout the day and the week, intricately related to anytime-, anywhere-access to work tools and information. This shift provides motivation to look for new applications of technology.
  • The emergence of cloud services, which both fuels the other changes and is fueled by them. (see table below)

MAP Cloud Table
Lessons from our Innovation Research and Consulting Experience

Our innovation research suggested that some myth busting is in order. People often think of innovation as futuristic, cutting-edge technology, but we found that many nonprofits are innovating with straightforward technologies. For example, HOWA Family Center switched from email to text messaging as a more effective way to communicate with teen mentors.

We also found that innovation can be low cost. Many nonprofits successfully use existing technology to innovate in subtle ways, implementing solutions that are often both low-cost and effective. For example, Community Thread is using free social media for volunteer engagement. One big success was using Facebook to recruit roughly 1500 volunteers for relief efforts during a 2011 flood.

A key recommendation from our research was to consider starting small. Starting with a small project can, potentially, provide a straightforward success that will help your organization embrace the idea of innovation. This lesson was a painful one for one of our pilot participants. Through the pilot process of soliciting input from across the organization, they realized that they had rolled out a big technology change before the organization was fully ready. For their next technology implementation, they have taken a more iterative approach, testing it first on a smaller scale.

Cloud Technology in our Innovation Pilot

The proliferation of cloud services can leave a nonprofit professional looking like a deer in headlights, unsure how to select the right service and evaluate ROI. That’s why one of our goals for the pilot program is to help organizations identify actionable ideas for applying technology to address organizational needs – ideas which are prioritized based upon feasibility and return on investment.

So far, simply bringing people together and guiding them through the Framework for Innovation has yielded positive results. Not surprisingly, peer interaction has been one of the most valuable components of the program, providing new, outside perspectives and a support network for leaders seeking innovation. One of our pilot cohorts is comprised of smaller organizations that are all using cloud services for file sharing, as well as a variety of SaaS (Software as a Service) products for communication, outreach and fundraising. In their first group meeting, they did a lot of comparing notes and jotting down names of products. They are hungry for ideas and eager to experiment.

Barriers Still Exist

Funding plays a role in what sort of innovation happens. Some funders are savvy to the cloud trend, such as the Greater Twin Cities United Way which helped to underwrite the cost of migration to the cloud for a number of MAP’s clients. However, many funders are still reluctant to provide ongoing operating funds for IT. Knowing they are more likely to get funding for a capital investment (read: server, custom development), some nonprofits are choosing that route over the cloud, even if it isn’t the best fit for their needs, and even if it hinders innovation.

Privacy and security concerns are also holding people back from cloud services. For IT professionals used to controlling system, application, and data security, moving to the cloud means giving up many of the existing best security practices, simply because they are not available in the cloud environment. Even though there are always risks involved with cloud solutions—from outages to security leaks—cloud-based defenses can be more robust, scalable, redundant, and cost-effective than anything most nonprofits could put into place locally. HIPAA compliance remains unclear: most cloud solutions hesitate to state they are HIPAA compliant, but can be made so by tweaking their Service Level Agreement.

One practical thing we’ve learned is that an organization’s internet speed can be a huge help or hindrance to making the best use of cloud technology, especially streaming media such as webinars and webcasts that require a lot of bandwidth, and also web-based CRM and data management tools. Through our pilot, one organization discovered significant bandwidth problems, which they were then able to fix. This resulted in improved productivity as well as better trust and buy-in from employees related to IT changes.

So, is there a connection between cloud technology and innovation in nonprofit organizations? Our research and early results from our pilot program suggest that cloud technology, together with some of the cultural shifts which are closely related to it, are throwing the doors wide open to innovation. Cloud technology offers a multitude of new, low-cost, low-risk tools. It remains for nonprofit leaders to understand those tools, make smart connections between organization needs and technology, and overcome barriers to innovation. Collaboration with peers may be the secret sauce that pulls this recipe together.

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Filed under Innovation, Nonprofit Management, Nonprofit Strategy, Nonprofit Tech - NPTech

Power, Money and Control

By Gordon Goodwin, Strategic Services, MAP

One of the things I love about my job at MAP is that I get a chance to work with some truly great people who are willing to share the values and insights they have collected over the span of their life experience. Capture 1Our clients are among the most principled, passionate and ingenious leaders anywhere – and I never fail to learn something new from them, even as we work together to achieve solutions to their agency challenges and realize opportunities that better serve their missions.

Occasionally, a client imparts a lesson or insight that redefines my understanding of “why things are.”

These instances don’t happen often. I’ve been consulting with organizations for over a decade – and there are a handful of these encounters that have caused me to be stunned into a new level of understanding. One occurred recently, in the midst of a particularly “engaging” merger discussion. Our client, the smaller of the two organizations, changed the course of the conversation, by making this point:

“These discussions about merger occur at the very intersection of Money, Power and Control. The ability for our organization to be self-governing, to carry its own assets on its own books, and to be able to freely pursue its mission without hindrance strikes at the very essence of self-determination and independence.”

I’m not sure if our client had rehearsed these lines before this moment, but his delivery was as impassioned as any Actor’s Studio performance. The weight of his words – coupled with the tension of the moment – made this a memorable moment for all in the room. We got past the impasse. And I haven’t forgotten the great truth in his remarks.

We’re only human. Power, Money and Control – and all of the emotional fallout that accompanies these factors – can completely define the success of the realignment process. Although nonprofit realignment is about creating a greater good for our community, ignoring or avoiding talking about the human element of negotiations will only serve to delay trust building – or derail the process altogether.

Power – Who’s in charge here? Discussions about realignment are supposed to reflect the best interests of both organizations and the people they serve. How these discussions happen – especially when one of the organizations has a significantly larger budget, staff and reputation – can begin to signal that one of the parties is more equal than the other. When only one party has influence to determine the date and venue for a meeting, and what the agenda is, that will be perceived as an outright power play by the other organization. These first impressions of the management character, internal culture and priorities of an organization are not much evidence to go on, but do set the tone for how working within the other culture might be. Power plays sometimes add up to become deal breakers. This is one of the reasons that using a facilitated realignment process is a significant success factor in nonprofit mergers. (Success Factors in Nonprofit Mergers, 2012.)

Money – Whose money? The public’s money! Some of the inequality in realignment has to do with who has more money and financial stability. More than half of the realignments MAP facilitates are motivated by organizations that are seeking a stronger revenue model and a partner to help them transition to it. When one organization has a larger budget and operating reserves, and the other has a smaller budget and modest or no capital reserves, the financially healthier partner’s resources may be viewed by both organizations as being the sole advantage to making a realignment work. “We’re a lifeboat for their coming shipwreck – and now is the time to get them on board.” While there’s no denying financial stability as a desired realignment outcome, it’s not the only outcome.

When we talk about the role of money in a merger, all involved need to be reminded that they are stewards of public resources. Although it’s always important to understand when (and to what extent) money resources are at risk – the money being invested does not actually belong to either organization – it belongs to the public. As a result, nonprofit boards and staff are accountable to the public for how the combined resources of both organizations will be invested to create more opportunity for more people to succeed and participate in our society.

The core capacity each organization possesses – staff and volunteers with expertise, programs that create  measurable outcomes, and relationships that can be leveraged for organizational sustainability and public policy / systems change – must all be accounted for. Blending the organizational core capacities and money assets of two organizations may create a stronger and more relevant entity than either can achieve on its own.

Control: You’re not the boss of me. Everything seems like a good idea until it’s time to work out the details. Take these examples:

  1.  The departure of an executive director or CEO can be a very natural opportunity for a board to explore a merger because surviving management leadership is usually apparent. However, in cases where a merger is being discussed and both executives are staying on, how will they create a new management structure to lead the organization? Is one willing to work for the other?
  2. When organizations consider a subsidiary structure, how much control will the parent have (and exercise) to make decisions on behalf of the subsidiary? Will any current board members remain in place for the subsidiary?
  3. When an organization with a fantastic public profile is being acquired by another organization that few people have heard of, which organization’s name will be adopted? The name with the greatest brand equity? Or the name of the organization with the most control?

At MAP, we help both organizations begin their discussions with a clear understanding of what each other’s most important desires are for continued pursuit of their mission, identity and continued involvement. After both organizations share their desired merger outcomes, we work together to create a mutual set of desired outcomes and priorities that help to guide the process through to an agreement that serves the public, and both organizations. This doesn’t mean that there aren’t some difficult conversations and negotiations that occur – but being able to focus on the shared benefits of merger can help to keep the conversation going when the times get tough.

Do you have a “Power, Money and Control” insight to share? I’m interested in hearing about it, and in hearing your reactions to this post. Please leave a comment below, or email me at ggoodwin@mapfornonprofits.org, phone 651-287-2262.

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Filed under Nonprofit Governance, Nonprofit Leadership, Nonprofit Mergers, Strategic Conversations

Light Up Your Brain with Joy

Christie HammesChristie Hammes, director of Strategic Development at MAP, was recently trained in The Art of Hosting, which she is now using in her work. Following are my questions to Christie related to the workshop, and her answers. — Julie Dappen

1.    What is the Art of Hosting?

A set of practices and tools for facilitating challenging conversations and creating the safe space necessary for courageous dialogue.—CH

2.    How is The Art of Hosting similar to or different from other facilitation methods you and other MAP consultants use?

The Art of Hosting recognizes that the accelerating pace of change in our world now and its complexity require all the diverse thinking and ideas communities can bring to make sense of things. Facilitation for this “maximizing of diversity,” invites a broad sharing of leadership.

It’s a result of asking the question: “What are the organizational concepts that we can develop together that are actually good for us, and are good for this time we’re in?” Facilitation in the Art of Hosting model draws on a portfolio of methods, for example, the use of powerful questions, Appreciative Inquiry, and Open Space Technology, among others. The methods used are dictated by what the situation requires.—CH

3.    When and where did you receive your training?

I was trained in December 2012 in a cohort of facilitators invited by the InCommons initiative.–CH

4.    Any current projects where you’ll use this new skill?

Yes, I’m using pieces of the process in listening sessions with various communities where collective input is critical to shaping the path forward.–CH

5.    Anything else you’d like to add?

I love this quote that gets at the spirit of what actually occurs when people are working in an Art of Hosting facilitated session:

“Scientists have discovered that the small, brave act of cooperating with another person, of choosing trust over cynicism, generosity over selfishness, makes the brain light up with quiet joy.”

–Natalie Angier, Pulitzer prize-winning New York Times reporter, describing a study of the effects of behavior on brain chemistry

Thank you Christie!

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Leaders: We Know What to Do. Now How Do We Behave?

THE CHALLENGES WE FACE

“Information is intervention,” said Paul Mattessich at the recent Minnesota Compass annual meeting. Indeed, staying informed of such trends in our state as increasing racial disparities and an increasingly aging population is a critical spur to action. And the staff at Minnesota Compass help us make meaning of the data in order to act.

So what about that “action?” Minnesota has among the very worst racial gaps in the nation. This is not news. And, in many cases, such as the academic achievement gap, we even know what to do about it. So why don’t we do it?

The answer may lie in our behavior.

WHY DON’T WE ACT?

Increasingly, leaders are called to work across boundaries to launch collective action.  In fact, our region is home to many new and creative efforts at collective action, like Generation Next and Northside Achievement Zone.  But for every promising initiative such as these, many others succumb to churn or simply stall out at the action stage while we grandstand, turf-protect, or admire the brilliance of our ideas. In meeting after meeting…

WHAT WE CAN DO TO BECOME LEADERS WHO ACT?

While we don’t get a lot of leadership courses on learning to play well with others, there is something we can do to build this competence and help others to build theirs.

Gather in person on a regular basis with a few others interested in leadership for collective action. Build trust by getting to know each other. Agree to share personal challenges and opportunities. When describing an issue, ask the others to challenge you. While listening try to tap into your own curiosity (vs. judgment) about your effectiveness. What’s your intention in a given situation where action seems elusive? And then, what’s the impact on others?

When another leader in your group describes their challenge, flip your curiosity around to them. What are they grappling with? How can you help them explore their intentions and impacts to discover how they might better connect so as to act?

In listening, sharing, and learning, let a simple set of questions be your guide:

  1. What? (What are the facts and info?) 
  2. So What? (What meaning do you make of the facts and info, what do you learn from it about yourself?) 
  3. Now What? (What action can you take based on what you’ve learned?)

Then come back as a group and de-brief your actions out in the world, what you learned about yourself, what new actions you might try out.

Increased ability to mobilize and lead toward action is a key outcome from such practice groups. Over the years, leaders have reported a variety of reasons for this:
“I’ve become more grounded in leading from my strengths.”
“I now align how I act with what I believe—with greater frequency.”
“I’m more adept at listening, sharing feedback, and posing challenging questions.”

These happen to be comments from MAP’s Leaders Circles, but building competence that allows us to play better in the sandbox with others can occur in any group of trusting leaders committed to mutual learning, practice and growth.

Why wait to act?

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