July 2016: Nonprofits Today

Eight steps to help define excellence

Rande Richardson

Rande Richardson

We know the nonprofit sector’s impact has been consistently diverse, positively affecting education, human services, the arts and culture, religion, philanthropy, health and economic development. The Northern New York Community Foundation is increasingly looking to diversify how it supports the work of nonprofit organizations in our community. The nonprofit shared services collaboration floor within the future home of the philanthropy center is one immediate and tangible way we can do that.
For many years, the Nonprofit Coordinating Committee of New York has promoted excellence in nonprofit management. Recently, it compiled a list of eight common areas of excellence for nonprofits to focus on as they aspire to improve. There is something within these common areas that all nonprofits can examine as a way to better serve stakeholders.

1) Effective and ethical fundraising and resource development

The major theme has consistently been that the best organizations look for ways to have fundraising revenue streams as diverse as possible. Relying on any one source makes an organization less sustainable. This means not only diversification of annual revenue sources, but recognition that an organization has short- and long-term needs and it should deliberately address both.

At the community foundation, grant-making promotes this type of thinking. Many grants are made in support of real-time projects poised to make a difference today with the understanding that those investments also need to be positioned for future support. Many recent grants have been coupled with an endowment-building component, including matching grants to provide incentives to organizations to build another leg of sustainability.

Another theme that falls under this category is the importance of the board’s role and responsibility for an organization’s viability. This “duty of care” includes not only providing guidance but also raising money, with the first gift being their own. It is understood that without 100 percent of board members giving financially annually, it’s very difficult to morally make the case that others should.

2) Overall management focused on results

This begins with a well-defined mission statement. What is the difference you aspire to make? How do you then assess the impact you are making? Past columns in this magazine have been devoted solely to mission and vision statements for good reason. The mission statement serves such an important role as a guide for decision making and resource allocation.

While I tread carefully on this, there are times when organizations should consider outside consultants or facilitators to assess and improve certain areas or functions of their work and an objective look at overall program and organizational results. It is a healthy exercise to continually assess what worked, what didn’t and adjust accordingly. Sometimes a general organizational assessment is required before even considering a higher level strategic plan.

3) Governance structure that moves the organization forward

Effective organizations view boards of directors and top managers as true partners. This involves a continuous and conscious effort to ensure everyone is on the same page, moving in the same direction, for the same reasons. While assessing staff effectiveness is a natural board function, regular evaluation of the board itself is critical, aligning expectations with commitment. It is frequently said that the most important committee of the board is the nominating/recruitment committee. Anyone who has been involved with a board knows why this is true. The best models of board governance focus as much or more energy on the roles and responsibilities of board members as they do staff.

4) Strong, transparent and accountable financial management

Sustainability is once again the driver for this by making smart choices for the long-term, while also keeping an eye on a diversified revenue stream and adequate cash flow capabilities for the near-term. As mentioned before, this must be coupled with aligning financial decisions with the organization’s mission.

Many nonprofits have a break-even mentality. This puts the organization’s entire mission a risk. It is OK to strive toward a budget surplus, perhaps even treating it as a recurring expense or a deliberate savings plan. This is no different than responsible personal financial management.

With today’s technology it is easier than ever for the public to access an organization’s finances. Internal Revenue Service Form 990s are great windows into an organization’s fiscal picture. While they are publicly available, organizations should make it easy for stakeholders to find the information.

5) Diversity and culturally competent organizational practices

Organizations should seek to develop boards that are a mirror of the communities and populations they serve. This is by no means a perfect science and often a challenge to achieve. One way to supplement this is to make external engagement a critical part of organizational culture, including seeking regular feedback from stakeholders and continually assessing emerging needs of your community as they pertain to your mission. At the community foundation, we broaden our diversity by inviting a wide base of participation from non-board members on our committees.

6) Enlightened use of human resources

Does your organization maximize available talent by best using staff skills and experience to benefit the work and mission? Do you care and nurture staff to promote a healthy and supportive workplace? Do you consciously invest in the betterment of your staff? Respecting the law of equilibrium is important to attracting and retaining the best talent. Of all the resources, your human ones are among the most critical, with an awareness of the importance of succession planning as well.

7) Appropriate and reliable information technology systems

It’s important to not lose sight of technology infrastructure, including ensuring effective technology for maximum efficiency and advancing mission-related goals, including program support. It never hurts to plan for worst-case scenarios with solid infrastructure and redundancy. There should be a technology plan and someone assigned with its responsibility, including seeking innovative ways to use technology, and budgeting for it. This should be done considering how the plan relates to various functional parts of organization.

8) Regular and effective communications and use of communications technology

This includes not only broadcasting the message but a dialogue that seeks feedback from various stakeholders, including those you serve, board members, and volunteers. This two-way communication culture, tailored to various audiences, can be valuable and should include formal and informal communications. The frequency and form of telling the story of your mission and progress toward fulfilling it should be carefully thought out.

Our nonprofit sector is a fluctuating landscape as it evolves and changes. All organizations, including the community foundation, must continue to look at ways to perform at a high level. No organization is perfect and in all likelihood, never will be. However, all can aspire and strive to operate in ways that not only stay true to mission but allow a greater expression of it, understanding excellence is always a work in progress. All nonprofits should routinely ask: Are we doing this right? Is there a better way?

Many north country organizations already deliver well on their missions and provide great value to our collective quality of life. These same organizations are often doing so in ways that are more effective, efficient and dignified than government. However, we can all do better to enhance our work and mission and solidify our sacred obligation to those who make the choice and sacrifice to support it.

Rande Richardson is executive director of the Northern New York Community Foundation. He is a lifelong Northern New York resident and former funeral director. Contact him at rande@nnycf.org. His column appears every other month in NNY Business.