Nonprofit Mergers & Turnarounds: When Restructuring Makes Sense in the Non Profit Sector
Don Crocker, CEO of the Support Center, talks about mergers, turnarounds and strategic alliances in the nonprofit sector—when it is right and when it is not; what’s involved in getting the process started and what makes a success. This timely and informative recorded interview on Not for Profit eXchange radio – http://bit.ly/vvEEYG – targets a subject that is gaining momentum in this tight economy, but not often talked about.
Support Center Expands Executive Search & Change Consulting Services for Area Nonprofits – Grantmakers Contribute to Ensure the Health and Stability of their “Mission-Critical Grantees”
The economy remains volatile and government cuts are upon us. The needs in our communities are growing and even the strongest nonprofit organizations are struggling to “steady the ship.” Executive Director and CEO transitions, too, are disrupting the ability of nonprofit organizations to remain effective.
As nonprofit funding changes, community need inc
reases, and executive directors transition, it makes sense that the most caring and connected foundations and corporations are looking for ways to ensure the health and stability of their own “mission-critical” grantees. Karen Brown (Support Center Board Member and Fairfield County Community Foundation VP of Programs), in a recent interview in Philanthropy News Digest’s Philantopic said, “We’ve been urging grantees to continue to invest in staff and professional development and not to look at those kinds of investments as frills…funders need to consider supporting these programs in order to help organizations hold the line on their budgets without sacrificing effectiveness.”
Many private and corporate funders are investing in efforts to ensure the health and well-being of the nonprofit groups and communities they care about. JPMorgan Chase Foundation, the Altman Foundation, and the Prudential Foundation are just three of the many foundations that are demonstrating a real commitment to nonprofit effectiveness and impact, and are partnering in the Support Center’s efforts to guide nonprofit change and transition.
While we know that some of our readers have worked directly with us and have experience with all of these services, we realize that many of you may not be as familiar with our full scope of offerings. Here is a brief overview:
Executive Search and Transition Management (ESTM)
A change in leadership, whether from a founder, long-time executive director, or a mismatched hire, can be a pivotal time in the life of a nonprofit—presenting an opportunity to examine organizational challenges and make decisions for future directions. Here at the Support Center, we use the proven techniques of Executive Search and Transition Management to address organizational needs and work to strengthen the whole organization, while also successfully managing the hiring of a new leader. Our three-phase process addresses a nonprofit’s needs through an organizational assessment, facilitates the hiring of the new executive, and guarantees a successful outcome with “on-boarding” consulting for the new leader. Throughout the process, our consultants work hand-in-hand with board members, staff, funders and other stakeholders in the community.
Change Consulting and Turnaround Services
In addition to facing leadership changes, NYC nonprofits—like many others nationwide—have been hit by significant declines in funding in the wake of government shortfalls and the volatile economy. Nonprofits—from arts and culture groups to human service organizations—are undergoing painful reassessments and restructuring, including mergers, acquisitions, collaborations, cutbacks and closings. Adjusting to this new economy means increasing effectiveness and sustainability for many small to mid-sized neighborhood based nonprofit organizations. Increased funding from foundations this year allows us to reach out to more nonprofits and provide critical Change Consulting services that can help them assess current programs, improve financial management, increase board engagement and fundraising effectiveness, while keeping our fees affordable to NYC-area small and mid-sized nonprofits.
Professional Development and Cohort Learning
Each year we strive to develop the best course offerings, listening to your requests and needs for professional development. As we plan for 2012, increased funding will allow us to expand the range of workshops, tailor them to your time-frames (half-day, full-day and evening offerings), and add more custom programming at affordable rates. In addition, we also will be developing new opportunities for cohort learning. The Trajectory Leadership Group we formed this year has confirmed our belief that cohort learning is an effective means for executive directors and other senior nonprofit professionals to learn new skills and learn from one another in a supportive atmosphere outside of their offices and daily activities.
Find out more about our work and partnerships by visiting us at www.supportcenteronline.org.
Building Nonprofit Capacity: A Guide to Managing Change Through Organizational Lifecycles
In this new book, authors John Brothers, Senior Fellow here at the Support Center, and Anne Sherman, of TCC Group seek to help nonprofit leaders figure out how to effectively navigate change within their organization, no matter how large or small the nonprofit might be. They use the theory of nonprofit “lifecycle advancement’ as a type of change management that can help organizations build capacities that are appropriate to each stage of a nonprofit.
“A central question for leadership is to identify where, and when, to focus organizational energy, and that is where Brothers and Sherman’s book comes in. Changing organizations is never easy, which is why managers need the right set of maps and tools—like this one.” Jon Pratt, Executive Director, Minnesota Council of Nonprofits.
What’s Included?
Chapter One: Change as a defining force in the nonprofit sector
Chapter Two – Chapter Six: Examines the five life cycle phases of organizations, including a discussion of how an organization in decline can navigate a turnaround
Throughout the text the authors:
- Make the case for a deliberate change process, yet also acknowledge the very real challenges
- Provide a context for the struggles that nonprofits face
- Offer success stories
- Offer frameworks and tools that leaders can apply in their own organizations.
Building Nonprofit Capacity is a highly useful guide for nonprofit professionals who want to focus on capacity building efforts that will yield the greatest impact. Books can be ordered at Amazon.
John Brothers, is a Senior Fellow at the Support Center for Nonprofit Management and the owner of Cuidiu Consulting in New York City.
Anne Sherman is an Associate Director and Co-director of the Strategy Practice at TCC Group in New York City.
November Tweets for Thought
Social media, management and capacity building were hot topics on our twitter feed this month! Here are a few of our favorites that focus on how to build the capacity of your organization as well as building your capacity to excel at your work.
- Funding for Capacity Building: 5 Questions for Karen Brown, Fairfield County Community Foundation
- Four Ways Women Stunt their Careers
- Jim Collins on 3 Ways to Avoid Demotivating People at Work
- How the Top 50 Nonprofits Do Social Media: An Infogrpahic by Craig Newmark
- How to Create a Social Media Marketing Schedule
Please leave a comment about what you think about these articles, or let us know what you have been reading about this month!
The Interim Solution: Nonprofit Boards Increasingly Embrace Interim Executive Leadership During Executive Transitions
Transitions of nonprofit chief executive officers – whether the position is called Executive Director, President, or CEO – continue to cause nonprofit boards worry and anxiety. A CEO transition can lead to one of the most vexing periods for a nonprofit. Funder and staff concerns and community confusion often take the organization off-course and can stall out the success of even the best organizations. Recent research on nonprofit CEO transition indicated that in 2011 7% of current CEOs have given notice and 67% anticipate leaving within five years. But within that 67% there is also a large cohort (10%) who have not given notice but say they are actively considering leaving.
However, when professionally managed, a chief executive transition can be one of the most valuable periods of time in a nonprofit’s life cycle. Important new approaches can be explored, alliances and merger opportunities can be investigated, and the board can reconnect with critical stakeholders through the transition process. Increasingly, nonprofit board leaders are choosing Executive Search and Transition Management (ESTM) services and the placement of a professional Interim Executive Director to guide the organization through its transition period. A stronger alternative to traditional search services, ESTM consultants and an Interim Executive Director can work with the organization and its board to seek a harmonious ending for the departing CEO and a healthy, focused beginning for the new one.
An interim not only stabilizes the organization through the transition, but also provides the board with the time needed to carefully examine the aspirations and direction of the organization so that the new leader can effectively move the organization forward. With the help of local and national foundations, the Support Center has helped to prepare a large pool of interims that stand ready to step up and help organizations navigate the potentially rough waters of executive transition.
What have your experiences with transition been like? Let me know your thoughts below.
Tweets for Thought
This month, we found interesting examples of NYC organizations who are taking new approaches to their work and seeing results!
- Taking risks fostered new financial opportunities for the Metropolitan Opera
- In a Bronx Complex, Looking Good Mixes with Doing Good
- A success story in West Harlem. More than four walls — something to be inspired by!
Feel free to share any of your favorites below!
Change at the Top – Risks and Opportunities: What Does the Research Say?
The findings from the latest Daring to Lead study from CompassPoint Nonprofit Services and the Meyer Foundation are sobering. Why sobering? Because while we work with many engaged boards and funders who are helping to strengthen the executive leadership of the sector, there are many others who do not realize the extent of the issues or are not aware of potential solutions. This national study reflects the trends we see here in the tri-state area, and their recommendations also mirror best practices we have found to work.
Several aspects of nonprofit leadership are explored, but here we focus on highlights relating to Executive Transitions, a growing part of our work:
- As reported in previous Daring to Lead studies, the large majority of executive directors –67 % in 2011– report that they will be leaving their jobs within the next five years. And an additional 7% have already given notice. Executive and boards are still reluctant to talk proactively about succession and just 17% of organizations have a documented succession plan.
- 33% percent of current executives followed a leader who was fired or forced to resign, indicating the frequency of mis-hires and unclear expectations between boards and executives across the sector.
- Many boards see executive transition ending with a successful hire. And many new leaders in the study were challenged by establishing effective partnerships with their boards. These executives were confounded by the lack of strategy, resources, and personal support they got from their boards.
The author’s “Calls to Action” include strategies that will help prepare for these executive departures, and ensure healthy transitions and productive, effective, and satisfied new leaders:
- Creation of emergency succession and transition plans to ensure continuity in the event of an unexpected departure
- Recognition by funders of the importance of successful leadership transition to the strength and stability of grantees and, where possible, stepped up support during the transition
- Ongoing board involvement and support for new executives beyond the hire
From our own experience with executive transition clients, we would add:
- Board engagement in a comprehensive executive search and transition plan helps to assure a successful hire and makes the most of the opportunities in transition. Our approach includes three phases: 1- an organizational assessment to determine the organization’s current needs and the qualities necessary for a new executive to succeed, 2- a thorough search for a new leader involving all stakeholders, and 3- “on-boarding” coaching for the new leader to aid integration into the organization and to foster productive relationships with the board and staff. In addition, transition to a new leader is often aided by the placement of an interim executive director who manages the day to day operations.
A chief executive transition also provides the opportunity for boards to explore organizational restructuring including administrative outsourcing, strategic alliances, and mergers.
There are, indeed, opportunities available during “Change at the Top.” Following the recommendations of the researchers provides opportunities for nonprofit organizations to both explore – openly – opportunities for the future of the organization and find the right next leader to help them build that future.
Tell us what your experience has been in the executive transition process as an executive director, board member or funder. What works and what could be better?
-Don Crocker, CEO
Drumthwacket Foundation Selects Robyn Tromeur Brenner as New Executive Director
The Support Center’s congratulates the Drumthwacket Foundation—the official residence of the Governor of New Jersey—on the selection of its new Executive Director, Robyn Tromeur Brenner.
In assuming responsibility for the residence, Governor and Mrs. Christie formulated a new vision for Drumthwacket as a means to offer wider outreach and engagement of New Jerseyans. This new direction provided a remarkable window of opportunity to achieve significant, near term organizational results, but it also required systemic rethinking of Drumthwacket’s current programming, operations and funding as well as a change in leadership. Working with the Support Center in its search to find a new executive director has helped Drumthwacket to produce a more engaged board that has a commitment to the mission and vision and a means for achieving its goals.
Brenner most recently served as Executive Director for The Center for Contemporary Art located in Bedminster, NJ. During her ten-year tenure, she implemented the organization’s first, multi-year strategic plan which led to more than doubling the number of studio course offerings and membership; launching program and fund development initiatives which increased private, corporate and government support; and strengthening community partnerships and outreach. Prior to that she was Curator of Fabergé & Manuscript Collections for Forbes Inc. in New York City, one of the largest privately held collections of objets d’art by the House of Fabergé. She curated numerous on- and off-site exhibitions at The Forbes Magazine Galleries and prestigious domestic and international museums. Brenner is succeeding Francine Lynch who has served as the Interim Executive Director since November 2010.
Tweets for Thought
Learn how your work-life might benefit from ‘cyberloafing” and volunteering, but not necessarily at the same time! Also, if you’re involved in communications at your nonprofit, here are some tips for making your content more varied and interesting to your readers.
Please leave a comment and share your favorite tweets!
Remembering a Generous Spirit
By now, many of you have heard about the sudden and unexpected passing of Steve Damiano, the Support Center’s Director of Professional Development. While his family, friends, and colleagues mourn his passing, the loss extends far beyond those closest to him, leaving a large hole in our sector and our world.
Steve successfully led the Professional Development effort here at the Support Center’s since March of 2003 — except for a brief journey to Los Angeles in 2008 to direct the Education Division of the Center for Nonprofit Management there. In his role here at the Support Center, Steve planned and managed hundreds of workshops, serving thousands of nonprofit professionals each year. He dedicated his life to important nonprofit causes, serving as Vice President at MZA Events/AIDS Walk from 1991 – 2003. In that role he managed AIDS Walk Los Angeles and AIDS Walk New York, helping raise money and resources for the cause in these cities. He continued his commitment to the cause, volunteering at AIDS Walks after he came over to the Support Center.
Here at the Support Center, Steve worked tirelessly to insure that the broadest range of workshops were available to professionals in our sector, nimbly creating learning opportunities that responded to the ever-changing environment we work within. Steve was determined to keep Support Center workshops affordable and accessible to everyone who wanted to learn and grow and, thus, he pursued a host of funding sources — government, foundation, and corporate — to encourage donations for scholarship subsidies for those who did not have the resources to enroll.
Steve did all of his work in a quiet, understated way. Unassuming and down to earth in his approach, he earned the respect of his colleagues here and on the other side of the country. At work, no job was too big or too small. In a world where much of the focus is on “getting,” Steve Damiano was all about giving. We celebrate his life and his spirit of generosity — he will be sorely missed.
Please feel free to leave a comment about Steve here. Thank you.
Don Crocker
