Moving the Needle

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 increases, 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.

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.

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

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.

There was a time in the nonprofit world when bringing up the “M” word (merger) was avoided like the plague.  Our volatile economy and drastic government budget cuts have opened the door to greater discussion and exploration.  While such exploration may not be for everyone, there appears to be evidence that there are a host of benefits to such exploration.

The Forbes Funds in an article from their Tropman Reports publication notes that “The exploration process is time consuming but viewed as worthwhile, even if organizations don’t merge.”  Some of the benefits highlighted include:

• Organizations that don’t merge often instead structure program alliances with their merger exploration process.
• The process helped clarify and reinforce organizational missions.

In our own experience at the Support Center, organizations that take this journey of exploration are able to clarify their unique value within their community, have an enhanced understanding of their capacities, and – in some cases – discover cost savings and program innovation opportunities.  A good time to explore a merger is during an Executive Transition (learn more here).

Merger exploration can often result in other forms of restructuring that may be helpful to your organization such as joint programming, strategic alliance, collaborative proposal writing, consolidation of services or administrative functions, and cross-referral agreements.

Can exploring a merger opportunity benefit you? Please leave a comment and let me know.

By Gilles Mesrobian, Senior Associate, Support Center

In March 2010, the Support Center began working with Newark Emergency Services for Families (NESF), an agency which provides quality services to individuals and families who need assistance with emergency food, clothing, shelter, utilities, rent, and other basic necessities during times of crisis.

At that time the Board was in the final selection process in its search for a new Executive Director. They were committed to ensuring that a landscape of success was in place for the new ED as well as ongoing support for the staff.

Marge Wood, Board Chair of NESF and CEO of Independence: A Family of Services, stated, “I was very pleased with how quickly the Support Center consultant was able to grasp the agency culture and nuances of the challenges we faced and come up with practical recommendations for solutions.”

After providing an initial organizational assessment, the Support Center worked with the Board, Executive Director and senior staff to develop a customized plan of action to address a range of challenges facing the organization, including a development plan, a board development plan and management tools that ensure the continued progress and success of the agency in its critical work.

According to Damyn Kelly, J.D. NESF’s new Executive Director, “The Support Center’s reports allowed me to immediately address the challenges that the organization faced as opposed to conducting my own assessment… The work of the Support Center has been immensely helpful to me in getting the organization back on track and allowing us to meet the needs of our constituents.”

>>> Executive Search & Transition Management

Don Crocker

A board member of one of our area nonprofits recently told me that “the board doesn’t hire the nonprofit CEO; the nonprofit CEO hires the board”.

Are you kidding me?

Sadly, the reality of this perception is frightening — especially given the current economic realities we face.

Here are some thoughts for Board Development and Effectiveness in 2011:

1. Increased board engagement is NOT optional! Boards must step up and govern and they must be “in-charge” of hiring and firing CEOs

2. The board as a body and as individuals must sharpen their understanding and ownership of finances

3. Board members must up their activity in engaging new supporters and stewarding long-term supporters

4. The board leaders and CEO must communicate openly and often

5. The board must organize itself and its individual members to be effective and efficient, set clear goals for itself, and regularly measure its progress toward results

Our most thoughtful and progressive boards are renewing their commitment to strategic planning and organizing their meetings to determine how board members can fuel staff efforts to meet organizational imperatives.

Let’s talk about this and let me know what your board is doing to fuel your strategy in 2011.

Please post your comments/strategies.

WANTED:

A few good leaders who have the aspiration and vision to advance themselves

and their organizations to a new level of impact.

Trajectory Leadership Group (TLG) is a group of dedicated leaders from

nonprofit organizations who work together to find and execute creative solutions

to management, operations and sustainability challenges and achieve their goals.

Membership Profile:

Executive Directors and key decision makers of diverse and sustainable Nonprofit

Organizations. The applicant should have adequate staffing and be ready (and

available) to make the investment of time, money and energy.

Membership in the TLG includes:

■   ISSUES PROCESSING:

Members attend a monthly 4 to 8 hour meeting.  Meetings function as a confidential advisory board, helping leaders think creatively and collaboratively to find solutions, and resolve problems. It does not have to be lonely at the top!

■   MENTOR PROGRAM:

Members will be paired with executives from the for-profit sector. These mentors will be volunteers.

■   SPEAKERS:

Several meetings per year will host a speaker.  The speakers will focus on best practices aimed  at the specific needs of the TLG: emerging leadership, succession planning, governance, etc.

Speaker meetings will be longer sessions.

■   ONE-TO-ONE’S:

>>> Individual Coaching – a monthly 90 minute session to work in depth to develop goals and action plans, maintain accountability and queue up issue(s) for group work.

>>> Tiger Groups – Three-to-One groups that assemble as needed when a member has a critical issue and requires immediate support. Outside experts may be used.

■   SPECIAL EVENT & RETREAT:

Once a year a retreat will be planned for the TLG cohort.

Starting date:
Applicants will be interviewed in July and August 2010 and the group will start meeting in October 2010.

For more information, contact
Jayne Gumpel, Project Director, groupworks@aol.com l 212-286-1850
John Brothers, JBrothers@supportcenteronline.org l 917-522-8305
Harriet Joynes, HJoynes@supportcenteronline.org l 917-522-8310

Trajectory Leadership Group (PDF)

By Calvin Thomas
The Times of Trenton Op-Ed

Although the financial earthquake occurred in the fall of 2008, the aftershocks are still being felt by the nonprofit sector.

The Support Center for Nonprofit Management recently conducted a Meet the New Jersey Grantmakers forum July 14 at the PSEG Headquarters in Newark.  The forum was attended by more than 100 nonprofit leaders from all parts of the state who represented a diverse range of services and sizes.

Calvin Thomas Jr.

If I had to pick one clear and bold message from the comments made by the nonprofit leaders who attended, it would be this:

The financial “squeeze” is beginning to really take its toll on our ability to adequately provide services much needed in New Jersey.

The squeeze that is becoming more apparent to the sector is what was referred to as the “private-public” squeeze.

On one side, the private foundations and corporations in New Jersey have significantly reduced their grant dollars to the nonprofit sector due to the negative effect of the financial meltdown on their financial portfolios and income statements.

And on the other side, the state legislators have just passed a FY2011 budget that significantly reduces spending for social services that they relied on from the nonprofit sector through state grants and contracted services.

The question echoed by the nonprofit leaders was:

“Where do we go for financial support to service a rapidly growing population of citizens in dire need of help?   Funds are being significantly reduced or completely cut from both sides.   We are stuck in the middle.”

What makes this “private-public” squeeze a tumultuous time for the nonprofit sector is that the state of New Jersey — that is, the public sector — is depending on the foundations and corporations — that is, the private sector — to assume more of the financial responsibility to support the nonprofits.

However, in this very weak economy, the private sector has yet to recover from the recent economic meltdown.

Foundations are trying to rebuild their portfolios while corporations are trying to protect their bottom lines.

The latest prediction from the federal government is that the recession could last another five or six years before any indication of normal growth to the economy is seen.

I believe that having these Meet the New Jersey Grantmakers forums throughout the state is critical for creating a roadmap to navigate through the present financially challenging times.  It allows for creative and meaningful dialogue between the leaders of both the nonprofit organizations and private grantmakers.

Grace Egan, Executive Director of New Jersey Foundation for Aging (NJFA) and a panelist at the forum, stated that NJFA granting policy prohibits it from granting private funds to nonprofit applicants that are looking to replace public funds that were cut or reduced.

After hearing the concerns of the audience and the impact that this “private-public” squeeze is having on their ability to operate, Egan plans to raise this issue with her foundation’s board to consider changing its policy.

I am certain that there are a number of New Jersey private foundations that operate with that policy.  In these challenging times, I implore any private foundation in New Jersey with such a policy to reconsider its position. It is one step in the right direction that will make a big difference.

The nonprofit sector may not have been responsible for the 2008 financial earthquake.

However, leaders of the sector are responsible for their survival and long-term sustainability.  The leaders must take the opportunity during these trying times to re-examine their organizations’ mission, infrastructure and capacity.

Now is the time for organizations to engage in an independent and thorough:

• Organizational
• Financial assessment
• Board development
• Staff development and
• The development of a strategic and fund-raising plan to take them into the future.

The next financial aftershock or earthquake may be just around the corner.

Nonprofit leaders must build their organizations to adapt and endure.

With the current state spending reductions, they may be the only service providers in their communities.  They owe it to their customers.

Calvin B. Thomas Jr. senior associate consultant for the Support Center for Nonprofit Management.

By Gilles Mesrobian, Senior Fellow, Support Center

Gilles Mesrobian

Leadership transition is challenging but the transition from a founding Executive Director to a new Executive Director is perhaps the most vulnerable point in the evolution of an organization.  Studies show that 50% of searches fail in these situations.

I was a founding director myself and there are clearly things that a founding ED can do to lay the groundwork for a successful transition.

Perhaps the first step is helping the organization address succession planning before you leave–even before you know you want to leave. Succession planning should be in place for all organizations. One never knows when a medical crisis or family emergency could take you away from your job for a short term, long term, or permanently.

Once you know you are going to leave, planning a proper departure will help the organization prepare for the challenges ahead.

Identifying your exit strategy is critical and communicating it to all parties in a manner that is positive and constructive for the organization is important.

A parting ED can also help the Board or Search Committee understand the skill set needed in the new ED.  Remember that the search process is not about replacing you, but rather about finding someone who can lead the organization to the next step in its evolution. You can help the Board understand what that means.

Being prepared to move on in your career is also critical so that you don’t feel the need or desire to fall back on your prior commitment to the organization you founded.

Setting healthy boundaries for you and the organization, staff, Board and new ED is important. You need to strike a healthy balance so that you can be relied upon for information and assistance when called upon without meddling in the organization.

Any role you play moving forward will not be as the ED but as an experienced professional who understands the unique challenges of the organization, perhaps better than anyone.  Nothing will sour your relationship with the organization more than meddling or getting involved in the day-to-day management or politics of your past employer.

And finally, a little soul searching is needed.  Accept the fact that your commitment to the organization and your career are changing as you depart. Both you and the organization you founded are moving on to new things. Embrace the opportunity for change and what it promises.

>>> Emergency Succession Planning for Arts Organizations