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Consulting Group Dramatizes Non-Profit Needs

Tuesday, June 1, 2004

According to a membership survey of The Society for the Advancement of Consulting™ (SAC), non-profit groups in the U.S. will continue to grow in both personnel and assets. However, included in the findings is a recommendation for them to improve their management and strategy, if they are to uphold their fiduciary integrity for contributors, constituents, and regulators.

SAC found that non-profit growth is surging ahead of needed support resources and infrastructure. "Boards of non-profits are often composed of major contributors, celebrities who can lure major contributors, and internal management," notes SAC CEO Alan Weiss, Ph.D., "and therefore major issues such as governance, strategy, and staff performance evaluation are not managed effectively."

Terrie Temkin, Ph.D., a SAC member from Florida, notes, "A comprehensive study recently done in Indiana showed that the number of non-profits actually operating in that state were three times the number registered with the IRS. If extrapolated to the country as a whole, which recognizes approximately 1.6 million nonprofits enjoying 501(c) status and another 90,000 new organizations that applied to the IRS last year alone for such status, there is a huge market for consultants trained in the unique culture of the sector."

In response to the survey findings, SAC member Keith McLeod offers these guidelines for non-profit management and governance:

  1. Start with a business plan, which includes a statement of your competitive advantage and your value proposition.
  2. Establish a 501C-3 to make donations tax deductible.
  3. Recognize that your Board of Directors is the key to your success. Avoid all in-house or industry-only board members. Also have laddered term limits.
  4. Obtain E&O (malpractice) insurance.
  5. Establish a board grid. Place the names of board members vertically and responsibilities horizontally: legal, diversity, facilities, accounting, public relations, fund raising, etc.
  6. Work on a few high-priority projects at a time, to avoid board member burnout.
  7. Establish annual memberships with different levels.
  8. Plan for retreats and strategy sessions, preferably facilitated by a SAC member.

"Effective NPO managers build strong working relationships between the board and staff. They develop the appropriate infrastructure to allow them to plan for, monitor, and evaluate the effectiveness of their programs. Effective managers also understand that accountability must be established and good work needs to be recognized," cited member Dominic Cingoranelli, a financial specialist.

Lynda Ford, SPHR, comments, "Don't sacrifice accountability in the name of 'human services.' Treat employees with as much dignity and respect as the people the agency serves. Regularly scan the environment for changes that impact the organization. Use a simple strategic analysis and make sure that every manager is conversant in strategy."

United Kingdom SAC member Paul O'Byrne has observed, "NFPs are, collectively, major employers. The NFP is entitled to performance, loyalty, and value for money. Employees are entitled to clear direction, but do they get it? Boards of NFPs can get as carried away as Boards of commercial firms in obsessing about efficiency. Go for effectiveness. You're trying to achieve something!"

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