NTEN, the Nonprofit Technology Network, has announced that its 2010 Nonprofit IT Staffing Survey is now open for submissions. Now in its fifth year, the survey collects benchmarking information in areas including how IT is structured and situated within organizations, staffing and responsibilities, budgets, training, salaries, and retention. 

Photo credit: Alan_D

Yesterday, I had the pleasure of “listening” in on a Twitter chat focused on the use and sharing of data to improve educational outcomes for kids. My interest in the conversation was two-fold. For one, it offered me the opportunity to learn more about educational effectiveness and measurement, topics about which I am increasingly curious. Additionally, and more relevant to this post, it occurred to me that the ideas and lessons shared might be of value not only to those involved with education, but also to those interested in the application of technology and data in the broader nonprofit and social services communities.

The chat was hosted by The After School Corporation (TASC), a New York City-based organization dedicated to giving all kids opportunities to grow through after-school and summer activities that support, educate and inspire them.

The discussion featured the expertise and research of Bill Tucker, Managing Director of Education Sector, a Washington-based nonprofit, nonpartisan organization committed to achieving measurable impact in education policy. Mr. Tucker and Education Sector recently published Putting Data Into Practice: Lessons from New York City. The report, funded by the Charles Stewart Mott Foundation, examines New York City’s efforts to “create an evidence-based and collaborative teaching culture”. In addition to clear and compelling documentation of the City’s experience, the report recommends five valuable “design principles for smarter data systems”:

• Systems must change from being institution-centered to being learner-centered
• Information must flow across institutions
• Usefulness and usability must drive adoption
• Systems must be common but open
• The data must fit the goal

The Twitter chat did not disappoint. Mr. Tucker demonstrated his knowledge of the topic and provided insight in response to the many questions he fielded. He also shared over a dozen resources for further exploration. I left the chat not only feeling much better informed, but also with a strengthened belief in the broader value and applicability of the lessons and recommendations, particularly with regard to the use of data and technology in improving and evaluating program effectiveness.

One of Twitter’s downsides is the often temporal nature of the exchanges. To document the chat and provide lasting access to the information, I’ve prepared the following transcript, slightly edited for clarity:

Share your thoughts and reactions in the comments. How can data and technology be further exploited to improve the education of our children? How can the lessons learned in this area be applied in the broader nonprofit and social services communities?

photo credit: dave_mcmt

“Why?”

“Because I said so.”

This exchange, perhaps a staple of parent/child relationships, has no place in management. In fact, communicating to employees the why of their work — the context, value, and relevance of their work — is vital to both training efforts and effective coaching. Further, recent research, including a study conducted in a nonprofit fundraising environment, suggests that employees who know how their work positively impacts others are more productive than those who don’t.

Putting Training in Context

A fundamental element of effective training is to place the skills and knowledge being transferred into context. Without this, employees may be unclear about the value of their new abilities. Understanding when and how to apply skills and knowledge aids learning and increases the likelihood that the investment in training will be rewarded.

Context is also important when it comes to the timing of training. Whenever possible, training should be delivered in close proximity to the time it will be used. For example, when I conduct training around performance management programs, which typically have planning, mid-year, and year-end components, I prefer to deliver training in three separate sessions during the year rather than in one fell swoop at the beginning of the year. Not only does this allow information to be digested in smaller chunks, it also ensures employees have the opportunity to apply the training while it is fresh.

Optimizing Performance Feedback

When working with managers on coaching, I emphasize the importance of communicating the why of what they’re doing. For providing developmental feedback, I suggest a simple, three-part approach:

• Identify what needs improvement
• Explain why improvement is necessary
• Solicit ideas about how to improve and/or offer suggestions

In the second step, the deficiency is placed in context, enabling the employee to understand the broader implications.

Communicating the why also comes into play when delivering positive feedback. Here is a similar, three-part framework:

• Describe the situation generally
• Describe, in specific terms, what the employee did that was effective
• Describe the positive impact of the employee’s effective performance

In the final step, the value of the employee’s contribution is emphasized. This provides positive reinforcement and increases the likelihood that the performance will be sustained or repeated.

Understanding Equals Results

The importance of communicating the value of employees’ contributions is underscored by recent research, including studies conducted by Professor Adam Grant of the University of Pennsylvania’s Wharton School. Dr. Grant’s research suggests that employees who understand the positive impact their work has on others are not only happier, but they are also more productive.

In one study, summarized on the Knowledge@Wharton blog, Dr. Grant and his co-researchers conducted an experiment among university call center workers employed to solicit potential donors. The workers were relatively low paid and frequently encountered rejection, resulting in low morale and high turnover.

In the experiment, one group of call center workers met for five minutes with students who received scholarships funded by the employees’ fundraising efforts. Then, for the next month, the researchers monitored both the amount of time all employees spent on the phone with potential donors and the amount of money they brought in. Compared to employees who had no personal contact with the beneficiaries of their work, those who previously met with the recipients spent twice as much time on the phone and brought in nearly three times as much money.

From these results, as well as other research, Dr. Grant concluded that simply being aware of the impact of one’s work greatly increases motivation. Where the work has a direct, visible impact on other people — as is often the case in nonprofit settings — the impact is magnified.

—

To maximize the effectiveness of training and coaching as well as employee motivation and productivity, organizations and managers should continually seek ways to communicate to all employees the context, importance, and relevance of their work.

What are creative and/or effective ways that organizations and managers can communicate the why of work?

This post originally appeared on the Mission Connected blog on March 30, 2010.

photo credit: Marco Bellucci

This week, I had the pleasure of presenting at Rutgers Business School as part of the Institute for Ethical Leadership’s 2010 Nonprofit Leadership Certificate Program. In addition to conducting sessions on nonprofit compensation for both the executive and emerging leaders tracks, I welcomed the opportunity to conduct a plenary session on the use of social media and social networking for nonprofit organizations. The session offered the program participants an overview of what social media is, why many nonprofit organizations are choosing to use it, and some tips on how to go about implementing or enhancing their organizations’ social media presence and practices.

Below the presentation slides are links to a number of valuable resources that I referenced during the presentation.

Social Media Resources for Nonprofit Organizations

The web offers an overwhelming number of resources for those seeking information on social media.  During my presentation, I referenced several that nonprofit organizations might find particular useful.

In particular, I highlighted the excellent book Brandraising: How Nonprofits Raise Visibility and Money Through Smart Communications, by Sarah Durham, principal and founder of Big Duck, a communications firm serving noprofit organizations in the New York region.  Beyond insights into the potential value of social media, Sarah’s book offers nonprofit leaders a proven holistic approach to fundraising that puts the focus on marketing, branding, and communications.

For those who are active Twitter users or who are just beginning to explore that platform, definitely check out #NPTalk, the innovative weekly Twitter chat hosted by SocialNicole. The chat offers a virtual “think tank type environment that helps push the envelope on innovation, creative, cutting edge solutions, approaches and ideas to help nonprofits meet the challenges of finding ongoing success in this new economy”.

I also want to highlight the excellent work and resources offered by the Nonprofit Technology Network (NTEN).  In particular, the Nonprofit Social Network Benchmark Report provides great insight into the state of the art in terms of nonprofit social media and social networking, and the annual Nonprofit Technology Conference (which I very much hope to get to in 2011!) is an outstanding opportunity for learning and collaboration.

The page 10 essential social media SlideShare presentations for nonprofits is self-explanatory, and definitely worth a look.  In addition, the following pages are valuable resources, and the sites hosting them can serve as jumping off points for nonprofit leaders exploring, creating, or enhancing their organization’s social media presence.

Social Media Strategies & Tactics
How to get nonprofit leaders on board with social media
Eight tips for nonprofit leaders implementing social media
How nonprofits are using social media for real results
Fifty social media tactics for nonprofits
Social media strategy from A to Z
Closing the loop between social  media and offline action

Social Media Policies
Online database of government and nonprofit social media policies
Rough draft of a nonprofit social media policy
Does your social media policy let your staff be real?
Social media plans and policies for nonprofits

Facebook
Facebook pages and Facebook groups — the ultimate nonprofit cheat sheet
Facebook best practices for nonprofit organizations

Social Media Measurement
Social Media Measurement for Nonprofits
Thirteen truths about social media measurement

I’d love to hear your comments!  By all means, let me know if you find any of these resources to be particularly helpful.  Also, please share any other valuable social media resources that you know of, or identify specific areas about which you’d like more information.

It was my pleasure to present this week at Rutgers Business School as part of the Institute for Ethical Leadership’s 2010 Nonprofit Leadership Certificate Program. In addition to leading a plenary session on the use of social media and social networking for nonprofit organizations, I had the chance to address both the executive and emerging leaders tracks on compensation in the nonprofit sector.

The two presentations overlap in conveying information about the past, present, and future of nonprofit pay. The first presentation, for the emerging leaders, also offers a brief overview of executive compensation in the sector, as well as a primer on pay for performance approaches. The second, for established executives, provides recommendations on ways to enhance their organizations’ pay and performance management practices.

Emerging Leaders

Executives

Each of the conversations branched out in several interesting discussions, some of which I’ve touched upon in previous posts, and all of which were worthy of further discussion.  You may find the following related posts of interest:

Are Your Executive Compensation Bases Covered?
The Buck Stops Where?
Development in Demand: Challenges for Fundraising Professionals and Employers
Executive Compensation at Boys & Girls Clubs of America: A Closer Look
Human Resources Maturity
A Look at Nonprofit IT Staffing
The Path to Pay for Performance
Paying Attention to Turnover in the Nonprofit Sector
Salary Ranges 101

Please feel free to share the presentations and posts with your colleagues and, as always, share your comments and questions!

Lately, it seems that any sentence containing the words “nonprofit” and “compensation” is related to the scrutiny of pay provided to the presidents and other top executives of organizations. However, for most nonprofit organizations, far more compensation dollars are paid to the broader, non-executive employee population.

My presentation from the October 2010 Nonprofit Human Resources Conference in Washington, DC focuses on prevailing practices and emerging trends regarding compensation in the nonprofit sector, including the impact of internal and external influences.

My presentation from the June 2010 Nonprofit Human Resources Symposium at the University of San Diego outlines the steps nonprofit organizations can follow to develop an implement an effective, performance-based base salary compensation program.

“Where are they going to go?”

“They’re lucky to have a job.”

These are, unfortunately, actual statements I’ve heard in the past year from nonprofit managers, offered as rationales for not taking steps to advance human resources practices within their organizations. While there is no question both the economic downturn and its effect on labor markets have limited employment opportunities for many nonprofit employees, it has by no means brought the market to a halt, and staff turnover and retention continue to be important issues on which nonprofit employers should focus.

Rather than becoming less of an issue because of limited job mobility, controlling costs associated with turnover is actually more critical nowadays as nonprofit organizations seek to do more with fewer resources due to reduced giving and government funding. Every departure results in at least temporarily diminished capacity and productivity. Where the position is re-filled, the organization incurs expenses associated with recruiting, selection, onboarding and training of new employees.

In recent posts, I’ve taken a look at the changing market for fundraising positions, where demand appears to be heating up, and for information technology positions, where employers are cautioned against hiring overqualified but available talent who may not stay when the job market improves. A recently released survey report from Opportunity Knocks provides a comprehensive look at the turnover issue in the nonprofit sector and suggests strategies to consider to reduce turnover and improve retention. Here are some of the findings I found most striking and potentially useful to nonprofit employers.

How much of an issue is it?

The report found that among all participating nonprofit organizations, the average turnover rate — including both voluntary and involuntary departures — was 16% in the past year (down from 21% in 2008) and attributes the reduced turnover rate to economic conditions. Put another way, one out of every six employees in the nonprofit sector left his or her job during the year compared to one out of five in 2008.

The rates were significantly higher for smaller organizations — nearly 25% among organizations with annual operating budgets less than $2 million. There was also considerable variation in turnover rates among various subsets of the nonprofit sector. By far, the highest turnover rates — more than 35% — were found among arts, culture and humanities organizations while the lowest rates were found among housing/shelter and education organizations.

Despite the reduction in actual turnover numbers, 37% of organizations participating in the survey indicated turnover and retention are a problem.

Why are they leaving — and what can you do about it?

The following chart reports the reasons nonprofit employees left their organizations during the past year:

A little more than a third of the turnover reported was involuntary, i.e., initiated by the employer. Approximately 18% was the result of layoffs — a sobering reminder of the economy’s impact on the sector and, to some extent, beyond the control of employers. Another 18% was the result of terminations for disciplinary reasons.

I was most interested in the causes of voluntary turnover, i.e., departures initiated by the employee. I not only I see these as most costly to organizations, but I also believe these issues are within the ability of employers to control and, also, are those to which they can respond.

The leading cause of voluntary turnover — accounting for 14% of all turnover — was the employee receiving a competitive offer from another employer. This finding shows that while the nonprofit labor market may be chilled, it is far from frozen. It remains important that employers ensure reward offerings remain competitive. In addition to salary levels, employers should seek to ensure they are doing all they can to remain competitive in terms of benefits, to ensure employees understand the value of their reward packages and to utilize non-monetary rewards where possible to enhance retention.

Reported as the second leading cause of voluntary departure was employee dissatisfaction which accounted for 10% of all turnover. There can be many sources of dissatisfaction, so the first step in managing this source of turnover is understanding what factors are important to your employees and how they feel about them. Employee surveys and exit interviews are among the tools effective in this area. (My recent post “How to Be a Great Nonprofit Employer” takes a closer look at nonprofit employee satisfaction.)

Another 8% of turnover is attributable to factors I consider within organizations’ sphere of influence including limited professional growth potential, salary, conflict with supervisor and conflict with co-workers.

The balance of voluntary turnover is attributable to personal reasons largely beyond employers’ control including family issues, relocation, retirement, change of profession and continuing education.

These findings, and the other benchmarks in the report, illustrate that even in the current economy, turnover and retention are significant issues within nonprofit organizations, and many causes of a great deal of turnover can be directly addressed by employers. As the economy improves, voluntary turnover will increase, and it will become even more important to ensure the ability to retain valuable employees. As a nonprofit human resources professional or organization leader:

• Are you aware of your organization’s voluntary and involuntary turnover rates and how they have changed over time?
• What have been the leading causes of turnover within your organization?
• Do you consider turnover and retention a concern for your organization?
• What is happening in your organization — or can be done — to control turnover and enhance retention?
• What do you need to do to retain and compete for talent as economic conditions improve?

This post originally appeared on the Mission Connected blog on May 5, 2010.

photo credit: Dan4th

I’m honored that my recent post “Development in Demand: Challenges for Fundraising Professionals & Employers” was among the four selected for the May Nonprofit Blog Carnival, hosted by Mark Horoszowski on his Helping Help blog.

This week’s roundup of interesting nonprofit sector job openings in and around New York City from my Twitter stream, clients, network, and other sources highlights 17 individual job openings, as well as five organizations that are currently recruiting for multiple positions.

• Administrative Assistant/HR Specialist, Lawyers for Children (via @NPtechJobs)
• Budget and Multimedia Projects Coordinator, UNICEF (via @NPtechJobs)
• Deputy Director, Girls Educational & Mentoring Services (GEMS)
• Director of Development, Rockland Family Shelter (Rockland County, NY) (via @execSearches)
• IT Administrator, Center for the Integration & Advancement of New Americans (via @NPtechCareers)
• Manager, Communications & New Media, Municipal Art Society (via @NPtechJobs)
• Manager, Design & Online Services, American Lung Association (via @NPtechCareers)
• Manager, Innovative Financial Services, Center for Financial Services Innovation
• Payroll Coordinator, Housing Works (Brooklyn)
• Program Assistant (Health), Nathan Cummings Foundation (via @onPhilanthropy @DotOrgJobs)
• Program Associate, Greenwich Village Society for Historic Preservation (via @DotOrgJobs)
• Program Director, Green City Force (Brooklyn)
• Program Officer, Multimedia, Asia Society (via @NPtechCareers)
• Special Assistant to the CEO, Turnaround for Children
• Vice President, Budgets & Contracts, Seedco (via @linkedin_jobs)

Also check out the multiple job openings at these organizations:

• Achievement First (Brooklyn; Bridgeport & New Haven, CT)
• Echoing Green
• Foundation Center
• GLAAD
• New Visions for Public Schools

Be sure to also check out last week’s roundup. And to make sure you don’t miss a weekly update, subscribe to the blog.

Finally, be sure to let me know if by chance one of these opportunities pans out for you, or if there are any particular sources of nonprofit jobs in the area that you think I should keep my eye on.

Photo credit: Thomas R. Stegelmann

While generally working behind the scenes, information technology (IT) professionals have long been important to nonprofits as they strive to function as modern, efficient organizations. The importance of IT in most organizations continues to increase as nonprofits seek to fully utilize social media and online fundraising and as they explore the potential of technologies such as content management systems (CMS), contact relationship management (CRM) and software as a service (SaaS).

Last month, the annual conference of the Nonprofit Technology Network (NTEN) in Atlanta brought together more than 1,400 professionals with various roles in nonprofit IT. In advance of the conference, NTEN released its fourth annual IT Staffing and Spending Report. The survey offers a broad range of nonprofit IT management benchmarks drawn from the survey responses of more than 1,000 respondents representing a range of nonprofit organization types and sizes. In reviewing the report, I was particularly interested in staffing-related issues that emerged from the survey results.

What Matters Most?

Among the most interesting findings for me were respondents’ views of the most important factors to consider when hiring IT staff. The following chart summarizes their ratings of a variety of factors on a scale of one (not at all important) to five (extremely important).

Perhaps not surprisingly, past experience with technology was viewed as the most important factor. But, ranked right behind this were the “softer” factors of fit with organizational culture and attitude/personality. Possession of a degree/formal education was a distant last.

How’s the Market?

At times during the past two decades, IT professionals in various disciplines have been among the hottest employment commodities. Organizations in all market sectors often have been compelled to pay significant premiums relative to other staff and to take other steps to attract or retain qualified IT staff. In the NTEN survey, respondents were asked if they were currently utilizing any targeted recruiting or retention practices for IT professionals that are not being used for other staff positions. The majority (57%) indicated they were not. Among those organizations utilizing targeted approaches, the most common considerations included offering higher pay scales for IT staff, telecommuting opportunities, alternative/flexible work schedules and professional development opportunities.

A recent Chronicle of Philanthropy article painted a picture of an even softer market for IT professionals, suggesting that nonprofit organizations nationwide seeking to hire IT staff are encountering a more than adequate supply of qualified candidates — and a surplus of overqualified individuals. The Chronicle article points out a very important consideration given these market dynamics: nonprofit employers should “find workers who will serve their needs, embrace their missions — and also stay at their organizations when the job market thaws.” The concern is that as the job market improves, qualified or overqualified individuals who lack commitment to nonprofit missions might leave for higher salaries.

Your Next Move?

In addressing IT staffing needs, organizations should:

• Carefully consider needs. Ensure the organization is able to explore and utilize current and emerging technologies.
• Proceed with caution when hiring. Seek IT professionals who fit the organization’s culture and will remain committed to the organization and its mission as the job market improves.
• Focus on development and retention. Identify and implement attractive and relatively low-cost practices including professional development and flexible work schedules.

What has your organization’s recent experience been with recruiting and retaining IT personnel? Does your organization have the talent needed to take advantage of the full potential of today’s technologies?

This post originally appeared on the Mission Connected Blog on April 27, 2010.

photo credit: KaVass

California, here I come!

I’m excited about participating in the San Diego Nonprofit Human Resources Management Symposium on Wednesday, June 16th, 2010.  The event is sponsored by the Institute for Nonprofit Education and Research, part of the University of San Diego‘s School of Leadership and Education Sciences, and will take place on the USD campus.

Nonprofit Employment Trends

I look forward to participating in a panel discussion framed around the results of the recently completed 2010 Nonprofit Employment Trends Survey.  This survey, conducted jointly by the Caster Family Center for Nonprofit and Philanthropic Research and Nonprofit HR Solutions, examines the employment practices of over 500 nonprofit organizations nationwide.  Our discussion will focus on key findings including staff size and projected growth for 2010-2011, recruitment strategies and budgeting, key staffing challenges, and staffing resource management.

The Path to Pay for Performance

Following the panel discussion, I am conducting a seminar which will guide organizations in preparing for, developing, implementing, and maintaining effective, performance-based salary programs.  We will examine the rationales, prerequisites, steps, and tools for a successful program, and participants will have the opportunity to ask questions about implementing pay for performance in their own organization.

Update: Click here to view the presentation

Other panelists and presenters at the symposium include:

• Lisa Brown Morton, Nonprofit HR Solutions
• Laura Gassner Otting, Nonprofit Professionals Advisory Group
• Emily Davis, EDA Consulting and YNPN San Diego
• Christopher Olmsted, Barker, Olmsted, and Barnier
• Ann Shankin, Nonprofits’ Insurance Alliance of California
• Karen Kramer Horning, NextLevel HR
• Sherri Petro, VPI Strategies

Click here for more information and to register for the symposium.

I hope to see you there!

PS:  Nonprofit HR Solutions is also the force behind the 2010 Nonprofit Human Resources Conference in Washington, DC this October.  I look forward to attending and presenting there as well.

Photo credit: SD Dirk

Much like the occasional baseball game, last week’s scheduled edition of this weekly feature fell victim to a rain delay! So in a bit of a double-header, this week’s roundup of interesting nonprofit sector job openings in and around New York City from my Twitter stream, clients, network, and other sources not only includes a baker’s dozen of individual job openings, but also spotlights six major nonprofits in the city who are currently recruiting for multiple positions.

• Controller, Saint Peter’s College (Jersey City, NJ) (via @ExecSearches)
• Coordinator, HELP USA (via @dan_blakemore @GordonJayFrost)
• Development Officers, Robin Hood Foundation (via @RobinHoodNYC)
• Director of Development, OpenGeo (via @NPtechJobs)
• Director of Information & Technology Systems, Institute for Transportation & Development Policy (via @NPtechCareers)
• Director, Major Gifts, B’nai B’rith International (via @ExecSearches)
• Educational Technology Consultant, Teaching Matters Inc. (via @NPtechJobs)
• Executive Campaign Director, Rutgers University Foundation (New Brunswick, NJ) (via @ExecSearches)
• Manager, Financial Reporting & Accounting, Metropolitan Museum of Art (via @ExecSearches)
• New Media & IT Coordinator, The Vilcek Foundation (via @NPtechJobs)
• Senior Web Strategist, Atlantic Philanthropies (via @pndblog)
• Web & Mail Order Coordinator, New Museum of Contemporary Art (via @NPtechJobs)
• Web Content Editor/Manager, Mary J Blige & Steve Stoute Foundation for Advancement of Women Now (via @NPtechCareers)

Also check out the multiple job openings at these six organizations:

• American Civil Liberties Union (National Office)
• Amnesty International USA
• Computers for Youth
• Open Society Institute
• OpenPlans
• Seedco

Be sure to let me know if by chance one of these opportunities pans out for you, or if there are any particular sources of nonprofit jobs in the area that you think I should keep my eye on.

Also check out the previous roundup.

Photo credit: bropho

For the vast majority of the country’s more than 1.2 million registered 501(c)(3) organizations, the development function and fundraising professionals have always been of critical importance.

Today, while the profession itself faces challenges on a number of fronts, organizations face rising demand for qualified development professionals, the need to maximize their return on investment in fundraising staff and pressure to intensify efforts to attract and retain successful fundraisers.

The Landscape

Recent years reflect significant expansion of the nonprofit sector with the number of registered 501(c)(3) organizations increasing by 90% from 2006 to 2009. Given the current economic climate, these organizations are competing for fewer charitable dollars as individual, corporate and foundation giving have declined. According to a study released last month by the Association of Fundraising Professionals, 57% of American and Canadian nonprofits received less or the same giving dollars in 2009 compared to 2008.

While most organizations are, at best, cautiously optimistic that the economy will improve in 2010, it is reasonable to assume that charitable giving will lag behind any economic improvement. Foundation giving, in particular, is expected to remain flat in 2010 and improve only slightly in 2011 according to a recent Foundation Center report. Government funding for many organizations, particularly at the state level, has also significantly declined. Completing the perfect storm, the recession has led to increased demand for services from many nonprofits.

Changing Field

As if the economic landscape wasn’t challenging enough, fundraising professionals also increasingly find themselves in need of broader skill sets. A recent Chronicle of Philanthropy article summarizes the views of executive recruiters and fundraising experts who say that people skills alone no longer make for a successful fundraiser. Instead, emerging trends will create demand for development professionals who also possess entrepreneurial ability and spirit, who have cross-cultural and generational knowledge and who are strategic, analytical and technologically savvy.

Demand Rises

All of these forces combine to increase the demand for qualified fundraising professionals, and the job market for such positions appears to be on the rebound at least in some markets. The Association for Fundraising Professionals reports that listed job openings for fundraisers have increased every month since January and are now at November 2007 (pre-recession) levels. The job market is expected to continue to loosen especially for seasoned, broadly skilled development pros with a track record of success.

It Takes Money…

While development professionals are essential to a nonprofit’s survival, each fundraising position hired represents a significant organizational investment. The following table details the current median base salary among all organizations nationwide according to salary.com:

According to survey results released earlier this month by the Association of Fundraising Professionals, the median salary for all fundraisers nationwide was $66,000 in 2009, an increase of 3.9% from 2008. The survey found that highest salaries were paid to development professionals working for consulting firms, with a median salary of $80,000. Among charitable organizations, the highest median salary levels were found among fundraisers for educational institutions ($71,200), hospitals and medical centers ($71,000) and other health organizations ($67,000).

None of these figures include the additional expenses related to any bonus or incentive compensation, statutory and other benefits, and taxes.

Keeping Finders

As with any position, turnover brings even higher costs. Penelope Burk, a Chicago-based fundraising consultant, estimates it costs 65% to 83% of a fundraiser’s annual salary to replace him or her. In a presentation at the Association for Fundraising Professional’s annual meeting last week, she also agreed that turnover among fundraisers will increase as the economy improves previewing findings from recent research that suggest 48% of the 1,200 development professionals she surveyed would leave their current jobs for higher pay.

Ms. Burke reasons that this finding may provide an argument for organizations to increase rewards for top-performing fundraisers, but she also suggests other strategies for their retention including increasing their managerial responsibilities, creating succession plans and offering more flexibility and other non-monetary benefits.

In light of the economic and charitable giving climate, the changing nature of the development profession, and the need to compete for qualified talent:

• What demands face your organization’s fundraising function and professionals?
• Have your organization’s development staffing levels or needs changed?
• What is your organization doing to attract and retain high-performing fundraisers?

A version of this post originally appeared on the Mission Connected Blog on April 20, 2010.

photo credit: nDevilTV

Done by People is now featured in Alltop Nonprofit, which aggregates the “best of the best” from across the nonprofit blogosphere to keep readers informed about what’s happening in the nonprofit sector. Quite proud to see my blog listed alongside so many which I admire.

Do you remember Friday, December 31st, 1999? I do. I remember rushing to backup all of my business and personal data to CD-ROMs. I remember wondering just how fast and how far the market for COBOL programmers was going to fall. I remember losing count of how many times I heard Prince‘s 1999. I remember staying in that night to watch CNN, wondering if the anticipated global computer meltdown was going to occur (and feeling, I admit, just a bit of a letdown when it didn’t).

Over ten years later, heading into this mid-Spring weekend, I find myself experiencing a bit of déjà vu. If you are at all involved in the nonprofit world, you probably know by now that this Monday, May 17th, marks a significant deadline for nonprofit organizations nationwide. Under the provisions of the Pension Protection Act of 2006, any organization that has not filed its annual tax form with the IRS for at least one of the past three years by that date will lose its tax-exempt status. The 2006 law actually only changes the game for organizations with annual revenue below $25,000, which have for decades been exempt from filing requirements. For larger organizations, the filing requirement has not changed.

How hard could it be?

If no action is taken, more than 365,000 nonprofits will lose their tax exemption — along with their ability to accept tax-deductible donations and receive foundation grants. But if this fate befalls an organization, it means that at least one of the following statements are true of its leaders:

1. They were not aware of the regulatory change and its implications for their organization, despite the three-year notice and grace period given by the IRS and the widespread coverage of the issue in both mainstream and social media over the past few months. If you are still not aware of the details of the change, I suggest you check out this information from the National Council of Nonprofits or this from the IRS itself.
2. They did not recognize that their organization had not met the filing requirement for each of the past three years. I would hope that every board member and nonprofit leader would be aware of their organization’s filing status, but if not, the Urban Institute’s National Center for Charitable Statistics provides this simple tool to determine if your organization is at risk of losing its exemption by not filing.
3. They failed to take the necessary step to file this year. While larger organizations and private foundations need to complete Form 990, 990-EZ, or 990-PF, an organization with revenues under $25,000 need only perform the exceedingly simple task of completing Form 990-N, the online “e-postcard”. This literally involves providing the following eight pieces of information:
   • Employer identification number (EIN)
   • Tax year
   • Legal name and mailing address
   • Any other names the organization uses
   • Name and address of a principal officer
   • Web site address, if the organization has one
   • Confirmation that the organization’s annual gross receipts are normally $25,000 or less
   • If applicable, a statement that the organization has or is going out of business

Good riddance?

Here’s the part where I may lose a friend or two. I would suggest that if an organization loses its exemption because one or more of those statements are true of its leaders, the organization probably shouldn’t exist as a tax-exempt nonprofit. In all likelihood, the organization has ceased — or never started — operations. Alternately, it may not be being operated in a sufficiently professional and effective matter to merit the investment of charitable dollars that could be put to better use elsewhere in the nonprofit sector.

The number of registered 501(c)(3) organizations nearly doubled between 1996 and 2009 — from approximately 654,000 to over 1.2 million. Many, including myself, have cited and questioned the necessity and appropriateness of this proliferation. Others have downright criticized it. If my theory that the vast majority of any organizations which lose their exempt status next week are not operational anyway is true, there will be little or no impact on the efficacy of the nonprofit sector. However, this “thinning of the ranks” may be very valuable in giving us a truer sense of the size — and heading off criticism — of the nonprofit sector.

Now if only there were a Prince song about this…

photo credit: Mykl Roventine

On Monday, I had the opportunity to attend a highly informative and engaging forum which brought together government and nonprofit representatives to discuss the topic of strategic alliances and partnerships among nonprofit organizations. While the discussion focused on New York State’s nonprofit sector, the challenges, considerations, and ideas discussed are applicable to organizations nationwide. In the absence of a video or audio recording of the session, I wanted to share this detailed recap and my impressions of the session.

The event was sponsored by the Community Foundation for the Greater Capital Region and the New York Council of Nonprofits (NYCON) and held at the headquarters of New York State United Teachers (very nice digs, by the way) in Latham, New York, a few miles northeast of Albany.
“Most in government recognize the importance of the nonprofit sector.”
Karen Bilowith, President and CEO of the Community Foundation for the Greater Capital Region, presided over the session. The approximately 75 attendees included representatives of various nonprofits, including arts, cultural, health, and human services organizations, as well as a number of funders and consultants (including yours truly). Following Ms. Bilowith’s welcoming comments, New York Secretary of State Lorraine Cortés-Vázquez provided brief opening remarks. Ms. Cortés-Vázquez assured the attendees that “most in government” recognize the importance of the nonprofit sector and rules and regulations pertaining to the sector should not be so onerous as to provide disincentives for staff, board members, and volunteers to participate.

I’m from the government, and…

Ms. Cortés-Vázquez then introduced the session’s keynote speaker, New York State Comptroller Thomas P. DiNapoli. The Office of the State Comptroller has responsibility for the review, approval, and payment of the state’s contracts with nonprofit organizations. Mr. DiNapoli noted the importance of the nonprofit sector to the state and its economy, citing 2006 statistics that the state’s approximately 24,000 nonprofits reported revenue of $133 billion and employed nearly 1.2 million people, or 17% of the state’s workforce. He quantified the state’s contractual bonds with the sector as consisting of nearly 31,000 active contracts totaling $14.6 billion, as of June 2009.
“The current crisis offers the opportunity to change ways of doing business.”
Mr. DiNapoli indicated that the day’s session was one of several he’d participated in recently, including convenings of nonprofit representatives from Long Island, New York City, Westchester County, and Rochester. His remarks in part highlighted findings from his office’s recently released report on the state’s nonprofit sector. The Comptroller invoked the metaphor of the “perfect storm” to describe the combination of increased demand, flat or diminished government funding, and decreased charitable giving facing the state’s nonprofits, and acknowledged the state’s concurrent fiscal difficulties, including the current lack of an approved budget. However, he also suggested that the current crisis offered both the government and the sector the opportunity to look at and potentially change ways of doing business.

Mr. DiNapoli acknowledged the “unacceptable lateness” of the state’s current contracting practices. He indicated that in 2008, 87% of the state’s contracts, representing $2.7 billion, were not approved by the start date. On average, these contracts were approved 184 days late, with significant impact on the operations of the nonprofit entities awaiting approval and payment.

Mr. DiNapoli called on nonprofit leaders to look at successful models within the nonprofit sector, but also in other sectors, including government, including shared services, strategic alliances, and mergers. He suggested that both government and nonprofits could benefit from streamline and consolidating back office operations, including information technology, human resources, payroll, and other functions. He indicated that among the state’s local government entities, approximately $760 million could be saved annually, and that nonprofit organizations might also benefit from similar models. Mr. DiNapoli did acknowledge that the feasibility and success of this range of actions were dependent on organizations’ assets, cultures, and leadership, and that they should be considered on a case-by-case basis. He suggested that these considerations should include cost-benefit analyses, and that members of his office, including Angela Dixon, Deputy Comptroller for Human Resources and Administration, were available to provide assistance and advice in this regard.

The balance of Mr. DiNapoli’s remarks focused on ways to potentially streamline and increase the effectiveness of the nonprofit sector as well as the government’s relationship with it:

• Mr. DiNapoli introduced John Moriarty, Assistant Comptroller and head of the office’s contracts unit, and indicated that Mr. Moriarty was available to investigate and expedite specific contract issues.
• He indicated his desire to centralize and streamline contract monitoring among the nine state agencies with oversight of the majority of nonprofit contracts.
• The Comptroller cited the importance of performance-based contract measures, indicating that such measures should be established in collaboration between government agencies and providers.

Following his prepared remarks, Mr. DiNapoli fielded a number of comments and suggestions from the audience. Ms. Bilowith capped off the Comptroller’s remarks by noting that two of Mr. DiNapoli’s points, regarding performance-based measures and externally imposed barriers to actions such as mergers and strategic alliances, were also important ones for private funders to consider.

I felt that Mr. DiNapoli offered a fair and reasoned view of the state of the sector and approaches to improving its effectiveness. He struck me as earnest in seeking to improve the state’s contracting procedures, and was characterized by at least one participant as a “champion” for nonprofit organizations.

Why? How?

The balance of the session was devoted to presentations and discussion by a panel consisting of:

• Doug Sauer, who has served as Chief Executive Officer of New York Council of Nonprofits (NYCON) since 1980. NYCON’s membership represents approximately 1,600 charitable nonprofit organizations across New York State.
• Cristine Cioffi, who is a partner in the law firm of Cioffi • Slezak • Wildgrube P.C., but spoke primarily in her role as Chair of the Board of Trustees of Ellis Medicine, an organization which resulted from the recent merger of three nonprofit hospitals in Schenectady County.
• David W. Palmquist, who as Manager of the New York State Museum’s Chartering Program, oversees the chartering of museums, historical societies, and similar cultural organizations with educational purposes across the state.

The panelists responded to questions posed by Ms. Bilowith, as well as several questions from audience members.

Doug Sauer

While all three of the panelists presented interesting perspectives on the potential of various collaborative models for nonprofit organizations, I was particularly impressed by Mr. Sauer’s insight and candor on a number of fronts. Early in his presentation, he discussed the recent proliferation of nonprofits, describing the creation of thousands of new organizations each year, many of which are not active, and the resultant saturated environment. (I was reminded of a recent article in the Chronicle of Philanthropy, which noted that the number of nonprofit organizations nationwide has increased by 90% to 1.2 million since 1996).
“Identity and egos can get in the way.”
Mr. Sauer also emphatically reminded the audience that organizations are merely vehicles — mission is most important and should come first in their thinking. He indicated (quite correctly, in my opinion) that organizational identity and egos sometimes get in way of making organizational decisions and changes that are in the best interest of mission achievement.

Are mergers and alliances a way to save money? According to Mr. Sauer, the answer for most small to mid-sized nonprofit organizations is no. He pointed out that for such organizations, there is not much money to save in the first place, and that any potential savings will be lost to increasing salaries, seeking new funding sources, combining systems, and other costs related to organizational changes.

I was pleasantly surprised by Mr. Sauer’s final comment in the session, which was to suggest that organizational restructuring can and sometimes is used as a way of “cleaning house on the board”. He noted the potential for organizations to “get rid of dead weight”, improve the performance of fiduciary responsibilities, and expand opportunities for the organization.

Mr. Sauer also:

• Suggested that if your organization is already operating in survival mode, it may be too late for effective collaboration. Being in a situation where assets are low, your liabilities high, and you can’t make payroll does not make you an attractive partner for alliance.
• Characterized the New York State Attorney General’s process for vetting nonprofit mergers, dissolutions, and the like as highly problematic. The process lacks rhyme or reason, and reviews can take one to two years. In December, the Attorney Generals’ Office pledged to review potential mergers within three months, but that hasn’t happened. Mr. Sauer contrasted New York’s “onerous” process and documentation requirements with that in Mississippi, where proposed mergers require the completion of “a four page form”.
• Cited the need for public and private funders to provide monetary incentives to grantees to collaborate, and to provide funding for the development of organizational capacity and sustainability.

David Palmquist

Mr. Palmquist spoke to different forms of nonprofit collaboration and alliances from the perspective of museums and other cultural and historical institutions, for which his office has oversight. I found it interesting to learn that New York is the only state in which such organizations are chartered as educational corporations charged with protecting the public trust, rather than general nonprofit corporations. According to Mr. Palmquist, this fact has placed his office “in the driver seat” with regard to controlling and rationalizing the creation of new organizations. He noted that the state’s unique treatment of educational corporations made organizational changes easier than for other nonprofit corporations.

Other interesting facts offered by Mr. Palmquist were that performing and fine arts organizations may be eligible for and could potentially benefit from state chartering as educational corporations, and that recent regulatory changes meant that a “museum” no longer necessarily referred to a physical facility, but to an institution, opening up the possibility of “museums without walls” (citing the example of the National Soccer Hall of Fame).

Mr. Palmquist also detailed actual examples of several types of organizational changes among organizations within his office’s purview, including mergers, consolidations, reorganizations, alliances, partnerships, startups, and dissolutions.

Cristine Cioffi

Ms. Cioffi brought yet another perspective to the conversation. In framing her comments, she first spoke of her previous experience in county government and her efforts to bring together municipalities in the interest of collaboration and efficiency. “Nothing happened until there was a crisis,” she said.

Ms. Cioffi then spoke extensively of the formation and success of Ellis Medicine. The nonprofit entity resulted from the merger of two acute care hospitals and one maternity hospital in Schenectady County, prompted by a recommendation of the state’s Commission on Health Care Facilities in the 21st Century. She echoed Mr. Sauer’s sentiment that issues of organizational identity and ego were challenging, but highlighted ways in which they were overcome and the organization’s success in integrating the three facilities and in the process improving the health care services provided to the community. Ms. Cioffi identified the following as among the keys to the success of the organizations’ merger:

• A process for identifying the best practices in patient care protocols from each of the three component institutions, and consistently implementing across the merged organization.
• Reconfiguration and streamlining of services where possible, including the consolidation of three separate laboratories into one central lab, under the direction of a leader who was selected by the laboratory employees themselves.
• The provision of leadership training to all employees, starting with middle management, in order to ensure consistent messaging throughout the merged organization.
• While the merged organization could not offer jobs to all administrative staff, positions were offered to staff in all other functions. Further, in each function, compensation and benefits were brought up to the highest level which existed among the three component organizations.

Ms. Cioffi went on to describe several aspects of Ellis Medicine’s efforts to enhance collaboration and consolidation of services, particularly for the community’s indigent residents, and how their efforts were enhanced through collaboration with other community organizations.
“Form follows function.”
To close, Ms. Cioffi provided the audience with a few general observations regarding nonprofit mergers and alliances. First, she emphasized that merger or alliance should not be seen as failure, but instead as holding the potential for growth and opportunity — for “more mission”. Secondly, she suggested that in this area, “form follows function”. That is, alliances that bring together organizations with complementary geographies, services, and funding (rather than duplicative funding), may be the most successful. Finally, she pointed out that there are many models of alliance available to organizations, and that leaders should be open to a variety of possibilities.

■ ■ ■

As the proceedings ended, I heard murmurs including “good meeting” and “I wish more people from my organization would come and hear this” from among the attendees. I, too, found the session to be quite worthwhile, and felt that the dialog and the ideas shared held promise for the sector, with value and applicability to organizations within and beyond New York State.

I strongly feel that collaboration, mergers, strategic alliances, and similar approaches should be among the options that organizations consider as they determine how to best achieve their mission, while also recognizing the myriad challenges and considerations involved. I look forward to continuing to monitor and participate in these important conversations — and to supporting nonprofit organizations — as they adapt and strive to best meet society’s needs.

photo credit: Horia Varlan

My new post on the Mission Connected Blog, “What’s in Your Manual? Nonprofit Employee Handbooks“, summarizes general considerations for employee handbooks, details essential content and resources for creating a handbook, and highlights one important area your organization’s handbook might be missing.

Here’s this week’s roundup of interesting nonprofit sector job openings in and around New York City from my Twitter stream, clients, network, and other sources.

• Account Manager, United Way of New York City (via @RutgersNWK_SPAA)
• Assistant Director, IT Support, Institute for Community Living (via @NPtechCareers)
• Chief Financial Officer, Large NY-Based Non-Profit (via @ExecSearches)
• Director, Community Relations, Stepping Stones Museum for Children (Norwalk, CT) (via @ExecSearches)
• Director, Donor Relations, Action Without Borders/Idealist.org (via @idealist)
• Executive Director, South East Bronx Neighborhood Centers (via @ExecSearches)
• Fund Administrator, Rockefeller Philanthropy Advisors
• Manager, Major Gifts, Brennan Center for Justice, NYU School of Law (via @ExecSearches)
• President, Children’s Tumor Foundation (via @pndblog)
• Program & Grant-Writing Assistant (part-time), Better Business Bureau Serving Metropolitan New York
• Program Director, Environmental Grantmakers Association (via @pndblog)
• Program Manager, World Cares Center (via @CaitrinO @IdealistJobsNYC)
• Project Associate, Center for Social Inclusion
• School Food Learning Lab Manager, School Food Focus (via @KellyCleaver @ynpnnyc)
• Technology Coordinator, Harlem Day Charter School (via @NPtechCareers)

Be sure to let me know if by chance one of these opportunities pans out for you, or if there are any particular sources of nonprofit jobs in the area that you think I should keep my eye on.

Also check out last week’s roundup.

Photo credit: greeblie

In a recent post, compensation consultant Ann Bares questions whether salary ranges, long a staple of compensation programs among America’s companies and organizations, are still a useful tool given the relatively slow pace of annual salary growth during the past two decades.

There is no question that administering salaries — and, in particular, differentiating rewards according to performance — is challenging in what I’ve long described as a “four percent world” (or, perhaps, for the past two years, a “zero to three percent world”). However, I believe that for the vast majority of nonprofit organizations, salary ranges remain an important and effective tool. This is especially true for growing nonprofits which find themselves adding staff and needing to ensure that salaries are equitable and competitive while simultaneously managing compensation costs.

A couple of years ago, I was retained by an organization in just that situation. The organization, which had been in existence for about 20 years, experienced significant growth through the previous decade, growing from fewer than 50 employees to more than 200. One of the problems the organization was experiencing was a high level of employee turnover, particularly among young, high-potential employees in their second and third years of employment. The organization’s management assumed this was related to compensation.

As I began to speak with employees and managers, I found that there was, in fact, a connection to compensation. But, rather than dissatisfaction with the actual compensation levels, an issue that emerged was that employees had no sense of what future opportunities existed compensation-wise in their current jobs or in positions to which they might aspire. Employees also questioned whether there was consistency and equity in compensation levels and the linkage between pay and performance.

Salary ranges are the foundation of a compensation program that can address each of these concerns and can serve the needs of a nonprofit organization and its employees in a rational, straightforward and effective manner.

Every organization’s compensation approach, whether a formal program or a collection of informal practices and ad hoc decisions, reflects a balance between the fairness of pay among employees within an organization and the ability to compete for talent in external markets. Ideally, objective measures of performance also play a role. The relationship between these forces is illustrated below:

This continuum is anchored at either end by purely hypothetical schemes. In perhaps an ultimate — but not at all real-world — manifestation of internal equity, everyone in the organization would simply be paid the same amount. At the other end, pegging each employee’s pay to the market value of their skill set in something approaching real time would be the ultimate hypothetical extreme of external competitiveness.

We find a couple of alternatives to salary ranges along the continuum. To the left are maturity curves, which have, thankfully, fallen out of favor in most environments (primary and secondary education being one of its last bastions, but don’t get me started on that). To the right is broadbanding. This practice, which has emerged in some for-profit settings in the past two decades, has not gained much traction among nonprofit organizations most likely due to its stronger external market orientation and relative complexity.

Near the middle of the continuum, we find salary ranges that provide each employee with a range of compensation opportunity based on their relative position in the organization and generalized market positioning. The employee’s actual pay is determined by their performance over time most commonly through the use of a merit increase grid. Such grids are simple but effective tools that provide base salary increases based on two factors: 1) annual performance — which should be objectively evaluated through a performance management process, and 2) the employee’s current position in the salary range.

Let’s take a closer look at the construction of salary ranges and some of the considerations involved with their implementation and management. A “typical” salary range is illustrated below.

The midpoint of the range represents the market target for the given level of work — the amount the organization would theoretically look to pay a fully competent performer in the position. The minimum and midpoint are then constructed around that. As Ann Bares points out in her post, salary ranges constructed with a 50% “spread” — in other words, where the maximum of the range is 150% of the minimum for the range have become something of a de facto standard. That results in a range with a minimum equal to 80% of the midpoint and a maximum equal to 120% of the midpoint.

Once salary ranges are implemented, it is important to interpret the minimum and maximum as expressions of policy — that the minimum is the least amount the organization considers fair to pay for a given level of work and that the maximum is the most the organization is willing and able to pay for a given level of work. (Discussions of what to do when an individual’s salary falls below or above the range are frequently a part of my consulting in this area.)

As mentioned, an individual employee’s position in the range should be a function of performance over time. That is, high-performing employees should, over time, migrate toward the higher end of the range while employees who are lower performers should remain, or end up, in the lower portion of the range. A common misperception about salary ranges is that every employee should be at least at the midpoint of the range. This is a fallacy that, if followed, effectively limits the organization to only half of the range and targets pay overall at a higher level of market competitiveness than intended.

Many organizations look to offer new employees starting salaries that are in the lower portion of the salary range (between minimum and midpoint in this illustration). Exceptions can, of course, be made when necessary to attract essential talent, but the details of doing so should be spelled out in the organization’s compensation management guidelines.

There is definitely a learning curve — for employees and managers — involved with implementing and utilizing salary ranges. But the investment is well worthwhile in that ranges provide a rational and effective way of ensuring equity and competitiveness in the organization’s pay practices by linking pay to performance, by communicating current and future compensation opportunities to employees and in managing compensation costs.

In constructing salary ranges, designing annual merit increase grids, and managing the compensation program overall, there are opportunities for the organization to tweak the relationships among internal equity, external competitiveness and performance to strike the balance that best represents the organization’s compensation philosophy and responds to its fiscal realities.

When designed and utilized appropriately, salary ranges provide an effective way of ensuring equity and competitiveness in the organization’s pay practices by linking pay to performance, by communicating current and future opportunities to employees and by managing compensation costs.

Does your nonprofit utilize formal salary ranges? If so, what has your experience been? Do you find them to be effective and relevant?

If your organization does not utilize salary ranges, have you experienced any problems in terms of equity, competitiveness, communication or costs? Does your organization use an alternative approach to compensation management?

A version of this post originally appeared in two parts on the Mission Connected Blog in March 2010.

photo credit: ##Erika**

My new post on the Mission Connected Blog, “Paying Attention to Turnover in the Nonprofit Sector“, takes a look at the prevalence of, causes of, and potential responses to the costly issue of employee turnover among nonprofit organizations.

I love it when a plan comes together!

During last month’s #socentchat on Twitter, a discussion started among some of us in the New York City area about the idea of getting together in person, to meet, share ideas about social enterprise and social change, and see what might come of it. Tyler Ahn of Ashoka Changemakers took the lead, kept us on track, and has made it a reality!

I hope that everyone in the area with an interest in social enterprise and social change will consider joining us this Thursday, May 6th, anytime after 6:30pm, at the Village Pourhouse (64 Third Avenue at East 11th Street in Manhattan). We’ve got the big back room at our disposal and drink specials until 8:00pm. I look forward to meeting many of you there!

Photo credit: Saucy Salad

A big thank you to Jackson Wightman for inviting me to contribute a guest post to his blog Proper Propaganda.

My post, “Social? Me?“, details my journey into social media, including my first forays with Facebook, my steep learning curve with Twitter, and my belated blogging beginnings. I’ve included a few lessons learned, and my much bigger list of lessons yet to be learned.

Check it out and let me know what you think.  While you’re there, check out Jackson’s, um, unique approach to PR.

I’m honored that my recent post “How to Be A Great Nonprofit Employer” was among the seven selected as the best nonprofit posts of the month in the April Nonprofit Blog Carnival, hosted by Jeff Brooks on his Future Fundraising Now blog.

Is nonprofit hiring starting to heat up in the New York City area? Two dozen positions in this week’s roundup of interesting nonprofit sector job openings in and around New York City from my Twitter stream, clients, network, and other sources.

• Assistant Director, Data Analysis, GMHC (via @NPtechJobs)
• Associate Director, Messaging, GLAAD (via @WhoisJRStevens @glaad)
• Associate Director, National News, GLAAD (via @utopia333 @glaad)
• Center Coordinator, Immigration and Justice, Vera Institute of Justice (via @pndblog)
• Chief Financial Officer, PAX – Program of Academic Exchange (Port Chester, NY) (via @execSearches)
• Communications & Publications Manager (via @ORTaurean @glaad)
• Coordinator of Web Content and Social Networking, Answer (Piscataway, NJ) (via @NPtechCareers)
• Deputy Director, Media Programs, GLAAD (via @ORTaurean @glaad)
• Development Manager, American Institute of Architects, NY Chapter (via @GordonJayFrost)
• Director of Special Events, GLAAD (via @celiawchen @BWRPR)
• Director, Business Affairs, Environmental Defense Fund (via @fjayhall)
• Director, Corporate & Foundation Philanthropy, Recording for the Blind & Dyslexic (Princeton, NJ) (via @execSearches)
• Director, Warehouse Operations & Technology, Computers For Youth (Long Island City) (via @NPtechCareers)
• Director/Interactive Services, UJA-Federation of New York (via @NPtechCareers)
• Executive Director, Columba Kavanagh House (via @execSearches)
• Executive Director, GO Project (via @pndblog)
• Human Resources Assistant, Computers for Youth
• Interactive Designer, Open Society Institute (via @NPtechCareers)
• IT & Operations Support Administrator, ORBIS International (via @NPtechCareers)
• Network/Systems Administrator, Women’s Housing & Economic Development Corp (via @NPtechCareers)
• New Video Media Coordinator, UNICEF (via @MakeWavesBonnie @IdealistJobsNYC)
• Program Manager, New Jersey Development School for Youth (via @RutgersNWK_SPAA)
• Technology Specialist, The Cathedral School (via @NPtechCareers)
• Web Producer, American Jewish World Service (via @NPtechJobs)

Be sure to let me know if by chance one of these opportunities pans out for you, or if there are any particular sources of nonprofit jobs in the area that you think I should keep my eye on.

Last week’s roundup

Photo credit: MattGDawson

“Managers are commonly ill-equipped to understand the dynamics of their compensation costs, never mind monitor and control them.”

I was struck by this statement by Chuck Csizmar in a recent post on the Compensation Cafe blog. Chuck was making a case for companies to focus on the return on investment (ROI) for employee compensation, and he went on to discuss the reasons for and consequences of managers making poor compensation decisions.

I have to agree with Chuck about managers’ abilities in this area, as this phenomenon is at the heart of a challenge I have repeatedly faced when working with nonprofit organizations to overhaul and improve their compensation practices. But, rather than ruing the fact that managers lack these skills and looking for ways improve them, I suggest that there is no real need for the vast majority of managers to develop them in the first place.

Don’t push compensation decision-making too far down in the organization I believe it is a mistake to push responsibility for compensation decision-making too far down in the organization. As Chuck describes, poor or subjective decisions on the part of managers potentially result in uncontrolled payroll costs — an obvious problem for organizations already facing decreased revenue and increased need in the communities they serve. But, there are other even more compelling potential consequences even when managers make compensation decisions with the best intentions:

• Perceived and/or real inequity in reward practices within or across different managers’ areas
• Inconsistent linkage of compensation and performance across the organization

Such inequity and inconsistency can significantly impact employee morale, trust, engagement and turnover which, in turn, can result in higher recruiting, onboarding, training and opportunity costs.

I recently worked with a nonprofit organization where the practice had been to provide individual managers with annual merit increases and bonus pools to be allocated as they saw fit. Beyond establishing the size of each manager’s pool, senior management and the human resources department exercised virtually no control as to how and on what basis increases and bonuses were distributed. There was significant variation in how managers exercised this authority resulting in what more than one employee described to me as the creation of individual “fiefdoms”.
Managers should be focused on managing, supporting, and evaluating employee performance
With my efforts to refine this organization’s compensation practices and pay-for-performance orientation, the free reign previously afforded to managers is a thing of the past. Managers are instead charged with focusing on that which managers should be focused — managing, supporting, and evaluating employee performance — while the task of linking performance to compensation is managed by the human resources leadership in consultation with senior management.

In addition to the ability to centrally manage and control compensation costs, this approach ensures far greater equity in reward practices, it provides consistency by linking compensation to performance, and it and clearly and authentically communicates these important messages to employees.

How did the managers feel about all of this change? Rather than resisting it and perceiving it as a reduction of authority, managers in this particular organization actually welcomed the shift. They felt it not only relieved them of a burdensome responsibility and the need to make often unpopular decisions, but it also freed them to focus on the optimal performance of their staffs and their departments.

So, where does the buck stop in your organization? In developing or refining your approach to compensation, strive to let managers focus on what they do best while affording the organization — and all of its employees — the benefits of appropriately positioned compensation decision making.

This post originally appeared on the Mission Connected Blog on March 23, 2010.

photo credit: SqueakyMarmot

Delighted that my recent post “Human Resources Maturity and the Three P’s” on the Mission Connected Blog was included in the 4/28 Carnival of HR, which “features recent posts from the best of the HR and management blogging community”!

My new post on the Mission Connected Blog, “A Look at Nonprofit IT Staffing“, considers current factors and trends in hiring information technology professionals, and offers advice for nonprofit employers as they address their IT staffing needs.

Here’s this week’s roundup of interesting nonprofit sector jobs in and around New York City from my Twitter stream, clients, network, and other sources:

• Account Manager/Business Development, Seedco/Workforce1 Career Center (via @newyorkcivicjob)
• Account Manager/Recrutiment & Placement, Seedco/Workforce1 Career Center (via @newyorkcivicjob)
• Associate Director, Direct Mail, Capuchin Province of St. Mary (via @onPhilanthropy @DotOrgJobs)
• Chief Technology Officer, NY eHealth Collaborative (via @NPtechJobs)
• Communications Director, Common Ground National/100,000 Homes Campaign (via @execSearches)
• Director of Development (via @NonProfitRecrtr)
• Director of Operations, NY eHealth Collaborative (via @NPtechJobs)
• HR Data Management Analyst, Ford Foundation (via @pndblog)
• Senior Director, Major Gifts, Save the Children (Westport, CT) (via @execSearches)
• Single Stop Specialist, Seedco (via @SocialMediaJob @Idealist)

Be sure to let me know if by chance one of these opportunities pans out for you, or if there are any particular sources of nonprofit jobs in the area that you think I should keep my eye on.

Last week’s roundup

Photo credit: doortoriver

Much conversation and debate in the nonprofit and philanthropic communities these days revolves around how to determine which organizations are the “best”. Fortunately, there seems to be a consensus away from basing such determinations on measures such as overhead ratio and administrative expenses and towards evaluation of impact — but that’s a topic for another day and post.
Employee opinions offer another perspective on a nonprofit’s quality.

Another perspective on a nonprofit’s quality can be found in the opinions of the organization’s employees. A recent study by the NonProfit Times and Best Companies Group used such opinions as the primary basis for identifying the “50 best nonprofits to work for in 2010″.

In the study, employee’s responses to a written survey accounted for 75% of each organization’s score. The remaining 25% was based on assessment of the organization’s benefit offerings and other practices, using a proprietary methodology.

The survey asked employees to rate their employer on 70 statements, grouped into eight categories. The following table summarizes the percentage of employees among the “50 best” who responded favorably in each category compared to employees of all participating nonprofits.

Clearly, employees were generally favorable across all of the categories, most notably with regard to their physical work environment, overall sense of engagement, supervisory relationship, and satisfaction with their current role.

Culture and communications the biggest differentiator?

What I find most interesting about the results are those areas where the biggest difference exists between employees of the “best” organizations and all study participants. In particular, for culture and communications, there is a seven percentage point difference, suggesting that this area may be the single biggest differentiator of the best nonprofit employers. The items in this category include:

• Frequency and detail of organizational communications
• Degree of trust that employees have in those communications
• Understanding of the organization’s financial situation
• Fair and individual treatment
• Recognition for work well done
• Adequate staffing levels
• The priority placed on quality and safety
• Spirit of cooperation among and like of coworkers
• Communication of changes before they are implemented

There are gaps of six percentage points between the top organizations and all nonprofits in the areas of leadership and planning, pay and benefits, and training and development, suggesting that these are also key differentiators.

Room for improvement in training and development?

The area of training and development also stands out because the ratings in this area, while still favorable, are significantly lower than any of the other areas. Among both the top nonprofits and all participants, there is a gap of ten percentage points between training and development and the next lowest rated category (pay and benefits). The items in this category include:

• Amount of initial and ongoing training received
• Adequacy of information, equipment, and resources to do job well
• Room for advancement, and clear understanding of and trust in expectations for advancement
• Training or experiences to explore other opportunities within the organization
• Trust in the relationship between doing good work, pay increases, and being considered for promotion

The results suggest that these aspects of training and development may hold the greatest potential for improvement among all nonprofit employers.

■ ■ ■

All nonprofit employers should consider their current effectiveness in each of these areas, and perhaps undertake an employee survey or other formal organizational assessment, to ensure they are in a position to attract and retain the most qualified, highest performing staff.

How does your organization shape up? What do you think it takes to be a great nonprofit employer?

photo credit: ~Brenda-Starr~

Last week, I offered an extensive look at the financial situation that led to the closing on April 1 of the Harlem School of the Arts, an institution that has served thousands of members of its community for nearly 50 years.

This morning, New York City Mayor Michael Bloomberg announced that the closing would only be temporary. The Mayor, other city officials, and many donors have stepped in to save the school, which will reopen this Saturday.

“With the help of dedicated New Yorkers, private funders and arts education advocates working together with the city and local officials, the Harlem School of the Arts is now on a path to a new and sustainable future, and that’s great news for everyone.”
–Mayor Michael Bloomberg

The New York Times also reported that five new members of the board of directors have been selected (it is not immediately clear if these new directors will replace or join the six current directors, or if one of them will assume the board chairmanship). Charles Hamilton, managing director for strategy and development for La Cité Development will assume the role of board chairperson.  The new directors include Ephraim Emmanual, president of the Harlem School of the Arts Parent Association. Adding the voice of the students’ parents to the school’s leadership is a positive step toward improving communication with this constituency, which was clearly missing during the school’s decline over the past few years.  Mary Schmidt Campbell, Dean of New York University’s Tisch School of the Arts, is also among the new directors.

This morning’s announcement is great news for the school, the community, the city, and the arts. I hope that the new leadership will quickly turn its attention to righting the financial woes that I described in my earlier post, that the new donations that have and will flow into the school receive the highest levels of stewardship, and that the school continues to serve the city’s children for the next 50 years and beyond.

Photo credit: bfick

My new post on the Mission Connected Blog, “Development in Demand“, takes a look at the current challenges facing fundraising professionals and their employers, including the economic landscape, the profession’s changing skill requirements, and the need for organizations to make the most of their investment in development staff.

Here’s this week’s roundup of interesting nonprofit sector jobs in and around New York City from my Twitter stream, clients, network, and other sources:

• Associate Director, Major Gifts, Columbia Business School (via @GordonJayFrost)
• City Director, Taproot Foundation (via @taprootfound)
• Development Events Officer, WBGO (Newark, NJ) (via @RutgersNWK_SPAA)
• Director of Administration, Robertson Foundation (via @pndblog)
• Executive Director, Garden State Alliance for a New Economy (Newark/Jersey City, NJ)
• Grants Management Assistant, Atlantic Philanthropies (via @rvans)
• Loan Officer, Seedco Financial (via @linkedin_jobs)
• Program Manager, Taproot Foundation (via @taprootfound)

Be sure to let me know if by chance one of these opportunities pans out for you, or if there are any particular sources of nonprofit jobs in the area that you think I should keep my eye on.

Last week’s roundup

Photo credit: _Circa_

In my previous post on the Mission Connected Blog, I examined the first two of three basic phases in a nonprofit organizations’ human resources maturity and their implications for the design and effectiveness of key human resources processes. My new post, “Human Resources Maturity and the Three P’s, Part 2“, examines the third and final phase and outlines some questions that nonprofit managers and human resources professionals should ask about their own organization.

This week, Washington, DC’s Black Philanthropic Alliance is hosting a blog salon on nonprofit racial diversity.  One of the questions asked by the Alliance was how can donors and philanthropy help to increase racial diversity in nonprofit leadership?

I’m very pleased that the post I wrote in response, “Donors and Funders Should Help Build the Pipeline“, was selected for inclusion in the salon, and that I was able to contribute to this important conversation.

I’m thrilled that my recent post “The Power of Why” on the Mission Connected Blog was included in the 4/14 Carnival of HR, which “features recent posts from the best of the HR and management blogging community”!

For an update to this story, please see
Great News for Harlem School of the Arts!

New York City’s Harlem School of the Arts, a nonprofit institution which for nearly half a century has offered children and young adults training in dance, music, theater, and the visual arts, locked its doors on April 1st. A decision on whether or not the closing will be permanent is expected next week. The story has attracted considerable attention from the media, including multiple stories in the New York Times and the New York Daily News and on WPIX. It has also triggered emotional reactions from the community, including former and current students and parents. A Facebook group started by supporters of the school has grown to over 1,300 members in two weeks.

Nonprofit effectiveness is not necessarily measurable in financial terms. Much of the media coverage and public reaction has highlighted strong feelings and opinions on the part of the community as well as current and former administrators and board members. There does seem to be a general consensus among the media, public, some employees, and even some former board members that the school’s downfall resulted from an extended period of fiscal mismanagement. Parents in particular have been very vocal about their lack of confidence in the abilities of the current board, and while the board is seeking at least $500,000 to reopen for the remainder of the academic year, parents and other members of the Facebook group are suggesting that donations not be made to the school until such time as the board is replaced.

While one New York Times story highlighted a number of specific financial issues, including questions about the school’s failure to meet the benchmarks of a $1.5 million grant to strengthen its financial, marketing, and fundraising efforts, the use of a $1 million mortgage taken on the school’s building in 2007, and nearly $500,000 in payroll tax arrears, it failed to provide what I could perceive as a complete and objective look at the problems that had befallen the institution. To satisfy my own curiosity, I decided to take a look at the most recent form 990s as well as the media reports and other publicly available information. In this post, I want to share some of what I found to be some of the most notable data and patterns from those findings, as well as some questions that my findings raised for me and that might also be on the minds of those interested in the school, including students, parents, donors, and funders.

A Microcosm?

Before moving into the details, I want to share my observation that there are characteristics of this case that are illustrative of current trends and issues in the broader nonprofit sector:

• It seems beyond question that this is an organization which has had a significant impact on its community. Since its founding in 1964, it has been recognized and respected as a transformative institution in Harlem. The school serves over 3,000 students each year, and has seen countless alumni move on to higher levels of arts education and success. Yet, looking solely at the organization’s financial numbers over the past few years, one would be hard-pressed to think of the school as “effective”. To my mind, this underscores the growing and important recognition that nonprofit effectiveness is not necessarily or exclusively measurable in financial terms, and certainly not through comparisons of administrative costs and overhead ratios.
• It strikes me that the school’s transparency and use of communication channels have been quite limited, prior to and in the face of the current crisis. It does not appear that the school was very forthcoming regarding the school’s financial difficulties over the past few years. In researching this story, I also found it notable that no annual reports, form 990s, or financial information of any kind is available on their web site, nor is there any mention of the current closure or financial situation. The most recent item on the site’s news page dates to August 2009, and its online fundraising capacity — consisting solely of a link to Network for Good — seems less than robust considering the financial straits it finds itself in. The school also seems to lack any presence on Facebook, Twitter, or other social media and networking sites. These findings all run counter to what seems to be a growing recognition in the sector that in this age of information, web 2.0, and social media/networking, nonprofit organizations — especially those so directly involved with the public — need to avail themselves of all available channels for transparency, dialog, and development.
• In the organization’s 2008 form 990, the organization’s expenses were not delineated by the categories of program service, management/general, and fundraising. This apparent lapse in transparency is unfortunate from the perspective of one trying to understand the school’s financial breakdown and is also surprising given that this categorization of expenses is explicitly required of 501(c)(3) organizations. With the IRS’ recent redesign of the form 990, and the increased scrutiny that the agency is bringing to the finances of nonprofit organizations (both mentioned in my recent video blog post), we should expect more consistent and compliant reporting, providing donors and interested communities with clearer understanding of all organizations’ financial management and challenges in the future.

With those observations made, let’s get into the numbers.

Less In, More Out

The school’s financial difficulties, in the words of the current interim Executive Director John Corwin, “did not arise overnight”. Despite suggestions of some, including board chair Christopher Paci, that the problems resulted from the economic environment, they also clearly predate the December 2007 start of the recession and the banking and market collapses in the second half of 2008.

Quite simply, while program revenue and donations from the general public declined (even though government funding and event income increased or remained relatively constant), the school’s expenditures increased dramatically, leading to significantly greater annual deficits. The following chart summarizes revenue by source, expenses, and annual deficits during the fiscal years ending June 2006, June 2007, and June 2008:

The increasing annual deficits over these three years resulted in a rapid decay in the organization’s net assets:

More People, More Pay

Several of the media reports have called attention to the fact that when the school hired President and CEO Kakuna Kerina in October 2006, her compensation was set nearly 50% higher than that of the her predecessor, Camille Akeju. To my mind, a more striking and, in budgetary terms, more significant trend is observed in the organization’s total cash compensation expenditures for all staff, which increased by 50% from 2006 to 2008:

The increase in compensation appears to reflect an increase in staffing that occurred between 2005 and 2008. To further understand the school’s staffing patterns, I consulted archived copies of the organization’s staff listings from 2002 through 2008 through archive.org. The listings, which based on the job titles included appear to be inclusive of all staff, show that the school’s staffing level appeared to be relatively constant from 2002 through 2005, and then increased dramatically over the next two years. The increased staffing does not appear to have been accompanied by significant increases in program expenditures or programmatic offerings during that time. Following layoffs, including several in March, the school’s staffing levels have now returned to their historical levels:

Now What?

What can be done differently? These analyses and findings helped deepen my understanding of the financial issues that have led to the school’s closure. But the numbers also left me with questions which, while they don’t have to be answered on any tax form, would also be reasonable ones on the part of the community and on the part of previous and potential donors and funders. Among these questions:

• What if anything did the school do in recognition of and reaction to decreasing revenue and increasing expenses from 2006 through 2008? What could have been done differently?
  
• What was the basis for providing significantly higher levels of compensation to the president and chief executive hired in 2006 relative to the compensation of the previous chief executives?
  
• What accounted for, and what were the results of, the significant staffing increase and corresponding increase in compensation expenditures?
  
• What can be done differently going forward to reflect better financial management and stewardship and to ensure the sustainability of the school?

For the sake of all involved, but most of all for the sake of Harlem’s children, I hope that these questions are soon answered, that the ship is righted and community trust reestablished, either under current or new leadership, and that the school reopens its doors and resumes providing the important services which have so long been of value.

Photo credit: Serge Melki

My new post on the Mission Connected Blog, “Human Resources Maturity and the Three P’s, Part 1“, takes a look at the first two of three basic phases in nonprofit organizations’ human resources maturity, each of which has implications for the design and effectiveness of key human resources processes. Later this week, part 2 will examine the third and final phase, and outline some questions that nonprofit managers and human resources professionals should ask about their own organization.

In this video, nonprofit executives and board members are reminded of the risks associated with not having a formal executive compensation policy and provided with guidance as to how to strengthen their organization’s governance of executive compensation.

View the text version of this post.

View the video version of this post.

A recent survey found that 73% of nonprofit organizations have a formal policy to review executive compensation. As a human resources and management consultant to nonprofits, what I found striking about this statistic is that it means 27% of organizations do not have a formal policy.

In recent years, the compensation of nonprofit organization executives has come under increasing scrutiny by public and governmental entities and the media. It seems each month brings new stories of executives whose compensation — which may include salary, bonuses, deferred compensation, benefits and perquisites — is under question. A quick glance through my bookmarks from the past few months reminds me of recent stories about the compensation of Massachusetts nonprofit healthcare executives and the president of a nonprofit housing organization in Chicago.

Some trace this increased focus back as far as the early 1990s when a widely publicized scandal erupted around the long-time CEO of the United Way of America who was ultimately convicted of misusing the organization’s resources to finance a lavish personal lifestyle.

The adoption of the Sarbanes-Oxley Act in 2002 marks another milestone in scrutiny of organizational finances and executive compensation. Most provisions of Sarbanes-Oxley, which was enacted in the wake of major corporate and accounting scandals, apply only to publicly traded corporations. Yet, there is little doubt of its influence on the nonprofit sector.

The Internal Revenue Service serves as the nonprofit fiscal watchdog. Ultimately at stake is each organization’s tax-exempt status. Further, under the agency’s intermediate sanctions provisions, nonprofit executives and board members may be found personally liable if they receive — or even approve — transactions construed as excess benefits.

Recently, the IRS has taken steps to strengthen its enforcement efforts. In 2009, the agency hired 155 new employees focused on nonprofit organizations.

IRS Form 990, Return of Organization Exempt from Income Tax, which must be filed annually by most nonprofits, is the primary tool for collecting information about an organization’s finances. For the 2008 tax year, the IRS significantly redesigned the form with an emphasis on enhancing transparency, promoting tax compliance and minimizing the filing burden. The 2009 tax year brings another round of changes and clarifications.

The Form 990 changes relating to executive compensation include expansion and clarification of Part VII, which captures information regarding the compensation of officers, directors/trustees, other key/highly paid employees and independent contractors.

The redesigned form also introduces Schedule J, Compensation Information, which must be completed by organizations who pay any individual more than $150,000 or who meet certain other criteria. Schedule J not only requires further quantitative breakdown of compensation paid, but it also collects qualitative information regarding compensation policies and practices. This includes close examination of executive perquisites, expense reimbursements, retirement benefits and contingent compensation.

It is in light of this media, public and governmental scrutiny that I find it remarkable that more than a quarter of nonprofits have no formal executive compensation policy. This unnecessarily creates the potential for significant financial and reputational liabilities for the organizations as well as for their executives and board members.

Fortunately, Schedule J can also serve as a blueprint for actions a nonprofit can take to strengthen governance of executive compensation thereby enhancing the transparency and appropriateness of its practices and minimizing liability. Specifically, the form asks which of the following tools and processes are used to establish the compensation of the organization’s CEO/Executive Director:

• Compensation committee
• Independent compensation consultant
• Form 990 of other organizations
• Written employee contract
• Compensation survey or study
• Approval by the board or compensation committee

By being able to answer “yes” to as many of these as possible, organizations can go a long way toward establishing rebuttable presumption that compensation paid is reasonable, which is a key step in heading off intermediate sanctions and other IRS actions as well as media and public scrutiny.

All nonprofit executives and board members should consider whether their organization has covered its executive compensation bases. Is your organization among the 27% with no formal policy? If a policy does exist, are there further steps that your organization can take?

View the video version of this post.

This post originally appeared on the “Mission Connected Blog” on March 16, 2010.

photo credit: stuseeger

Quantity, quality, and diversity in this week’s roundup of interesting nonprofit sector jobs in and around New York City from my Twitter stream, clients, network, and other sources:

• Associate Director, Annual Giving, Rutgers University Foundation (New Brunswick, NJ) (via @execSearches)
• Associate Director, Messaging, GLAAD (via @WhoisJRStevens @glaad)
• Associate Director, National News, GLAAD (via @utopia333 @glaad)
• Communications & Publications Manager (via @ORTaurean @glaad)
• Coordinator, Education & Community Engagement, NJ Symphony Orchestra (Newark, NJ) (via @pndblog)
• Deputy Director, Media Programs, GLAAD (via @ORTaurean @glaad)
• Director, Consulting Services, Synergos (via @execSearches)
• Director, Corporate Giving, Japan Society (via @execSearches)
• Director, International Program Giving, Planned Parenthood Federation of America (via @pndblog)
• Director, Philanthropic Partnerships, Auburn Theological Seminary (via @GordonJayFrost @DotOrgJobs)
• Education Director, Bronx Early Learning Center (via @execSearches)
• Executive Director & CEO, Boscobel House & Gardens (Garrison, NY) (via @execSearches)
• Executive Director & CEO, Phipps Community Development Corporation (via @execSearches)
• Executive Vice President, Auburn Theological Seminary (Auburn, NY) (via @execSearches)
• Human Resources Manager, Population Council (via Monster)
• Robert Wood Johnson Foundation (New Brunswick, NJ) – several great job & internship opportunities
• WITNESS (Brooklyn) – several job openings (via @hastao @witnessorg)

Be sure to let me know if by chance one of these opportunities pans out for you, or if there are any particular sources of nonprofit jobs in the area that you think I should keep my eye on.

Last week’s roundup

Photo credit: jphilipg

“He was spurred on by the conviction that
the world needed his immediate presence.”
– Miguel de Cervantes, Don Quixote

For 400 years, Don Quixote has stood as one of the most influential works of Western literature. The official lifespan of the Quixote Foundation, named after Miguel de Cervantes‘ whimsical character, will be only 20 years, but the foundation’s leaders hope that its impact will be as eternal.

They are, you see, choosing to go out of business.

I only became aware of the Quixote Foundation — based in Seattle and with current assets of approximately $16 million — a few weeks ago, through their thoughtful response to an item I posted on Twitter. Clicking through to their website, I was immediately drawn in by a number of things:

• History: The Quixote Foundation was started in 1997 by Arthur “Stuart” Hanisch, who was born into a prominent, wealthy family but spent most of his life — and money — championing civil rights and a range of social and environmental causes. Since Mr. Hanisch’s death in 2002, the Foundation has been steered by a very small group of board and staff members, including his son, Erik, and daughter-in-law, Lenore.

• Focus: The Foundation’s mission is a simple but profound one — to see free people in fair societies on a healthy planet. Toward that end, the Foundation has focused its grantmaking in four areas of interest: media reform, election integrity, reproductive rights, and environmental equity.

• Style: Everything about the Foundation’s public presence — its web site design, the writing style of its Tiltings dispatches — embodies the whimsical, unassuming, idealistic nature of its namesake, definitely departing from the, well, stuffy style one often finds associated with family foundations. The modesty and understatement of the founder and the Foundation is further underscored by the use of the nom de plume “Don” for all of the organization’s writings.

Over the few weeks since I became aware of the Quixote Foundation, I’ve had a few interactions with “Don” through the Foundation’s Twitter account, @QuixoteTilts, including mutual retweets and comments back and forth. For several days last week, I didn’t notice anything from them in my Twitter stream. Then on Monday, I came across this fairly nonchalant tweet:

Following the link brought me to an entirely new section of Quixote’s web site, dedicated to the Foundation’s decision to make the most of its assets and maximize its impact by spending its entire endowment between now and 2017. In what some might dismiss as semantics but I see as indicative of the Foundation’s unique perspective, Quixote has characterized its decision as spending up, rather than spending out or down.

The attractive, interactive addition to the site and the newest edition of Tiltings provide clear and thoughtful explanations of the decision, how it was arrived at, and how the money will be spent. Quixote also recognizes the inspiration that it drew from the decisions of several other foundations to spend everything — including the Albert A. List Foundation, Atlantic Philanthropies, Beldon Fund, Brainerd Foundation, and the French American Charitable Trust — and provides a list of resources that other foundations might find helpful in considering their spending strategy. In the wake of Quixote’s announcement, there are hints that even more foundations may be following suit. “Getting email from other foundations that will spend everything but haven’t announced yet,” the Foundation tweeted on Tuesday.

In the course of writing this piece, I reached out to Quixote and was delighted to be in touch with Keneta Anderson, strategic consultant to the Foundation. Having been a part of the Quixote “family” for more than six years, Keneta quickly deepened my understanding of the Foundation’s enlightened approach:

When we talk about ROI, it stands for ‘Return on Idealism’.

The Foundation emphasizes that the decision to spend up reflects founder Stuart Hanisch’s belief that the donor’s role is secondary to what organizations and people do “on the ground”, and that its imperative is to be the most effective change agent possible, even if it means ceasing to exist as an institutional entity. As Lenore Hanisch, Co-Executive Director of the Foundation, communicated to me:

My father-in-law wanted the foundation to be a gift, not a burden. He left us completely free to decide what the mission and spending model would be. We’d love to see the whole sector set up in a way that foundations are able to have that conversation based on what the current opportunities are.

It is Quixote’s hope that its grantees will benefit more from up-front funding than from smaller grants over a longer period of time, and that a conscious focus on the sector’s capacity can maximize social impact. Co-Executive Director June Wilson helped me understand that Quixote will also be putting its mouth where its money goes:

We plan to talk really frankly with collaborators about using this concentrated resource to get in front of policies and issues now, so problems are avoided long term. One reason we’re making our decision public early is to work with grantees on building the capacities they see as most important. We also plan to convene and help weave a network of leaders who think collectively about how their work impacts the whole, so decisions made in one interest area strengthen the others too.

I applaud the Quixote Foundation’s bold and selfless decision, and I look forward to following its story — and its impact — over the next seven years and beyond. As was Don Quixote when he made the decision to leave his village and take up knighthood, it is clear that the Foundation is “spurred on by the conviction that the world [needs its] immediate presence.”

What are your thoughts on the decision of Quixote — and other foundations — to spend up?

In my previous post on the Mission Connected Blog, I made a case for the use of salary ranges by nonprofit organizations as a tool for ensuring equity and competitiveness in pay practices, linking pay to performance, communicating current and future opportunities to employees, and managing compensation costs. My new post, “Salary Ranges, Part 2: Anatomy of a Salary Range”, examines the construction of salary ranges and some of the considerations involved with their implementation and management.

My new post on the Mission Connected Blog,“Salary Ranges, Part 1: Why Ranges?”, makes a case for the use of salary ranges by nonprofit organizations as a tool for ensuring equity and competitiveness in pay practices, linking pay to performance, communicating current and future opportunities to employees, and managing compensation costs. In Part 2, we’ll examine the construction of salary ranges and some of the considerations involved with their implementation and management.

Here’s this week’s roundup of interesting nonprofit sector jobs in and around New York City that I came across via my Twitter stream, clients, network, or other sources:

• Chief Financial Officer, Do Something (via @pndBlog)

• Chief Financial Strategist, Freelancers Union, Inc. (Brooklyn) (via @execSearches)

• Deputy Director of Stewardship, Columbia University (via @execSearches)

• Director, Development & External Relations, Hudson Guild (via @onPhilanthropy @DotOrgJobs)

• Director, Development, Center for Reproductive Rights (via @execSearches)

• Director, Residential Services – Liberty Enterprises (Amsterdam, NY) (via @execSearches)

• Executive Director, Stonewall Community Foundation (via @pndBlog)

• General Manager, Grocery Co-op (New Brunswick, NJ) (via @JobRTBot) @nytweetifier)

• Manager, Emerging Initiatives, Community Health Care Association of New York State (via @execSearches)

• Program Assistant to the CEO, Seedco – great opportunity supporting new president (via @linkedin_jobs)

• Program Coordinator, iMentor (via @rosettathurman @ajlovesya)

• Program Design & Evaluation Specialist, United Way of Essex & W. Hudson (Newark, NJ) (via @execSearches)

• Program Officer, Economic Development, Prudential Foundation (Newark, NJ) (via Monster)

• Social Media Project Manager, AJWS-AVODAH Partnership (via @NPTechJobs)

Be sure to let me know if by chance one of these opportunities pans out for you, or if there are any particular sources of nonprofit jobs in the area that you think I should keep my eye on.

Last week’s roundup

Photo credit: eviltomthai

For the past year or so, Saturday Night Live‘s Fred Armison, in his depiction of New York Governor David Paterson, has hurled a series of outrageous insults at New Jersey.

Like most residents of the state, having lived here for nearly two-thirds of my life, I’m kind of used to that. We tend to turn a deaf but knowing ear on the “what exit?”, “Joisey”, and “bada bing” references, while taking pride in the knowledge that there’s so much more to the state than what many visitors see as they travel the New Jersey Turnpike between Philadelphia, Newark Liberty International Airport, and New York.

But you know what does hurt? Perusing the report “New Jersey Non-Profits 2010“, recently released by the Center for Non-Profits, which paints a grim picture of the recession’s impact on the state’s more than 31,500 nonprofit organizations.

The gist of the story for New Jersey’s nonprofit sector is in many ways no different from that facing organizations elsewhere in the country — demand for services is up, funding from all sources is down. But there are certain economic factors that perhaps make the situation in New Jersey even more dire.

First, a recent study by the Center on Wealth and Philanthropy at Boston College, which was commissioned by the state’s Chamber of Commerce and the Community Foundation of New Jersey, found that more than $70 billion in individual wealth left the state between 2005 and 2008. This trend, which reversed a large influx of wealth in the preceding five years, is attributed by many to the state’s tax structure. Whatever the cause, the effect on charitable giving has been notable.

Second, many fear that state spending cuts proposed by New Jersey’s recently elected governor, Chris Christie, will squeeze those with lower incomes and thus further increase demand for services from nonprofit organizations.

The Center for Non-Profits’ report revealed that 45% of the state’s nonprofit organizations experienced a decline in total funding in 2009. Quite honestly, this number is lower than what I might have expected given the national and local economic climate. What I found more alarming in the report, however, was that 43% of the state’s nonprofits reported that their expenses exceeded their income in 2009 — that they are operating in the red — clearly an unsustainable situation.

The outlook for 2010 doesn’t inspire a great deal of hope. 74% of organizations anticipate increased demand for services, 60% expect their total expenses to increase, and the majority expect their fundraising to decrease (35%) or stay constant (27%).

As a consultant focused primarily on human resources and management in nonprofit organizations, I was particularly struck by the severe impact that the recession has had on the state’s nonprofit workforce:

• 43% of organizations froze or reduced salaries during 2009
• 19% reduced staff hours
• 31% cut staff, with another 17% expecting they might do so this year

To some extent, organizations have sought to offset the impact of the recession and the loss of personnel through increased use of volunteers, with 35% reporting an increase in their volunteer ranks.

The report also revealed that people-related issues are among the most pressing challenges facing organizations. After financial uncertainty (66%), the next three challenges most frequently cited by organizations are the need for stronger boards (48%), the increased costs of insurance and other benefits (44%), and the inability to afford quality staff (38%). Another 10% indicate that they simply can’t find quality staff, and 4% cite staff turnover as a challenge.

Another recently released survey of New Jersey nonprofits, from the nonprofit staffing firm Professionals for Nonprofits (PNP), offers a slightly rosier recap of 2009 and forecast for 2010. According to that survey, 26% of organizations froze salaries, while 74% “offered slight pay increases where appropriate”. That survey corroborated the Center’s finding that 31% laid off staff, but also indicated that 34% hired staff to fill critical vacancies. Notably, the PNP survey also indicated that 23% of organizations also reduced benefits during 2009.

Echoing the Center’s finding regarding the ability to find and afford quality staff, the PNP survey report indicated that “managers noted that it was difficult to find the talent they needed in the marketplace so when they did, they paid a little more.” The survey forecast significant hiring activity for 2010, especially for fundraising and program activity, and indicated that slightly more than half of the organizations surveyed planned on increasing salaries.

Returning to the Center for Nonprofits’ survey, the report offered telling insight for the future of the nonprofit sector as seen by New Jersey’s organizations. When asked about the challenges for the sector over the next decade, funding and revenue issues predictably ranked high, but the most prominent issue, selected by 58% of organizations, was infrastructure/capacity building. The workforce issue was again prevalent, with 36% expressing concern about attracting and retaining qualified workers. Organizations also indicated that it was important to ensure nonprofit accountability and effectiveness (30%), and to reduce competition between nonprofits (29%).

Related to the last point, one of the report’s findings did prompt me to think that necessity, in this case, is the mother of collaboration. 47% of the organizations surveyed reported having launched new partnerships during 2009, with other nonprofits, businesses, or government entities. At the same time, the findings suggest that collaboration does have its limits when it comes to formal mergers. Only 2% of New Jersey’s nonprofits merged during the year, although 8% explored mergers and 16% indicated that they might do so during 2010.

In the face of these many challenges, New Jersey’s nonprofit sector is fortunate to have the support of the Center for Non-Profits. For 25 years, the Center has served as the sole umbrella organization for all of the state’s nonprofits, providing the sector with capacity-building, advocacy, and public education programs, as well as timely publications, and cost-saving programs.

Two other organizations that seek to strengthen the state’s philanthropic sector are the Council of New Jersey Grantmakers and the Community Foundation of New Jersey.

On a personal level, my review of the Center’s report and enhanced understanding of the state of the state’s nonprofit sector serves as something of a wake-up call. Despite making my home in New Jersey, I typically find myself traveling across the Hudson River into nearby New York City for the majority of my consulting work. I feel compelled to change that, and to seek more opportunities to serve organizations here in the Garden State.

I’m interested in hearing from those working in and around New Jersey’s nonprofit organizations. How does your experience jibe with the reports’ findings? What do you see as the greatest challenges, priorities, and needs for 2010 and beyond? What tools, resources, and approaches do you believe will be most effective in meeting these needs and maximizing the collective impact of our nonprofits?

In a post a couple of weeks ago, I attempted to shed some light on the then-breaking “scandal” regarding the compensation of Roxanne Spillett, President of Boys & Girls Clubs of America. I was glad that my post, which was intended by as an analytic and non-judgmental look at the numbers behind the controversy, was received that way by most (including Dan Pallotta, an outspoken advocate for higher nonprofit pay levels). Hopefully, the conversation will take an even more informed turn once the additional information requested from BGCA by Senator Grassley et al. is received and becomes public. (The Senators requested that the additional information be provided by Monday, March 29th. To this point, there have been no reports with regard to the receipt or content of that information.)

While we wait, I wanted to respond to a very good question that I received regarding my original post. This involves an important clarification to the comparisons I provided, but also points to just how muddy the waters around nonprofit executive compensation analyses can be.

How Big is BGCA?

In my post, I informally compared Ms. Spillett’s compensation with that of the heads of 11 organizations with 2008 income between $1 billion and $5 billion. This prompted a question from Fred Scaglione, Editor of the New York Nonprofit Press, who asked why I chose comparator organizations of that size, when BGCA’s revenues were less than $150 million.

The answer is one of just what revenues are being measured. As I pointed out to Mr. Scaglione, the source that I used to select comparator organizations was the Chronicle of Philanthropy’s annual Executive Compensation Survey. That survey in turn categorizes organizations on the basis of organizational income as reported in the Chronicle’s annual “Philanthropy 400“, which details the American charities which raise the most money from private sources. In those surveys, BGCA’s total organization income for 2008 is reported as $1.3 billion, with $672 million of that coming from private sources (placing it 17th in the most recent Chronicle 400). However, those figures include support received not only by the national office, but by the organization’s more than 4,000 affiliated clubs as well.

When we take a look at the organization’s 2008 Form 990, the national organization’s gross receipts are $148 million, much smaller than the total income reported in the Chronicle. This figure is corroborated by the organization’s most recent annual report and consolidated financial statements.

This raises an interesting question, and points to a glaring ambiguity in the process of determining “like” organizations for the purpose of compensation comparisons. On one hand, given the relatively autonomous nature of the affiliated clubs, and the fact that nearly 90% of the total income was raised outside of the national organization, it does not necessarily seem reasonable to consider Ms. Spillett the head of a $1.3 billion organization and to compare her compensation on that basis. On the other hand, as Mr. Scaglione points out, the national organization does provide essential marketing, communication, and other services, as well as policy and programmatic guidance, so it would seem unreasonable to completely discount the affiliate operations and consider only the size of the national organization.

Show Me the Money?

Let’s take a look back at the comparisons I offered. Among the 12 organizations I included in my review, I indicated that Ms. Spillett’s total compensation was third highest, while the organization’s income was mid-pack (ranking 6th, to be exact). So what happens if we look just at gross annual receipts as reported on each organization’s 990? In the majority of the cases, the number is about the same either way we look at it. But for three organizations besides BGCA (United Way Worldwide, Goodwill Industries International, and Salvation Army), the national organization’s gross receipts are much smaller than the total organization income. So if we look solely at the national organization’s receipts, BGCA ranks 8th. This does not markedly change the original comparison.

For BGCA and the other 11 organizations included in my comparison, the following table details the total organization income (as reported by the Chronicle), the gross receipts of the national organization (from 2008 Form 990s), and the 2008 cash compensation and total compensation for the organization’s top executive. (For each statistic, the organization’s rank among the 12 is given in parentheses.)

Download table as Excel file

It is reasonable to guess that if we were to completely disregard the affiliate income and compare Ms. Spillett’s compensation solely to that of nonprofit organizations with gross receipts of approximately $150 million, both her cash and total compensation would appear to be relatively high in comparison.

One analyst, Linda Lampkin, research director for the Economic Research Institute in Washington, DC, has taken a stand regarding Ms. Spillett’s compensation, suggesting that “she’s certainly at the very high end, if you average everybody at that level”. According to an article in the Pittsburgh Tribune-Review, Ms. Lampkin indicates that Ms. Spillett “should” receive total compensation between $282,000 and $433,000, depending on whether affiliate revenue is included.

To provide an additional frame of reference, I’ve taken a look at the compensation for top officials of the 10 nonprofits categorized as youth organizations in the Chronicle compensation survey. Among this group, BGCA is either first or fifth largest, depending on the income measure used, and Ms. Spillett’s 2008 cash and total compensation both rank second among the cohort. This 2008 data for this group of organizations is detailed in the following table.

Download table as Excel file

So What’s the Answer?

In the words of one commentator, Pamela Grow of Pamela’s Grantwriting Blog, “it depends”. What is most clear is the ambiguity and challenge of applying the IRS’ standard that reasonable compensation is determined by comparisons with “similarly situated” organizations.

I eagerly await release of the additional information that has been requested and the next developments in this case. My hope is that shedding additional light on the nature and detail of the numbers behind stories such as this can help elevate the discussion of nonprofit compensation beyond emotion and politics and to a place that best serves the needs — and the beneficiaries — of the sector.

In the meantime, what do you think? Has the information you’ve seen so far influenced your opinion about the BGCA case in particular, or nonprofit executive compensation overall? Or has it just created more questions?

Photo credits: edinburghcityofprint

My new post on the Mission Connected Blog,“The Power of Why”, stresses the importance of communicating to employees the context, importance, and relevance of their work in order to maximize the effectiveness of training and coaching and to increase employee motivation and productivity.

Here’s this week’s roundup of interesting nonprofit sector jobs in and around New York City that I came across in my Twitter stream (I usually retweet them with the hashtags #NYC #nonprofit #jobs), through my clients or network, or via other sources:

• 12 great jobs at Ford Foundation (Beijing, Rio, Cairo & NYC) (via @GordonJayFrost)

• Chief Program Officer, Safe Horizon (via @execSearches)

• Director of Training, Recruitment, & Development, Bowery Residents’ Committee (via Monster)

• EarnBenefits/Single Stop Specialist, Seedco (via @SocialMediaJob @Idealist)

• Executive Director, Montclair Child Development Center, Montclair, NJ (via @execSearches)

• Intake Service Assessment Specialist, Seedco (via @SocialMediaJob @Idealist)

• Manager, Training & Development (Field Operations), Autism Speaks, Princeton, NJ (via @execSearches)

• Online Communications Manager, Dorot (via @BigDuckSarah)

• Outreach Specialist, Seedco (via @SocialMediaJob @Idealist)

• Software Engineer, ChildCount+ (via @realize_ink @mobileactive)

• VP, Business Development, VisionSpring (via @execSearches)

Be sure to let me know if by chance one of these opportunities pans out for you, or if there are any particular sources of nonprofit jobs in the area that you think I should keep my eye on.

Last week’s roundup

Photo credit: ktylerconk

I am very pleased to announce that I will be among the speakers at the 2010 Nonprofit Human Resources Conference!

The conference, which is produced by Nonprofit HR Solutions and sponsored by The Chronicle of Philanthropy, will be held October 3-5 in Washington, DC.

My session, “Pay for Today (and Tomorrow): Compensation in the Nonprofit Sector”, will take place on Monday, October 4th, from 3:45pm to 5:00pm. The session will:

• Focus on prevailing practices and emerging trends regarding compensation in the nonprofit sector
• Provide the new, established, or non-HR professional with insight into the current and future state of nonprofit compensation
• Offer a broad survey of the state-of-the-art in topics including pay-for-performance, variable and incentive pay, and non-cash rewards
• Consider the impact of changes underway in the nonprofit sector — including the increased focus on organization evaluation and measurement of impact and the emergence of low-profit, social enterprise, and other hybrid forms of organization — on the future of compensation.

Visit this link to learn more about the conference and make plans for attending.  I hope to see you there!

My new post on the Mission Connected Blog,“The Buck Stops Where?”, takes a look at the appropriate positioning of compensation decision-making in nonprofit organizations.

Without setting out to do so, I ended up writing a lot about nonprofit executive compensation last week. Even less intentionally, I wound up with three posts sewn together by a common thread.

• My first post of the week, “Are Your Executive Compensation Bases Covered?“, on the Mission Connected blog, encouraged organizations to take a look at their executive pay policies and practices, with an eye towards IRS compliance.
• Then my curiosity was aroused when I learned of proposed Canadian legislation that would require reporting of and place a cap on the compensation of charity executives in that country, and so out popped “USA vs. Canada…No Hockey Involved!“
• In the meantime, the story of Senator Grassley’s inquiry into an organization’s executive compensation and other financial practices led to a fairly impassioned debate in the nonprofit community, and my analytic bent led me to “Executive Compensation at Boys & Girls Clubs of America: A Closer Look “.

I have every intention of moving on to other topics in nonprofit human resources and organization management — and of writing posts with shorter titles.  But before I do, I wanted to ask you — my nonprofit sector colleagues in the US, Canada, and beyond — for your opinion about the common thread in these posts:

What role, if any, do you feel governments should have in monitoring, regulating, or otherwise being involved in the compensation paid to executives and employees of nonprofits and charities?

Please share your thoughts in the comments.

Photo credit: takomabibelot

I try to make a habit of re-tweeting interesting nonprofit sector jobs in and around New York City that I come across in my Twitter stream or that I hear about from my clients or others in my network.  It feels good to spread the word and perhaps facilitate a great connection.  I usually tweet the jobs with the hashtags #NYC #nonprofit #jobs.

Now that I’m blogging, it occurred to me that it might be worthwhile to wrap up each week with a post recapping those jobs.  Here, then, is the first of what I’ll try to make a weekly feature.

• Director of Individual Giving – New York Academy of Medicine
  (via @execSearches)

• Executive Director – Neighborhood Coalition for Shelter – New York, NY
  (via @execSearches)

• P/T Community Impact Associate – United Way of Essex & West Hudson – Newark, NJ (via @execSearches)

• PENCIL seeking experienced, top-notch Partnership Coordinator
  (via @Helpingschools)

• PENCIL seeking experienced, top-notch Development Manager
  (via @Helpingschools)

• VP, Communications & Marketing – Michael J Fox Foundation
  (via @jellsworth)

Be sure to let me know if by chance one of these opportunities pans out for you, or if there are any particular sources of nonprofit jobs in the area that you think I should keep my eye on.

Photo credit: Tony the Misfit

For an update to this story, please see
The Fine Print: BGCA Executive Pay Update

The debate around the compensation paid to Roxanne Spillett, President of Boys and Girls Clubs of America, prompted by an inquiry on the part of Senator Charles Grassley and three other Republican Senators, is one which continues to grow, at least here in the blogosphere and twitterverse.  While I made passing mention of the controversy in my post yesterday (Canada vs. USA…No Hockey Involved), I feel compelled to address the issue a bit less obliquely.  However, if you’ve come here looking for impassioned moral or emotional arguments on either side of the controversy, you will be disappointed. That ground has been well-staked, on one end by Dan Pallotta, in his Harvard Business Review post “Senator Grassley Is Undermining the Humanitarian Sector”, and on the other by Rosetta Thurman, in her Chronicle of Philanthropy post “Nonprofit CEOs Who Want For-Profit Salaries Should Work At For-Profit Companies“. Each of their posts have received a fair number of comments on both sides of the issue.

Perhaps because I’ve spent the past two decades as a human resources management consultant, primarily in the rewards arena, and the past 12 years working exclusively with nonprofits, my perspective is somewhat different.  My primary reactions around nonprofit pay tend not to be emotional.  It may be that I’ve seen enough cases — on both the high end and the low end — to be inured.  In addition, when I am asked, as a consultant, to render opinions about executive compensation levels, it’s a serious and diligent undertaking which requires far more information and access than what is publicly available in this case. It’s also something that I’m accustomed to getting paid to do. Nonetheless, given the high profile of this case, I found myself asking questions…

Well, how did we get here?

Like many of you, I’m sure, when the story broke, one of the first things I did was to have a look at the organization’s most recent (2008) Form 990.  Having just written a post asking organizations, “Are Your Executive Compensation Bases Covered?“, I wondered about the processes and tools the organization used to establish and manage compensation for the President.  I found that, with the exception of a written employment contract, all of the specific approaches identified on the IRS form had been applied.

As outsiders to the process, what we don’t know, of course, are any of the details or outcomes behind these approaches, particularly the independent consultant engagement, review of other organizations’ 990s, and use of compensation surveys or studies. The closest we get is this, from the original Chronicle of Philanthropy article:

The group said its board’s human resources committee worked with an independent consulting firm, Mercer, to assess the marketplace in setting Ms. Spillett’s total compensation. Mercer “found that it was consistent with prevailing and current market practices of similarly situated national nonprofit organizations,” it said.

As time goes on, we may learn more of these details than is the case in many nonprofit executive pay “scandals”.  As part of their inquiry, Senator Grassley et al. have requested a copious amount of information related to the organization’s governance and compensation practices:

• Copies of BGCA articles of incorporation, charter, by-laws or other documentation indicating how BGCA board members are selected.
• Number of board meetings held in calendar year 2008, and provide the attendance record for each Governor, Life Member, and Governor – Emeritus listed.
• Indication of which, if any, Governor, Life Member or Governor – Emeritus is also a board member or officer of a BGCA affiliate.
• Titles, job descriptions, and resumes for all compensated individuals listed.
• Copies of the compensation studies, reports, and other documentation for each individual’s compensation, including minutes of compensation committee and governors’ meetings approving such compensation.
• Criteria used to determine each individual’s bonus and incentive compensation.
• Minutes of all meetings where the Board of Governors discussed and decided that a Supplemental Executive Retirement Plan (“SERP”) was needed for Roxanne Spillett.
• Copy of the SERP document and any compensation studies or reports used to determine the amount of BGCA’s contribution to the SERP.

What does “nearly a million” look like?

The next thing I wondered about was the composition of Ms. Spillett’s compensation, which totaled $988,591 in 2008. Working from any executive’s total compensation figure, I find, leaves out too much of the story. Understanding the size and relationship between the individual compensation elements allows one to better understand — and question, if desired — the overall package. Here’s the breakdown of Ms. Spillett’s 2008 compensation:

Again, I am not going to offer a professional judgment on — nor an emotional or moral reaction to — Ms. Spillett’s compensation. While the breakdown does allow some observations about the manner in which Ms. Spillett is compensated, we again, as outsiders to the organization and its internal processes, will still be left with questions. To provide further context for observations, I’ve taken a look at the 2008 Form 990s for the other 11 organizations in the Chronicle of Philanthropy’s annual Executive Compensation Survey with organization income between $1 billion and $5 billion, exclusive of colleges, universities, hospitals, and medical centers (which tend to be their own beasts, in terms of compensation practices). Following, then, are a few general observations and unknowns:

• A general comment: The changes made to Form 990 effective with the 2008 tax year have the potential to to bring much greater clarity and consistency to the reporting of nonprofit executive compensation. However, with regard to data available as of now, this potential is yet to be realized. For most of the organizations reviewed, their non-calendar fiscal years ended during 2008 and, as a result, the 2007 version of the 990 was utilized. In the older version, which lacks the much more detailed Schedule J, the breakdown of executive compensation is limited to “compensation”, “contributions to employee benefit plans and deferred compensation”, and “expense account and other allowances”. This makes it impossible to know, for example, what portion of an executive’s compensation was base salary versus bonus or incentive pay, or what portion went to unqualified deferred compensation arrangements as opposed to qualified benefit plans, or what income may have been realized from related organizations other than the filing entity. Of the 12 organizations reviewed, B&GCA was one of only three for whom the detailed Schedule J information was available. Beginning with the 2009 filings, we should have consistent access to much better information.
• Across the 12 organizations, Ms. Spillet’s cash compensation of $510,774 is the third highest, falling below the $685,884 paid to John R. Seffrin of the American Cancer Society and the $652,800 paid to James E. Williams, Jr. of Easter Seals. The Chronicle reported 2008 incomes for these organizations that were 21% and 9% lower than B&GCA, whose income falls mid-pack among this group of organizations.
• Ms. Spillett’s bonus compensation was equal to 42% of her base salary. What we do not know is what results were seen as the basis for this bonus, how her actual bonus compares to any target opportunities that may have been established, or how the base/bonus allocation compares to her peers.
• The $385,500 in deferred compensation paid to Ms. Spillett is a notable number in relation to the base salary and overall pay package. When combined with “other” income of $83,152, this is equivalent to 87% of her base salary and represents 48% of her total compensation. The $385,500 consists of contributions to a 403(a) non-qualified supplemental executive retirement plan, so we can make general assumptions with regard to vesting, forfeiture, and taxation but, again, do not have adequate information to fully evaluate this compensation element. Looking back at the organization’s 2006 and 2007 990s, although they do not provide the same level of detail as in 2008, it is clear that similarly large contributions were made. Among the other 11 organizations, only two reported comparatively significant non-cash compensation. Mr. Seffrin’s deferred/benefits total of $360,003 is equivalent to 52% of his cash compensation and represents 34% of his total compensation, while United Way Worldwide’s Brian Gallagher’s deferred compensation plus “other” income totals $505,146, equivalent to 102% of his base salary and 49% of his total compensation. The bulk of the “other” compensation consisted of imputed non-qualified pension income.

So, is your head spinning yet? Mine certainly is. But hopefully all of this detail gives you a glimpse into some of the questions and perspectives that I — and other consultants — bring when we look at executive compensation stories and data, and perhaps adds to your perspective on the current debate. I will watch the situation play out as an interested bystander, and eagerly await a time in the near future when the improved reporting requirements bring greater transparency and allow for more meaningful and rational analysis, discussion, and management of nonprofit executive pay. How about you?

Photo credits: Lieutenant Pol, Migraine Chick

Nonprofit executive compensation gets a lot of attention in the United States these days, as I wrote in my post yesterday on the Mission Connected blog (“Are Your Executive Compensation Bases Covered?“). Over the past week, the topic has gained prominence in both the US Senate and the mainstream press, as Senator Charles Grassley (R-Iowa) and three other Republican senators have raised questions about the compensation provided by the Boys and Girls Clubs of America to the organization’s president.  That controversy has struck an emotional chord on both sides of the issue, including a scathing response by author Dan Pallota.

In this context, I found it notable to learn this week that the issue of nonprofit executive compensation has also attracted attention at the federal level in Canada. Specifically, as Jane Taber reports in her Ottawa Notebook blog, a Liberal Member of Parliament from Ontario has introduced a “charity transparency bill”.  Under the legislation proposed by MP Albina Guarnieri, all registered Canadian charities would be required to publicly disclose the salaries of the organization’s five highest-paid employees.  Further, the annual salary of all executives would be capped at $250,000.

The proposal has already garnered response on both sides — including this extensive counter-argument by Mark Blumberg on GlobalPhilanthropy.ca — and is scheduled for a vote next month.

I am not registering an opinion about the bill either way, but I am struck by the contrast between the legislation’s provisions and practices in the United States.  On the one hand, the disclosure requirement provides for far less transparency than that required in the US.  On the other hand, the concept of a finite cap on executive pay is one that I believe would be met with tremendous resistance in the US.

The proposed Canadian legislation calls for organizations to disclose the salaries of the five highest-paid employees.  (Taber and Blumberg’s articles refer specifically to salary.  It is not clear to me from the information currently available how or if non-salary compensation would figure in to the disclosure requirements.)  Under the US Internal Revenue Code, nonprofit organizations are required to disclose on their annual IRS form 990 the compensation paid to all officers, directors, and any employees paid more than $150,000.

The US requirement dates all the way back to the very first Form 990 filings in 1941 (when the threshold for reporting was $4,000).  Form 990 goes beyond salary, encompassing all forms of compensation (e.g., benefits contributions, deferred compensation, and expense allowances).  With the Form 990 revisions instituted in 2008, the disclosure requirements have become even more extensive.  So it appears that the Canadian requirements, if implemented, would fall well short of what is required in the US.

But let’s consider the second provision of the proposed Canadian legislation, calling for the compensation of all charity executives to be capped at $250,000, at the risk of forfeiting the organization’s status as a registered charity.  The $250,000 figure appears to be somewhat arbitrary, but Ms. Guarnieri notes that it is more than what a minister (cabinet member) earns.  This echoes a notion that I’ve sometimes heard in my work as a human resources and management consultant to nonprofit organizations — that no nonprofit executive should earn more than the US President’s salary (currently $400,000).

Public opinion notwithstanding, the only “cap” that exists on nonprofit executive compensation in the US is that imposed by Internal Revenue Code Section 4958, under which high levels of compensation can be construed as an excess benefit, triggering intermediate sanctions for the organization and the individuals involved.  However, this is far from a finite cap, in that the standard applied is one of “reasonability”, based on the somewhat fuzzy criteria that the compensation be consistent with “the value that would ordinarily be paid for like services by a like enterprise under like circumstances”.

I would venture to guess that any serious effort to impose a finite quantitative cap in the US would be met with considerable opposition from many sides, including, in perhaps an ironic twist, some proponents of free market capitalism who might not often find themselves advocating on behalf of the nonprofit sector.

So what do you think?  Does the proposed Canadian legislation go too far or not far enough?  I am interested in hearing from those on both sides of the border — and both sides of the issue — as to the appropriate role of federal governments in the disclosure and regulation of nonprofit executive compensation in either country.

Photo credit: scazon

I am happy to announce that I am now a contributor to the Mission Connected Blog!

Mission Connected, which features topics of interest to job-seekers and employers in the nonprofit sector, is the blog of execSearches.com.  ExecSearches.com’s job board has served the nonprofit, government, education and health sectors since 1999, helping to fill executive, mid-level and fundraising positions. ExecSearches.com’s goal is to be the most efficient, online source for connecting mission and talent.

My contributions to Mission Connected will focus on human resources and management issues facing nonprofit organizations.  My first post is “Are Your Executive Compensation Bases Covered?”  You can check it out here!

On February 24th, I was among the guests discussing the issue of nonprofit organizational sustainability on the blog talk radio show All Nonprofits Considered.

I joined the show’s host, Rosetta Thurman, along with my fellow guests Nelson Layag, Projects Director, CompassPoint Nonprofit Services and Patrick Sallee, Development Director, Big Brothers Big Sisters of Greater Kansas City, for a rich conversation about what nonprofit organizations are doing and can do in the current economic climate. Each of us, having different roles in the nonprofit sector, brought a unique perspective to the conversation. Among the points I emphasized:

• Look forward as an organization
• Focus externally — on mission — not on mere survival
• Collaboration can exist at many levels
• Continue to focus on and make investments in the organization’s people

You can listen to the entire discussion or download it as a podcast using the player above or here.

I grew up in a family of football fans.  As I understand it, somewhere around the age of two, they sat me down in front of a televised professional football game and told me “you’re going to watch this, and you’re going to like it”.  Fortunately for me, I did like it, and I still do.  Somewhere along the line I became a New York Jets fan, but I’m hardly rabid in that regard.  I’m much more interested in watching a competitive game between two skilled teams.  I consider myself a student of the game, having picked up a fair bit of knowledge about its history, rules, strategies, and culture.

One phrase I’ve heard countless times over the years from football announcers on television and radio is “getting off the schneid”.  As long as I can remember, I’ve known what was meant by this phrase. It refers to a team scoring its first points in a game, or winning its first game in a season, usually after being stuck at zero points or wins for an extended period of time.  I don’t think I’ve ever uttered the phrase aloud, in part because I had absolutely no idea of its origins or connotations beyond the realm of football announcers.  Just recently, I decided to look it up.  I was surprised to learn that the phrase comes from the card game gin rummy (I’ve never been much of a card player), but was satisfied to have learned something new and to know that, should the situation arise, I’d feel confident using it in conversation.

That brings me, finally, to the point of this post.  With regard to blogging, it is long past time that I get off the schneid.

As my participation in social media and social networking has grown, it has become increasingly evident to me that my not having a blog was a missing piece of the puzzle.  I realized this when I found myself wanting to share thoughts and ideas that could never be captured in 140 characters.  I realized this when I found myself writing comments on other people’s blogs that dwarfed the length of the original post.  And I realized this when, on numerous occasions, I was asked, “do you have a blog?”

Now, with this inaugural post, I do.

I have spent most of the past twenty years as a management consultant.  Through most of the 1990s, I worked for the Hay Group, a global human resources management consulting firm.  In 1998, I founded Slope Resources, and am now in my twelfth year dedicated to providing human resources and organizational management consulting services to nonprofit organizations of all types and sizes.  I’ve come to realize that this experience has provided me with a fairly broad range of knowledge — and an even broader range of opinions.  Also, as social media and social networking have expanded my connections, exposure, and awareness in the areas in which I work, I have found my thinking, interests, and imagination stimulated to a degree that I never imagined.  And I’ve been encouraged, if not urged — particularly by my new friends Heidi Massey and Ericka Hines – to get to blogging.

My blog, for which I’ve chosen the name Done by People, gives me an outlet for sharing my knowledge, experiences, and opinions regarding human resources and organization management in the nonprofit sector.  It also provides a platform both for deeper interaction with others in these and related fields, and for further expanding my interests and thinking.

I’ve learned a great deal in the process of just getting to this first post, and I’m sure that I’ll learn much more as I proceed. Toward that end, I welcome any input, tips, critiques, questions, or other feedback that anyone might be kind enough to offer.

I have, at last, gotten off the schneid.  How am I doing so far?

Photo credit: ccarlstead