Wednesday, August 20, 2008

Staff Up

Because most charities are service organizations much of their expense is personnel and one of their critical challenges is attracting, employing and retaining staff - at all levels but especially at the top. And because they are more than anything else mission driven, nonprofits tend to have the most bench strength in program. Other key institutional functions like board development, organizational management, fiscal management,communications and development, i.e., fund raising are in my experience often found wanting.

Because nonprofit organizations have so wildly proliferated since World War II - there are now an estimated 1.4 million non-religious charities in the US alone - it is more difficult than ever to find people. On the scale of difficulty recruiting top management- CEOs,CFOs, marketing and fund raising executives remains a dicey business with high failure rates, low retention and a lot of burned out people (stress is combustible).

As the private nonprofit economy has grown (to more than 10% of the work force) a concomitant parallel development has been the rise of professional associations covering most areas of nonprofit activity. Much of the work of these groups is dedicated to offering in-service education, "credentialing," continuing education credit and a visible labor market. Also graduate degree programs in nonprofit management are now in place at about 50 US colleges and universities and a few have undergraduate majors as well.

Over the years I have had the privilege of working for scores of effective and efficient organizations. On the other hand I have seen some where people are pushed out - or push themselves out of - organizations that are poorly governed, badly managed or worse. Most interesting to me - counterintuitive though it may seem - the efficacy of nonprofit organizations has less to do with money than I used to believe. I recently came across a survey of for-profit businesses that found the number one motivator for most people was not money but working conditions.

In the business world there is usually a management hierarchy that enables a company to vet executives over time trying to push the best to the top And we all understand that doesn't always work). In the nonprofit world there is a search committee; inevitably the size of the search committee is inversely proportional to the caliber of the person ultimately employed. Just as in the nonprofit world there are founder dominated or nepotistic enterprises and in those cultures trouble sidles up. In the nonprofit world the founder hangs on and goes out toes up. In the business world major share owners force the founder out and install professional management. In the nonprofit world it takes a lot for a board to expel a CEO let alone one of their own.

In my view nonprofits have paid less attention to better and best management practices than they might have. That includes management holding the board accountable for oversight,the board holding management responsible for implementing policy and programs, and both parties working together on issues of long term strategic planning, governance, stewardship, asset and revenue growth - as well as transparency, marketing and financial management - including fund raising. Happily these problems make for billable time. Sadly it shouldn't be this way.