Sumption & Wyland

Teaching Class Tonight

2009-10-06T13:05:00.000-07:00

I've been hired as an adjunct professor at Colorado Technical University in Sioux Falls to teach a graduate course on grant writing. The first class is tonight. It's both exciting and daunting. I'm sure I'll get into the swing of it after I meet the students. Most are Criminal Justice majors, I'm told.

I have a good textbook and access to tons of supplemental materials. For tonight, I'll focus on getting to knwo them and talking about nonprofits, government, and grants in general. I'll also discuss the importance of knowing one's own organization prior to seeking grant funding. That'll easily take two hours!

Summer on the Road for Nonprofits

2009-08-25T12:08:00.000-07:00

What a busy year! I was in Toronto a couple of weeks ago, attending the meeting of state psychological association executives (CESPPA) at the Am. Psychological Assn. convention. Someone asked me if I had been travelling. I hesitated and said, "This is the seventh hotel I've stayed in in the past three weeks. Tomorrow, I give my 11th and 12th presentation on the fifth subject during that time. It's been great fun, but I'm ready to be at home and in the office for a while!"

Sumption & Wyland was contracted to provide support to the South Dakota Community Foundation in putting on six (6) day-long workshops focused on nonprofit capacity building.

Over 600 people attended the workshops, with workshop presentations tailored to each region of South Dakota using research survey data from a study conducted by the Government Research Bureau at the University of South Dakota (USD).

Both the workshops and the survey are components of a $2 million grant-funded "South Dakota Nonprofit Enhancement Project" administered by the SD Community Foundation under a grant from the Archibald Bush Foundation of Minneapolis, MN.

If you're interested in seeing the PowerPoint presentations, visit the web site http://www.sdcommunityfoundation.org and look for the links about the "convenings."

In Toronto, I was program chair for the CESPPA meetings and made two presentations; one on nonprofit executive succession planning and one on running an association in a bad economy. Please look at my LinkedIn page for copies of those presentations.

My hope is that I'll post regularly to this blog in the future. Linking the blog to LinkedIn is a further inspiration to keep both updated.

What's In the Stimulus Package?

2009-02-16T06:07:00.000-08:00

Congress has passed the "stimulus bill" and the President is expected to sign it on February 17.

The bill is HUGE (over 1,000 pages) and is the product of much last-minute wrangling among Congressional and White House negotiators.

So, what made it into the final bill? No one really knows yet. However, I've become aware of a conservative web site that has analyzed the bill in its various forms since it was first introduced last month. They'll have an analysis of the final bill as soon as the language is typed up (!) and put into official format by the Government Printing Office (GPO).

The web site is http://www.readthestimulus.org. This web site is sponsored by several conservative think tanks, including the Heritage Foundation. If there are corresponding liberal web sites, please let me know.

It appears that there will be oppportunities for nonprofits to enhance and expand services to meet increasing need (and unmet need), but how this will be accomplished is unclear.

How much in direct government aid to individuals? How much in Federal support for state and local government action? How much will be available for competitive application (grants and contracts) from either the Federal government or from state & local governments?

Finally, remember that legislation is one step in a process. What is done in a bill is often redone (read: changed) when regulations are written by Cabinet departments and agencies.

Long Hiatus, New Year

2009-02-16T06:02:00.000-08:00

My apologies to anyone reading this blog. It's been far too long since I've posted an entry.

My last post talked about our workshop on nonprofit accountability sand transparency. The workshop was a great success. Over 50 nonprofit CEOs and board members attended the short-day session. We presented way too much information, but people were pleased with the opportunity.

For those interested, I have posted three of the six PowerPoint slide shows on my LinkedIn profile (see link at right of this page).

Workshop on Nonprofit Transparency

2008-10-01T14:01:00.000-07:00

Sumption & Wyland, with the USD Government Research Bureau and Wild Horses Multimedia, will conduct a one-day workshop on the trends in nonprofit accountability, the new Form 990, and executive compensation. We're calling it "Transparency," and it's scheduled for Friday, November 14, 2008 in Sioux Falls. The brochure is downloadable from our home page at www.sumptionandwyland.com.

The backstory is this: Margaret Sumption and I have both attended recent presentations on these topics. Our clients have been asking us questions, and been surprised at the trends. Margaret's reaction after one such presentation was, "Michael, they're saying what you've been saying for several years. We need YOU to present a workshop!"

My immediate reaction was that no one would willingly sit in a room for six hours and listen to me talk about laws, regulations, requirements, and all the "un-fun stuff" about nonprofits! But I really liked the idea, so I ran with it.

I contacted Dr. William (Bill) Anderson, Director of the Government Research Bureau at the University of South Dakota. He's a colleague of ours and we've collaborated on some projects. He was eager to participate in the workshop idea, as were his faculty colleagues. I then contacted Dave Thomas at Wild Horses Multimedia to see if he'd be willing to do a brief talk on nonprofit marketing and branding.

Quickly, I had accomplished three things: 1) I had event co-sponsors; 2) I had additional speakers; and 3) I had thoroughly intimidated Margaret by building something beyond her initial vision!

The agenda has been agreed to, the venue has been selected, brochures are done, and we have a marketing plan.

One of the unique features is that we're offering current and recent clients a GREAT DEAL if they have their Executive Director/CEO *AND* a board officer attend together. We believe strongly that both executives and board members need to know this information, and we're willing to put our money behind that belief.

Anyway, check out the brochure and give me your comments. If you're in town, or plan to be here, please sign up! We'll treat you well and give you lots to think about.

The new Form 990

2008-08-25T07:33:00.000-07:00

Discussion of the new IRS Form 990 (the usually informational tax return filed by nonprofit organizations) will take books and books. One small area of the new form attted attention on EXECSEC, the dicsussion list (listserve) for executive durectors who are members of the American Society of Association Executives (ASAE).

A discussion thread on disclosing staff compensation to board members elicited the following response from me:

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With the new 990, one disclosure element is whether the *entire* board reviewed the final Form 990.

From the new form and from the instructions:

2008 Form 990, Part VI, Line 10:
Was a copy of the Form 990 provided to the organization’s governing body before it was filed? All organizationsmust describe in Schedule O the process, if any, the organization uses to review the Form 990

Line 10. Governing body review of Form 990. State “Yes” only if a copy of the organization’sfinal Form 990 (including required schedules), as ultimately filed with the IRS, was provided toeach voting member of the governing body of the organization, whether in paper orelectronic form, prior to its filing with the IRS. Also describe in Schedule O the process, if any,by which any of the organization’s officers, directors, trustees, board committee members, ormanagement reviewed the prepared Form 990, whether before or after it was filed with the IRS,including specifics regarding who conducted the review, when they conducted it, and the extentof any such review. If no review was or will be conducted, state “No review was or will be conducted.”

Specifically in regard to disclosure of compensation, most nonprofits (including associations) will not have to disclose most staff compensation on the Form 990. Here are the disclosure thresholds:

Overview. Organizations are required to list in Part VII, Section A the following officers,directors, trustees, and employees of the organization whose reportable compensationfrom the organization and related organizations (as explained in the Schedule R instructions) exceeded the following thresholds:
• current officers, directors, and trustees (no minimum compensation threshold)
• current key employees (over $150,000 of reportable compensation)
• current five highest compensated employees other than officers, directors, trustees, orlisted key employees (over $100,000 of reportable compensation)
• former officers, key employees, and highest compensated employees (over $100,000of reportable compensation, with special rules for former highest compensatedemployees)
• former directors and trustees (over $10,000 of reportable compensation in the capacityas a former director or trustee)

NOTE: if an Executive Director/CEO is an ex officio director or officer of the corporation, then his/her total compensation (salary plus benefits and expense allowances) must be reported, regardless of amount.

In short, beginning next year, not only do all EDs and key & highly compensated employees have to disclose their compensation on the 990, but the full board is expected by the IRS to review the 990 prior to filing. There is a great opportunity for nonprofits to revise or implement policies that address the new reporting requirements in such a way as to emphasize transparency within the Federal regulations.

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Interim CEOs

2008-07-08T13:20:00.000-07:00

I promise I'll get off the subject of CEO transitions soon! It's just that when I think of things to write about, the flash of inspiration takes me that direction. It's a subject that is not often written about, and when it is, it's often treated in a legalistic or formulaic way. Legalistic and formulaic is almost the opposite of what it is -- emotional, upsetting, and often surprising.

When a CEO leaves employment, it's always expensive (see earlier blog posts). One way to mitigate the expense, as well as to increase prospects for long-term success, is to quickly identify an interim CEO to take the helm while the board assesses the organization's position and prepares for the CEO selection process.

Ideally, an interim CEO: 1) knows how to run the organization; 2) knows how to work with a board of directors; 3) has NO interest in seeking or accepting the permanent CEO position; 4) comes from OUTSIDE the organization (there are rare exceptions to this rule; 5) has the ability and willingness to serve more than full-time for the 3-6 months it will take to put a new CEO in place; and 6) has the requisite leadership skills to do all this while exuding a sense of reassurance to employees, board members, and all other stakeholders.

In our experience, having a list of 25-50 names of potential interim CEOs will result in 3-5 suitable candidates being identified for a specific situation. Why? Most candidates are busy or retired people, having other priorities and claims on their time. One of the key vetting criteria is "Are you available for this 3-6 month full-time-plus assignment?"

The good news is that, having such a list, it's often possible to identify an interim CEO within days and have them in place in as little as 1-2 weeks after the previous CEO's departure.

Communication and Trust - Boards and Executives

2008-06-27T14:32:00.000-07:00

The simplest test of whether a board of dierctors and its CEO/Executive Director enjoy a good working relationship is to ask two questions: 1) do you believe you have access to consistently good information that allows you to fulfill your role?; and 2) do you have reason to doubt the motives or truth of what you're told in your role?

If the answer to either of these questions is anything other than an enthusiastic and confident "Yes!", communication and trust are issues for your organization.

Note that I didn't specify whether a board member or the CEO/ED is taking this 2-question test. Both roles need to have confidence, and both should be asking this question periodically.

I would argue, however, that the CEO/ED should also be asking themselves, "Do I conduct myself in such a way as to BUILD trust and ENHANCE communication? Am I proactive or reactive?" These concerns are more important for the personal interests of the CEO/ED, as they affect job security and job performance. After all, in the extreme case, a board can fire a CEO/ED when communication is poor and/or trust is lost. It's VERY rare for a CEO/ED to "fire" a board.

No Comments Doesn't Mean No Traffic

2008-05-30T09:52:00.000-07:00

I was surprised and pleased to receive an e-mail this morning from the Executive Director of OMBwatch in Washington, DC. He read my blog post yesterday on nonprofits and lobbying, and wrote to thank me for referencing the "SNAP" research project. [SNAP was a collaboration of OMBwatch and the Center for Lobbying in the Public Interest.]

This blog is still relatively new, and one always questions whether anyone's reading a new blog -- especially when no comments are posted. Turns out that some people are reading. That's good; I need to be sure I write things worth reading!

Charities, Associations, and Lobbying

2008-05-29T11:36:00.000-07:00

I am participating in an interesting discussion on the American Society of Association Executives (ASAE's) discussion list for executive directors. To what extent can a charity lobby, and how is it different from an association's lobbying?

Here's part of one post:

...most 501(c)3s, and most people, for that matter, define the term "lobby" too narrowly. It is entirely legal and appropriate for a charity to spend a substantial part of their time and budget in advocacy and public education/information (assuming such activities are part of their stated missions).

OMBWatch did a study on this topic a few years ago called the "Strengthening Nonprofit Advocacy Project" or "SNAP." Here's a link to the executive summary, which includes links to a press release and PowerPoint presentation:
http://www.ombwatch.org/article/articleview/769/1/101/

I also reviewed two books on nonprofit political action for the current issue of the journal "Nonprofit Management and Leadership" (http://www.josseybass.com/WileyCDA/WileyTitle/productCd-NML.html). I can send my copy to anyone who would like it. The books are "Hardball Lobbying for Nonprofits: Real Advocacy for Nonprofits in the New Century," by Barry Hessenius and "Lobbying for Social Change, Third Edition," by Willard C. Richan.

Executive transitions and real costs

2008-05-13T06:31:00.000-07:00

It seems so simple, but so many people miss it....

We've had occasion to assist with several senior executive transitions for clients. The CEO/ED resigns (or is fired), and we're asked to assist with identifying an interim CEO/ED and/or recruiting a new CEO/ED.

We aren't an executive recruitment firm, but we do have a senior partner who is both an LPC and an SPHR. This, coupled with the relative lack of recruiting firms with nonprofit sector expertise, makes us a resource for nonprofits in transition.

The costs of the transition process are usually expressed in terms of dollars spent on severance pay, advertising for the new person, the costs of the interim exec, and, sometimes, even the costs of a good consultant to assist in the process.

The problem with this assessment is that the real costs should be expressed in terms of lost productivity and lost opportunities, both before the departure of the first executive and after the arrival of the new executive. Viewed in this light, the "hard dollar" costs of executive transition pale in comparison.

What to do? First, don't get too used to the "comfortable problem" executive. If the issue is addressed early, perhaps executive coaching can help the individual become more productive and happier. This may mean having a better employee, or it may mean knowing sooner rather than later than a change needs to be made. Earlier intervention, regardless of the outcome, is less expensive than living with the "comfortable problem."

If coaching doesn't work, or if it's too late for coaching, make the tough choice and free the executive to seek other opportunities. Worrying about severance pay, advertising costs, recruiter fees, etc., distracts from the mission-focused attention to true value or return on investment (ROI).

Committing Intentional Grantsmanship

2008-05-05T09:52:00.000-07:00

Some nonprofits, even those that have been around for a long time, can't commit to a grants strategy. They talk a good game, but they allow small issues to stop them from doing more than occasionally throwing an application out to "see what happens."

I just wrote to a client this morning: "Your experience may demonstrate the necessity of your Board being willing to commit to a comprehensive grantsmanship strategy as an element of [the organization's] development plan. Having a predetermined budget for grants development and being able to spend it as opportunities arise will help you be more flexible and more successful.

"In the meantime, definitely pursue the CCR and grants.gov registration process. You might also want to have your project director level and above staff, including yourself, update their resumes for use in grant applications. Specifically include your fiscal officer, as their credentials in administering funds can be a bonus in being awarded grants."

"A predetermined budget" can be expressed in terms of staff, consulting/professional fees, or a combination. It's good to also budget some travel for conferences and briefings, as an increasing number of Federal agencies and some foundations conduct periodic workshops for grant-seekers.

The nonprofit's budget is the expression of its strategic plan in currency. If you're not devoting resources to grantsmanship, how serious are you -- really?

Charities Soliciting Businesses

2008-05-01T10:23:00.001-07:00

I had dinner last night with friends who are also local business owners. They expressed dismay and some disgust with charities that take their generosity for granted, and/or use cheap "salesmanship" tactics to induce them to give.

One example is the phone call: "We appreciate your past support and ask for a $1,000 gift." When asked, the caller admits that it's been three years since he's given any gift, and the last gift was $100!

Another example is the vendor/supplier who drops in on the account owner and asks for a charitable gift to a charity of the vendor's choice. The account owner agrees to a $1,000 gift, whereupon the vendor complains that they had "had him down for a $7,000 gift." The vendor got a $1,000 gift and lost the account because the owner was so offended.

These are two examples of poor fundraising. Whether the charities are to blame is a separate issue. Why? Because both examples are of VOLUNTEER fundraisers making the ask. I don't know whether the volunteers were trained by the charity, and whether the volunteers ignored any training they might have received.

The charity needs to remember that volunteers become the "face" and "image" of the charity. They can do much good -- AND MUCH HARM -- in that role. The observations of these business owners emphasize that donors often don't distinguish between the fundraiser, the cause, and the charity.

The charity using volunteers to solicit funds needs to pay attention to training, especially in the area of image. Charities should redirect those volunteers who are averse to training away from contact with major and corporate donors.

New Blogging Experiment

2008-04-28T09:48:00.000-07:00

Welcome!

We're testing the idea of creating a blog as a way for our clients, friends, and colleagues to communicate with us and with each other. Out intent is to posty as regularly and as often as we have news & information, commentary and opinion, etc., to share.