Managing a Nonprofit Organization

Recently I was adding up the number of Board of Directors I have served on over the years for nonprofit organizations.  This includes computer societies, fraternal organizations, homeowner associations, even Little League.  The number was close to 40 where I have served in some capacity or other, everything from president, to vice president, secretary, division director, finance chairman, publicity and public relations, newsletter editor, webmaster, even historian.  In other words, I think I've learned a thing or two about nonprofit organizations over the years.  One of the first things I learned early on is that unless you manage the nonprofit group, it will manage you.

Running a nonprofit group is not exactly rocket science and is actually pretty simple, but surprisingly few people grasp the basics and end up bungling the organization thereby creating upheaval for its constituents.  If you are truly interested in properly managing a nonprofit group, consider these ten principles that have served me well over the years:

1.  Know the rules.  Get a copy of the governing docs, read them, and keep them with you.  Do not try to hide them.  In fact, make them available to your constituents either in paper form or as a download on the computer (such as a PDF file).  Got a briefcase dedicated to your group?  Keep a copy of the docs in it and, if an electronic version is available, place an icon on your desktop to quickly access it.

2.  Get to know your constituents.  How can you expect to adequately serve them if you do not know what their interests are or the group's priorities as they perceive them?  They won't always be correct, but understand their perceptions and deal with them accordingly.  You might want to circulate a survey to get their view on certain subjects, and to solicit their support.

3. Communicate - not only with the other members of the board, but with your constituency as well.  Failure to do so only raises suspicions about what you are doing.  Newsletters, e-mail blasts, and web pages are invaluable in this regard, particularly the latter where you can post news, governing docs, contact information, meeting minutes, audit reports, correspondence, etc.  Simple communications will clear up a lot of the problems you will face as an officer on the board.

4.  Administer - Keep good records, regardless if government regulations require it or not.  Whether you are maintaining records with pencil and paper or by computer, it is important that accurate records be maintained, particularly about the group's membership, logs of activities, attendance, finances, minutes, etc.  It is not really that complicated to perform; you just need someone who pays attention to detail.  Don't have the manpower to do it yourself?  Then hire someone, such as a management company, who can competently keep track of things. 

5.  Lead - People like to know where they are headed.  If you are in charge of the group, articulate your objectives and prepare a plan to get you there.  Also, do not try to micromanage everything.  Nonprofit groups are primarily volunteer organizations and the last thing they want is Attila the Hun breathing down their necks.  Instead, manage from the bottom-up.  Delegate responsibility, empower people, and follow-up.  Make sure your people know their responsibilities and are properly trained.  Other than that, get out of their way and let them get on with their work.

6.  Add value to your service.  People like to think they are getting their money's worth for paying their dues.  In planning your organization's activities, be creative and imaginative, not stale and repetitive.  In other words, beware of falling into a rut.  Your biggest obstacle will typically be apathy.  If your group's mission is to do nothing more than meet periodically, make it fun and interesting, make it so people want to come and participate.  Try new subjects, new venues, new menus, etc.  Even if you are on a tight budget, try to make things professional and first class.  Change with the times and never be afraid of failure.  You won't always bat 1.000 but you will certainly hit a few out of the park and score a lot of runs.

7.  Keep an eye on finances.  As officers of the Board, you have a fiduciary responsibility to maintain the group's finances and report on their status.  I cannot stress enough the importance of having a well thought-out and itemized budget.  Operating without one is simply irresponsible.  And when you have a budget, manage according to it; if you don't have the money allocated, don't spend it.  Obviously, you should also have routine finance reports produced (at least on a monthly basis) showing an opening balance, income, expenses, and a closing balance.  Most PC based financial packages can easily do this for you.  At the end of the year, perform a review of your finances by an independent party, either a compilation as performed by a CPA or a review by an internal committee.  Post the results so the constituency can be assured their money has been properly handled.

8.  Run an effective meeting.  Nobody wants to attend an inconsequential meeting. Whether it is a weekly/monthly board meeting or an annual meeting, run it professionally. Print up an agenda in advance and stick to it.  Start and end on time and maintain order.  Got a gavel?  Do not hesitate to use it judiciously.  Maintain civility and decorum.  Allow people to have their say but know when issues are getting out of hand or sidetracked.  And do yourself a favor, get a copy of <a rel="nofollow" onclick="javascript:pageTracker._trackPageview('/outgoing/article_exit_link');" href="http://www.robertsrules.com/">"Robert's Rules"</a> and study it.

9.  Beware of politics.  Like it or not, man is a political animal.  Politics in a nonprofit group can get uglier than in the corporate world.  Some people go on a power trip even in the most trivial of organizations.  Try not to lose sight of the fact that this is a volunteer organization and what the mission of the group is.  Keep an eye on rumors and confront backstabbers, there is no room for such shenanigans in a nonprofit group.  If you are the president, try to maintain an "open door" policy to communicate with your constituents. It is when you close the door that trouble starts to brew.  Also, ask yourself the following, "Who serves who?"  Does the board serve its constituents, or do the constituents serve the board?  If your answer is the latter, than dissent will naturally follow.

10.  Maintain control over your vendors.  Try to keep a good relationship with those companies and people who either work for or come in contact with your group, particularly lawyers.  Always remember who works for whom.  I have seen instances where attorneys have taken over nonprofit groups (at a substantial cost I might add).  The role of the lawyer is to only offer advice; he or she doesn't make the decision, you do (the client).  One last note on vendors, make sure you maintain a file of all contracts and correspondence with them.  Believe me, you're going to need it when it comes time to sever relations with them.  Keep a paper trail.

Bottom-line:  run your nonprofit group like a business.  Come to think of it, it is a business, at least in the eyes of the State who recognizes you as a legal entity (one that can be penalized and sued).  There are those who will naively resist this notion, but like it or not, a nonprofit group is a business.  Consider this, what happens when the money runs out?

I mentioned earlier that you might want to hire a management company to perform the administrative detail of your group.  To me, this is an admission that the Board is either too lazy or incompetent to perform their duties (or they have more money than they know what to do with).  Just remember, it's not rocket science.