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E-Newsletter -- June, 2005
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In This Issue:
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CEO Transition and Board/Management Relations |
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US Giving Reaches $248 Billion; Volunteer Time Worth $17.55/Hour in 2004 |
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It’s 10:00 p.m. – Do You Know Where Your Next Grant Money Is? |
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Book Review – “Winning” by Jack Welch |
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At Deadline – Independent Sector Releases Final Recommendations |
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Please Share With a Friend or Colleague! |
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Featured Links:
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CEO Transition and Board/Management Relations
We’ve been working with several different organizations this year, all sharing a common problem and opportunity – CEO transition. Ideally, CEOs establish systems that soften the blow of their personal departure and make the transition easier for the board and the management team. However, all too often, boards and CEOs fail to plan for transition, and the need to transition takes them by surprise.
At their core, a CEO’s relationships with the board and management team are built on trust and communication. When trust is tested and communication breaks down, the organization can thrust into crisis.
These crises are often protracted, destructive, and expensive. Occasionally, lawsuits and large damage awards or severance packages are involved. More often, destruction and expense can be measured in delay, missed opportunities, reduced morale, increased board and staff turnover, and even decay in service quality and client satisfaction.
Not addressing problems, or addressing them only indirectly, only delays the process and increases costs – both monetary and non-monetary.
Boards, CEOs, and management teams have a mutual interest in taking several steps. First, be proactive, especially in setting up – and using – good communication systems. Establish clear measures of success, and communicate those measures. Most importantly, establish systems and culture that focuses action on the organization’s mission, rather than on money, projects, or personalties.
US Giving Reaches $248 Billion; Volunteer Time Worth $17.55/Hour in 2004
The American Association of Fund Raising Counsel (AAFRC) issued their annual “Giving USA” study, reporting a 5% increase in total charitable over 2003's $241 billion. Individual giving, the largest source of giving, was up just over 4%. Churches receive $88 billion in gifts annually, making up the largest component of charitable sector gifts, according to the report.
Almost all giving in response to the December 26, 2004 tsunami will be documented in next year’s report. Giving USA estimates total 2004-2005 tsunami giving at between $1.5 and $2 billion, less than 1% of total annual giving and about 75% of the total raised for 9/11-related charity in 2001-2002.
In other, related, news, Independent Sector reports that the value of a volunteer’s donated time increased to $17.55 in 2004, a 2% increase over 2003's $17.19 per hour rate.
Annually, in the US, over 20 billion volunteer hours are donated to charity. This means that volunteers donate time to charities that exceeds in value – by $100 billion – the money raised by charities each year. Think about that the next time someone says, “She’s just a volunteer.”
It’s 10:00 p.m. – Do You Know Where Your Next Grant Money Is?
Many organizations, including many of our clients, have been successful in securing grant funds to provide needed programs and services, purchase equipment, and sometimes even to help pay the routine bills. Grants can be an important part of a well-balanced fund raising strategy, and sometimes they’re crucial to continuing specific projects.
Most grants are time-limited. After a certain date, the grant term will end and the money will stop. What do you do then?
Many organizations that rely on grants are always seeking grants, looking for opportunities and submitting applications in a strategic manner. These organizations have built a culture of seeking opportunity for enhancement, expansion, and new programs and services through targeted grant-seeking.
Don’t allow your organization to fall into the trap of not thinking about new grants until the current grant is about to end. The best time to think about preparing the continuation grant application is right after you receive the new grant award. The second best time is – today!
Assemble data on your current grant’s success and impact. Seek out funding sources to continue or expand your grant-funded activities. Always be ready to tell your story in a compelling way. Grant application timelines are short, so be ready to jump when opportunity knocks!
Book Review – “Winning” by Jack Welch
Jack Welch, former CEO of General Electric, has written a second book on business and the lessons he’s learned in four decades with GE and two decades as GE’s CEO. His basic advice on strategic planning and vision statements are alone worth the price of the book. He also discusses how to select a career path, how to get promoted, how to deal with a tough boss, and the evolution of the work-life balance as a concept for today’s executive.
He also goes into greater detail about his controversial doctrine that managers should evaluate their staffs. He believes in using a model that says that 20% are outstanding and should be promoted as leaders, 70% are average and should be further investigated to see who might be developed into leadership, and 10% are underpeformers who should be placed on probation with an eye to dismissing them from their employment. Welch believes that most employee assessment processes do a disservice to the employee as well as the organization by not candidly assessing true performance. This leaves organizations performing below capacity and some employees vulnerable to dismissal during lean times while having no clue why they were the ones chosen and having had no opportunity to improve.
At Deadline – Independent Sector Releases Final Recommendations
Independent Sector’s Panel on the Nonprofit Sector released its 112-page final report to the Senate Finance Committee and to the public this week. The Panel worked to provide advice and recommendations from nonprofit sector leaders to the Senate as it drafts new nonprofit sector regulations. Diana Aviv, executive director of Independent Sector, cites several specific areas of Senate interest for new or expanded regulation: 1) tightening rules on Type III supporting organizations; 2) clarifying the uses of donor advised funds; 3) monitoring nonprofit credit counseling services; 4) ending abusive tax shelters; and 5) substantiation of non-cash contributions to charity.
The new, far-reaching legislation, which may be introduced as soon as July, 2005, is also expected to task the Internal Revenue Service with additional nonprofit oversight and enforcement duties, require many nonprofits to have annual audits or financial reviews, and allow for suspension of a nonprofit’s tax-exempt status if it fails to file annual IRS paperwork.
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