It's Lonely at the Top

 Whoever coined the phrase, “It’s lonely at the top”, knew what they were saying.

Often, leaders are in a position of not being able to openly discuss critical issues, whether they involve privacy, or considering countless intended and unintended consequences of actions that a CEO alone is ultimately responsible for anticipating. There are areas that only executive committees of boards and God can be sought out for help.

On an after-Christmas morning, years ago, as I awaited the start of our belated gift exchange – now that all the “kids” were home – I sat on the couch with a load of issues weighing on me heavily. I picked up a book at random, hoping that mindless reading would chase some of these wearisome thoughts from my mind, if only for a few moments. But they hung there, and I closed my eyes not wishing them to betray the level of anguish I felt. As I sat there, not hardly breathing, music began to reach my heart; notes that my daughter had been playing on the piano, but somehow just started to reach me in the midst of this turmoil.

The soothing music began to draw the anguish away and the thoughts began evaporating from my mind. My heartbeat, which just moments before had been heavy and obvious, now softened and calmed. A deep breath arose within my chest and exhaled as if the music itself was reaching in and drawing out of me the tension and concerns that were binding me tightly.

As the weight rose from me I opened my eyes and watched out our living room window as a beautiful sloop slowly sailed across the bay. I recalled a day of sailing in San Diego bay some years ago and the feeling of being drawn along by the wind and only the slightest movement of the wheel guiding its direction; that effortless pressure to an unseen rudder aided by the invisible force of the wind took us across the bay and out the channel. That day was awesome – and I now felt as though I was out there on that sloop and nothing was holding me back.

The last notes dissipated, and another deep breath subsided within me. I asked Molly what that song was. Almost knowing what I was feeling, she silently arose and handed me the paper – an Order of Service from our church – and she pointed to the lines of the hymn:

How sweet the name of Jesus sounds in a believer’s ear!
It soothes his sorrows, heals his wounds,
And drives away his fear.
It makes the wounded spirit whole
And calms the troubled breast;
“Tis manna to the hungry soul, and to the weary, rest.
How Sweet the Name, John Newton & Thomas Hastings

Whoever coined the phrase, “It’s lonely at the top”, didn’t know what they were saying, and couldn't see Who was there all along.

Demonstrating Donor Due Diligence

As a major donor to a large nonprofit charity or foundation, what due diligence do you perform to ensure the board leadership is making unbiased decisions as disinterested board members? If your answer is none, you are making poor investment judgments. Just as you would examine an investment prospectus, you should perform similar due diligence ensuring the board director's decisions are being made "at arm’s length." 

Especially during an executive search, directors may make decisions based upon their personal bias or connections, not solely on the ability and experience of the candidate who will best bring sustainability and move the organization forward.

As an "investor" in a nonprofit or foundation, ask for search committee and board minutes to examine their hiring policies, process and judgment. If the search committee is limited to too few members, lacks transparency, fails to include major donors, or other directors are told not to refer candidates, I would question the board’s process and lack of policy and transparency. If the evidence indicates any of these issues, at the least I would address these issues with the board - at the most I would immediately remove my investments.

As representatives of the public, 501(c)(3) corporation directors are ethically and morally bound to leave self-interest at the door, seeking only the interest of the organization, donors and those receiving public benefit. Your investments and your community deserve no less.

Online Assessment Tools for Identifying Organizational Issues

Nonprofit Leader,

As an Executive Director I often wanted to know how well my board and staff understood our organization’s mission and vision, and if they were being clarified well enough.  I needed to assess the awareness of my board of how critical their understanding our programs and networking was to the organization and to our position in the community.  

Each time I looked over an organization’s financials and fundraising, I found areas needing improving, and fundraising issues that the staff and board had not recognized had changed over time.  It was that process of discovery and analysis that helped me revitalize several stagnant nonprofits and help them thrive. 

It was the fresh perspective of an outsider that made the difference.  In many cases a consultant is hired to show an organization’s leaders what they have been missing and help them make the right changes.  Some of the leadership and/or staff may recognize the issues, but may not be able to be the agents for the needed change.  Thus, the third-party consultant is engaged.  But how do small, struggling under-funded nonprofits afford the rates for an experienced consultant?  They can’t, and so they keep struggling through tough organizational issues, ineffective programs, staff turnover, disconnect with the community, and loss of funding as a result.  And what are the options for well-run organizations to take an occasional fresh look at their organizational dynamics and leadership?

It was recognizing these issues that led me to create several online assessment tools that provide the data nonprofits need to get the overall view of their organization and start recognizing the needed changes to make.  By limiting travel and time of on-site interviews we reduce the cost and still provide a needed summary analysis to help an organization: 1. understand the stage in their life-cycle, 2. examine Staff-CEO-Board relationships, 3. measure their fundraising effectiveness.  

By developing anonymous surveys administered online, I have been able to assist a number of organizations of various age, size and budget.  The survey results are graphed for ease of understanding, and a brief, interpretive assessment is provided of potential action steps for further considerations.  The next steps are up to your organization’s leadership and funding capabilities.  You may decide to engage me or other advisor to help you move forward.  In any case, you will have this very important data with which to help change your organization for the better.

I invite you to take a few moments to examine my website and my background, and the four levels of low-cost assessment analysis tools I offer at jklewis54.wixsite.com/charisnp.  Whether you decide to engage my services beyond the surveys is completely up to you.  I am available to you to discuss how these can help your organization and help you lead quality change.

 

Serving together,

James K. Lewis, m.a., ccnl, cfre^®

Road to Better Health March 12, 2014

Dear Ministry Leader,

As you focus on God's plan and priorities for your life, have you considered how to protect your mind and body so that you can stay happy, healthy and remain in the ministry you love?

Ecclesiastes 12:6 calls the human brain the “Golden Bowl” and instructs us to serve God before it’s “broken.”

Recently the leader of a national ministry (who also teaches at a nearby Christian university) was terminated from both jobs due to poor judgement and mental confusion caused by "sudden" dementia. He and his wife are heartbroken because they intended to stay in ministry together for another 5-10 years. With what we know about neuroscience it’s very likely this devastation was avoidable and certainly postponable if together they had make diet and lifestyle changes at least 10 years before the disease was actually noticed.

FACT: Dementia actually starts developing during our 30s and 40s.

Accelerated by inflammatory diets, toxins, trauma, unhealthy lifestyle choices, un-managed stress and genetic factors—unhealthy brains become progressively diminished by Dementia. Just as concerning, however, are projections that the number of people with Alzheimer's will triple in the next few decades.

The Narramore Institute appreciates your ministry and cares deeply about your health, your happiness and your longevity of service. That’s why I created the Road to Better Health 2014 luncheon for RM leaders on March 12th in Pasadena.

You’re going to love this event because the content is so relevant:

 LIVE BETTER AND LONGER

 AVOID LEADER DERAILMENT

 ENJOY MORE PEACE OF MIND

 SAVE YOUR BRAIN

I’ve invited Christian psychologist and author Dr. Earl Henslin (“Brain on Joy”) to share the latest and best ways to deal with depression, anger and other damaging emotions. A friend and mentor to many Christian leaders, Earl is passionate about harmonizing the brain with the soul.

Then, I’ll be discussing the myriad of health benefits that occur when you lower chronic inflammation. In fact, you learn the secret to reducing your risk for sudden heart attack death by up to 90%.

FACT: Every 34 seconds an American has a coronary event.
1/3 to 1/2 of heart attacks occur in persons with "normal" cholesterol.

Our last speaker is veteran Rescue Mission executive Rev. Jim Lewis. Whether it’s waking up in the middle of the night wondering how to meet this week’s bills, a concern about the welfare of a troubled staff member or a family concern, Jim will share some invaluable insights on managing daily stress and avoiding derailment.

I know how hard you work and the sacrifices you make every day to save others. So please join us on March 12, 2014 for a wonderful time of fellowship, renewal, to hear Christian speakers while enjoying a healthy and delicious lunch.

See you in beautiful Pasadena!

Kevin Narramore, Ph.D.

Narramore Institute, 844 Colorado Blvd. Suite 202 Los Angeles, California 90041 949-874-8000

Please CLICK HERE to register because space is limited. 

Assessing Proper Board Oversight Limits Culpability

This article by Eugene Fram, author of "Policy vs. Paper Clips" is a good overview of critical board roles in providing due diligence. Too many nonprofit boards don’t realize their culpability for CEO performance. Appropriate oversight will provide for proper monitoring and fully understanding organizational issues.

The board must recognize their responsibility as an independent arbiter of facts, without prejudice. It may be that the board's monitoring of the CEO is minimal or non-existent, which puts a level of onus on the board for an escalating issue. Sitting down with the CEO to gain insight and discover what support he or she needs should be the first step when any issue is brought to the board's attention.

Your board and your community (which you represent) are too deeply invested to allow for a lack of proper oversight sidelining your CEO – and potentially your organization’s mission and vision. Remember, your role with the CEO is a partnership!

As a nonprofit consultant, I'm particularly cognizant of the issues raised by this article. I've heard that among the membership of just one national nonprofit association, in the last year there have been about 12 member organizations that have gone through tumultuous leadership shifts, with this being the primary issue.

While the board must step in when appropriate, there must be policy and procedure in place that is closely followed. Only when serious ethical or fiduciary malfeasance is found should a board step in directly.

Developing, protecting, and reconciling the relationship with their sole employee, the CEO, is their primary job.

In light of these concerns, one of the first assessments I recommend is a board survey to highlight any governance and policy issues or disconnect with the CEO. In a majority of my cases so far there have been indicators of a need for board/CEO training in monitoring and policy creation. Every effort at deepening the relationship and trust with your CEO will pay dividends.

When do you need a consultant?

 

Numerous issues in a nonprofit organization rise to the occasion of requiring paid outside assistance. These involve acknowledging you’re facing something larger than your in-house skill set can handle alone. Accepting that help is needed is the first step in any weakness or dysfunctional behavior – whether of a person or an organization.

Sometimes a struggling organization just needs help transitioning to its next stage of growth. Perhaps a well established organization needs help re-inventing itself. Facing reality is the most difficult when leaders and staff are deeply ingrained in the present organizational culture. It becomes even harder if the leader is a founder or long-term CEO, where he or she may be sensing a loss of control or that recent changes are becoming overwhelming. A lack of positive organizational dynamics keeps many dysfunctions hidden, and people are unwilling to be the one vulnerable enough to upset the apple cart.

Consulting with outside professionals isn’t limited to the need of addressing serious issues . . . most leaders could use regular coaching with peers and/or professional consultants. But some circumstances call for more serious consideration for outside help:

Strategic Planning. This process can require an anonymity that an independent consultant allows. Often I’ve found a key staff or board member who admits to not being sure of the direction or even of the organization’s mission and vision. In one case it was found that a new board member wasn’t aware of the organization’s religious core principles of faith. Appropriately laying the foundation before discussing strategy is critical to success. 

Analyzing fundraising effectiveness. In such a volatile economic landscape, it can become comfortable for an organization to stay the course with tired or limited funding appeals and stale communications. Organizations tend to stay with old metrics and “shot-gunning” rather than using new tools to target a segment of their donor base who are more likely to respond to different types of communications. E-commerce is still only effective in a small portion of demographics, and it is key to understand when and how to phase that in.

Closely aligned with fundraising is an understanding of an organization’s publics – those who can control or limit an organization’s ability to flourish. Many times an organization has “blinders” and they are not aware that they’ve grown myopic in their programs and vision. I’ve seen organizations atrophy due to ignoring the reality of their external context and relationships. This is where familiarity breeds contempt; stakeholders who once supported and helped form the organization can, if ignored or taken for granted, become the worse critics.

A most serious issue that desperately demands immediate assistance is internal organizational conflict due to a lack of unity in mission and vision. It's critical to quickly re-establish clarity of mission and unity between the leaders and the staff or board. This requires outside intervention. But choose the consultant carefully, as this requires a professional who is able to decipher the organization’s deeper cultural and personal issues – not merely personnel or HR issues that are on the surface. The former is ripe with personality clashes and broken trust, while the latter involves organization policy and procedure – which may need addressing, but is not the root cause.

I will mention briefly the need for a consultant and/or interim management through a period of crisis leadership change. Addressing this will require a separate blog, but it's most critical to contract with outside assistance rather than use internal staff in such a case.

These are just a few areas of concern where an independent third party will be able to increase awareness, broker unity, and ensure the stability and sustaining of the organization’s mission. Don’t wait until you realize the need – develop relationships with those you trust and who will be ready and willing to intercede within your organization when needed. While these resources may be costly, you will save time and money with the judicious use of consultants. They will be worth it to the organization, as you will gain much more than you spend. They may be reported as an expense, but they are an asset to any organization.

For more information on choosing Consultants:

http://strengtheningnonprofits.org/resources/guidebooks/Working_with_Consultants.pdf

http://www.first5la.org/files/Nonprofit%20Consultants-How%20to_Buttenheim.pdf

http://charisnp.com/
http://www.artiosinstitute.com/

http://www.theedgegroup.org/

A Case for a New Leadership Paradigm

We are in a world of change as paradigms are being challenged. Gone are the days of the broad community acceptance of the Christian service provider. Postmodernism is taking its toll . . . leadership is changing, urban demographics are changing, legal regulations are changing, staff and boards are changing, donors are changing, and ministry core services are changing. Change is as certain as the sun rising.

In this day and age, faith-based service providers and their staff need to be on the cutting edge to keep up with an ever-changing environment that challenges the sustainability of the mission and vision of an organization. In order to meet these challenges there needs to be a constant – and two critical constants are proper stewardship and increasing core competencies through accreditation.

Stewardship of the organization, program curriculum, staff resources, liabilities, finances, and board governance are paramount – and most importantly, is stewardship of the physical and spiritual health of the leader.
Artios Institute provides collaborative accreditation through coursework designed with stewardship as the focus. Through a peer cohort of fellow leaders, development staff and board members, your knowledge, skills, and capacity for change is strengthened and profound impacts are cultivated. In this two-year course, meeting two and a half days every other month for the first year and three times the second year, we will explore four foundational pillars:

1. An Understanding of Biblical Stewardship, Fund Development & Advancement 
2. The Keys to Balanced Personal & Professional Growth of the Leader 
3. The Core Components of Building Boards & Effective Teams
4. The Role of Strategy in Determining Vision & Direction 

Whether you are a seasoned executive or development leader, or just starting in ministry, this course of study will challenge and strengthen you and your organization – and prepare both for the challenges of today and years to come. This is an investment in stewardship you can’t afford not to explore. Examine the course elements and consider Artios Institute for yourself and your team.

  Review the Four Pillars               Examine the CCNL Credential

Seeking Counsel From Failure

Do you follow any thought leaders* for counsel and insight?  What happens if he or she has failed in their leadership?  Can that person still speak into your issues, or do you turn elsewhere?

For some that may depend on their sector and the type of failure . . . and what affect the failure is considered to have on the leader.  For example, in Christian circles, failure is often the “kiss of death” for a leader; in the financial world an ethical violation or fiscal misrepresentation will end any respect.

Less often, I fear, do people perceive the benefit of failure that results in even more reason to seek that leader’s counsel.  Where am I going with this?

An example may be seen in the repentant embezzler who speaks out on the lack of ethical oversight in his industry that allowed his actions.  Another may be the pastor who has gone through reconciliation from an affair who now counsels men on strengthening their marriage.  

Many are the quotes of leaders who state that failure strengthens leadership – even tempers it; making it stand the test of time and providing learning moments from which others can profit.  One such quote I embrace is Teddy Roosevelt’s, “Failure is the backdoor to success” . . . apparently his success came on the shoulders of his failures.  

We won’t accept pharmaceuticals without thorough R&D and lengthy testing, so why would we accept leadership ideas or direction from someone who has never been through the trials and fire of failure?  

Perhaps next time you interview someone for a position or a project, see if they’ve been tried by fire – and ask them to share their most beneficial failure.

Has your thought leader failed?  It may be even more reason to seek them out . . .

*See http://en.wikipedia.org/wiki/Thought_leader

Starting a nonprofit revisited

Once again a recent question from someone starting a nonprofit brings me back to this topic. I will share an edited version of an e-mail response to some serious questions someone asked on seeking help getting funding, for what he sees as unique and critical services.

Bob:

Blessings to you! You are attempting daunting tasks.

First, be careful of making claims of exclusivity... other local providers do similar, if not identical work that you share here. Sometimes under the radar as you are. You may unintentionally alienate yourself from other providers you will need to work with.

Ensuring accountability is a first step for funding requests. To whom are you accountable? Who is working to assist you (church, board, committee)? Do you have a clear, well written case for support? In trying to understand all the areas you are attempting to serve I would ask if you aren't biting off too much and are at risk of choking on your own good works. Start with one thing, get good at it so you are sustaining it before adding an additional service.

It also brings up legal issues to ensure you are covering...to protect yourself and those you serve. For example: Are you a registered sober living home in order to be under the protection of state regs (so local codes don't apply)? Do you have appropriate program documentation to protect against federal fair housing laws and claims of discrimination? Funders will need assurance you have legal oversight as well.

"Tentmaking" (funding through outside income) is still a viable method of starting and funding a ministry, but the above questions are still relevant. God's clear leading should/will be accompanied with like-minded people wanting to help.

Quite a few people ask me about starting a nonprofit, and I always state, "DON'T"!

First couple yourself with a local or nearby similar organization and work under and with them -- and learn. (When my son wanted to get a horse, he spent a year volunteering at a horse ranch before buying his own) Oft times, after proving yourself, they will be open to suggestions in serving your area of interest. Then, and only IF that organization's goals do not match what you see as a clear leading from God, should you strike out on your own...hopefully with their blessing and support. I never endorse a new work too similar and too close to another viable current work unless the goals are significantly different. Dilution of your community's support and donor funding, along with a potential competitive spirit and confusion to the public serves to harm the ministry. This happens far too often.

These are just a few items for discussion. Let's meet at our fall conference and talk more about it. 

Blessings!  Read my article: Critical Shift

Do You Launder "Tainted" Donations?

Is there any donation for which the source of would require your nonprofit to refuse? What do you consider tainted money? Gambling, soft or hard liquor sales, non-PC investments....? When would you say "no thank you" to a donor? Or does it matter, and why or why not? When should the nonprofit responsibly scrutinize the source of charitable donations?

Nonprofits need to ask these questions.

Usually it is the Christian or other organization that takes a moral stand on issues, or serves at-risk clients, that questions the source of their funding. Some foundations limit allocating investments to those funds they consider socially responsible. Boards are now developing donor policies that prohibit investments and/or donations perceived as not being in alignment with the organization’s core values. However, in this season of economic decline, can nonprofits afford to be picky? As a nonprofit CEO whose organizations serve those affected by addictions, I’ve had to wrestle with this question.

During a round-table discussion with other homeless shelter executives, this topic came up and the responses were from both extremes: While one CEO based in California’s wine country readily accepted the lead donation for a capital campaign from a famous vintner, a fellow CEO denounced that, stating in no uncertain terms that he would never accept such a tainted gift.

A personal experience came after giving a tour of our homeless shelter ministry to a local businesswoman who owned a high-end restaurant and custom jewelry and art gallery on upscale El Paseo Drive in Palm Desert, CA. Upon exiting our aging women’s’ shelter, with her eyes misting over, she exclaimed she was going to help the Mission build a new shelter. She created a fundraiser titled “Winefest: Celebrating Wine, Food, and Art.” She flew in top restaurateurs, vintners, and art for one night in her art gallery; and invited her clientele, including Stephanie Powers and Clint Eastwood . . . and underwriting the total cost of the event. At $500 a head, and exotic auction items from celebrity clients, she raised $750,000 in three years – enough to purchase 8 acres for a new shelter campus! How could we not accept such heartfelt charity, especially as it was her event, with little participation from Mission staff or board!

Or the call I got from Jesse James’ executive assistant asking if my organization would like to be the recipient of the annual West Coast Choppers charity motorcycle rally. Should I accept a $5000 gift from such an infamous character? (I did readily accept it, but that was prior to his life hitting the fan). These are examples of donor-owned and directed events – of which we were the recipient. I would not have necessarily created either event, nor sought out these donors to do so for us.

Have we considered what service and ministry we provide to donors in accepting their donations? Realistically, each nonprofit will have their own limit to undesirable funding. At some point that decision will have to be made – and such a decision should be made prior to having to make it. What should constrain donations to your organization: your mission, core values, media coverage that construes ill will with a major portion of your donor base – or that triggers community sensibilities? Does the questionable donation seek to control your program services or pull you off core purposes, or does it provide public notoriety to the donor?

I sometimes wish we had such a problem more often, as deciding whether to accept large donations . . . but somewhere in the midst of our policy and practices, we are making that decision daily without realizing it. There is a limit to what scrutiny we can provide into our donors’ charitable intentions. However, where there is clear intent of a donor to personally benefit or control, nonprofit executives and boards need to be willing and able to “just say no.” Otherwise, don’t look a gift horse in the mouth.

AGRM DC Forum on Policy and Advocacy

Spending a couple days in the seat of our republic for most people is an exercise in observing history, memorials, and art – not necessarily an observation of our political process . . . unless one goes there to influence that process in order to get something (if only a gallery pass). In joining 38 fellow leaders in our Association of Gospel Rescue Missions, I spent two days doing the latter . . . not to get funding, but to ask for continued ability to serve our community.

You see, many of the regulations that come from DC hamper fundraising and provision of services through onerous regulation and tax law. The issues we took to the offices of our Congressional representatives involved: a cap on charitable deductions; a potential loss of nonprofit postal rate discount; fixing vehicle donation rules; and the erosion of the definition of “religious organization” by narrowing it to an ecclesiastical church. My observations of our issues and meetings with representatives are mixed.

In sharing with staffers (who actually wield the power in DC), their response varied according to party and office. My meetings with two Senate staffers were met with a measure of aloofness and push-back against our issues. Even though we weren’t asking for funding, they made plain to us that our requests were clearly seen as expenditures; any reduction in tax revenue due to charitable deductions was a loss to them. As if the money was already theirs to begin with . . . and there was little admittance of savings to government services due to the services we provide. It was obvious that they saw what we do as within their preview. When one asked for the CBO “score” of our legislative issues it was evident that the gain or loss to tax revenue would be the deciding factor rather than principle. One actually began to argue with our position on religious exemption with their partisan argument of the need for government to ensure equal access, rather than address the long-standing moral exemption provided to religious organizations.

On the other hand, congressional staffers took more time and asked questions – sometimes surprised at our statistics of services provided and impact of regulations on our operations. A lot of notes were taken, and there seemed to be genuine interest in what we do and the struggle we have in this economy. Their raised level of interest was perhaps because the representatives are closer to us and our issues – if not outright concern for their constituents (and that we would take the time to visit them). When I shared that because of withdrawing principle from an investment in response to our emergency funding request, one donor paid more than 30% tax on their charitable gift, the absurdity of that issue hit home.

As mentioned earlier, it was evident who controls the inflow of information to our elected leaders. But it was brought home when I heard of one representative who, upon leaving the office for a 15 minute floor vote, asked the staffer, “This one is a YES, right?” I think we need to trust these staffers as much as those we actually elected to get our message to them.

Do I think it worth the efforts of the thousands of people who make the trek to DC each day to bring issues and requests to staffers – and hopefully to our elected representatives? I think so . . . it was obvious that some of what we shared was news to them and brought a fresh understanding of how regulations and legislation affect those of us who provide critical services to the most at risk in our communities. WE are the safety net – not government services. Although a letter can do some of that – sitting across from us, hearing our stories, and seeing our concern will, I believe, accomplish so much more . . . if only continued freedom to raise funds and serve others in the Name of Christ.

Considering My MAGL Experience at Fuller Seminary

Since walking across the stage at Lake Avenue Congregational Church on June 11, 2011 and “graduating” from Fuller Theological Seminary, I have been thinking of writing about my experience. However, building pressures of ministry and various professional and personal issues compounded against me that last spring semester as I doubled up classes, and I “hit the wall” in my studies. I could not get through that one last paper on the Ethics of Bonhoeffer – an outstanding course that stretched me in many ways. That failure required me to make up four units . . . and set me back emotionally and financially. It also provided a dose of needed humility as I was looking to add to my long string of hard-earned A’s and end with a high GPA (one of my dysfunctions of focusing on my accomplishments was seriously dealt with). Having made up for that misstep by struggling through another rather stretching course, I finally earned a Masters of Arts in Intercultural Studies: Global Leadership.

I never thought I could complete an MA program . . . you see, I never finished my undergraduate degree. My daughter Molly (who earned a BA at Wheaton and MSc at the University of Edinburgh) used to playfully chide me, saying I was cheating by skipping the BS. I think she understands what a feat this was for her old dad. Perhaps it was the underlying competitive nature of our family of four MAs that egged me on . . . or was it my own stubbornness?

In any case, this effort was one I chose to enroll in almost six years earlier, after earning a graduate certificate in Nonprofit Organization Management from UC Riverside. That really got things rolling, as I had already desired to complete my BS in Business Management at University of Redlands, but several close peers challenged me in that desire (with its cost and effort), saying that I had already attained that level of education through a lot of seat-of-the-pants management experience in several positions – culminating in turning around a nonprofit organization from embezzlement and closure. Although I saw their point, I still felt that I lacked something . . . I wanted to do better in the leadership role I found myself. As I struggled with my own dysfunctions and weaknesses, I sensed there was something I should do to provide a more solid basis for my leadership; I wanted to be a better leader.

My program director at that time suggested I look into Fuller Seminary, which has a special student classification – allowing those lacking their undergraduate degree to compile their accumulated studies and ministry leadership experience into an MA degree. I did apply, and started a program in Christian Leadership (SOT), and several years later transferred to Global Leadership (SIS) when I realized I needed the MAGL’s cohort structure to be disciplined enough to push through the busyness of ministry and complete my studies. The content of the MAGL was very compelling and related directly to my ministry and leadership focus.

The MAGL provided exactly what I needed to grow personally and professionally . . . being able to recognize my dysfunctions and potential through what Robert Clinton examines as Leadership Emergence. Being stretched in my theology and social understanding, I have been able to more fully establish what I believe and desire to accomplish through my faith and practice. I think understanding what is meant by “community” has provided foundation for truly being missional in thought and deed. Exploring it all with likeminded and similarly focused students from around the globe was an extraordinary experience.

There is so much more to share that is appropriate for this brief blog posting, I will have to expound on it further in additional posts . . .

I will just say that for those seeking to explore their own faith and leadership, I can’t recommend highly enough the learning experience you will find through Fuller’s MAGL program. If you are in a position of leadership in a church or nonprofit organization, and expect more from yourself, and desire to build into others, you need to consider this program of study.

Drop me a note or invite me for a cup of coffee if you want to explore if the MAGL is right for you . . .

Organizational Leadership: Considerations for a Nonprofit Merger ~ Final

“No nonprofit organization can survive and succeed in advancing its mission while living independently of other nonprofits. Organizations gain information, political power, and personal and professional support from and in concert with other nonprofits. Thus, close working relationships, partnerships and even joint ventures between nonprofit organizations are a fairly natural occurrence.” ~ David La Piana

Organizational Leadership: Considerations for a Nonprofit Merger ~ © by James K. Lewis

CRITICAL CONSIDERATIONS

In Nonprofit Board Answer Book II: Beyond the Basics, Robert Andringa strongly cautions organizations to think first about creating collaborations before even breathing the word merger. There is so much angst connected with mergers and acquisitions, that putting the effort forward into collaborations will benefit all involved – as well as lessen the chance of one’s intentions being misrepresented at the start of what is difficult enough without causing discord. Besides, if collaboration were a priority all along, one might not be in the place of needing to merge.

Analysis
Thomas McLaughlin begins his book Nonprofit Mergers and Alliances: A Strategic Planning Guide with the admonishment that the best time to consider change is “when the collective energies and creativity of the two entities can be used proactively instead of being sapped by the demands of crisis management” (McLaughlin 1998, 3). If conditions move an organization’s leadership to consider a merger, Andringa provides several factors for analysis and discussion that will clarify your positions (Andringa, 118-123):

1. What is the reason for the merger? Zero in on your goals. Is your desired outcome organizational growth; a greater diversity of services; a wider geographical scope; a larger market; an enhanced public profile? If the reason is your organization will not survive financially in the short term without merging, be honest about it. Discussions with the board and key staff will help bring consensus around the desired outcomes.

2. If a similar organization has been identified, how compatible are your missions? If not already knowledgeable about other organizations, do the research. History, reputation, programs, and fiscal stability are a few main concerns. Do you target the same general ends and utilize similar means for successful outcomes? How do you measure success?

3. What about your publics? Performing a focus group and feasibility surveys will help get a consensus from your stakeholders. What is the perception of the other organization/s in the eyes of the community; to civic and church leaders? Will a potential merger be looked at positively or will it create suspicion or undue confusion? Whose identity is more prevalent to the public? Or will donors follow the resulting entity as they did one or both of the organizations, or will the combined gifts equal the amount of one gift? This needs to be part of your feasibility study and financial forecasting.

4. Do your cultures conform or clash? Are both organizations’ core values compatible? Are there traditions to recognize as needing melding? How is each organization structured? How much effort will it take to integrate the two systems if they differ? Does either organization have anything that is non-negotiable?

5. Who will assist in the process? A consultant; a joint committee; an attorney? Defining parameters of roles, expectations, timetables, and communication will be key to the successful merger. What will the resulting staffing look like? Will some not survive the transition? Be clear in the process so as to be inclusive as possible in any negotiations. Ultimately the buy-in of all concerned will go far in building a new team.

Additionally, when analyzing a potential merger or acquisition, some critical questions must be discussed of the core competencies and sustainability of the resulting new entity: 1. What core activities would be combined, and how? 2. Would any revenues be lost? 3. Will there be efficiency savings? These questions can assist the two organizations in understanding the “strategic imperatives” of their individual core competencies and can more preemptively coalesce the two into an entity that can operate the combined program services in a fiscally responsible manner – with sustainability as the common goal (Bell, Masaoka and Zimmerman 2010, 123).

Decision
Once the subject is broached and leaders of both organizations have decided to move forward, the leadership will create a Joint Merger Explorations Committee (JMEC) as outlined in the sample Nonprofit Merger Process as shown in the attached Appendix. Key leaders and staff from both organizations will continue the process forward internally and in a combined effort to reach a joint venture. The process facilitated through go/no-go decisions provides the structure and procedures that will guide each transition step as outlined in the Appendix. Due to the intricacies of that progression this paper will not unpack that procedure here. I recommend the books which are included in the Bibliography. Primarily, I suggest the texts Nonprofit Mergers and Alliances: A Strategic Planning Guide by Thomas A. McLaughlin; Nonprofit Mergers: The Power of Successful Partnerships by Dan H. McCormick; and The Nonprofit Merger Workbook: The Leader’s Guide to Considering, Negotiating, and Executing a Merger by David La Piana.

CONCLUSION

McLaughlin provides an excellent assessment of what our environment is saying to today’s nonprofits: “. . . existing nonprofit organizations, as instruments of society, must change their ways of doing things. A big part of that change is to embrace mergers and integrated service delivery as the preferred strategic option of the next decade, rather than as something one must be forced to consider” (McLaughlin 1998, 8). As we see an increase in economic and other external factors causing change in programs and funding, more companies, subsidiaries, nonprofits, churches, and other service agencies with similar products and/or services will experience an ever-increasing need to consolidate services and/or merge . . . or risk the consequences. Unfortunately, the two major issues I hear most nonprofit executives lamenting are limited government funding and an increasingly frugal private donor base. Currently, there exists an inverse relationship between increasing service needs and decreasing funding.

In light of this decline in sources of funding, Gose calls on nonprofits to not just continue to rely on donors to pick up the slack, but urges merging with similar providers. In an environment of challenges, nonprofits need to seek out net-gain options. In the sphere of cultivating communities of practice, Wenger calls for “inter-organizational partnerships.” Full mergers; joint ventures; loose networks – even joining forces with “competitors” – will provide greater access to new capabilities and resources. He cautions, however, that doing so requires a large measure of trust and vulnerability (Wenger, McDermott and Snyder 2002, 222). It is not to be considered lightly – but through much prayer and counsel.

I believe wholeheartedly that these times demand more from our leaders, and that they need to recognize steward leadership as the crucial element for success. In The Leader’s New Work: Building Learning Organizations Peter Senge points to steward leadership as the issue that must come to the forefront in any question of an organization’s future. The primary purposes of the organizational leader are stewardship of the people and resources, and sustaining the organization’s mission and purpose. In fulfilling that duty, the role of steward becomes central. The resulting question becomes: in what manner can the organization’s people continue within a community of shared purpose and how can the mission be sustained? Will it be accomplished through mentoring, reorganization, restructuring, or through a third party merger or acquisition? Ultimately, I feel that as Christians we are to seek missional outcomes in our organizational development. We are not called to build complex structures of disconnected and remote organizations; rather, we are to create synergistic and holistic ministries that create a feeling of wholeness and connectedness of community, within which people thrive and are empowered to develop their full potential.

It may be that one nonprofit’s success is the answer to another’s adversity; leaders of both organizations should take note and be open to innovative collaboration.

BIBLIOGRAPHY

Andringa, Robert C. Nonprofit Board Answer Book II: Beyond The Basics. Washington DC: BoardSource, 2002.

Anon., interview by James K. Lewis. Interview of Anon(TBD) via telephone. Long Beach. May 30, 2011.

Beckhard, Richard. "What is Organization Development?" In Organization Development, edited by John V. Gallos. San Francisco: Jossey-Bass, 2006.

Bell, Jeanne, Jan Masaoka, and Steve Zimmerman. Nonprofit Sustainability: Making Strategic Decisions for Financial Viability. San Francisco: Jossey-Bass, 2010.

Blackaby, Henry, and Richard Blackaby. Spiritual Leadership: Moving People on to God's Agenda. Nashville: B&H, 2001.

Bolman, Lee G., and Terrence E. Deal. "Regraming Change: Training, Realigning, Negotiating, Grieving, and Moving On." In Organization Development, edited by Joan
V. Gallos, San Francisco: Jossey-Bass, 2006.

Carlson, Mim, and Margaret Donohoe. The Executive Director's Guide: To Thriving as a Nonprofit Leader. San Francisco: Jossey-Bass, 2010.

Clinton, J. Robert. The Making of a Leader: Recognizing the Lessons and Stages of Leadership Development. Colorado Springs: NavPress, 1988.

Cloud, Henry. Integrity: The Courage to Meet the Demands of Reality. New York: Collins, 2006.

Collins, Jim. Good to Great and the Social Sectors. Boulder: Jim Collins, 2005.

Condon, Tom. "Generous to a Fault? Nonprofits Must Align Efforts." The Hartford Courant, http://www.courant.com, January 22, 2009.

Drucker, Peter F. Managing for the Future: The 1990s and Beyond. New York: Plume, 1993.

Frank, John R., interview by James K. Lewis. Interview of John R. Frank, Ph.D. San Diego, CA, (May 24, 2011).

Gose, Ben. "After the Fall." The Chronicle of Philanthropy, http://philanthropy.com, October 24, 2008.

Lawler, Edward E. "Business Strategy: Creatng the Wining Formula." In Organization Development, edited by John V. Gallos. San Francisco: Jossey-Bass, 2006.

Lewis, James. 2010. "New Missional Strategies in Ministry to the Homeless." A paper written for MP520: Transforming Culture. Pasadena: Fuller Theological Seminary.

McLaughlin, Thomas A. Nonprofit Mergers & Alliances: A Strategic Planning Guide. New York: Wiley, 1998.

Parker, Glenn M. "What Makes a Team Effective or Ineffective?" In Organization Development, edited by John V. Gallos. San Francisco: Jossey-Bass, 2006.

Piana, David La. The Nonprofit Mergers Workbook. Saint Paul: Amherst H. Wilder Foundation, 2000.

Porter, Michelle, interview by James K. Lewis. Interview of Michelle Porter San Diego, CA, (May 24, 2011).

Rosenstein, Bruce. Bruce Rosenstein Interviews Peter Drucker. n.d. http://brucerosenstein.com/index.php (accessed May 29, 2011).

Senge, Peter M. "The Leader's New Work: Building Learning Organizations." In Organization Development, edited by John V. Gallos. San Francisco: Jossey-Bass, 2006. 776.

The Nonprofit Sector in Brief: Facts and Figures from the Nonprofit Almanac 2007. http://alliancetrends.org/nonprofits.cfm?id=56. Washington, DC: The Urban Institute, http://www.urban.org, 2007.

Wasley, Paula. "100,000 Nonprofit Groups Could Collapse in Next Two Years, Expert Predicts." The Chronicle of Philanthropy, http://www.philanthropy.com, November 27, 2008.

Wenger, Etienne, Richard McDermott, and William M Snyder. Cultivating Communities of Practice. Boston: HBS Press, 2002.


Appendix A

Re-Post in Memory of Peter Drucker ~ Inspiration Comes in Unexpected Ways

On the occasion of the anniversary of Peter Drucker's passing, I re-post this blog in his memory:

It was March 1999. I was nursing a failing business, going to school at night, working part-time for FedEx, and driving a limousine. I was pretty low.

After our furlough in Palm Desert, CA from a three-year missionary term with Wycliffe Bible Translators in the Philippines, we were unable to obtain a new assignment there. I completed a Management course at Summer Institute of Linguistics in Dallas, and was referred to International Relations work, but the director of staffing in Manila office would not allow my wife’s position as a teacher to be our primary assignment so I could intern in the Government Affairs office. Likewise, stateside opportunities were being thwarted by a personnel director refusing to allow me to serve in a field representative position as I had for six years at Eastman Kodak. I was at a stalemate; and so, we resigned a 10 year tenure as technical support missionaries.

Now what to do? Leslie was already teaching in public school, which left me seeking a technical management position in the Coachella Valley where few tech jobs existed. My lack of an undergraduate degree kept me from several promising positions, even though I was told I was overqualified. After the rejection of Wycliffe and these interviewers, I was a bit desperate.

My wife suggested I start a business, as I knew a lot about radios; so I did. I developed a business plan that thoroughly impressed a business loan manager. With an SBA loan and my retirement funds I dove into self-employment. Setting up shop, a sprinkling of sales, repairing CBs for truckers, and developing a tracking system for the local transit company was a great challenge for me. Ultimately, my small draw against a meager net profit slowly drained the business. When the transit manager gave the contract to a relative rather than putting it up for bid, and a ruptured appendix put me in the hospital, I was down for the count.

Having moved the business into my garage, I started a three-quarter load at the community college at night and found three part-time jobs to help keep the family afloat. I was now determined to complete my BS degree so that I could advance in management. In addition to school, and fixing radio and data equipment for two FedEx stations, I started driving a limousine. Although the clients were often glamorous, the level of my self-worth was not.

I picked up the Lincoln Town Car and the client order and headed west on the 2 ½ hour trip to Claremont to pick up a Mr. Drucker. As the elderly gentleman settled into the front seat and we began some small talk, it occurred to me who he was. Wait a minute, I exclaimed . . . “You are THE, Dr. Peter Drucker!” He smiled and said, “Ja, that is me.” I almost wrecked the car.

I am sitting with the worldwide guru of management captive in my limo for two and a half hours . . . as the commercial says – Priceless! He asked about me and I poured out my story, leaving out no detail or the current state of my frustration. He was a most gracious counselor and mentor to me during that drive back to the desert as the keynote speaker at some conference. He put off those interviewers as the loser, not me; the unethical practice of the transit manager; and shortsightedness of the Wycliffe personnel managers. Quoting Teddy Roosevelt, he said, “Failure is the backdoor to success.” Experience is much more valuable than the degree, he said; the piece of paper says nothing of your actual abilities to succeed in business. However, he did encourage me to finish my studies, promising that they would complement my experience.

Of course I told the dispatcher that I would drive Dr. Drucker back the next day. A tired Dr Drucker slept most the way back, but took the time to further encourage me in my endeavors, telling me that he saw great promise in someone with the courage and fortitude to keep up such a load to provide for his family.

Within months I became Administer for a commercial business, then General Manager of two RV Resorts, and subsequently CEO of two ministries in need of restoration. After completing a graduate-level certificate in Nonprofit Organization Management at UC Riverside, two years ago [now 5 1/2 years ago] I took a shortcut into an MA in Global Leadership at Fuller Theological Seminary.

Thank you, Dr. Peter Drucker, for your inspiration during a limo ride.

“All things work together for good to those who love God, to those who are called according to His purpose.” Rom 8:28.

PS: On June 11, 2011 I walked across the stage and recieved my MA in Inter-cultural Studies: Global Leadership from Fuller.

Organizational Leadership: Considerations for a Nonprofit Merger ~ Part 6

“No nonprofit organization can survive and succeed in advancing its mission while living independently of other nonprofits. Organizations gain information, political power, and personal and professional support from and in concert with other nonprofits. Thus, close working relationships, partnerships and even joint ventures between nonprofit organizations are a fairly natural occurrence.” ~ David La Piana

Organizational Leadership: Considerations for a Nonprofit Merger ~ © by James K. Lewis

STEWARDING CHANGE

What is the role of the leader seeking to assist his or her (or another’s) organization in creating change? In The Making of a Leader, Robert Clinton asks successful leaders to expect to be led into these types of situations in which God will use them to humbly undertake action in the life of other leaders [or organizations]. This action can be through: affirming or encouraging leadership potential; offering guidance on a special issue; giving insights that broaden the leader [or organization]; challenging the leader [or organization] Godward; or opening a door to ministry opportunity [or collaboration] (Clinton 1988, 149 brackets mine).

Resistance
Resistance to needed change can be due to several issues. Resolving change and its related conflict through the abuse of position and/or power are common maladies – such as the founder refusing to step aside, or a board chair disallowing discussion on the topic. Staff resistance – either preceding or subsequent to decision-making time – may create additional issues. An existing dysfunction of the organization, or the breakdown of a successful transformation, may be caused by an incongruence between people’s actions and the organization’s stated values. Addressing this mis-fitting of people to organizational values cannot be overstated; as Peter Drucker said in an interview with Bruce Rosenstein, “When people are very unhappy, they are in a position that the values of the organization don’t fit them.” The result is that they must be assisted into other work. (Rosenstein)

It is imperative in this scenario for the leader to focus attention on the primary purpose of the organization . . . that is, the sustaining of the mission of the organization. If the mission cannot be continued through an alliance with or mentoring by another organization, then the choice will be between a merger and acquisition, whereby the organization’s core purposes are sustained by and through the resulting entity. If the mission has been sufficiently accomplished, then either the reimagining or dissolution of the organization is the appropriate and normative choice. It takes a sensitive leader and/or consultant to lead the board and the staff to either of those responsible conclusions.

To reiterate: the role of the leader is to steward change in such a manner that the core mission is sustained. If it is determined that the mission has been completed, unless the mission is revised, the organization’s life-cycle is at its end. The leader must then develop the process for the required transformation of the organization, or for the legal dissolution of the organization.

Responding to Change
While the leader may be working on the process for change within the organization or with another entity, he or she must recognize and address specific change issues. In Reframing Change: Training, Realigning, Negotiating, Grieving, and Moving On, Lee Bolman and Terrence Deal outline several critical strategies leaders must implement in order to realize success through change of this magnitude. Three of these that I will share here are Realignment, Conflict, and Loss (Bolman and Deal 2006, 447-469).

The leader needs to begin to realign the organization’s structures to invite and provide the impetus for change. While an organization’s maladies may have developed due to deterioration or lack of structure, this is the time to act. The need for structure at this time is more imperative than ever; people need clarity, predictability, and security. Policies and procedures become welcome and bring cohesiveness to an otherwise chaotic work environment. Often, people are looking for structure in this scenario. Additionally, the formal delineation of authority informs all concerned who is responsible and provides continuity.

Change often brings about discord, which requires a leader to be able to identify the real issues, develop collaborative efforts and provide an environment in which discord can be mediated towards common ground. Two conflicting, and sometimes alternating, responses to change are status quo (to hold onto past accomplishments), and ignoring the situation (staying busy enough or throwing money into the organization hoping that the problems will go away – or solve themselves). The loss of what “once was” can also cause paralysis, and in the midst of responding to the changes, leaders and staff can go through cycles of grief. Providing appropriate counsel during this time will help the staff to handle the challenges and uncertainty they face.

Human Assets
In coping with the issues within a merger or acquisition, leaders must recognize the pressures that are being carried by our most important asset – our staff; human beings with feelings for the past and dreams for the future. Appropriately responding to how people deal with change is likely the most critical element for the success or failure of the organizations involved (Beckhard 2006, 12). Critical to the success of the resulting organization is the communication of its mission and core values that the staff is charged with embracing while supporting the development of new direction and purpose of the organization (Lawler 2006, 551).

Bolman and Deal also address several issues that leaders must assist staff in facing as the organization transitions and realizes stability through change: values, symbols, and celebration. It is crucial for people to be able to hold onto their organization’s core values. For many these values are what kept them in the ministry, struggling in order to provide crucial services for individuals in need and to benefit their community; perhaps having been asked to give up compensation and forgo raises, but remained loyal to the organization rather than taking a more lucrative position outside the ministry and the nonprofit sector.

Ensuring that symbols—either real or perceived—are protected and endure beyond the restructuring may help in dealing with the loss of what they identified with in the organization and its ministry. Keeping a logo or being identified in name as a ministry of the surviving organization can keep that flame alive for those surviving the change. Investing in ceremony is also an encouraging process that aids in bringing the positive to the forefront of significant change and celebrating a successful transition.