Building a More Diverse Board

diversity rules!

diversity rules!

It’s hard to find an organization today that’s not focused on, or at least giving lip service to, diversity. But have you ever considered the cost to your organization of not having a diverse board? A recent study of for-profit boards found that diverse boards return a better ROI for investors. [See Board Diversification Strategy: Realizing Competitive Advantage and Shareowner Value]. The same is true for nonprofit boards.  Boards lacking diversity can make poor financial decisions, such as investing the bulk of their endowment with an investment manager  “everyone knows.” Boards lacking diversity can miss big opportunities to reach new communities, or create new partnerships.

So how can you create a more diverse board?

First, let’s define diversity. When I meet with boards on this topic, everyone’s first instinct is to think ethnicity and gender. These are important. But just as vital to decision-making are having people of diverse ages, life experiences, socio-economic backgrounds, even neighborhoods.

1. Range of Ages. The most common lack of diversity I see on boards is related to age. And the most common form of ageism I see is against younger people (which on boards tends to mean under- 35). Yet the views of the 18-35 set, and their facility with the internet and social media tools, makes them especially valuable on boards.

2. Varied Life Experiences. Another area where boards often lack diversity is in life experiences. That’s because so many people are recruited to boards by friends, business associates or college/grad school classmates. So if you have one corporate lawyer on your board, you’re likely to have two or more. That’s not to say anything against lawyers, but there is also diversity among types of legal expertise and it could benefit your board to have more than one kind.

3. Personal Attributes. A third area for boards to focus on when attaining diversity is a mix of personal styles and personality attributes. If you’re board is every color of the rainbow, if every person on it is a forceful leader, you’re going to have trouble filling your committees. By the same token, if everyone is a quiet, behind-the-scenes type of operator, you’ll have trouble finding a chair every year. You need a mix of several personality types to make a board fully functional.

4. Varied Connections. Finally, board diversity requires diverse community connections. One of the most overlooked areas for recruiting board members is among the clergy. Rabbis, priests, and ministers tend to know a lot of people in their communities, as well as other organizations that are making a difference there. That makes them great “connectors” to have on your board, irrespective of whether your organization has a religious mission.

Tapping diverse talents always leads to a stronger board. And a stronger board helps you avoid costly mistakes and deliver on your bottom line: the mission.

c 2009 Amy DeLouise, Amy DeLouise’s Blog

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Stress Test Your Nonprofit

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This week, federal regulators plan to release the methods they are using for the “stress test” being applied to banks accepting TARP money. Non-profits should be developing their own stress test to assure soundness to funders, who are both private donors and the American taxpayer (by way of the gift of tax-exempt status).

Why should non-profits conduct a stress test of their own?

Despite signs that America’s economic engine may be coming out of a stall, non-profits have a long way to go before times get good again. There is a higher than ever demand for their services, especially in the social sector, as more and more people lose jobs and health care coverage. Donations continue to drop in many sectors. At the same time, new and existing donors must be assured that the charities they support can withstand more months of hardship.

Five Ways to Stress Test Your Nonprofit

1. Increase Transparency. Good governance is critical to success, but especially during lean times. Confirm that your board decision-making is fully transparent, documented and bench-marked. Especially decisions around executive compensation.

2. Ensure Sustainability. Confirm that your organization has sufficient cash-flow for ongoing operations. Some say have as much as one year’s operating capital on hand. This may not be realistic for smaller charities. Still, you should assess and update your working capital assumptions so that donors know you can deliver.

3. Assess Human Resources. Do you have the right people on the job? Evaluate staff capabilities through regular reviews, but also a build strong professional development program so that you are cultivating talents from within. Bringing along a promising staffer costs much less money than launching a search.

4. Engage the Board. During tough economic times, it’s also important to tap the talents on your board. And that means more than check-writing. Pair experienced board mentors with staff and newer board members. Leverage board connections wisely. Consider them a valuable resource for not only financial contacts, but also great volunteers, future board leaders, and important community connections. And most importantly, focus board members’ limited time on the tasks that will have the most impact for your mission.
5. Focus on Vision. When times are hard, it’s easy to get mired in the day-to-day and lose track of the overall vision of the institution. Whether your goal is a world without hunger, a river that is unpolluted, or a school where children thrive, keeping the vision front and center is critical to delivering results. Set up a regular “vision-checkup” for the organization so that staff and volunteers have a way to connect daily, weekly, monthly, and annually with the vision and know they are making a difference.

These are just a few ways the non-profit sector can ensure it uses donor funds wisely, including those of the American taxpayer.

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Promoting Your Brand Value in a Recession

McDonald’s is thriving. It’s global same-store sales rose just over 7% in January, and were up more than 5% in the U.S. Why? Is it simply that people are looking for a cheap meal when times are tough? It’s more complicated than that. People are looking for good value in a recession. And the McDonald’s brand delivers just that: a predictable experience, a reasonable price, a respectable product. McDonald’s has also remained true to its core products, while meeting new customer demands (more chicken, more salads and wraps, apple slices and carrots in the kids meals, lattes and other specialty coffees).

In a recessionary environment, other organizations have much to learn from McDonald’s.

It’s a great time to remind your customers about the value your brand promise delivers. This applies if your customer is purchasing your product or service and also if they are invested in your nonprofit’s outcomes as donors and volunteers.

So what are some things you can do to promote your brand value?

First, emphasize the consistency, quality and value of what you provide. Second, remind people about the niche that you serve and what is unique about your way of meeting that need. Third, make sure your stakeholders know what steps you are taking to reign in expenses and overhead in this economic crisis so they know they are not paying for unnecessary costs.

If you are not able to do those things, it’s a good time to regroup and focus on your core mission.

What does that mean? For both for-profit and non-profit enterprises, it means honing in on your key products and services and pulling back on extras that are not your core competencies. If those are areas where you still want to deliver, it’s a great time to look for partners who can provide that extra value without the added overhead.

The Chronicle of Philanthropy and The Wall Street Journal have both been filled with articles about nonprofits and for-profit companies going out of business. While it’s no fun being those organizations’ leaders or their employees, in the long run this is a good thing. Those groups with a strong brand value, well-defined core mission, and well-served and well-understood “customers” will survive. Others will team up to provide broader offerings without diluting their main focus. Those whose brand value was inflated (Citibank), stretched across too many product lines (AIG), or produced poor products (GM) will be restructured or bankrupt. In the end, those brands with the best value will come out on top. Make sure yours is among them, standing right there with the golden arches.

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Re-Branding Your Nonprofit

AIG CEO sunflower-1Edward M. Liddy recently admitted to Congress, “I think the AIG name is so thoroughly wounded and disgraced that we’re probably going to have to change it.” And so begins a re-branding process that starts with re-naming several subsidiary divisions, the way Philip Morris became “Altria.”

But how useful is re-branding if the underlying brand promise is still broken?

A true re-branding process can only be successful for two reasons, and often both exist: 1) the organization is delivering a different brand promise than what it is widely known for and needs to correct this mis-impression, or 2) the organization has decided to change–usually expand–its mission.

A Re-Brand Mini-Case Study

In the non-profit and public sector world there are many examples. A great re-branding example is Imagination Stage in Bethesda, Maryland www.imaginationstage.org . Once known as the Bethesda Academy for the Performing Arts, the group founded by Bonnie Fogel in 1979 had a unique and much-needed focus on arts for children, including accessibility for deaf and disabled children. As the nonprofit expanded its offerings, encompassing original plays and musicals performed with and for children of all abilities, the “Academy” title seemed to no longer fit. This was in 2000, right about the time that the group was also outgrowing its two locations in the suburbs of Washington, D.C.
So as part of a major re-visioning project, Bonnie led her organization through a challenging but ultimately rewarding fundraising and strategic planning effort that resulted in a custom-designed new home in downtown Bethesda–public transportation accessible–with a new name that fit the breadth of dynamic arts programming they provided for children: Imagination Stage. Today, the group reaches thousands of children through programming in schools, professional performances on its stages, classes and workshops and is embarking on expanding its reach further through new technologies.

What Comes First in a Re-Brand?

Re-branding is always an act of imagination. The question to ask if you want to re-brand is “will this propel our mission?”  Or, in the lingo of branding, “does it help us better deliver on our brand promise?”  In the case of AIG, the brand promise may still be broken.  So re-branding can only begin with internal restructuring–mending the cracks in the brand promise. Simply changing externals like name and logo won’t cut it.

For nonprofits, donors, volunteers and the public need to have confidence that you will provide the value they expect and deserve.  Here are three things to focus on in a re-brand:

1) programs and services: are they consistent with our mission/vision?

2) governance, strategic plan/fundraising plan, and staff-board relationship: do these support our programs and services?

3) externals: do our name/logo/tag line help people understand our mission, vision and value to our community?

So many organizations start a re-branding with the externals.  Starting on the inside first will help you pave the way to succeed.

Do you have a great re-branding story? Please share with us!

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