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THE CATCH-22 IN NONPROFITS

Posted by Tim Bryce on January 5, 2021

BRYCE ON NONPROFITS

– Why it is hard to win in a nonprofit.

Click for AUDIO VERSION.
To use this segment in a Radio broadcast or Podcast, send TIM a request.

I decided to write this column because I suddenly realized one of the nonprofit organizations I belong to was being run incompetently. Then it occurred to me, it was run incompetently the year before under a different Board of Directors, and the year before that, etc. In all likelihood it will be run incompetently for years to come as the people change on the Board. I then began to ask “Why?” and I think I have the answer.

The expression “Catch-22” is, of course, derived from Joseph Heller’s novel of the same name. The story takes place during World War II and describes a no-win scenario. The book was so popular, “Catch-22” became a standard expression in corporate America to warn of developing winless objectives and tactics in the execution of a project. It is also a convenient way to understand why nonprofit groups seldom succeed, but limp along instead.

First, we must remember most nonprofits, particularly at the local level, are run by amateurs, not professionals. I am, of course, talking about such things as homeowner/condo associations, political groups at the grassroots level, fraternal organizations, professional trade groups, sports associations, religious organizations, etc. These are groups usually run by well-meaning people with a little time on their hands and want to volunteer their services. Unfortunately, many haven’t a clue as to what they are doing. As such, this is an excellent example of the Peter Principle in action, whereby people rise above their level of competency.

Trade groups featuring members from the corporate community are generally run the best as they have a good sense of business and management about them. Some long-established institutions, such as fraternal groups, adopted standard policies and procedures years ago and, as such, run smoother than most. However, it all depends on who is in charge and what their goals and agenda are. Some want to serve on a Board for nothing more than accolades and recognition, others are bent on a petty power trip to control others and form a “Good Ole Boy” club, and there are others who genuinely want to help. When electing people to the Board concentrate on the latter group (those wanting to help). However, if you do not get the right people on the Board, you will get what the group defaulted to, and probably not to your liking.

The linchpin of the Board is the President or whatever the title du jour is. Regardless, this person needs to possess the following attributes in order to succeed:

1. Knows how to conduct a meeting. I have seen way too many people who haven’t a clue as to how to run a meeting, particularly in voting on simple proposals (see “Roberts Rules of Order”). This results in wasting the time of others attending the meeting, thereby creating apathy and hindering participation. If you don’t know how to use a gavel, appoint someone else to run it for you.

2. An understanding of the mechanics and administrative reports prepared by the Secretary.

3. An understanding of the mechanics and financial reports prepared by the Treasurer.

4. Appreciates the need for implementing “checks and balances” of finances and how to implement such a system, especially if finances are a problem for the organization.

5. Understands how to prepare an effective budget for income and expenses. This includes an understanding of the group’s Chart of Accounts and previous annual reports.

6. The laws, rules and regulations governing the organization.

7. The duties and responsibilities of all officers and committees.

8. How to lead and manage others. As for me, I believe in “managing from the bottom-up,” meaning delegate authority, don’t interfere (except to referee), and follow-up. You must remember, we get things done through people, not by trying to micromanage them. For this to work, you need people willing to accept responsibility, just as in business.

9. Possesses empathy for their constituents. This requires listening and analyzing feedback. Your constituents won’t always be right, but they should be heard so they feel part of the team.

10. As a nonprofit, insist on transparency. After all, you are all in this together, and what have you got to hide? Hopefully nothing. A good, regular line of communications is essential. Concentrate of content, not glitz.

Without these basic traits, the President will be viewed as incompetent.

Finding people with such talents is difficult, which is why many organizations encourage a rotational system whereby junior officers progressively learn new skills over time until they are ready to assume the presidency.

As to the “Catch-22” side of things, because most officers lack the proper skills, they are frequently criticized and second-guessed by their constituents, sometimes violently. This, of course, causes the officers to feel harassed, frustrated, and unappreciated. Such a situation causes them to lose interest and their work effort suffers, thereby making things go from bad to worse. As a constituent, when communicating with the group’s officers, try to make your suggestions more positive. “Any idiot can see what is wrong, but can you see what is right?” – Winston Churchill. If we are all supposed to be on the same team, what is the point of creating a pissing contest? After all, they have the job and you do not. If you remain at loggerheads with a board member, the choice is for one or the other to exit. In addition, I am NOT a proponent of lawsuits unless they are absolutely necessary. Remember, the only one who prospers in a lawsuit is the lawyer.

More often than not, participating on a Board of Directors is a thankless job. It is a necessary evil that has to be accomplished, and No, the Board will not bat 1.000 all the time. However, with a little empathy by both parties, a spirit of cooperation, and effective communications, you can make this a productive experience for all involved. Try to remember, most Board Members are trying the best they can, even if it is misguided. At least give them credit for stepping up to the plate when nobody else would.

For new Boards, try to avoid the temptation of reinventing the wheel every year, particularly when it comes to the responsibilities of the Secretary and Treasurer. Your goal should be to develop standard practices thereby making it possible to teach new people the various jobs.

One last thing, there are some nonprofits who hire a management company to handle the administrative affairs of the organization. This is an admission either the Board doesn’t know how to do their jobs or they don’t want to get their hands dirty. The problem here is, if left unchecked, the management company will likely usurp the powers of the Board, thereby superseding the Board’s authority. Just remember, THEY work for the nonprofit, not the other way around.

I am certainly not suggesting it is impossible to manage a nonprofit, you just need to remember it is a legal entity and must be handled professionally. This notion is often considered abrasive to a lot of naive people. However, a nonprofit is a legal entity in the eyes of the state and may be subject to taxes, financial liabilities, and lawsuits. Regardless of the intent of the nonprofit, if you take a professional business attitude to running it, the greater your chances are for success.

For more information, see my book, “How to Run a Nonprofit: It doesn’t Require Rocket Science.” This is a MUST READ for anyone associated with a nonprofit, particularly newbies and anyone interested in assuming authority as an officer.

Keep the Faith!

P.S. – For a listing of my books, click HERE. These make great holiday gifts!

Note: All trademarks both marked and unmarked belong to their respective companies.

Tim Bryce is an author, freelance writer and the Managing Director of M&JB Investment Company (M&JB) of Palm Harbor, Florida and has over 40 years of experience in the management consulting field. He can be reached at timb1557@gmail.com

For Tim’s columns, see:   timbryce.com

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Copyright © 2021 by Tim Bryce. All rights reserved.

Listen to Tim on WZIG-FM (104.1) in Palm Harbor,FL; Or tune-in to Tim’s channel on YouTube. Click for TIM’S LIBRARY OF AUDIO CLIPS.

One Response to “THE CATCH-22 IN NONPROFITS”

  1. Tim Bryce said

    An M.B. of Clearwater, Florida wrote…

    “Good article and timely to start a new year.”

    Like

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