ALB to DSM

After 18 years living, working and writing in New York’s capital city, I relocated to Des Moines, Iowa, in November 2011. Following this change of venue, I established Indie Moines to host new cultural and creative writing, and to serve as an archive for print and online articles dating back to 1995. My long-time personal website (you are here) will be preserved as an archive of sample professional writing for prospective freelance and consulting work. Thanks for reading.

Understanding Nonprofit Mergers and Acquisitions: A Primer

“Merger-mania” has come to be a prominent defining characteristic of the nonprofit sector in the first decade of the 21st Century, as a growing level of organizational consolidation provides strong evidence that a wide-spread restructuring of the sector is underway. The article linked below provides an executive overview of contemporary literature on nonprofit mergers, with cites and references to support continued study, as well as a summary of the ways in which nonprofit organizations can consolidate, key considerations before such actions are taken, and an overview of the due diligence process required to bring a merger to fruition. At bottom line: such actions are not for the faint of heart, though when executed with caution and care, they may provide immense improvements in efficiency and the quality of services that nonprofits can offer to their communities.

Understanding Nonprofit Mergers and Acquisitions: A Primer

Understanding Organization Development: A Primer

Wendell L. French and Cecil H. Bell, Jr. once defined Organization Development (OD) as “a long-term effort, led and supported by top management, to improve an organization’s visioning, empowerment, learning and problem-solving processes, through an ongoing, collaborative, management of organizational culture — with special emphasis on the culture of intact work teams and other team configurations — using the consultant-facilitator role and the theory and technology of applied behavioral science, including action research.”

For contemporary managers, it is often difficult to choose between “flavor of the day” management and process improvement theories, which may or may not be underpinned by testable, repeatable, scholarly research. To help get past this potential muddle and the marketing bugaboos that exploit it, I offer the article posted at the link below, which provides a high-level introduction to some of the seminal research in the OD field, with cites and references to allow further exploration.

Having a stronger sense of the academic literature in this field can help separate the snake oil salesmen from the legitimate change agents when they come knocking at your corporate door. And, believe you me, they will come knocking, and they’ll promise to transform your operation, for a price. Sometimes, it will be worth it. Other times, not. But at bottom line: if a self-proclaimed OD professional, management consultant or “life coach” doesn’t know who Lewin, Schein, Senge and Argyris are, then you can feel very confident in showing them to the door, and saving your organization a healthy chunk of otherwise ill-spent capital in the process.

Here’s the link to the full article . . .

Understanding Organization Development: A Primer

Five Common Misconceptions About Nonprofits

I have spent the majority of my professional career in the nonprofit sector, doing work that I have found intellectually and morally rewarding. All of my nonprofit jobs have involved some mix of communications, marketing, public relations or fundraising work, so I’ve spent a lot of time thinking about the things that we do, and finding ways to explain those things to others, most of whom operate outside of the nonprofit sector. While engaged in such interactive and explanatory work over the years, I’ve been confronted with an interesting collection of misconceptions about the nonprofit sector. Here are five of the most common ones I’ve encountered, along with explanations as to why they’re wrong.

1. “Nonprofits can’t make more money than they spend.” In Business 101, people learn that Profit equals Revenue minus Expense. Therefore, it would seem to a casual viewer that a nonprofit corporation can’t have revenues greater than its expenses, because in that case, the nonprofit would be making a profit, and would no longer be a nonprofit corporation accordingly. This is wrong, though. Bad wrong. Any nonprofit corporation that spent every single penny it earned, as it earned it, would quickly become an ex-nonprofit corporation. The real difference between nonprofit and for-profit corporations is what happens to those surpluses when revenues exceed expenses: in a for-profit corporation, the surpluses are distributed to shareholders as income or dividends; in a nonprofit corporation, the surpluses must (eventually) be applied toward to the nonprofit corporation’s mission. Some amount of running surplus is always required on a year-to-year basis just to meet basic payroll and operating requirements. Some larger surpluses may support organizational mission by being placed in endowments, with interest earnings providing long-term revenue streams. Some surpluses may be designated for specific programmatic needs, and held until such time as the funds must be paid to meet those needs. The tricky part, for any nonprofit, is figuring out how much surplus and reserve is too much surplus and reserve, given the commensurate benefit of funds being spent in real time. If a nonprofit sits on a $1.0 million in liquid assets while providing only $100 worth of services a year, then there’s probably a problem there. But if a nonprofit spends $1.0 million a year while making $1.1 million in the same year, then that shouldn’t be a red flag, in and of itself. In any case, nonprofits must, over the long term, make more than they spend, or they will cease to exist as effective entities. So don’t begrudge nonprofit corporations their positive balance sheet positions and reasonable cash reserves.

2. “Nonprofits should always be grateful for any and all gifts given to them.” Well-meaning community members often organize grassroots fundraisers for nonprofit organizations. Some of these grassroots fundraisers are wonderful, sure, but many of them aren’t. While it may seem great on the surface that a group of concerned and caring friends create an event that collects, say, $250 in a bar one night to give to a certain nonprofit, if that nonprofit supports a community that may be harmed by alcohol consumption, then the association of the nonprofit’s name with the bar event may actually be a negative, rather than a positive. Also, if the event’s organizers expect the nonprofit organization’s marketing department to promote the event, invite the organization’s leadership to the event, and then expect the organization’s development office to prepare and mail donor letters after the event, when you consider the total nonprofit labor, overhead and materials costs supporting the event, the net financial impact of the event is actually very likely to be negative. You should never stage a fundraising event or use a nonprofit’s name to promote an event accordingly without checking with the nonprofit first, and without asking the nonprofit if such an event represents the very best way for you to serve their mission as a volunteer. You should also never seek to provide legitimacy to a dodgy commercial, political or social enterprise by tacking on the name of a nonprofit as an afterthought, or publicly treating a nonprofit as though it should be grateful for whatever you toss in the proverbial begging bowl. If you take the time to put the nonprofit’s needs and requirements first, then everybody will be happier with your contribution when it’s done.

3. “I can take a tax deduction for anything that I donate to a nonprofit.” For straight-up cash gifts, this is generally a good assumption, although once your income rises to a certain level, you may not get 100 cents worth of deductions on the dollars you spend. But that fundraising dinner you went to last night, with the $100 ticket price? You can’t claim a $100 tax deduction, since you received tangible goods and services (food, fun, etc.) by attending, so only some lesser portion of your payment is tax deductible; the nonprofit should tell you how much. And the $100 worth of raffle tickets you bought? Since you didn’t win anything, that’s a donation now, right? Wrong: those tickets were your entry fee into a game of chance, and in the eyes of the government, the chance at the prize is worth the same value as the prize itself, so you can’t claim any portion of that raffle expense as tax deductible. And that time that you took all those clothes to the Salvation Army over the weekend and put them in their collection bin, and you tallied up how much you had spent on them all ($1,000) and took that as a tax deduction? Incorrect and illegal, since the value of an in-kind donation is based on the fair market value of the item donated at the time of donation, not purchase. Also, if your in-kind donation is valued at more than $500, you’re going to need to include an appraisal with your tax filing, and have documentation from the charity that confirms your gift. Or say you donate your car to a charity, and its Blue Book value is $5,000. You can take that amount as a tax deduction, right? Not necessarily: if the charity sells it for $3,000, then that’s all you can claim. The bottom line on all of these examples is that tax deduction rules are more complicated than you might think, and you should always seek guidance from the nonprofits of your choice on how best to support them, while maximizing your own tax benefit as well, and not setting yourself up for penalties associated with incorrect tax filings. Get gift confirmation letters from the nonprofits for your gifts, too, in the tax year that you are claiming them. The burden is on you, not the nonprofits, to prove that you made the gifts when the Internal Revenue Service comes knocking.

4. “I see a specific need not being met in my community, so the best thing for me to do is to establish a new nonprofit corporation to address that need.” Maybe this is correct, sometimes, but not very often, and a nonprofit organization shouldn’t be established as a hobby, especially if it plans to fundraise. You also should never establish a nonprofit corporation to give yourself a job as its Director. That’s just bad form. While there is a wide-spread shortage of funding in the nonprofit sector these days, there is no shortage of nonprofits themselves: the National Center for Charitable Statistics reports that there are nearly 1.6 million nonprofit organizations in existence today (a 66% increase since 1998), while Nonprofit Times noted that the number of 501(c)(3) charities (a subset of the total number of nonprofits) with income levels of over $25,000 broke 1.0 million in 2005. There are, of course, hundreds of thousands of additional small nonprofits that never get to that $25,000 threshold, and are likely having minimal, marginal impacts in their home communities accordingly. The Balkanization of service sectors into restrictively tight missions of a growing number of niche nonprofits ultimately hurts the overall effectiveness of the response within that service sector. If you see a charitable need unfulfilled in your community, your best, first bet is to figure out which existing service provider may have a mission that could allow it to meet the need within its existing, established operational and fundraising infrastructure. Setting up competing, small nonprofit corporations without the ability to actually pay for such provision will generally make it very difficult for any funds raised to have any significant, long-term impact. Again, this is not to discourage people from volunteering their time, talents and treasures, but they’re going to be a lot more useful to a lot more people if you don’t reinvent the wheel by starting a new nonprofit from scratch on a whim.

5. “People work in the nonprofit sector because they can’t cut it in the for-profit sector.” From a strictly monetary standpoint, this might seem to make sense, since salaries in the nonprofit sector are generally lower when compared to comparable positions in the for profit sector, and if people can get paid more for doing the same job in the for-profit sector, then their continued presence in the nonprofit sector must be indicative of their second-tier talents. But this, too, is very wrong, offering a shallow and reductive view of the nonprofit sector that fails to recognize fundamental elements of the charitable experience: altruism, philanthropy, and a desire to serve others. There are obviously myriad reasons why people choose to work in the nonprofit sector, but at bottom line, people who work for nonprofits generally get some intangible, immeasurable benefit from their belief in the rightness of their work and their organizations’ mission, and the value of this benefit in their lives may often be higher to them than the additional monetary value of doing similar work for a less mission-driven organization. They feel that their work has a sense of deeper meaning, beyond simply providing income and dividends to shareholders. Others may simply see their lower-than-for-profit salary levels as essentially contributions back to their employing organizations, increasing funds available for mission. At bottom line, few people get Masters Degrees in Social Work or Masters of Public Health degrees (to cite but two common examples in the non-profit sector) strictly to help them become wealthy. They get such degrees because they want to make a difference. Some of the most talented individuals that any of us are ever likely to encounter have forged their entire careers and reputations working for and with nonprofits, to the tremendous benefit of their communities and nations. The nonprofit workforce isn’t less effective or less valuable than the for-profit sector is, it’s just driven by a very different set of motivations and inspirations. So don’t pass shallow judgment on those who put something other than money first.

Introduction to Strategic Planning for Nonprofit Corporations

Strategic planning may be broadly viewed as an iterative, two-part undertaking. In the first part of the process, an organization defines a vision for the future that is consonant with its mission. In the second part of the process, the organization then allocates financial, capital and human resources toward achieving this vision. The two parts of the process must be linked with regular feedback mechanisms that allow both the vision and the allocation of resources to evolve, together, to meet emergent opportunities and challenges.

For a nonprofit corporation, the Board of Directors is tasked with determining the organization’s mission, and must, therefore, play a central role in strategic planning, to either ensure that the organization’s vision supports its mission, or (in rare cases) to amend the organization’s mission should a particularly compelling vision of the future or extreme circumstances require such a change. In broad terms, then, the Board’s role in strategic planning is tied to the first functional element described above: the definition of vision.

The second functional element (allocation of resources) is typically the purview of the organization’s staff, with the Board’s members providing the oversight (but not management) necessary to ensure that the Board collectively satisfies its fiduciary responsibilities. Both the organization’s mission and the Board’s vision must be clearly, effectively communicated to the organization’s Executive Director, who is then tasked with managing the resources needed to bring the vision to fruition.

Strategic planners must recognize a principle most eloquently elucidated by General Dwight D. Eisenhower during planning for the invasion of Normandy: “Plans are nothing; planning is everything.” Planning is a dynamic, ongoing enterprise, not an occasional activity resulting in a static, printed plan that is likely to become obsolete soon after it is created. Planning is a process, while plans are tools—and no tool should ever be held in greater reverence than the process it supports.

Key elements to be evaluated as part of a strategic planning process should generally include:

  • Human, capital and financial resources, ensuring that the Board’s vision can be achieved without undue burden to the organization’s capital, financial or personnel assets; this may require identification, cultivation and solicitation of new donors, sponsors or grant-makers;
  • Physical needs and infrastructure, with emphasis on keeping an organization’s equipment and facilities up-to-date within a reality-based budgeting process, and on developing local solutions that consider best industry practices;
  • Services provided by the organization, with emphasis on the quality and quantity of services provided, recognizing opportunities to better serve constituents through new services, and equally recognizing when certain services have either run their course, or require a significant course correction to remain viable;
  • Contractual obligations and opportunities, keeping abreast of contract terms and conditions, working to schedule procurement actions as needed to ensure uninterrupted services, and also taking advantage of the sponsorship or philanthropic opportunities that arise as part of contractual negotiations;
  • Environmental and political ramifications of all the organization’s activities, considering how the organization may best support a sustainable, healthy community, linking all constituencies and stakeholders.

By undertaking an iterative, dynamic strategic planning process, nonprofit organizations can be reinvigorated and refocused on a shared, clearly-defined vision. With proper strategic planning, nonprofit organizations will be better able to serve their constituents in an era of rapid change in the charitable sector, ideally creating market opportunities where challenges and competitors once stood.

Be an Expert

A few days into my first post-college, big-boy job with the Federal government, my boss offered me one of the most profound bits of professional advice I have ever received.

“If you want to succeed here, or in any other job,” he said, “then you have to become an expert.”

I asked the obvious question: “An expert in what, sir?”

“It doesn’t matter. Just make yourself an expert in something, and when you’ve done that, you’ll be indispensable.”

Not much for a literal-minded office neophyte to work with, but I took his words at face value and looked for a field in which I could become an expert. As it turned out, this was right around the time that the Federal government decided that fraud, waste, abuse and mismanagement were bad things, and that agencies might want to consider implementing systems to ensure their organizations were free from such burdens on the taxpayers’ wallets.

Rules and regulations for what was dubbed “internal controls” fell from on high, most of them jargon-heavy codifications of such common-sense rules as “Don’t let the fox guard the henhouse” and “A penny saved is a penny earned.” It dropped to the office where I worked to figure out how we might satisfy the District of Columbiacrats, but without fundamentally changing our agency’s own culture (which was already frugal and pragmatic to a fault) or wrapping our engineers in cocoons of sticky red tape and paperwork. In short, we needed an Internal Controls Expert. I saw (and took) the perfect opportunity to run with the wisdom my boss had imparted to me.

Over the years, I have parlayed my early success as that program’s nascent internal controls expert into a variety of interesting positions and opportunities. Of course, I’ve had to become an expert in many other things (budgeting, security, procurement, fundraising, public relations, art and music among them) in order to keep myself fresh and marketable in changing work situations. But the fundamental lesson remains valid: as long as you’re the go-to guy or gal for some necessary discipline in your professional field, you’ll always be in demand.

So how do you become an expert? First off, you’ve got to carefully pick your field of expertise. There are two optimal ways of doing this: either by picking a field that no one knows they need until you convince them otherwise, or by picking a field that everyone knows they need, but in which no one else wants to become the expert.

Once you’ve identified your field, research is the crucial next step. You should seek the most primary, core documents available, so that you can assimilate and spin them in your way and on your own terms, rather than relying on secondary spin by others. You’ve got to have a working comprehension of the field that will allow you to go several questions deep when challenged, and (perhaps most importantly) you have to possess complete mastery of the field’s lingo and jargon, so you’re not undone by an infelicitous slip in terminology at a key juncture.

Note well, though, that when faced in public with the unanswerable question or the indecipherable phrase, the true expert relies less on bluff-on-the-spot than on convincing others that he or she knows exactly where to get the right answer. It’s always better to say “I’ll find out, sir” (and then find out, fast) than it is to get caught in a tortured obfuscation of some point about which you’re uncertain.

You look far more confident and in control that way, and confidence is key to becoming an expert. If you don’t believe in your expertise, then no one else will either, and if no one else believes in your expertise, then you’ve failed in making yourself indispensable. You’ve got to market your expertise, too, since if no one knows about it, then you’re not doing yourself (or your employer) any good in having it. If you say something long and loud enough, it’s more than likely to become true (or to be perceived as truth, which is essentially the same thing).

This is why every waiter in New York will tell you he’s an actor. This is why freelance writers call themselves freelance writers, even when no one is (yet) paying for their work. You’ve got to hang your shingle as soon as you can, probably before you’re really ready to do so, since you will gain more expertise by actual real-world work and interaction than you will by overstaying your time in an academic research mode. You’ll learn from your mistakes this way, too, oftentimes more than you’ll learn from your successes.

But you will have successes and you will learn from them, as will others. Once you’ve deployed your expertise with aplomb a few times, those who benefit from it will continue to seek you out, and will generally spread the word about your expertise to others, since everyone likes to get credit for being the first to spot something or someone useful. Success and expertise snowball from this point, one feeding the other, until the day when you realize that, holy crow, you really are an expert in your chosen field, and you really have made yourself indispensable.

And what do you do then? You keep your eyes and ears open for a new field of expertise, since nobody wants to read yesterday’s news, everybody wants to know what you’ve done for them lately, and the only things constant in life are change . . . and the demand for experts to shepherd others through it.

Do The Research

In two recent online conversations, I have had people make absolute, declamatory statements contrary to my own beliefs, and then inform me that their positions were not arguable, because they had “done the research.” If I didn’t agree, then all I needed to do was “do the research,” and then I would have no choice but to cede my position and accept theirs. Such is the power of “doing the research,” apparently.

The problem is, though, that in neither case did “the research” in any way, shape or form adhere to the standards to which I myself have been held as a student, or to which, as a University administrator, I would hold students  before I let them make absolute, declamatory statements at me.

So what is “research,” really?

To me, “research” is the word that we use to define a set of tools and protocols designed to help people turn subjective assumptions into objective conclusions. It can take many forms, but its fundamental requirements include:

  • Intellectual rigor in seeking out credible sources, records and documents beyond those easily available in the public domain;
  • A willingness to seek out and fairly consider documents and records supporting views in opposition to those of the researcher;
  • An ability and willingness to compile qualitative or quantitative data using generally accepted statistical and scientific methods;
  • A method for testing those data against a hypothesis, followed by an ability to have the results of those tests stand up to independent re-testing;
  • An affirmation of the research data and conclusions by a body of experts in the field of research; and
  • A recognition of the utility of the data compiled and conclusions drawn, as evidenced by cites and references from other researchers in the field of study.

That may be a bit academic and arcane, so perhaps a better way to frame this post would be to flip the question and ask: So, what isn’t research, really? To which I would reply:

  • Using Google, Wikipedia or Youtube as the primary search engines for source documents, since none of those portals have filters for accurately assessing the credibility of sources, and none of them index the countless proprietary scholarly, academic or scientific journals and resources that require proper library assistance to access;
  • Throwing out entire sectors of the printed and online media worlds because they are “mainstream” and do not cover certain topics in the way that the researcher may wish to see them covered;
  • Working in a vacuum, without the intellectual testing that comes from the healthy give-and-take of collegial debate and discourse;
  • Reaching conclusions that are only cited or referenced by other individuals who enter the realm of research with the same viewpoint as the researcher;
  • Promoting positions without having ever actually compiled, analyzed, or tested data independently, but instead relying solely on data developed by others, oftentimes without appropriate scientific or statistical rigor; and
  • Using shock tactics or logical fallacies to make points in the absence of said data.

I’ve spent more time in and around classrooms over the past decade as a College and University employee and as a “non-traditional” (which means “old”) student than most folks my age have, so let me cite one personal example of what I consider to be an acceptable level of documentation and work such that, if necessary, I could go online and say “I did the research,” and have it mean something.

My Masters Paper in Public Affairs and Policy was called “Where the Air is Sweet? A Policy Evaluation of Public Broadcasting in the United States.” What went into the research behind this paper? I never tallied the total hours, but it was an immense amount of time, and it took about nine months from inception to completion of the research project, the summary of which was a 60 page, 14,000 word document with 52 end-notes and 42 specific works cited. The conclusions reached were based on two massive databases that I developed myself, one related to a large, random sample of quantitative financial information regarding the nation’s public radio and television stations, and one related to coded qualitative data related to the programming offered by the same stations over the course of a month. I also conducted extensive interviews, spent extensive amount of time wading through proprietary scholarly literature not available to public search engines like Google, and had an academic advisor and an independent reader read, review, and challenge my results and conclusions, which then had to be presented to a board of faculty members at the college for acceptance.Perhaps most noteworthy, after conducting my research, I reached conclusions that were different from the assumptions I made going into the project, rather than discarding information that didn’t support my preconceived notions in the field.

So if you and I entered into a conversation about public broadcasting in the United States today, I would feel reasonably confident about making some absolute, declamatory statements, and telling you “I did the research,” because I actually did. There are very few other areas, though, where I feel that I could ever take such a position of authority, with the facts and data available to back up my positions.

If you haven’t done a comparable level of work to that described above, then you really have no right to dismiss my positions or those of others who may disagree with you by saying “These are the facts, because I did the research.” That’s insulting to people who have actually conducted real research, and it undermines your arguments, because you can’t really defend them with any objective, testable data or facts.

Which is not to say, of course, that you can’t offer your subjective positions so that we can debate them. I welcome that! I love to argue! The world is a mushy place, and most of the interesting stuff that engages us on a daily basis is unquestionably subjective and subject to debate. Easily 98%+ of everything I ever write or say is subjective, and open to discussion, and there’s nothing at all wrong with that. Engage me! I like that! But if you disagree with me, I promise I won’t slam the door in your face and dismiss your position, citing “research” that I didn’t actually conduct.

Please extend me the same courtesy when we have conversations in virtual or real space, okay?

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