Nonprofit Management: Tips of the Trade

In 1996, I wrapped up 14 years of Federal service in a variety of military and civilian roles. I had already established a solid freelance writing business at the time, but I wanted a “day job” to provide healthcare coverage for my family and a stable salary base atop which my I could write what, when, and as I wanted. Most of my colleagues from Navy days facing similar transitions at the time went into the for-profit sector, but I decided that public service meant too much as a guiding principle for me to walk into a world where shareholder profits were at all a governing interest in my day-to-day work.

So I made a conscious decision to enter the nonprofit sector, where I’ve remained ever since. I had to essentially start my career over that year, since my acquired skills of negotiating complex, high-value, confidential contracts for submarine and aircraft carrier components didn’t exactly translate into the cultural, educational, and social service sectors. But I’m a quick learner, and it didn’t take long before I earned the first of four nonprofit chief executive positions that I have held to date.

As that phase of my professional life now winds down with my retirement from TREE Fund this month, I wanted to share ten frank thoughts that I think might be useful to the next generation of up-and-coming nonprofit executives. I would have appreciated having someone tell me some or all of these things in 1996, so hopefully others may find them useful. (Note: in the few cases where I’ve already written more on some of these topics elsewhere, I link to those articles, rather than simply repeating them here).

1. Understand the differences between governance and management: Nonprofit boards are tasked with governance, nonprofit executives are tasked with management. I developed this grid to explain the key differences between those roles. When boards manage and executives govern, nonprofits fail. As the chief executive of a nonprofit organization, you sit as the single crossover point person looking upward to a multi-person board that supervises you, and downward at a multi-person staff that you supervise. No one is in a better position than you are to monitor roles in both directions, to set appropriate boundaries, and to formulate and implement corrective action when the governance vs management relationships get out of alignment.

2. Serve on nonprofit boards: You will never fully understand or appreciate the challenges that your boards face in fulfilling their governance and fiduciary roles unless you yourself sit on that side of the table at some point too. But don’t just serve on a board as checklist item on your resume, or for the cache of having your name on the letterhead of a prominent charity. Board service involves a lot of challenging volunteer work, and there are specific duties and responsibilities expected of all nonprofit board members. I developed this summary of those roles and responsibilities, and you should be prepared and committed to live, work and deliver within such a rubric before you join any nonprofit board.

3. Understand nonprofit accounting standards and auditing practices: On some plane, I’d almost say this is the most important of the ten tips provided here, as an adept skill with your budgets and financials will allow you to work most closely and effectively with your board’s treasurer and your own staff financial professionals. You want to have the best people possible in those roles, sure, but you don’t want to turn them into the de facto financial decision-makers for your organization because you don’t have a complete, timely and accurate understanding of the reports they produce, review and approve. Some years ago, I wrote a (hopefully) amusing introduction to this somewhat dry topic called Financial Basics for Nonprofit Managers. While I mostly developed these skills in a hands-on fashion over a lot of years, if you’re at that transition point between being a development or other nonprofit middle manager and serving as your organization’s executive, I would most emphatically recommend that you find a training or certificate course in nonprofit accounting. It will set you apart, and it will serve you well.

4. Develop a thick skin: I often use a sports analogy when I discuss the life of a nonprofit fundraiser, noting that a really good professional baseball player will hit at or above .300 over the course of a season, meaning that 70% of his at-bats result in failure. Well, guess what? A really good fund development or institutional advancement professional has about the same success rate in a given year, and if being told “no” hurts your feelings, then you’re in the wrong business. Some nonprofit executives think they can get around this by having their development directors and/or board members make all of the hard asks, but that’s a recipe for failure over the long haul. Peer-to-peer asks are crucial, and many times you are the right person to make such asks, and many times you will receive a negative reply after you make them. They key to enduring that is to recognize that most “no” answers are actually “not now” answers, and to practice your swings and hone your skills until the next at-bat comes around, with a smile on your face while you do it.

5. Understand and practice the donor development cycle: Related to the point above, if you step up to the plate having done none of the necessary training and practice, the likelihood of a big swing and a whiff increases exponentially. The donor development cycle involves prospect identification, cultivation, solicitation and stewardship, and it takes time, research, and talent. If you ask someone for a big gift the first time you meet them, you can pretty much plan on a “no” response. If you do not understand what motivates a prospect before you ask them for a gift, you’re even more likely to get a “no” from them. And some of those “no” answers will really mean that, for good, with no invitations to come back around again for another try. The one part of the donor development cycle that most often goes neglected by nonprofit executives is the stewardship phase, or what happens after you actually get the gift. If a major donor does not hear from you again until you want more money, he or she is less likely to feel the love and write the check. But if you carefully, judiciously, and personally steward those donors, your next gift is more likely to come in, and hopefully be bigger than the one before it. People want to feel connected to their charitable causes, and they want to know that their gifts make a difference. You are one of the most important players in making sure that’s the case.

6. Respect the sector and its people: There’s a sadly common trope in the business world that “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, right? But this is very wrong, offering a shallow and reductive view of the nonprofit sector that fails to recognize fundamental elements of the charitable experience: altruism, belief in a mission, philanthropy, a desire to serve others, a sense of deeper meaning, wanting to make a difference, etc. 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. 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. I believe those of us in leadership positions within the nonprofit sector have a clear responsibility to educate those outside the sector on this front, and we should never denigrate, by action or by inaction, our colleagues and their organizations in the eyes of those who would judge our staffs that way.

7. Understand and manage the power dynamics of our sector: This is a subtle one, somewhat related to stewardship, somewhat related to developing a thick skin, somewhat related to respecting the sector and its people, but it’s a common facet of the nonprofit world experience, so I think it needs to stand on its own. At bottom line, you need money for your organization, and your donors have the money you need, which means that your donors have a profound power to greatly enhance your success, or to deeply undermine it, as they see fit. Some of your biggest donors will be clearly aware of this fact, and they’re not going to be bashful about letting you know what they want and expect from you, when they want and expect it. Sometimes, those wants and expectations are going to cross lines of professionalism and propriety and you will have to stand firm on principles in such cases, and (hopefully) do so in a way that does not produce negative outcomes for your organization. But other times, sorry to say, you’re going to have to suck it up and go along with what they want, when they want it, on their terms. This can be a real prick to the pride when you’re feeling particularly powerful and accomplished as the CEO of your nonprofit corporation, and I’ll admit that accepting this reality has always been a challenge for me. I’m a seasoned professional and a major donor for some organizations in my own right, so being treated like “the help” can really sting sometimes, e.g. going to a gala event with a lot of heavy-hitting donors in your community, where their interactions with their peers, and then with you, make it very clear that in their minds, you are not one of them. But that’s, sadly, the macro nature of a world where there are those who give, and those who need their gifts. Many major donors are truly gracious and would never treat you this way. But a surprising number of them will, and you should know that going in.

8. Foster a strategic culture: Strategic planning is crucial to the success of any good nonprofit organization. It 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. 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 becomes obsolete soon after it is created because it is placed on a shelf to gather dust. Planning is a process, while plans are tools—and no tool should ever be held in greater reverence than the process it supports. As your organization’s executive, you sit smack in the middle of this crucial process: you must encourage and empower your board to think and act strategically, and you must manage your staff to implement the plan to fulfill the board’s vision, not your own personal preferences and projects. I wrote a bit more on this topic here.

9. Don’t start your own nonprofit as a hobby or on a whim: I will admit that this is a pet peeve of mine. I’ve seen more people than I care to consider over the years say “I see a very niche 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.” And then they do it. And more often than not, it fails, but only after wasting a lot of donated money. Maybe some of those folks are correct in taking that first step to organize and establish, sometimes, but not very often, and a nonprofit organization shouldn’t be established as a hobby, especially if it needs to suck funds from a finite pool of community resources. You also should never establish a nonprofit corporation to give yourself a paying job as its executive. That’s just bad form. While changes in tax codes and economic uncertainty are resulting in shortages in individual funding for the nonprofit sector these days, there is no shortage of nonprofits themselves: the National Center for Charitable Statistics reports that there are over 1.5 million nonprofit organizations in existence in the United States today, of which about 1.2 million are 501(c)3 charities. (Don’t make the amateur mistake of saying “501(c)3” interchangeably with “nonprofit;” they are not, necessarily). The Balkanization of the nonprofit sector caused by a growing number of tiny niche mission nonprofits ultimately hurts the overall effectiveness of our 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 established operational and fundraising infrastructure, and commit to helping it do so. 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 you from volunteering your time, talents and treasures in a visionary fashion, but you’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 personal whim.

10. Keep charity charitable: There’s been a lot of (needed) discussion over the past couple of years about tax code changes making it financially beneficial for donors to use the increased standard deduction in lieu of itemizing deductions (including charitable giving), thereby reducing the strictly financial tax return benefit donors receive from their charitable giving. But I think we make a mistake in our communications when we put too much focus on tax benefits, because the charitable good that donors do is actually independent of any quid pro quo tax benefit they receive as a result of their philanthropy. Charity is, by its very definition, the voluntary giving of help, typically via money, to those in need — and nonprofit organizations need to demonstrate, at bottom line, that they remain worthy of support for the good work they do, and for the benefits that they deliver to their clients and communities. After all of my years in the nonprofit sector, I know that when push comes to shove, the sense of doing something righteous, and making a difference through one’s gifts, is the truly fundamental motivator for individual donors, one that resonates deeply in ways that simple monetary benefit from tax-deductions does not. As your organization’s leader and spokesperson, it’s your job to keep the sense of awe that comes from doing the right thing front and center in everything you say and do.

Bonus Tip #11: Learn how to calculate and build a donor campaign pyramid. It should not look like this one.

PRESS RELEASE: TREE Fund Names New President and Chief Executive Officer

Note: My successor as President/CEO of TREE Fund begins his tenure this morning. I will be remaining with the organization in an advisory/emeritus status through November 15 to help, as needed and requested, with transition, then onward. I’m really excited about TREE Fund’s next chapter and leader, and I hope that all of you who have been a part of my story there will continue to support Russell and the organization in the years ahead. It was an amazing four-plus years for me, and I thank everyone who played a part in that. Excelsior!

FOR IMMEDIATE RELEASE: TREE Fund names Russell King as its new President and Chief Executive Officer

Naperville, IL, October 28, 2019: Tree Research and Education Endowment Fund (TREE Fund) is pleased to welcome its new President and CEO, Russell King, who is taking the reins at the Naperville, Illinois-based nonprofit organization on October 28. King’s hire followed an extensive national search to replace J. Eric Smith, who is retiring as President and CEO after four years’ service to the organization.

King is a seasoned nonprofit executive with over 25 years’ experience in the public sector, including multiple chief executive roles. He has a Bachelor of Science degree from San Diego State University, an MBA from LaSalle University, and is a graduate of the University of Delaware’s Institute for Organization Management. He is the author of four books, a long-time contributor to numerous online and traditional print media outlets, and has an extensive community service resume, including election to the Verona (Wisconsin) Area Board of Education.

“We are truly delighted to have hired Russell to serve as our new President and CEO,” says TREE Fund Board Chair Steven D. Geist, BCMA, RCA. “He is a deeply experienced nonprofit executive, with formidable leadership, development, communications and financial skills. Russell has a proven track record of leading growth and transformation in the nonprofit sector, and the Search Committee truly admired his deep hands-on, mission-driven, servant leadership experiences throughout his career. We are confident that he will sustain and build on our recent successes under Eric’s administration, and we look forward to working together to benefit our urban and community forests and the skilled professionals who care for them.”

“Communication, collaboration, diversity, and servant leadership have been, and remain, the keys to my success with those I serve, whether staff, board members, donors, or the communities we support,” says King. “Although the depth and breadth of my experience and education may have uniquely qualified me for this role, what most defines me is the passion with which I immerse myself in a worthy cause. When I take on a mission, it becomes my driving force, my raison d’être. I now look forward to putting my abilities to work on behalf of TREE Fund.”

About TREE Fund: TREE Fund is a 501(c)3 organization dedicated to the discovery and dissemination of new knowledge in urban forestry and arboriculture. Since 2002, TREE Fund has distributed over $4.4 million in research grants, scholarships and funding for environmental education to advance the science, practice and safety of tree care and engage the next generation of tree stewards. For more information, visit treefund.org.

Happy trails . . .

Tour des Trees 2019: Final Fundraising Push

I got back home to Des Moines last night after spending three days at the International Society of Arboriculture‘s (ISA) International Conference in Knoxville, Tennessee. We held our annual “Tree Fund After Hours” reception on Tuesday night (co-hosted with our good friends from ISA Southern Chapter), where a few hundred professional tree folks came out to celebrate our community, the work we do together, and the research that underpins our commitment to support and the sustain the world’s urban and community forests, and the utility rights of way that connect them.

As a result of our guests’ generosity, and the stack of checks and online gifts from other folks we had waiting for us when we got back to the office, we just pushed over a total of $250,000 raised by our 2019 Tour des Trees to Benefit TREE Fund riders and teams. Our goal for the year is $300,000 — and the deadline for riders to meet their individual minimum fundraising requirements ($3,500 each) is now only 19 days away. Folks are fundraising hard to meet both individual and aggregate goals, so if you’ve been thinking about making a gift toward this important community engagement event, time’s getting short, and there’s no time like the present for making that contribution.

I always try to lead by example and keep myself high on the fundraising leader board (I’m in fourth place among individual riders right now), so if you’d like to help me stay ahead of some hard-charging (friendly) competitors who are neck-and-neck with me, you can support my campaign here. Or if you want to support a rider who is still working to get his or her minimum fundraising done, there’s a list of all of this year’s 82 riders at this page, and you can click on any of their names to support their campaigns. Either way, you’ll push us closer to this year’s budget goal, and we’ll all be grateful.

This summer, TREE Fund pushed over $4.3 million in total grant awards made to support tree research and education, and we published an independent report by Drs Richard Hauer (University of Wisconsin: Stevens Point) and Andrew Koeser (University of Florida) evaluating and explaining the outcomes, outputs and impacts of those grants over our 16 year history. Their complete report is available here, and it ably demonstrates how these grants change the way our industry works, and leverage other dollars toward applied research and outreach. It’s a compelling story, and the Tour des Trees is a cornerstone to our success in the past, present and future.

I’ve shared a few photos from last year’s Tour (by the awesome Coleman Camp) below just to give you a taste of the experience, which depends on the goodwill of thousands of partners and donors every year. I appreciate you considering a gift this year. Your generosity will make a difference — now, and for many years yet to come.

The love we’re shown by the countless towns and cities we roll through is truly inspirational.

Riding is only part of the Tour des Trees story. We also make frequent community engagement stops to share the importance of tree research and education, for kids of all ages.

The end of the road in 2018, at the Ohio State House in Columbus: tired, stinky, sore, and proud, with over $340,000 raised for grants and scholarships!

The Legs Are Tired, But the Mind and the Heart Are Strong

Note: At the risk of being redundant in duplicating the gist of yesterday’s post, I sent out my last Tour des Trees fundraising appeal this morning, so I am cross-posting it here today, just in case someone reading one thing might have missed the other thing. Either way, I hope you will help support the cause!!

Hello friends and family,

As always, I apologize for sending a mass email (or blog post) to you all, but we’re in the final weeks of this year’s fundraising and training campaigns for the Tour des Trees to Benefit TREE Fund, and I would be honored to have your support for this most important endeavor.

I recently announced my retirement as CEO of TREE Fund effective at the end of October, but I specifically selected my timeline to allow me to lead this year’s Tour, which will roll out of Nashville, TN on September 15. We’ll be riding about 450 miles in five days, hoping to raise $300,000 in the process, while also offering a variety of community engagement events to educate folks (young ones, most especially) along the route about the importance of urban and community forests.

We just hit the 50% mark on this year’s fundraising goal, so it’s “rug cutting time” for our 80+ riders to hit our individual and collective goals over the next five weeks.

I always like to stay high on the fundraising leader board, from a good Navy-trained “lead by example” standpoint, but I’ve got some steep competition this year from a few regular riders and some new folks who are awing us all with their fundraising prowess. I would be most grateful, therefore, if you would consider making a gift, of any size, to my campaign, here.

You have my personal and professional commitment, as always, to ensure that 100% of the funds raised by our riders and teams goes back out the door to support our research mission, either by funding new grants, paying installments toward ongoing multi-year grants, or endowing funds to support future grants. We recently passed $4.3 million in total grants awarded since 2002, and our board commissioned a study last year to assess the impacts, outputs and outcomes of all those grants over the years. The results were compelling, profound, and satisfying: you can see the final summary report here, if you are interested.

You also have my personal commitment that I’ll be busting my ever-more-creaky body through these summer months ahead to be in proper shape to complete the Tour in September. I rode 302 training miles over the past six days . . . and I am enjoying spending “Day Seven” putting my feet up and sending emails (and blog posts) to you all, per the pic below.

Please don’t hesitate to holla if you have any questions about what we’re up to . . . and also please don’t hesitate to hit my campaign page if you know what it’s all about and you want to support it!!

All best, all love, all thanks,

Eric

Some tired pigs. But they’ll be ready to roll come September 15 . . .

Tour des Trees 2019: $150,000 Down, $150,000 To Go

The Tour des Trees to Benefit TREE Fund will be rolling out of Nashville, Tennessee on September 15, and our 80+ riders have until September 5 to complete their fundraising campaigns. The team broke the 50% mark this morning as we rolled over the $150,000 threshold on the way to our $300,000 aggregate goal, huttah!!

While my role with TREE Fund will be changing after October 31, I purposefully selected my retirement date to ensure that I could see this year’s Tour through to completion, and I am passionate about having an epic fundraising and riding experience for everybody involved this year. And in the years ahead, too, hopefully: we’re planning to stage the Tour in the Denver region in 2020, and we’re evaluating Eastern Texas and Central Iowa as our two finalist destinations for 2021. While I have truly loved riding with the team as President/CEO of the organization, I do intend to continue riding as a regular ol’ member of peloton for as long as my creaky body will allow me to do so, and as long as TREE Fund and my successor(s) want me along for the ride.

A lot of people talk about the Tour des Trees as as “life altering” event, and while I’m not one for hyperbole (usually), in this case, those folks are right: the community, the riding experience, the cause, the support . . . all of those things are amazing. It is hard, no denying that, but the sense of achievement when it’s over each year is glorious. As is the response year after year from so many individual donors and companies who give so generously to make it all possible, thereby allowing us to maximize the amount of funding we apply to urban forest research every year. We’ve pushed out $4.3 million in grants since our inception, and the Tour des Trees is a cornerstone to that success.

It’s a win for everyone when we have a successful Tour, and I hope you will consider joining so many others (744 gifts so far) in supporting us this year, perhaps building on your earlier giving, or perhaps making a first time contribution. I always try to stay high on the fundraising leader board, but I’ve got some serious competition this year, so if you could click the banner image below and help the organization, the team, and me as I work to hit my personal fundraising goal, I’d be a happy rider and a grateful CEO!

Also a bit of a tired one, too, truth be told . . . I logged 302 training miles on the road this week. Tomorrow’s Sunday. I’m gonna rest!

TREE Fund Trustees Announce Search for Next President/CEO

Note: This announcement was released this morning, so I am cross-posting here. I will provide some more personalized reflections on the news in my August “Leading Thoughts” column for TREE Press — but wanted to get this out now on my personal website, just in case you know someone who might be interested in and qualified for the position, and to let my non-tree peeps know that a new chapter will be opening for me in the months ahead.

TREE Fund President and Chief Executive Officer J. Eric Smith has announced his retirement, effective October 31, 2019. The Board of Trustees are beginning the search for his replacement immediately.

“TREE Fund’s Trustees are happy for Eric and his family as they move on to the next phase of their lives, though obviously very sorry to see him leaving the organization,” notes TREE Fund Board Chair Steve Geist, BCMA, RCA. “Eric has positioned TREE Fund exceptionally well over the past four years. We consider our President/CEO position to be a highly attractive opportunity for a skilled nonprofit professional. We expect our next leader to build on his successes as we continue our work on behalf of urban and community forests and the hard-working professionals who care for them. We are glad that Eric intends to stay involved in our work as a Tour des Trees rider and donor, and we are grateful to have his assistance in the search process through the months ahead.”

The full position description for TREE Fund’s President/CEO is available here. TREE Fund is a 501(c)3 organization based in the greater Chicago region. Established in 2002 via a merger of the International Society of Arboriculture Research Trust and the National Arborist Foundation, TREE Fund has awarded over $4.3 million in grants toward its mission of identifying and funding programs that support the discovery and dissemination of new knowledge in arboriculture and urban forestry.

The President/CEO search is open now and will continue until the desired candidate is hired. Qualified applicants who are interested in the position must submit a complete resume with a cover letter clearly expressing why the role interests them, how their professional experiences suit them for this leadership role, their salary expectations, and their starting availability timeline. Required documents must be emailed to jesmith@treefund.org with the subject line “President/CEO Search.” Resume and cover letter titles must include the applicant’s full name.

Please do not call TREE Fund’s offices with inquiries regarding the status of the search or of your application. 

It’s a great gig . . . I hope you will share the word that it is available!