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To Thine Own Organization Be True

In order to have a sound nonprofit organization that can deliver on its mission, it is essential to have solid organizational infrastructure.

By Caroline E. Boyce, CAE, President & CEO

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Caroline E. Boyce
CAE, President & CEO
Inter-Mission, LLC
cboyce@intermissionllc.com
610-613-6707
www.intermissionllc.com

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Would you prepare to renovate a building without a thorough assessment of the building’s existing conditions? No you would not. You would need to consider both its outward appearance as well as the soundness of its systems and structure. You own the building and you own its condition. If you are not fully aware of problems fundamental to the health of the building, like the foundation or electrical issues, and are not prepared to address them, you are asking for trouble. At some point they will “get you.”

Underlying infrastructure must be understood before moving forward. Infrastructure is the foundation or basic framework of a system or organization. You may already be aware of issues in need of attention but may be reluctant to face them right away. There are also hidden conditions that will at some point emerge as significant problems. In the case of a building renovation, you engage experts, like architects and engineers, to undertake a professional assessment. With the information they provide, you develop a plan that may include short term and long-term solutions, and then estimate cost. This minimizes risk and the surprises that will cost a lot of money, or potentially cause the problem to be beyond repair. You develop a predictable budget and timeline. You also know the skills needed to address the problem. You remain in control. Most importantly, you have an end product that achieves what you set out to accomplish. Transparency, information, and a plan make you a much better owner.

Nonprofit organizations have similarities to that building project. They have infrastructure, too. Components of that infrastructure include:

  • Administrative Systems
  • Financial Management Functions
  • Fundraising Strategies
  • Governance
  • Personnel Management (including volunteers)
  • Programs: Product and Service Operations
  • Public and Community Relations
  • Strategic Alliances
  • Technology

Nonprofit organizations are mission driven, they are focused on how their programs and operations are impacting clients and constituents. They are more likely to feel the need to put scarce resources toward programs than the organizational infrastructure that supports them. When confronted with difficult decisions about asset allocation, it is tempting for even the best executives to favor programs over administrative and operational needs. So, for example, personnel reviews may remain incomplete, insurance coverage may not be reviewed, and financial management systems may not be properly evaluated. Inefficiencies and risks remain to undermine the health of the organization.

Many nonprofits view the periodic updating of the strategic plan as the time to take an inward look. We are experts at goals, objectives, timelines, and assignment of duties. We do a Situation Analysis to understand the environment in which we are working, its opportunities, and its threats. We conduct focus groups and surveys to collect data to document our success and determine our future strategies. Some organizations use their strategic plans; some do not. Regardless, the production of a plan may cost thousands of dollars, and may not be positioned to leverage its full impact because on its own, it is incomplete.

Some nonprofits take the important next step of developing a corresponding financial plan – an accounting of the costs for what is proposed, with assumptions about where those dollars could come from. That should transform the strategic plan into an achievable business plan, right? Not so fast. Think about that building renovation. The financial plan must be grounded in knowledge of the organization as a whole, and that necessitates the completion of a thorough assessment of the organization’s infrastructure. Unless we do that, we are building an organization on an uncertain foundation.

An Organizational Infrastructure Assessment examines all of the systems associated with all areas of the entity’s operations. Across each category it encompasses policy review, legal compliance, systems transparency, management effectiveness, and an assessment of assets. It identifies those things that are and are not working well, and identifies areas where too much or too little time is being spent. It prioritizes those items that must be addressed. Ideally it is undertaken by an outside professional who can bring a fresh eye to the organization. The benefits will outweigh the costs. Similar to a financial audit, upon completion the board of directors must review the assessment, and, in conjunction with the executive director, develop an agreed upon implementation plan, for which the executive director will be held accountable.

Consider the example of an organization that to its board and constituents appears to be “humming along nicely”. A new executive director discovers that the computers used by the staff are more than a decade old, are not networked, and there is no centralized filing or back-up system. She immediately brings in an IT expert to assess the situation and it is determined that the system is on the verge of failure and must be replaced immediately. The financial impact and the disruption to programs and operations is enormous. Not to mention the negative impact on the staff. And what if the computers had crashed? A timely Organizational Infrastructure Assessment would have allowed the problem to be addressed in an orderly cost effective way.

Consider the example of an organization that loses its long-time executive director due to an unexpected health issue. The organization is in crisis because it has no short-term or long-term Succession Plan. Valuable time and resources are lost as the board and staff decide on the next steps, gather information, make interim staffing decisions, and hire consultants. Funders, clients, and staff get nervous and community-serving programs can be at risk. An Organizational Infrastructure Assessment would have identified the need for the Succession Plan as a high priority. The Succession Plan provides a predictable, agreed-to road map for moving forward with clear steps, timelines, and assignments of responsibility. The development of the Succession Plan is also a time to evaluate bench strength, cross training needs, and professional development needs. What a great opportunity for enhancing the underlying strength and capacity of the organization. But without the plan, the organization is likely to take backwards steps as opposed to forward steps.

The board’s Duty of Care embodies ensuring prudent use of all assets, and providing oversight for all activities that advance the organization’s effectiveness and sustainability. The board of directors has the responsibility for ensuring that the Organizational Infrastructure Assessment is conducted, and must hold the executive director accountable for its completion. There should be a positive spirit to the assessment. It is not punitive and it should be understood by all that there will always be areas that require follow up.

Nonprofits have a responsibility to their communities, clients, and funders to be as effective as possible. Nonprofit leaders are the stewards that ensure that happens. That means being proactive at identifying and addressing organizational infrastructure needs to keep programs sustainable. Undertaking a regular Organizational Infrastructure Assessment is one of the most important responsibilities a nonprofit organization has.

Caroline Boyce founded Inter-Mission in 2016 to help nonprofit organizations achieve smoother transitions. A nationally recognized strategic thinker leveraging more than 20 years of accomplishment and consistency in nonprofit management, she has demonstrated ability at revitalizing and driving the growth of organizations through developing cost effective solutions. Caroline excels in the design of communications initiatives, and special events that increase profile, membership and maximize budgets. A registered lobbyist for 20 years, she has developed nationally recognized advocacy initiatives.

Caroline has worked with nonprofits in many capacities. She was a founding board member of 10,000 Friends of Pennsylvania and the Pennsylvania Downtown Center. She served as the chief staff executive of nonprofits at the local and state levels, including the Preservation Alliance for Greater Philadelphia—a 501c(3); the Pennsylvania Chapter of the American Institute of Architects—a 501c(6); and 10,000 Friends Advocates—a 501c(4).

Caroline is currently Chairman of the Board of Directors of 10,000 Friends of Pennsylvania, a member of the Board of Advisors of both the National Trust for Historic Preservation and Preservation Pennsylvania. She is a recipient of Preservation Pennsylvania’s F. Otto Haas Award for lifetime achievement. Recognized as a Certified Association Executive by the American Society of Association Executives, Caroline also has an MA from Cornell University and a BA from Connecticut College.

1 Comment

  1. J. M. Farris

    It is crucial to obtain a standard reference base for each area being assessed. This means identifying which standard to use. For example one may wish to implement a standard based on how your physical assets are depreciated in your financial statements. This can of course lead to a conflict of standards when you are confronted with changing code requirements that necessitate updating or replacement of some assets (for example fire code; codes of professional associations and accrediting bodies).
    This is a significant undertaking that only experienced and/or sophisticated organizations may undertake. I do not wish to say that this activity is only done by certain types of organizations but rather that the activity requires time and resources. It requires ongoing attention and potentially (dependent on size and complexity) personnel allocated to the system of review and maintenance that you establish.
    This activity also requires an understanding by the board, the auditor and auditing committee, and by each member of the organization charged with implementation and maintenance, Further, the budgeting process must support this as an organizational priority. Funders may need to be approached and involved.
    For many organizations the adoption of this may involve deciding how to gain the expertise required to establish baselines, current status and relative priority. Avoiding conflict of interest and potential compromise of professional standards by relying on board members and ‘volunteers’ must be considered as well. Perhaps most important is the consideration of organizational capacity – care must be taken not to over-burden current personnel and to set timelines that are very difficult to obtain. Many groups would be wise to look upon implementation of such an activity as “strategic” and may need to engage outside expertise to begin to conceptualize what the activity involves.
    I could continue to enumerate other concerns but it would be very detailed and not all organizations have the same needs. I will finish by saying that this is an important and even essential activity to ensure the vitality and safety of the organization.
    Do not run away and hide from this because it seems so BIG an activity. To protect your organization, to ensure its vitality and for your staff, volunteers and participants it is something that must be considered.