Governance versus management in non-profit organizations

Poor governance significantly increases the risk that a non-profit organization or social enterprise will under-perform or close down.

Yet for some reason, many governing bodies struggle to perform their duties effectively. These mandated structures seem more interested in micro-managing staff and processes, when they should be helping to lead organizations into their strategic future.

Ultimately, when a governing body stops providing effective and foresightful oversight and starts doing managers’ jobs, then the executive management team is undermined. Blind spots start to appear in the organization’s strategy. This can be fatal.

This article will explore the differences between governance and management. It will unpack what tends to go wrong and how to fix it. It will also contain insights from a lawyer I work closely with.

Reduce overwhelm by fine-tuning your organization’s systems

Too many leaders have been consumed by their organizations. They’re too busy putting out fires to think about how they want it to run. They’re spending too much time in the “engine room” of their organization, rather than providing strategic direction from the captain’s chair.

I believe that we should learn to adequately appreciate and respect the important systems in our organizations. Then we can then begin to fine-tune them and get things running the way we’ve envisioned

There are signs of automation everywhere; fear of artificial intelligence taking jobs; and the “fourth industrial revolution” haunts the media. The good news is that if we learn to see and work with systems, then we’ll be able to benefit from these trends. We can use them to increase the sustainability and impact of our organizations.

This article will unpack my view of organizational systems and the benefits of working with them.

Assessment for revenue strategy

This 1-page Strategy Brief shows the areas we typically assess when asked to design a Revenue Strategy for a non-profit organization in South Africa.

The findings from this assessment create the foundation we need to design a suitable strategy. This framework is based upon a recent proposal I developed for a client.

Note that we “revenue” as the money that an organization earns through the sale of goods and services (i.e. trading activities). A subset of income.

Assessment for income-generation strategy

This 1-page Strategy Brief shows the areas we typically assess when asked to design an Income-Generation Strategy for a non-profit organization in South Africa.

We try to establish what is going on, working or not working, and what should change or be improved. The answers create the foundation we need to design a suitable strategy. This framework is based upon a recent proposal I developed for a client.

Note that we define “income” as the money coming into an organization, which has been earned or given. Income includes donations, grants, dividends, fees for the sale of goods and services etc. Income includes the donation of non-monetary things (e.g. time, goods and services). Income includes revenue.

Keeping your non-profit organization going: which strategy do you need?

South African non-profits are struggling to generate the income they need to fulfill their purpose and sustain themselves. As such they are embarking on a mix of strategies to improve their circumstances.

However, I’ve noticed that many non-profit organizations in South Africa are confused by the differences between a “revenue strategy” or “social enterprise strategy”, an “income-generation strategy”, a “sustainability strategy”, and an “organizational strategy”. This has led to much confusion with specialists like me being asked to design one type of strategy when an organization wants and needs one of the others.

This article aims to clear up the confusion around which strategy to invest in. It will clearly explain the differences between these four strategies and indicate when each is required. It complements my social enterprise glossary which aims to improve strategic clarity through clarity of language.

Income sources and types

This 1-page Strategy Brief shows the difference between Income Sources and Income Types.

Social Enterprises and Non-Profit Organizations are able to access a broad range of customers and income sources, which they can contract in different ways. It is unwise to think in very narrow channels based on one’s legal form. Here are some ideas.

“Necessary endings”: why we need to make them to move forward

We are all called upon to make endings in our work and personal lives. This can be a painful process that many of us postpone until it is too late. Endings can also be enabling – they can help us get unstuck and move forward in the right direction.

Learning how to end things is both a life-skill and a leadership-skill.

However, it is one of the things that my clients most struggle with – how to identify when to end something and knowing how to do it in the right way.

The book “Necessary Endings” by Dr Henry Cloud is profound and changed how I work with endings. It is the book that I most frequently recommend to clients. I encourage you to read it. This article pays homage to the wisdom in this book.

This article discusses some themes from the book that are most relevant to my consulting work. It adopts an organizational focus, while the book also explores the role of endings in our personal lives. This article will get you thinking more about the inevitability and value of endings.

Social enterprise glossary

I’ve designed this glossary to help social enterprises and non-profit organizations in South Africa think clearly about their strategies and business models.

Strategic clarity involves clear thinking, and clear thinking requires clarity of language. Many of us also rely too much on jargon, which clutters our minds and encourages lazy and fuzzy thinking.

Here is some of the terminology that I regularly use in my consulting practice and lectures, and my short descriptions of what each term means in simple English.

Charity and philanthropy need to work hand in hand

Charity is seen as a virtue by humanists and all major religions. But it has also been polarising. Some people believe strongly in it and feel that it reflects the inner heart of humanity, while others believe that it cultivates weakness and dependency amongst the underserving. Even the ancients grappled with the very practical implications of charity.

Nowadays, the news is full of stories of philanthropists who have given their fortunes away to help others and for the betterment of society.

This article explores the concepts of charity and philanthropy, the similarities and differences, and when each is appropriate. It is not a deep dive into these topics, but rather a high-level review.

This has been one of the hardest articles for me to write. I’ve thrown out two earlier versions, started from scratch and done more research and thinking. Even though I’ve been in this field for 22 years, I’ve realized how my passion for social entrepreneurship had obscured my appreciation of charity. I’ve also learned when charity is the only moral and appropriate response to a situation.

Donors 10% overhead requirements do more harm than good

In the effort to be a good custodian of their philanthropic funds, some donors impose a cap on overhead expenditure (i.e. indirect costs). This amount is typically somewhere between 10%-20% of total grant value.

These organizations, and much of the public, believe that by limiting such expenditure, they will be getting more value-for-money; that the endeavour will be more moral. This belief is based on a superficial view of how non-profit organizations achieve impact.

While there may be contexts when this rule is appropriate, its blind application can easily harm good organizations.

Justifiably, this method of funding is frequently referred to as the “starvation cycle”.

This article will explain what is meant by the 10% overhead cap, how it can easily do more harm than good, and how donors can use much better measures to judge the merit of their philanthropic investments.

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