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Nonprofit Management: Crash Course

Nonprofit Management: Crash Course. Prepared for the Fisher Board Fellows March 12, 2010 Stephanie Moulton, PhD John Glenn School of Public Affairs The Ohio State University Moulton.23@osu.edu. On Being Nonprofit. Defining Characteristics of Nonprofit Organizations.

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Nonprofit Management: Crash Course

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  1. Nonprofit Management:Crash Course Prepared for the Fisher Board Fellows March 12, 2010 Stephanie Moulton, PhD John Glenn School of Public Affairs The Ohio State University Moulton.23@osu.edu

  2. On Being Nonprofit

  3. Defining Characteristics of Nonprofit Organizations • Non-Distribution Constraint • Self-Governing • Non-Compulsory • Public Benefit/ Public Purposes

  4. Types of Nonprofit Organizations

  5. Funding for Nonprofit Organizations http://www.fas.org/sgp/crs/misc/R40919.pdf What is the largest source of revenue for nonprofit organizations?

  6. Why do Nonprofits Exist? PeterFrumkin

  7. Why do Nonprofits Exist? PeterFrumkin

  8. Why do Nonprofits Exist? PeterFrumkin

  9. Why do Nonprofits Exist? PeterFrumkin

  10. Managing Nonprofits to Increase Impact

  11. Capacity for Impact Defining Capacity Building Capacity • Capacity is everything an organization uses to achieve its mission (Light 2004) • Vision & Planning • Board Governance & Structure • Financial Management • Human Resource Management • Fundraising & Resource Development • Programs & Evaluation • Public Relations & Collaboration • Building organizational capacity is essential to achieving maximum social impact (Adapted from McKinsey, VPP)

  12. Capacity Assessment & Capacity Building http://www.vppartners.org/learning/reports/capacity/capacity.html “All too many nonprofits focus on creating new programs and keeping administrative costs low instead of building the organizational capacity necessary to achieve their aspirations effectively and efficiently”.

  13. Aspirations (Vision) and Strategy Moore, Mark H. 2000. Managing for Value: Organizational Strategy in For-Profit, Nonprofit, and Governmental Organizations. Nonprofit and Voluntary Sector Quarterly 29:183-208.

  14. Governance and Board Responsibilities • Duty of Care • Understand Mission, Purpose, Governing Documents • Attend Meetings and Come Prepared; Informed Decisions • Duty of Loyalty • Interest of Charity is Always First, Not Personal Gain • Disclosure and Avoidance of Conflicts • Duty of Obedience/ Compliance • Familiar with State and Federal Laws for Nonprofits • Duty to Maintain Accounts • Financial Oversight • Prudent Investment and Use of Resources

  15. Assessing Nonprofit Governance • Independent Sector’s • 33 Principles in 4 areas: • Legal Compliance and Public Disclosure • Effective Governance • Strong Financial Oversight • Responsible Fundraising www.nonprofitpanel.org

  16. Human Resource Management • The role of people in nonprofit organizations • What is unique about the nonprofit sector? • What is the same about the nonprofit sector? • Motivating people • Fit (KSAs) • Embeddedness • Unique Nonprofit Sector Motivations? • Intrinsically motivated • Desire to produce quality service • Desire to assist in production of public good for society • Other utility than profit

  17. Human Resource Policy • Adopt an Employee Handbook • Clearly communicates all employment policies and has been reviewed for legal compliance • Adopt an Ethics Policy • Employment on merit, qualifications and competence; laws for fair employment followed • Document Employee Evaluation Process • Constantly Review and Update Policies for Fairness • Designate an Individual Responsible for Policies • Typically the ED in smaller organizations • Consistently Apply Policies • Consistently apply within each group (exempt, non-exempt) • Periodically audit and update policies and practices • See items to review http://www.probonopartner.org/PBPGuide/frame.htm

  18. The Nonprofit Leadership Crisis Replacement Theory Stuck On Arrival • 75% of nonprofit executive directors plan to leave their job within the next five years. • 2001 survey, Daring to Lead • 2006 survey, Daring to Lead • 640,000 vacant nonprofit senior management positions over the next 10 years (Bridgespan, 2006) • Only 17% of the executives planning to leave their job were going to retire, or leave the sector. • 2006 survey, Daring to Lead • No room at the top? • Transition and job design strategy rather than recruitment strategy • Working Across Generations: Defining the Future of Nonprofit Leadership (2009)

  19. Managing Fundraising • Engaging individuals is a strategic decision for the nonprofit organization to increase impact- not just raising money • Habitat for Humanity • Give people concrete experiences • Not just opportunities to volunteer; appeal to need to belong • Allow people to express themselves • Create evangelists • Spread the cause • Sustain communities • Create communities of givers

  20. Other Resources • Types of Nonprofit Organizations and Political Advocacy: • http://www.afj.org/for-nonprofits-foundations/resources-and-publications/about-advocacy-getting-1.html • See specifically: http://www.afj.org/assets/resources/resource1/Comparison-of-501C3S-501C4S.pdf • Unearned Business Income Tax (UBIT) and Nonprofits (some good examples too): • http://www.irs.gov/pub/irs-pdf/p598.pdf

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