Non-profit organization
Non-profit organization Essay
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Introduction
A non-profit organization, usually abbreviated as NPO, is an organization that uses excess revenue with an intention of achieving its goals instead of distributing the revenues to other organizations as profits or even dividends. Despite the fact that the non-profit organizations are allowed to generate excess revenues, they are obliged to be retained by the organization for self-preservation, expansion or even plans. The NPOs have their leaders or controlling members who are also called the board members who encounter several issues or problems in their leadership. This article critically analyses a real-world leadership problem by expounding on the issues that leaders or the management face in nonprofit organizations. Aside from that, it further explains the skills that the nonprofit sector requires of its managers and leaders for the success of their organization. This is a strategic means of solving the real world leadership problem in the nonprofit through expounding on the roles and the responsibilities of the board members.
Leadership Problem in Non-Profits
Non-profit organizations face challenges, which are believed to involve the need for an improved execution in their areas of fundamental concern. These areas are the mission focus, board governance, succession planning, fundraising, and development and more so, the performance measurement (Leadership groups support area non-profits, 2013). Usually, the nonprofits that lose their way have these issues at the root of the problem, all of which revolve around the problem of leadership foundation.
The mission focus matters the most (Wells, 2012). For the profit corporations, leaders have the ability to assert with ease that they have a mission to maximize the shareholder value. This is not the case with the leaders for the non-profit organizations. The non-profit leaders lack that inherent purpose in clarity. They, thus, experience a mission creep, which remains the greatest threat to them. This issue is mainly caused due to the lack of the leadership foundation in the non-profit sectors, however, there still exists countless of external and internal stakeholders, who can lead such an organization astray. For example, there exist many funders who exert subtle but fierce pressure to the non-profit organizations with a purpose of broadening their mission in order to accommodate a particular grant-making interest (Hamlin, Sawyer & Sage, 2011). However, there exists some extraordinary leaders in the non-profit sectors who have the ability to celebrate their accomplishments and at the same time, share their best practices with others. They find it right to say ‘No, thank you’ to those funders who grant to cause mission creep (Business Policy and Strategy Conference Paper Abstracts, 2003). They choose to do what is in the scope of their mission and not what the funders are telling them to do. That, however, may cost them a lot but the non-profit leaders who are smart understand the cost of saying yes to the funders. Mission creep has the ability to stretch the resources of the organization so thin in that it ends up losing the ability to pursue its core goals.
Mismanagement of resources is a particular problem with the non-profits organizations. This is because the employees do not account to anybody with a very direct stake in their non-profit sector. For example, an employee is able to start a new program without telling the management and the rest of the staff about the complete liabilities of the program started (Clark, 2012). Rather, the employee will be appreciated for improving the reputation of the organization, attracting more donors and above all making the other staff happy. Indirect liabilities, affect the financial sustainability of the NPO negatively making the organization to have financial problems unless very dire controls are instated.
A better board of leaders will make a better non-profit organization. Members of the board of a nonprofit organization are obliged to engage both directly and very deeply into the work of their organization. Failure to that, the board meeting will degenerate into the rubber stamp exercises that could end up depriving the non-profit leaders of a much needed strategic guidance. The board members on their part would feel that their time is not spent in the right way. For example, the leaders at the Mothers2Mothers, which is a Kravis Prize organization, take that lesson to heart. The board members, according to Andrew Stem who is the board chair, talk and argue a lot to an extent where the meeting could be exhausting (Osula, 2014). They attend meetings to guide the organization’s strategy and to make the critical decisions.
The composition of the board is an equally important matter. A board that is constituted of the diverse composition of professional backgrounds with different representatives from the private sector and various segments creates a rich and more so, ultimately very helpful discussions which further balances decision making in board meetings.
In leadership foundation, there must exist an intentional succession planning. In organizations, nothing succeeds like succession (Doh & Quigley, 2014). An intentional succession planning is important for any organization. More so, it is an absolute imperative to any social sector that is led by a dynamic and visionary founder. The founder transitions are burdened with different potential challenges. These challenges pivot around the primal and the life and death issues rather much more than on the institutional and the organizational ones. The personality traits that drive most founders, for example, an urge to get the apparent constraints, make it quite hard for them to see their mortality like something they are forced to plan for. Succession planning has no time and it is never too early to start it (Doh & Quigley, 2014). This is another issue in the leadership foundation mostly experienced by leaders in the non-profit sectors. The problems and issues experienced in leadership foundation have the ability to bring down an organization because without a strong leadership foundation, the organization will not be able to run well. It is quite a necessity that has been assumed with the non-profit sectors and they need to be addressed in a more professional way.
Informed Suggestions on How to Address the Problem
In order to have a good and strong leadership foundation, the non-profit organizations need to have a strong and innovative leadership and more especially during uncertain times. The main governance competencies in the non-profit sectors involve the board leadership, performance measurement, strategic stewardship, and the financial oversight (Harrison, Murray & Cornforth, 2013).
The world today experiences very challenging environment of business. The board members of the non-profit organizations are required to effectively coordinate several key functions of governance. These functions range from the broad vision of the mission of the organization so as to define the specific metrics of performance measurement. Governing for Non-profit Excellence is designed so as to help the individual members of the board to enhance the leadership and the stewardship that they deliver to their organizations (Hess & Bacigalupo, 2013).
The members of boards of the non-profit organizations are required to start off in the right way. This could be easily done with an orientation program that is supposed to introduce them to the basic duties, roles and the responsibilities to serve as a good non-profit board member. This could at the same time involve the special issues that specifically pertain to the mission of the non-profit organization (Athanasopoulou, 2012). Other than that, it could also involve the information on the governance policies, accountability practices and review and approve the performance and compensation of the executive director. The governance policies remind all the board members about their legal duties together with their fiduciary duties. An example of the accountability practices is the need to disclose the conflict of interest.
During the recruitment of the board members, it is quite necessary to consider using the board member agreement so as to ensure that all members are on the same page. The board members excluding none are ambassadors to the community and that advocates for the nonprofit’s mission. The non-profit sectors are obliged to stand right for their mission, which is a discussion guide to use in the board. The organization’s president, secretary, treasurer among others should ensure they get to know in detail what is needed of them for the specific roles that they will be playing as non-profit officers (Athanasopoulou, 2012).
The board members should be highly educated about the organization. This is offered mainly by the State Associations of the nonprofits in which they offer the brown-bag lunches, roundtables, in-person seminars on the topics of governance and webinars (Karakas & Sarigollu, 2013). The roles and the responsibilities of the board are also included in this. Aside from the State Associations, other community-based sources are also involved in the education. These include the community foundations, local volunteer centers and above all, the university or college management programs for the non-profits.
Solving the non-profits leadership problem on foundation could also involve a local option. This is an option to seek a probono consulting so as to engage a consultant who is an expert in management in the non-profit sectors. The purpose of involving an expert in the non-profit management is to make it possible for him to work directly with the members of the board.
Some organizations however may not be able to involve a consultant or even get someone to train the board members. This does not mean that the organization will have to carry on with its leadership issues and problems. This is because there is still a better option for this; the consideration of the free online training on the ‘board basics’ which is developed by the CompassPoint (Laying the Foundation for Future Leaders, 2014). This is a leading authority in the board governance issues and offers a great numerous publications as well as webinars, national leadership conferences and in-person seminars.
There should be a significant commitment to management and development of leadership for the non-profit sector organizations. The critical factor for every non-profit organization to have the ability to sustain its strength is being able to hone in during hiring, developing and retaining the pool of best talent so as to ensure that it has the ‘bench’; that is, the organization’s own generation of next leaders to have to move the organization forward.
The non-profit managers and leaders will definitely find themselves challenged to maintain the health of the organization together with the health of their careers if the organization will stay without a team of leadership where all the members are able to fully contribute to the organization. The non-profit sectors are required to attend to the issues of succession planning, human capital management and the allocation of resources to impact its management and the preparedness in leadership (McCleskey, 2014).
Conclusion
In conclusion, leaders at high levels in the non-profit sectors are seen as needing more of everything in the organization. The ethics, values, the board, and the committee development are among the most important competencies in an organization regardless of the level of leadership. The leadership foundation must involve all these, and it is mandatory to get to address the problems that leaders face for the organization to run smoothly. Leaders should examine the issues of critical concern to the board members by clarifying the organization’s mission and identifying who will lead it, assessing the organization’s objectives and plans strategically for the future, exploring the efficiencies that are related to mergers, revenues and alliances, creating value added leaderships in board processes and ensuring that the finances are compliant and sustainable.
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