Should a CEO sit on the board of his/her own directors' companies?

Tuesday, June 25, 2013

Boards Risk the Future of the Arts When They Ignore the Youth of Today

I’m an arts buff. I love the theater, live music, dance, and the visual arts. You will often find me attending two or three plays in a weekend, or going to a museum and then on to a performance of jazz or modern dance. The more I dive into the arts, the happier I am personally, but the more fearful I am for the future of the arts. Why? I’m in my 60s, and I’m usually one of the youngest people in attendance, regardless of the genre. (Okay, so I’m not going to the rap concerts, but still….) I constantly worry about the future. Who will occupy the seats in another 20 years, especially in our classical venues?

Yes, there will always be a few young people who love Mozart or Swan Lake. In my own family I have a nephew and niece that are classical musicians. However, while young people will continue to make art, as people have done since the beginning of time, I worry whether there will be anyone who will support their art, who will buy tickets and attend the performances, allowing them to work at what they love.

This is an issue that I feel too few boards seriously grapple with. Yes, you see organizations that open up their space after work for networking and wine and cheese, but is that going to convert generations of younger people into dedicated audiences for the future? I think not. After all, it hasn’t yet. And if I’m right, what will?

Clearly, there are no easy answers. If there were, I wouldn’t be writing this essay. But I think our boards can take a more proactive role in trying to find solutions. Here are two specific approaches they can take to mitigate the loss of the arts as we know them.

Spend Time Wrestling with Generative Questions
Generative questions deal not with the “how,” but the “why.” Instead of asking, “How do we attract Millennials?” arts boards need to first understand the underlying nature of the problem. They need to ask, “Why aren’t they coming?” Is it, for instance, a lack of money to buy tickets? A lack of exposure to what is currently being offered – after all, very few people of any age are willing to spend money on an unknown? A dislike of what is being offered? A “coolness” (or lack of “coolness”) factor? An issue of not having the right clothes? A discomfort with being surrounded by people their grandparents’ age?

The board also needs to pay attention to the cues it is relying on to come to its conclusion. Is it assuming, perhaps, that young people don’t have the right clothes to wear because, on the rare occasions they do come to the theater, they always come in jeans? Or, did the board focus on the fact that less time is spent teaching the classics in school, and therefore the issue must be lack of previous exposure? To get it right, directors have to challenge their colleagues and ask questions like, “Are we focusing on the on the most logical explanations? Why do we think that? What else aren’t we considering?” They might even reframe the issue by asking questions such as, “What has our experience as parents/teachers/bosses taught us?”

The more information you have as a board, the more likely your decisions will be on target. Spend a significant part of each board meeting asking questions, delving into the “why” behind the “what” before attempting to answer “how.”

Include Young People on Arts Boards
If we want to attract the younger generations to the arts, we have to hear their voices. The best way to do that is put young people on our boards. Of course, “young” is a relative term. In Florida, for instance, “young” is often defined as under 60! But I’m advocating for YOUNG, including, though not limited to, high school and college age youth. These people are our future. They are the ones you want to attract as audience members. And, nobody knows better than they what is important to them.

Young people can serve on boards, even if state law prohibits them from are voting. Organizations like the Girl Scouts have been including them on boards for years. They serve next to adult directors and have all the same responsibilities for preparation and participation. In such organizations the adults have learned to respect the input of their young colleagues because they see the young people taking their job seriously and providing valuable insights to the group. (To learn more about how the Girl Scouts have successfully incorporated youth, read “Preparing the Board Leaders of Tomorrow by Involving Youth in Governance Today” by Olivia Selinger and Deb Walters, p. 187 of YOU and Your Nonprofit Board: Advice and Practical Tips from the Field’s Top Practitioners, Researcher, and Provocateurs, Terrie Temkin editor, CharityChannel Press, 2013)

Be sure to bring enough young people on the board to ensure a cohort. Nobody wants to be the only one “under 30” on a board. Typically recruiting three of anything – 20-somethings, Latinos or people with a dance background – ensures a comfort level for the directors, leading to better input and, ultimately, the best decisions for the organization.

These two approaches take work and neither is a magic bullet. However, invest the effort in experimenting with both and you will see a definite change for the better. Doesn’t your arts organization deserve the chance to enrich and extend its life?

Sunday, August 5, 2012


Could your organization use more money?

For most nonprofits, churches and synagogues, bequests are the most undervalued and under-accessed revenue stream. These end-of-life gifts can be used to enhance the quality of your programs and services, and in more and more cases they can serve as a financial safety net in the toughest of times. Established organizations with a significant number of prospects have the best chance for bequest success. If your organization, church or synagogue has 10 years or more of history and a market of at least 300 prospects, it is always the right time to start a Bequest Development Program. Here are some of the reasons why:

  • It is estimated that bequests comprise upwards of 80% of all end-of-life charitable gifts.
  • In 2011 charitable bequests totaled $24.5 billion, a 12.2% increase from the previous year.
  • Various studies have indicated that 8-18% of decedents leave charitable bequests.
  • Studies have also indicated that many more people would be willing to leave charitable bequests if asked.
  • Like other major gifts, the relative development costs are low.
  • In most instances, the majority of the prospect cultivation has already been done.
  • Bequest prospects are easily identified and prioritized.
  • Bequests do not compete with lifetime gifts and have been shown to positively impact lifetime giving.
  • Bequests can mean millions of dollars in new, untapped revenue.

While the general case for bequest development is ongoing, evident and strong; there are several factors that make right now the opportune time to start. These include:

  • The greatest generation of US philanthropists are aging. From our schools, to our churches, to our community agencies, they have built the institutions that provide essential programs and services to our communities and they care about what they’ve built. We have relied on them for support year in and year out and they have responded. What happens when they are gone?
  • The Great Recession has negatively impacted the charitable giving of many of our donors. Particularly our older ones; those who are on fixed incomes. They are frightened that they might “outlive” their money and be left without resources. They want to help, but are reluctant to give at past levels or even at all. Gifts from their estates, particularly residuary and contingent ones, are less threatening to their sense of security than lifetime gifts. It gives them an opportunity to make a difference to the causes they are passionate about, forever.
  • The Boomers, our largest generation, are at or approaching retirement age. As a result, many of them will be reviewing their financial and estate plans, and rewriting their wills and trusts. This is a great time for them to consider a charitable bequest.
  • Estate and Gift Tax laws are in flux. While we do not know exactly what the changes will be, we do know that any changes will necessitate the review of financial and estate plans for many of our donors. These reviews offer the perfect time for them to consider and integrate a charitable bequest in their plans.
  • The bequest development field is still not crowded. The competition for bequests is not nearly as intense as the competition for annual, capital and other lifetime gifts.

Can you imagine if your predecessors started a Bequest Development Program 5, 10 or 15 years ago? Think of how much easier it would be to manage the finances of your organization, church or synagogue today...

There is an old aphorism that goes something like this… the best time to plant a tree is 20 years ago. The next best time is now. As volunteers and professionals we have accepted the responsibility of leadership. Those of us with the wisdom to understand the positive and even existential impact a Bequest Development Program can have must find the courage to muster the resources to begin now.

By Irv Geffen, CoreStrategies Strategic Partner

Legacy Now Program

Thursday, March 1, 2012

Is a Strong Conflict of Interest Policy Enough? A Morality Play, Act I

The University of Miami and its president Donna Shalala got an early but ugly Valentine on February 13 when the community woke up to a front-page article in the Miami Herald entitled, "Shalala’s side job stirs up concerns." It turns out that Dr. Shalala has been sitting on two corporate boards with her trustees’ blessing. The fact that she is making for her board service more than $360,000 each year – on top of her greater than $1 million annual salary from the university – in a time of upset with the One Percent wasn’t the biggest shock. It was that the corporations are owned by university trustees.

First, I must say that I have always held Dr. Shalala in the highest regard and I trust that her ethical standards and those of her trustees Roger Medel (Mednax) and Stuart Miller (Lennar) are above reproach. I’m confident, too, that all three organizations involved here have strict conflict of interest policies to which they adhere. But that doesn’t mean that those who care about the University of Miami shouldn’t be apprehensive.

When working with clients I always suggest that the litmus test for any decision is how you will feel if you wake up one morning to find the resulting situation on the front page of the newspaper. Tuesday the 13th, it was. And the response wasn’t pretty, if the Herald’s Flashpoint comments on the Opinion page were indicative. This is a private university that relies on big donations, a number of which Dr. Shalala has personally influenced. The university is just kicking-off a $1.6 billion – yes, with a “b” – campaign. I have to wonder if this publicity won’t, at least in the short term, negatively affect charitable giving and consequently what the university can offer.

I worry about the independence of a board where there is so much overlap of leadership. The university and the community are not well served if, even at a subconscious level, trustees and/or the university president hold back from sharing their most creative ideas or raising challenges and critical issues – responsibilities inherent in good governance – because they are afraid that showing vulnerability in one setting will impact their role in another. Moreover, any other trustee who hesitates to speak his/her mind because s/he isn’t part of a perceived inner circle ultimately cheats the university of his/her best efforts.

A related concern is that by going back to the same small group of community leaders to sit on so many of our boards, we are getting only one, relatively homogeneous view of what the community needs. While presumably an intelligent view, it is still an insular one. More diversity on our boards could only benefit the university and the community as a whole.

I can appreciate why any CEO would want someone of Dr. Shalala’s caliber on his/her board. But she doesn’t have to sit on a board to offer insights. If she is going to sit on a board, she’d be wise to steer clear of the boards of her own trustees. The University of Miami Board of Trustees should insist on this. After all, that group is responsible for ensuring the health of the university. It can’t risk the loss of independence, diverse thought or potential donations.

The university has been rather quiet about this flap. Time will tell what the fallout might be. But in my mind the situation serves as a morality play for other organizations. Having a conflict of interest statement is an important first step. But in scientific terms, while necessary it is not sufficient.

What are your thoughts? Is this a lesson other organizations should learn from? Or, is it much ado about nothing? Perhaps Dr. Shalala, with a lens already on her football team, is just too big a target and others don’t have to worry. Are there situations where it is appropriate for the CEO of a nonprofit to sit on the corporate boards of his/her own trustees?

Wednesday, December 21, 2011

Is the Arts and Culture Community on Your List of Potential Collaborators?

Few would argue the value of arts and culture. The vibrancy of arts and culture within a community has long been a key indicator of its livability. Individuals and companies looking to move into an area frequently evaluate the number and diversity of offerings as part of their decision-making process. Art therapy has proven helpful in treating a wide variety of conditions, from Alzheimer’s to physical and emotional trauma. And, a great deal of attention has recently been paid to the substantial economic impact of arts and culture. According to the 2010 National Arts Index, a report issued by Americans for the Arts, economic activity in the U.S., while losing ground during the recession, is still a $150‐$160 billion a year business that puts more than 2 million people to work and increasingly attracts cultural tourists (the number of foreign visitors who attend cultural events or venues has increased 23% since 2003).

However, today we have another reason to value arts and culture. It’s being used “in increasingly diverse ways to engage and build communities and address the root causes of persistent societal problems, including issues of economic, educational and environmental injustice as well as inequities in civil and human rights.” (“Fusing Arts, Culture and Social Change: High Impact Strategies for Philanthropy” by Holly Sidford for the National Committee for Responsive Philanthropy, 2011) Artist-activists are pulling us in, forcing us to examine our assumptions and the way we do business.

To-date, most of this work has emerged from and been centered in the art world. Just one example from my community is the Center for Folk and Community Art, which involves the community’s residents in story-telling, using a combination of written work, murals and public presentation. In the past it has focused attention on societal issues such as gang culture and violence, bullying, abuse and violence in teen dating relationships, the environment and homelessness.

But, arts and culture could be so much more. It could be totally integrated into the fabric of social change, where artists sit at the same table as nonprofits, private businesses and governmental agencies committed to creating a healthier place for each of us to live. This is particularly important as the artistic voices of those who have previously often been disenfranchised – i.e., those making art outside of the better supported and recognized Western European, “classical” art forms – break through, since there is much to be learned from these voices.

According to the Animating Democracy’s 2010 report, “Trend or Tipping Point: Arts and Social Change Grantmaking” there are currently more than 150 funders nationwide that have recognized the value of supporting coalitions that are dedicated to social change and are inclusive of artists. I am proud that our own local community foundation is one of them. But what of the many nonprofits currently putting together coalitions to more successfully tackle community issues that are at the heart of their mission?

If your organization is contemplating collaboration, I would like to know if your board is considering the contribution artists, arts and culture could make in your success? How intentional is your board about including artists, especially those outside “mainstream arts and culture”? How are you going about finding the appropriate partners? Please write in and share your experiences and learnings.

Sunday, October 2, 2011

Power to the People: One More Reason for Boards to Listen to Their Communities

Smile Train and Operation Smile both provide (literally) face-saving surgeries to indigent children outside the U.S. born with cleft palates. Smile Train is actually an offshoot of Operation Smile, rising out of a difference in philosophy. Whereas Operation Smile sends doctors overseas to perform the operations, Smile Train uses local doctors. The spinoff, which occurred in the late 1990’s, left the two organizations bitter rivals. However, with the changes in the world the two organizations contemplated a merger this past spring that would have brought them back together again. Merger talks were suddenly called off though when donors of Smile Train representing 82 million dollars in contributions expressed opposition to the proposition – some quite publicly.

This is but one example of what those of us who closely follow the many news briefs and RSS feeds from the sector are increasingly seeing (special thanks to Ruth McCambridge, editor of The Nonprofit Quarterly who along with her colleagues put out an excellent daily feed and recently raised this particular example at the Alliance Conference in Oakland, California) – community stakeholders who are mad as hell about some of the decisions being made in their name. And, they aren't just going to take it any more. (For those too young to get the cultural referent, rent the 1976 film Network. It’s probably more relevant now than when it was released.) The public brouhaha that embroiled Smile Train and Operation Smile is just the latest volley in a trend that began with donors wanting a say in how their money is spent. It is a trend that intensified with those donors demanding the return of their money if they feel that the intent behind their gift is not being honored. And, it is a trend that became a runaway train with the decision of an increasing number of stakeholders to pump their financial and human assets into new organizations when they sense the legacy organizations are failing to achieve sufficient or desired impact.

Boards today must recognize that the marketplace will drive which nonprofits shall live and which shall die. If boards aren't paying close attention to what their stakeholders deem important, they may find their organizations on the list of failed entities and their personal reputations sullied for betraying the community’s trust.

To me, the lesson is obvious. Someway, somehow, boards must listen – really listen – to their stakeholders. This might be done informally as long as there is some intentional way of capturing the data on an ongoing basis, such as including BTW Talk on every agenda. For those who have not heard me explain this before, the BTW Talk involves scheduling 20 minutes or so at each meeting to discover what board members have been hearing in conversations with friends, family and colleagues since the last time the board met. These are conversations that could potentially impact the organization and its mission in some way and often start with, “By the way….”

Or, it can involve instituting a means for gathering information on a more formal basis. For instance, the board might contract to survey the community on a regular basis. These surveys can be done online, through the mail, in person or over the phone. Interviews, insight or focus groups, and large-scale change methodologies such as World CafĂ©, Future Search or Appreciative Inquiry can also be employed to garner the community’s insights.

The focused and purposeful use of advisory councils is another means of tapping into what the community needs. So is bringing greater diversity into our boardrooms. One way to do this is to choose a model such as Community Engagement Governance (see Freiwirth, Judy. “Engagement Governance for System-Wide Decision Making.” Nonprofit Quarterly. Summer 2007. pgs. 38 – 39), which actually shares the power of decision-making with different individuals in the community based on their interests and areas of expertise. The key in all of these cases is to truly give weight to what the community is saying and not just employ the techniques as window dressing.

Since this list is by no means inclusive, I am anxious to hear what others have used to stay in touch with what their stakeholders are thinking, feeling and desiring. Please share your success stories and your “learning experiences.”

Wednesday, September 28, 2011

Living with Hope, Part 4

In Parts 1-3 (please read those first if you haven't already), I talked about how my colleague Jim Mueller's blog about keeping a sense of hope during these challenging times inspired me to write about my amazing 3-legged Husky who happens to be named Hope. Her story may remind you of what we (and our organizations) are capable of if we approach each day with a focus on the gift of the now, while not losing sight of the possible (our vision).

Becoming part of the "pack" (human and dog) at the dog park has been an amazing journey. Hope and I tried out several dog parks (we are really lucky to live in an area where dog parks are plentiful) and settled on one that is close to our home. We began going almost every day at about the same time, early evening. Soon, Hope formed friendships with a few of the regulars and then so did I.

For about a year, none of us knew anything more about each other than our first names. Our conversations were very dog-oriented. Then, over time, we all began to bond in other ways, talking about work, personal life, challenges, joys. During the past four years, one of the pack got breast cancer, and we all got together to help with daily needs including care of her dog while she went through chemo and radiation. We celebrated births. We have been through deaths of loved ones and of beloved pets, and welcomed puppies. We helped out when someone had a car accident and couldn't drive for a while. We began to give and refer business to one another. We began to have parties! One of us who by day is an accountant is a drummer in a local band, so we go and dance when he plays.

We have become a really committed group of friends with the love of dogs as our core value. It just feels good, natural and comforting. We watch out for our dogs and for each other. Our daily time together in the park is when we get to leave the day behind and truly live in the now. We watch the dogs play and catch up with each other. And I know that Hope has a special place in the hearts of this group. I hear the pride in their voices when they describe her, how amazing she is, when new people come to the park and ask about her missing leg.

If you are reading this blog, you are probably involved in the nonprofit world and have no trouble understanding what I am saying. It doesn't hurt to remind ourselves that one of the reasons we do this is because we like to be around other people whose values match ours, people who care about others (human and animal) and want to make the world a better place. Through our work and our lives outside of work, we keep going forward with our commitment to change and better our communities. It's what we are about.

On that note, I would like to end this blog series with the last of my Hope-isms to add to the 13 on the previous posts.

  • Climb a tree while you still can

  • Live in the moment, especially if it includes a roll in the grass

  • A good massage does wonders for aching legs

  • Knowing when to back off is as important as knowing when to stand your ground

  • Protect your friends, especially from bullies

  • Jump up and run to the door when your loved one comes home, even if it takes you a few minutes to get your balance

Monday, September 26, 2011

Living with Hope, Part 3

In Parts 1 and 2 (please read those first if you haven't already), I talked about how my colleague Jim Mueller's blog about keeping a sense of hope during these challenging times inspired me to write about my amazing 3-legged Husky who happens to be named Hope. Her story may remind you of what we (and our organizations) are capable of if we approach each day with a focus on the gift of the now, while not losing sight of the possible (our vision).

After Hope and I had been living together for about a year, I began to research what types of assisting devices might be available to help her. As it turns out, there is really nothing much out there for dogs missing an entire front leg. I did find something I thought might be helpful to her. It was a two-wheeled cart with supportive fabric that fit around her chest. Her one front leg rested off the ground while the wheels supported her.

I was very excited on the day we went to try out this device -- Hope, however, not so much. She gave me withering looks during the fitting. I kept thinking "But wait until you see how much fun you will have with this!" Oh, was I wrong. Cart in place, Hope tried to walk toward me. But instead she began to circle. The harder she tried, the faster she went in a full circle. As it turned out, because of the imbalance the device caused, it was impossible for her to propel herself forward. I actually think the whole episode embarrassed her. That was the last time I went in search of a "fix." Hope doesn't see herself as needing fixing -- I was the one who did.

So we have now been together almost five years. Hope is thriving. In my next and last post, I'll give you a sense of our daily routines. I do believe one way or another Hope had a vision of this good life when she was struggling to survive on the streets of Miami. If she thought her entire life would be days full of pain and suffering I doubt she would have lasted. Along with the seven Hope-inspired life and work lessons I listed in Part 2, here are seven more. We'll conclude the list in Part 4.

  • Rest when you need to

  • A good howl every now and then is very cathartic

  • A little dance before heading out the door for a nice walk puts you in a great mood

  • A good head to toe stretch before your walk is also helpful

  • A great attitude goes a long way in assuring a fun day

  • Keep your ears clean and listen more than you talk

  • Always be making friends