Stanford Social Innovation Review

Your organization can legally discriminate on the basis of religion because it is a religious organization and your ministry requires members of your faith. The exception that allows you to discriminate on the basis of religion acknowledges religion as a Bona Fide Occupational Qualification (BFOQ). This is a discrete exception and does not extend to the other classes protected by federal law. In fact, the other position requirements you list-- humility, team playing and willingness-- should be evenly distributed throughout all the federally protected classes. Within the candidate pool of individuals of your faith, you should be able to find people of varied age, gender, marital status and physical condition, all with the ability to perform the job duties successfully.

If you go to FindLaw, you'll enhance your understanding of federal discrimination laws and the reasoning behind them. Some specific sections of interest are those on employee rights , discrimination rules for hiring employees and Bona Fide Occupational Qualifications, the exception to discrimination law which allows you to discriminate on the basis of religion.

That said, I'd like to offer a few suggestions for making your recruitment process more efficient while remaining within federal hiring guidelines. If you haven't already done so, it would be helpful to write out specific job duties related to the ministry postion. I'm guessing that some hesitations in hiring may revolve around travel and relocation and residence in remote, underdeveloped areas. Don't be afraid to spell these out in your job description; for example, you can say,"ability to thrive in a a two-year stay in another country" or "ability to function in a remote area, one hundred and fifty miles from the nearest city." This will help people self-select, and will leave you with a pool of candidates who believe they can perform the requirements of the job. Under the law, you need to give equal consideration in hiring to these applicants, because although they may not fit your historical experience or ideal profile, there are always exceptions. And, I'm sure some exist right in your organization. Second, since it is important that every step of your hiring process be viewed as non-discriminatory, it would be helpful to include your inhouse counsel and/or an outside employment attorney in a review of all materials, from website and other job advertising, to application and interview format and testing, to offer letter. Third, in order to make nondiscriminatory hiring practice work in the organization, educate all of your staff in unbiased hiring processes, so they are within federal law in all written and verbal communications.

The best overview I found about the process for setting up and administering scholarships is here: http://www.finaid.org/educators/awarddesign.phtml

I think that a good place to start would be contacting the Scholarship Management Organizations mentioned in the article. Even if you don't choose to use their services, they can educate you about the different requirements for establishing a scholarship fund.

I recommend that you start with the National Center for Charitable Statistics (NCCS), a project of the Center on Nonprofits and Philanthropy at the Urban Institute. As "the national clearinghouse of data on the nonprofit sector in the United States," NCCS provides data that should help address your current question as well as serve as an excellent future resource. If you find the data categories used in the tables showing nonprofits by activity/type aren't a perfect fit, the NCCS website offers assistance through both email and a toll-free number.

There are many advantages to forming a non-profit corporation with its own TIN. For example, the establishment of a non-profit corporation is a requirement for accepting tax-deductible donations. Please see the following articles for more details:

Five Reasons to Incorporate Your Nonprofit Association

IRS Streamlines Tax Exemption Application for New Non-profits

Starting and Building A Nonprofit

Stanford is a leader in Social Entrepreneurship research. You can visit the Center for Social Innovation's website to see what's been done at Stanford that may help you in developing your project. I like the Stanford Social Innovation Review (SSIR) in particular for insightful articles about Social Entrepreneurship. Here's one article that may be of value to you. The author of that article has recently published a book called The Search for Social Entrepreneurship that might help.

Lastly, this article about funding models in SSIR is the best that I have read in many years. Getting the funding model to work essential to any project.

I suggest you start with the books published by Nolo Press for starting a non-profit. One good one is titled "Effective Fundraising for Nonprofits". There's also another title from Nolo called "Starting and Building a Nonprofit" that should also be very helpful.

I've personally used Nolo books in many aspects of my professional and personal life and found them to be extremely helpful in laying out all of the steps needed to complete a project. Please write back if you have further questions.

Your model is quite interesting. Here are the existing non-retail stores/non-web models that I know of:

• Door to door sales: Cub scouts (Popcorn, candy), Girl Scouts (cookies)

• In-home parties: Tupperware (food storage), Avon (make-up), etc., Magazine subscriptions

• Auctions and fundraisers: Schools, PTAs, churches, etc.

Scarfs probably would do well in an in-home party setting. Here's a list of firms that sell jewelry and accessories in the home.

Perhaps some of these groups are interested in sustainable development and social innovation and would be willing to stock your products.

I'm sure that you're currently working through your network of contacts for referrals. Given the trust you need that another person will have the commitment and business savvy to start up and manage the enterprise, the personal referral route is likely the best. To develop additional contacts, I suggest two sources; one is Social Venture Network a membership organization which "inspires a community of business and social leaders to build a just economy and sustainable planet." In addition to providing resources on social transformation, the website contains a list of member-led enterprises. The second is a recent Business Week article on America's most promising social entrepreneurs. Some of these individuals may have referrals as well as additional ideas for you.

As backup, you may want to browse some of the newer websites specializing in social entrepreneurship positions (for example, Social Edge); posting a job on them is generally free or relatively inexpensive. I would also recommend Craigslist for "shaking the bushes." It has a large and diversified readership, and, among the many resumes you generate, you may find a few really intriguing candidates for the position.

I looked for a centralized resource for funding double-bottom line companies and didn't find one. I'm not an expert in this area, so I suggest you find one to talk to about your organization and the funding options. The Skoll Foundation's discussion service, SocialEdge, has a forum for funding discussions with a number of contributing writers. Perhaps talking to those who are actively involved in the field, such as the bloggers on the Skoll site, will give you some specific information on prospective funders to approach. Contacting other organizations with similar missions could also be useful. Here's a for-profit group focused on college access in Maryland. I don't know if you'll find a centralized resource, but I'm confident that you can create your own list by talking to those in the industry who are closest to funders.

I suggest you talk to others in your industry that have received funding for BioDiesel development projects. Here some links to companies/executives that should be able to point you to potential funders for your project.

• CrunchBase
• greenline Industries
• Innovation Fuels
• Homeland Energy
• Biofuels Journal article
• REG Fuel

I also suggest you contact the Virginia Business Incubation Association to find a local business incubator. As a non-profit building a "green" business, you may qualify for special funding programs. Here's such a program in Iowa. The staff at one of Virginia's incubators should be able to tell you more about such funding programs.

Lastly, if you haven't already, I suggest you contact DOE to find out about their funding for Biomass projects.

I suggest two recent publications which address merger and acquisition activity in the nonprofit sector. An article by The Bridgespan Group evaulates nonprofit merger and aquisition as a strategic tool through case studies of nonprofit organization mergers. And second, an article in the The National Law Journal addresses the "velocity" in consolidation activity. Together, the publications will provide you with some strategic and legal implications of merging entities as well as names of organizations you may use for your research.

The best way to find a mentor – in any field – is to find people who are doing the type of job to which you aspire (or doing jobs that you find interesting, if you don’t yet know what your career goals are). Ask them if they might have some time – whether it be 10 minutes in their office, or time to have coffee or lunch – when you could “pick their brain” and learn more about their career path. People, generally speaking, love to share their experiences (or just talk about themselves) so this shouldn’t be too difficult. You should ask to meet with a number of people to get different perspectives. You will also notice who is more helpful and who you “click” with, more than others. You might start by asking each person questions like:

• What was your background prior to this role?
• When did you become interested in this field/this position?
• What do you think is the best experience or training one could receive to prepare them for this role?
• How might I get this experience/training?
• What do you wish you knew when you were at my level (in my career), or when you were starting out?
• What’s the best advice you ever got related to your career?

In wrapping up the conversation, you might also ask:

• Would it be ok to check in with you from time to time to ask you questions/get advice/update you on how things are going?

This way, you will have explicit permission to keep the relationship going. Mentors may work within or outside of your current organization or sector (for example, a college professor or a retired executive) so consider diverse sources for your mentorship.

As a starting point, I suggest you obtain a copy of Nolo's "Starting and Building a Nonprofit"

There's a subchapter heading "Do you Want Tax-Exempt Status?" that may be helpful in answering your question. I'm not able to provide specific advice since I'm not a lawyer. I've used Nolo books in my own work to familiarize myself with the issues involved and then make an informed decision about whether to hire a lawyer.

Thank you for your challenging question. While the transition that you're planning is fairly common these days, it seems to be quite a frontier in terms of written materials, particularly in organizational development. I suggest you begin by reading my piece on organizational development on the Alumni Consulting Team web site for Stanford’s Graduate School of Business, and my recommended resources on organizational change and management. This reading should give you a basic understanding of the potential human and other resource factors—including restructuring, movement and training of people, technology, leadership and hiring—you might confront in undertaking your initiative. The second step is to consult with analogous organizations that have undergone a similar transition from print to online publication to learn what to expect and how best to proceed. Ideally, you or your colleagues might have contacts within these organizations who would be willing to share their experiences. If not, as a starting point, research in your law library might yield listings of policy, advocacy and/or law organizations that already publish online journals. The American Bar Association might also be a source of referrals.

Unfortunately, I can't recommend a specific person for the role of designing a social entrepreneurship program. I don't know if universities like Stanford and Harvard designed their programs with the aid of consultants or had staff members take on the project. I suggest you contact Exec. Directors of such programs to find out what's working, what's not working, and who can help you with your project. Here's a short list of such programs: http://money.cnn.com/magazines/fsb/bestcolleges/2007/social/ http://www.aacsb.edu/members/communities/interestgrps/socialdoc.asp

In all consulting engagements, you don't want to pay for someone else's on-the-job training. Therefore, I suggest you talk to experts in the area of nonprofit mergers and organizations that have just completed mergers to get recommendations for consultants. Here are some articles and resources related to nonprofit mergers:

1. Article in Boston Globe, April 15, 2009 La Piana Consulting, specializes in coordinating non-profit partnerships, quoted in article (but may not have advised on merger)
2. "Merging Nonprofit Organizations" by the Mandel Center for Nonprofit Organizations Authors of this book include Dr. John Yankey, a Professor at Case Western University's Mandel Center for Nonprofit Organizations.
3. Article in NonProfit Times, February 1, 2009 Article mentions Linda Schotthoefer, executive director of the Center for Nonprofit Effectiveness in Miami, FL. and Allen Proctor of Proctor Consulting in Worthington OH.

In my experience, calling people mentioned in the relevant articles and books and asking for their recommendations is a good way to find consultants experienced in exactly what you need to get done.

I have some key concerns for your organization. First, you have a group of volunteers who are not finding the experience at your organization fulfilling. This creates constant dissatisfaction, turnover and increased difficulty in recruiting new volunteers; and this steady exodus may eventually create a negative public perception of your organization. Also, you have discontented volunteers in two public-interfacing roles, the admissions area and the gift shop. The admissions area, which sets the tone for the whole museum experience, concerns me the most.

Since you can't continue in this cycle of volunteer dissatisfaction and turnover, I believe you face two choices: you can either make the volunteer experience rewarding or you can turn the public-interfacing jobs into paid employment and suspend your volunteer program until a time when you can invest resources into inspiring your volunteers. Because I promise you, that if you continue to place people into routine jobs, with no pay and no hope of change, they will quit.

I hope you will decide to invest in your volunteers, because they represent an incredible opportunity to create long-term help and advocacy for your organization and considerably realize and enrich your mission and goals.

Presumably your volunteers had initial expectations upon joining your organization. Since most volunteers are willing to perform routine work if some other goal is being met or will be met within a specified time-frame, I would suggest using the following general approach with modification to your own circumstances:

• As a first step, review with each volunteer what he or she expects to gain from the experience. (for some it's a learning opportunity, others want exciting projects, some want to add resume credibility, etc).
• Attempt to initiate volunteer goals within a specified time frame, say 6 months.
• Cut admissions and gift shop shifts to no more than four hours and rotate volunteers out to other areas after a specified time frame.
• Include and recognize volunteers as an integral part of your team.
• Solicit from your volunteers leadership in making both jobs more meaningful to the organization. How can the admissions area become a better initial place for sales, fund raising, community relations? How can the gift shop increase its revenue?
• Make a wish list with your colleagues of mission-related projects that need champions. Ask your volunteers to come up with their own list and meet to solicit volunteer leadership of projects in such areas as fund raising events, community development and potential new museum exhibits. Let them fly with their own ideas and credit them in print.
• Consider exposing them to prestigious jobs at the museum. Can they train to become docents? Can they intern with finance, public relations or curators. Don't these areas need help?

I think you'll be surprised not only at how volunteers change when they have significant responsibility and time frames for meeting their goals but at the vast contribution they can make to the organization.

I understand that turning volunteers into team members and advocates takes time, but in the long term, your efforts will produce not only involved volunteers, but a fuller realization of the mission, more community interest, a more successful and profitable museum and, needless to say, plenty of potential new volunteers.

There is an equivalent to the ACT in the DC area. It's called Compass, and it's a very strong and successful pro-bono consulting organization.

I thank you for your interesting question. I agree that Encore Career candidates are a logical place to start your search. I'm quite sure that there is a pool of qualified "encore" candidates who have achieved the financial stability to accept a deferred compensation plan for the right challenge. The trick is to locate them.

As a first step, I suggest you develop a working job description/talk sheet, including position description and responsibilities, required qualifications and experience and desired personal attributes of the candidate. Also, be prepared to address other benefits your organization can offer--tangible or otherwise--in lieu of immediate compensation.

For purposes of cost efficiency in recruitment and increased control of the process, I suggest that you begin the search in your own "backyard". One of the best sources for finding people in career transition is outplacement/career transition firms. If you haven't already done so, you should contact (calling is best) small outplacement firms in your area as well as the regional offices of large global firms. For example, Right Management and Lee Hecht Harrison have regional offices in your metropolitan area. Ask them if they can send candidates, whether they can post your job onsite and what else they may be able to do for you. In the case of smaller firms, you may find yourself talking to the owner/professional who works directly with your potential candidates, many of whom placed themselves into career transition. I would also recommend contacting alumni career centers of local universities to see how to reach their "encore" alumni.

In terms of advertising, most nonprofit/related career sites offer free or minimal cost posting to nonprofit organizations. Bridgestar would be a great place to start, and they may have other suggestions for you.

Because banking is such a regulated and unique industry, I suggest you focus on finding reviewers with industry experience. One bank comes to mind: newresourcebank in San Francisco is a place to start. For my own companies, I just picked up the phone and asked for help from someone in a position to do so. Also, reviewing a business plan is a big job, so it's better to focus on one or two areas of uncertainty rather than ask someone to read a long document or presentation.

In addition, visit the Center for Social Innovation at the GSB (if you haven't already) to get connected into the community of students and recent graduates who are creating social change. That could be a good place to start building out your management team.

I asked a friend who has worked in both a community foundation and a school district foundation about the fundraising prospects for each type of entity. Here's her response: "In general, donors tend not to invest in public agencies - hence the need for a non-profit that secures funding and provides accountability. Community Foundations are experts at donor engagement, but have the donors’ intent on the forefront of their decision-making…..so, if effective, an independent 501(c)(3) usually is able to be more successful in both fundraising and nudging the public organizations to continuously provide measurable results."

I thank you for your question. Perhaps the most effective method of assisting schools would be to partner with organizations and companies that already have a presence in South Africa. The offer that you'd make to these organizations is that RedCap has significant experience in improving education and can do the hard work of effectively implementing a program. For example, Room to Read is a US-based NGO that builds libraries around the world, including in South Africa. Perhaps there's a joint venture that you can do with that organization to help accomplish the goals of Room to Read and RedCap. If you give me a list of the types of services that you provide to schools, I may be able to come up with a list of foundations and companies that should have an interest in RedCap's work.

One other possibility is to tap into the microlending area by having entrepreneurs associated with specific schools get loans through Kiva to start small, self-sustaining businesses that benefit the entrepreneur and the school. Kiva is doing quite well at recruiting lenders in the US but is having challenges finding entrepreneurs in places like South Africa. Perhaps RedCap can help in this area.

In my experience, one of the best ways to separate the "crazy and good" ideas from the "crazy and not good" ideas is to try to find similar organizations that are doing well. So for braces, I would like to find foundations that provide dental services or other medical services to youth. SmileTrain comes to mind as one organization to research. Here's another in Orange County, CA. The good ideas are those that have a realistic chance of being funded by donors, government agencies, or clients, so one goal of the research on similar organizations would be to understand the financial model that each organization is using to provide grants or services.

I think that your idea is quite sound. I recently heard of a very talented team that is working on starting a similar business. I suggest that you put together a business plan that explains how you would make it into a sustainable business. If there's a way to make the business work, you should be able to get investments from friends and family or professional investors.

I have two suggestions. Regarding ad budgets, take a look at AdWeek. I searched under the term "American Red Cross" and found articles that discussed their ad agency changes and one article that indicated that the Red Cross spent 10 million dollars on advertising in 2003. For case studies on re-branding, I had success in finding articles on re-branding by typing in "American Red Cross case study brand" in Google. For example, here's a short one and one about the partnership with Home Depot for emergency supplies. In addition there is one Harvard Business School case for Habitat for Humanity.

There are some new financial products on the market that may meet your needs. Please see Business Week for a recent overview.

It is possible that your organization has reached that plateau which demands a new senior executive to achieve the next level of success. This is a natural occurrence in the evolution of organizations. Without sufficient information about the organization, the contents of your strategic plan or the performance or capabilities of your executive director, I am unable to determine whether you are at that stage. I am also wondering how the board operates as a group and whether you have shared your concerns with other trustees.

I would presume that your executive director has had a significant role in bringing the organization to its current success in growth and fundraising and creating the new strategic plan. As you and your colleagues interact with your executive director to discuss the plan's implementation, you have a prime opportunity to evaluate whether your ED has in fact the vision and ability to manage the next level of growth.

I would recommend that you look at my piece on Organizational Development on the ACT website. It should provide guidance to you in assessing what you will require in organizational resources to achieve an ambitious new strategic plan in comparison to what exists in your present organization. While you may find that the supplemental skills and capabilities exist in your current resources with some reorganization and training, you may just as likely find that you need to hire outside managers and a new executive to lead the growth.

As you carve out a potential new organization and the requirements for its leadership, you will be creating a rough job description for the senior executive and gaining a better sense of whether your current leader fits that role. I suggest that at some point you peruse current job offerings in the marketplace to gain awareness of the job responsibilities, skills, and capabilities required of leaders of organizations similar to your own and the corresponding salary ranges. A good place to start would be the position listings at Bridgestar. This research will help you confirm whether your executive director is in fact overpaid and under-qualified in the marketplace as well as view the market price commanded by a candidate with a higher level of skills.

This is not an area that I have much experience with, so I only have a limited number of resources to suggest. I strongly recommend an organization that will probably be able to help you: Social Venture Network (SVN). Here is how they describe themselves: "SVN is made up of more than 420 of the brightest and most innovative engaging socially-conscious business leaders in North America." I suggest that you search their Web site for information. Two of SVN's members who are very active in the socially responsible business movement have written a new book that I also recommend, called Values-Driven Business. It is part of the SVN Book Series.

Another good source of information is B Corporation, an organization run by Jay Coen Gilbert that focuses on "for-benefit" organizations. He was featured recently in The New York Times business section.

I think the answer to your question starts with understanding the measures that the for-profit lenders use to assess the attractiveness of a market and use those performance measures (e.g. number of borrowers, average loan size, average loan loss rate) to determine exit date. In other words, once you've proved the market is attractive to for-profit entities by achieving your targets, your plan is to leave the market. In addition, I would inform the for-profit community of your plan to exit the marketplace when these metrics are achieved. Such communications should mitigate the risk of crowding out. In a sense you need to "sell" this market to the for-profit lenders by quantitatively demonstrating its profitability and developing a compelling plan for how the for-profit entities will make money once they enter the market.

I don't have personal expertise in supply chain design and implementation. I suggest you look to the academic community to find experts. The Stanford GSB has a program in Global Supply Chain Management that publishes original research. You would need to contact them to get access. Harvard Business School cases are likely to have some relevant information — search on "supply chain". Here's one in particular that looks very good:

In my experience one of the most conservative ways to forecast revenue is to look at businesses similar to your own and find out their past and current revenues. Being conservative is important because if the revenue projections are too optimistic then you risk missing your budget and running short of cash. A second method is "bottoms up" analysis which focuses on coming up with a conservative estimate of the number of customers, the revenue per customer, the profit per customer, etc. My least favorite forecasting method is "top down" which uses the overall market size multiplied by the estimated market share (percent of market). This method often yields statements like "if we get 1 percent of a one billion dollar market then we'll have 10 million dollars in revenue" which is of little help in actually achieving the forecast.

If you give me some additional information on your business, I may be able to provide a more detailed response.

The services of an Executive Coach can be engaged to support a Board President in building and empowering the board to clarify and accomplish its mission. Mentorship may also come from an experienced past board president – either at your organization or at another organization who can share their experience and lessons learned. Executive recruiters who specialize in placement of board members will likely know or have access to many such individuals. A coach is different than a mentor in that the coach helps YOU determine the solutions that are going to work best by asking the right questions and probing in the right places, layering in advice only after the have helped you to come up with the solution on your own, and will likely have facilitation abilities to work with the board as a group. You can find an Executive Coach through referrals, or by conducting an internet search for coaches in your area, or through professional associations.

The question you raise tells me that you are at the beginning of a substantial and challenging process for your division. I hope you will set up your foundation with my piece on organizational development on the ACT Web site as well as the recommended reading.

This background will help you understand how to align your division's structure and resources with the overall mission, vision, values and strategy for your organization. By selecting your most critical initiatives and restructuring and migrating capable human and support resources to them, you are empowering your organization to succeed in its key work. If in the course of reviewing your current organizational capabilities, you discover that your current organization lacks all the necessary resources to attain your goals, you may have to look elsewhere; these outside resources may include training/development programs to prepare current employees for new roles, new outside leadership/talent and enhanced systems capability. Initiating change in an organization creates considerable uncertainty and anxiety among its individuals. I recommend that at the very start of the process, you engage your people and inspire their commitment to developing a division that can more effectively achieve its goals; you may assure them that this change process is not about individuals, but how, as a group, they can make a stronger impact on achieving their humanitarian work. Also, as you create and review optimum models for achieving your initiatives, you may consider tempering them with considerations of feasibility and relative merit within your organization. There may be values, both published and unpublished, which drive the commitment and success of your organization that don't fit easily into a new model. You may choose to continue to support those values in your new organization, weaving them into any optimum model you consider.

If you search for "nonprofit earned income case studies" in Google you will get links to many sources of information. I briefly skimmed the first dozen items listed and found a link to the Fuqua School of Business at Duke University which led to the following web page. It lists several nonprofit earned income case studies. I think many of the other items in the Google search results will also lead to case studies and other hands-on information.

Perhaps gathering data on Charitable Remainder Trusts and Charitable Lead Trusts would be helpful. The Charitable Lead Trust (CLTs) shares many characteristics with the CPA, so data on the number and size of CLTs, the fee structure for CLTs, etc. may be helpful in coming up with ideas for pricing your product.

Your question is a very good one. I think that technology is quite important to discuss as it is often how social entrepreneurs recruit, fundraise, and communicate. I have two starting points to suggest.

Craigslist.org has addressed this topic in their non-profit bootcamps over the past few years. The presentations and podcasts from many of these sessions are online. Perhaps you could use a podcast or presentation as a starting point for a discussion with your bootcamp students. Techsoup also has a collection of articles about non-profits and the Internet including articles on Facebook and social networking.

The first place I'd start is with Appendix A of this Nolo Press book: "How to Form a Nonprofit Corporation"

From what I read on other websites, there are state-to-state differences in non-profit regulation and costs. Appendix A contains a state-by-state listing of these rules.

I can understand your excitement for NHMH. In time your work will help make mental health as well funded and respected as other types of health care. In the start-ups that I've been involved in, enthusiasm has been vital in transforming the organization from an idea to a funded organization fulfilling its mission. I'm currently involved in helping a for-profit company raise its seed funding, so I'm right in the middle of discussions about the mission, message, and fundraising strategy. In its most simple form, the challenge of seed funding involves two simultaneous efforts: finding the right donors and crafting the message and strategy that convert a potential donor into an enthusiastic supporter. With respect to finding the right donors, my experience has been that personal introductions and networking work best. I can nearly always get the meeting or phone appointment if someone provides an introduction. Perhaps some of your classmates from the GSB nonprofit program know someone to whom you should be speaking. Is there a GSB-related email distribution list where you could ask a question to find out who is funding mental health initiatives? I think that getting the message right is harder than it seems. I read that one veteran newspaper writer would spend 1 hour and 45 minutes writing and rewriting the headline for the story and only 15 minutes writing the story itself because if the headline was right, then everything else would be right as well. Perhaps you could borrow some ideas from the venture capital industry about how to pitch an idea. Here's a link to some suggestions for a venture capital pitch.

I have two last suggestions. If your meetings with prospective donors are leading to responses like "call me when you've made some more progress," then either the donor isn't the right one to fund seed stage initiatives or the message isn't yet compelling enough. You should also find out everything you can about the two or three organizations that are most similar to NHMH. You may find the names of potential donors you haven't yet approached, and you'll also get a better sense of the financial model for nonprofits. Such data may be helpful in convincing donors that your plans and forecasts are reasonable.

Fundamentally, competence, competition, innovation and culture is about the alignment of the strategy for the organization's human resources with its overall business strategy. For an in-depth understanding of how this works, I suggest you read my Expert piece on organizational development and the suggested recommended reading.

Put simply, to succeed, a company needs to stay ahead of its competition. For an organization to be a forceful competitor, the organization's people must be constantly innovative and receptive to change. The best first step in developing this culture is to deem innovation a core competence, which, along with the traditional competencies, will be evaluated, recognized and rewarded (and sometimes tolerated - failures included). Culturally, adding innovation as an evaluated dimension of performance will move the organization as a whole to increased change; enhanced awareness of the competitive environment, receptivity to and support of change, initiation of smaller changes within business units and ground-shaking innovations in some technology areas. The overall cultural impact is unclear, particularly in cutting-edge technology companies, where those who pioneer new technologies and those who provide the organizational wheels to make them succeed, often receive vastly differing rewards.

I would suggest that you contact Bridgestar. Bridgestar offers advisory and executive recruiting services to help talented nonprofit leaders build their careers and their executive teams. The consultants there should be able to advise you on your compensation questions.

You raise a dilemma faced by many successful organizations. Attempting to manage organizational growth and still preserve the founding spirit of an organization is quite a challenge. I hope you will read my piece on Organizational Development on the ACT website as well as the suggested resources. This reading will help you understand how to align human resources structure and strategy with the overall mission, vision, values and stategy for your organization. It should give you insight about how best to restructure to manage growth initiatives yet preserve your unique mission, vision, values and original, relatively informal culture.

I think the terms business plan and strategic plan are interchangeable. Because start-ups face lots of challenges, I often add rigor to the planning process by "working backwards." Here's what I mean: If I were starting a non-profit, I would pick a point 2-3 years in the future and describe everything about the organization at that point - sources of funds, costs, number of employees, marketing and outreach programs, etc. Once that description is completed, it needs to be checked for reasonableness by asking questions such as "is it likely that the organization can have funding support of $x in 2-3 years, why or why not?" Finding and doing research on peer organizations is a good way to check for reasonableness. Once the future picture is deemed reasonable, then I work backwards to today and map out all of the steps that need to happen to achieve that future for the organization. That map of how to get from today to the future state of the organization is the backbone of the business plan. For me, working backwards forces those doing the planning to ask and answer the tough questions of on-going support, staffing, marketing, etc. before the crush of day-to-day operations makes it hard to step back and make good strategic decisions. I hope you find this answer helpful.

I think there's something to be learned from the for-profit world about good risks and bad risks. Venture capitalists are in the same position foundations are -- they invest in other organizations with the goal of helping that organization succeed. Venture capitalists divide risk into different categories, including execution risk (can the leadership do what needs to be done?), market risk (is the customer going to buy?), competitive risk (is there another company offering something similar/better?), funding risk (can the organization raise the funds it needs to sustain itself and grow?), intellectual property risk (does the company have the right to use the intellectual property it is using?) and technology risk (can the technology that's needed be developed?). When an investment is being considered, VCs will score, quantitatively or qualitatively, the investment on each of these risk categories. When an organization is new, there are many unanswered questions, and therefore many related risks to those questions. As the organization answers those questions, those associated risks are minimized, and the value of the company increases. One important aspect of venture investing that's related to dividing up risk is the practice of staging investments. New companies with lots of unanswered questions generally raise only small amounts of money, and as the company grows and proves itself, investors are willing to invest more in the company.

I have one additional point based on my experience as an entrepreneur and investor. Good risks are those that the organization can work to minimize. Bad risks are those that are outside of the organization's control and perhaps even knowledge.

According to the Foundation Center, foundation grants as a whole have increased by approximately $10 billion since 2003. Since 2003, the allocation of that total funding committed to general/operating support has remained at 20 percent, while 30-50 percent of the funding continues to support programs. Therefore, despite the funding growth, there is still a lack of senior leadership and other resources to maximize program effectiveness and manage the organization's future success. (Highlights of Foundation Yearbook, 2007 Edition; Foundation Giving Trends Preview, December 2007.)

The reason that I'm doing the revenue projection drives the method that I select for the estimate. If it is for a cash flow projection and I don't want to run out of money, then I'm going to use a very conservative method for estimating revenue over time. One such method would be to estimate the revenues, past and present, for similar services. When starting out, it's hard to anticipate all of the challenges, so looking to the experience of others is a good way to get a clear-eyed estimate of the revenues over time. If the revenue projection is going to be used to size the organization, I prefer to use a bottoms-up process. (A bottoms-up model focuses on very detailed and easy-to-understand variables to give estimates for the whole business. Example variables include: number of visitors who visit a web site, percent of visitors who register, percent of registered visitors who buy an item, and the average cost of an item.) An advantage of the bottoms-up process is that you can run tests to find out the true values of the key variables as you roll out the business and determine where the opportunities are for increasing revenues. Lastly, I avoid using top-down estimates for revenue projection because the errors can be so large. These estimates take the form of "the whole market is $500 million, and I'll get 0.5 percent in the first year, 1 percent in the second year, etc. Getting customers to click "buy" is hard, and looking at the market as a whole ignores that challenge.

While it is efficient to combine the related areas of performance and competency into one dialogue, it is becoming a common practice to separate the two discussions. In fact, they are quite distinct in tone, time frame, and purpose. The performance session, with its evaluative and monetary component, is often a bit uneasy, deals with a short-term time frame, and is meant to assess and reward recent achievement. In contrast, the competency area focuses on long-term career pathing and the skills and developmental movements required for promotional success. In a combined discussion, the former often eclipses the latter.

As businesses increasingly value the role of human capital in a rapidly changing and competitive future, they are realizing the need for a separate career pathing dialogue as input into human capital resource planning. With the performance session and monetary concerns in the past, the stand-alone competency session provides an opportunity for the employee and manager to more freely discuss career plans, promotional steps and the acquisition of necessary skills for success. Thus, the competency session provides a long-range planning tool for senior management, supplying, in aggregate, an inventory of all current and future skills resident in its human capital, and the resulting development, training, and outside hiring programs needed to deliver the total skills required to meet future goals.

Based on my reading of your questions, I think the core issue you are grappling with is one of employment practices, and not necessarily one of organizational mission, vision, and values. It sounds like you've had feedback that your practices may be perceived as discriminatory, and this is limiting your funding sources.

If you haven't done so yet, we strongly suggest that you consult an attorney (labor/employment), to be sure that you aren't violating any laws, and that you aren't inadvertently jeopardizing you not-for-profit status.

As far as seeking funding sources for whom your values-based hiring practices aren't an issue, the best I can suggest is that you contact a fundraising clearinghouse, like the Foundation Center or the Grantsmanship Center. They might have experience with situations like yours.

Your questions are really intriguing. All of the sectors of the economy--nonprofit, corporate, venture capital--are now engaged in the nonprofit sector, raising interest in how all the activity will "play out," what can best be performed by which sectors, and how nonprofits, in particular, will fare in this heightened arena.

The following data should help provide a context for predicting the future of nonprofits. According to the National Center for Charitable Statistics, there are currently approximately 1.4 million registered nonprofit organizations, representing a 13 percent growth rate during the last five years and, on average, 30,000 new nonprofit organizations per year. Approximately 81 percent of the total nonprofits fall into the below $100,000 revenue category. At first glance, a 1-5 percent yearly growth rate in nonprofit organizations doesn't seem significant. Yet, in view of a somewhat limited donor and leadership pool, 30,000 additional nonprofits yearly is staggering.

While increased funding may open up to nonprofits in key areas such as energy and other global efforts, corporations could just as easily shift donations inward to their own projects. On balance the average nonprofit within a growing nonprofit population is unlikely to see much additional funding. Furthermore, nonprofit growth will cause a leadership deficit. According to an extensive study by Bridgespan, nonprofits with $250,000 plus in revenue will require 640,000 new senior managers over the next decade; this is 2.4 times the number currently employed and will require the opening of alternate sources for leaders. (Stanford Social Innovation Review, Summer 2006.) Overall, as nonprofits compete with each other and socially responsible business for funding and leadership, a shakeup is inevitable.

To address your specific questions, how will this growth in both arenas "play out"? While it is difficult to discern an order within the current activity, the end result should be a more efficent, improved and socially responsible economy.

In the interim:

The Nonprofit Sector. Nonprofits have indeed become more businesslike. They've become much more adept at crystallizing their missions and marketing and finance strategies, and many have taken on self-sustaining initiatives. To date, they have reaped benefits from reciprocal relationships with socially responsible corporations that have ample resources to take on some portion of "good."

Corporate Social Responsiblity. There is going to be a range of growth in this arena. Some of these corporate responsiblity areas will continue as they are, and the reciprocal relationships with nonprofits will remain similar. At the other end of the range, businesses will establish and fund comprehensive nonprofit units. While most of these current corporate efforts seem different from those of the typical nonprofit, it is less certain what the relationship will be in the future. Also uncertain is the longevity of these areas, given corporate shareholder responsibility, including the need to see immediate results.

Over the next decade, we should also see the following:

• Because of the increasing competition among nonprofits for limited resources, many traditional nonprofits will fail. Only the strongest, those with the clearest mission, the most well-defined niche in the marketplace, the best messaging and delivery to customers and other constituencies will continue to attract the money and talent to survive.
• These winning nonprofits and their clients will be beneficiaries of the considerable information technology and other large-scale efforts currenty undertaken by socially responsible corporations(e.g. Google.org).
• Many new joint working structures will emerge, both ad hoc and formal, as nonprofit and business goals intersect.
• Some nonprofit organizations will become acquisitions of for-profit organizations; this is already in process in consumer products and related industries.
• The upcoming nonprofit leadership deficit will play out in part with increased hiring from the corporate sector, and overall, there will be more fluid movement of people between the two sectors.
• Over time, as competition continues to accelerate in all sectors of the economy and corporations become increasingly worried about the bottom line, some of the large corporate efforts will either scale down or fold back into the organization.

To answer your question on reacting to "encroachment," there is going to be some "encroachment" of the corporate sector into nonprofit organization territory. Rather than react to it, nonprofits should expect and prepare for competition by positioning themselves as the single source of trust and credibility with their marketplaces, through zealously adhering to their missions, guarding their unique value propositions, going to the next level to attract talent, and delivering on their promises. They also need to become increasingly agile in preserving competitive advantage against constant change in the marketplace.

You've asked whether big companies do a better job and/or are more efficient in doing good? Who does the best job at "doing good"? In general, nonprofit organizations, who don't have shareholder responsiblity, can do the most good. Their clear passion for the mission and their zeal can establish authority and trust in the marketplace, build an unbeatable value proposition, and accomplish extraordinary social progress. However, when the effort mandates large-scale development, technology, and/or production processes, business is most likely to be more efficient. So, in general, greening and other large-scale global efforts require partnerships of development and production by business, and advocacy, enforcement, messaging, "selling," and delivery of services by nonprofits. Overall, the involvement of business in greening efforts is positive; the synergy of business and nonprofit work will produce far more than previously possible. It is just hard to predict how it will all play out. With $3.95 billion in 2007 venture capital going to North American companies that create eco-friendly products and the Internet giants taking on established energy leaders, all the sectors will be in play.

With regard to future nonprofit strategy and positioning, I believe I've covered most of this above. The more adept nonprofits are at nonprofit functions as well as disciplined business functions, the more successful they will be. For compelling reading on nonprofits and socially responsible business, I highly recommend The Social Venture Network Series of books, written by high-profile business owners, investors and nonprofit leaders (for example, Ben Cohen, Chip Conley), who are advancing the movement for social responsibility in business.

I've often been in the situation that you describe. In my experience, this situation generates lots of ideas but not a coherent strategic plan. It's hard to investigate all of the ideas, so progress is slow. I have a suggestion for you. Focus on the goals of the venture first and foremost and then do the research to find and vet venture ideas that meet the goals. Here's a brief outline of the process:

• State the targeted financial projections (revenues, operating margin, investment, time to launch, time to generate revenue, etc). If you are doing a presentation, this is the first slide in the presentation. Doing this upfront will help drive organizational consensus about what success looks like for a venture.
• Determine what assumptions must prove true to achieve these projections (pricing, number of customers, % of recurring revenue, cost of service/goods, etc.)
• Implement a plan to learn and test whether the critical assumptions are reasonable. One way to test these assumptions is to look to peer (and non-competitive) organizations that have such revenue-generating programs and learn about their performance on these key factors.

If there aren't any ideas in the organization, I suggest you again look toward other professional societies and determine which models for revenue generation seem to work. I've frequently found my peers at other organizations to be quite helpful in answering questions about their strategy and its performance.

I'm happy to provide more detail on this method and some specific venture ideas if you'd like.

The board should have none of the information on the second list, with the possible exception of the nonprofit status letter. That document is sent to organizations from which you're seeking funding to prove you're a nonprofit. There is no real need for a board member to have that, but it isn't proprietary information.

In general, all managers and leaders should have integrity and commitment to the organization's mission, vision and values and the experience and ability to achieve the organization's success through building, managing and motivating a team and working effectively with "bosses," colleagues and relevant outside constituencies.

Specifically, the definition of sound managerial and leadership skills is often dependent upon the organization, its mission, vision, values and culture, whether it is private or not for profit, and the level of leadership in question.

1. Functional Skills. The skills required of a manager, ranging from direct expertise in one functional area, to multi-functional expertise/management and general management skills, depend upon how large a share of the responsibility the leader has for the organization's mission, vision, values and strategy: At the more basic levels of management, expertise in the direct area to be managed plus interdisciplinary collaborative business ability are mandatory. Managers of accounting teams, for example, need accounting backgrounds as well as the ability to work with interdisciplinary organizational members to understand their needs. In many areas of basic management, managers need customer and other outward-facing skills as well. Senior leaders, responsible for all or a large part of mission, vision, values and strategy require strong multi-functional management expertise as well as comprehensive generalist capability(for example, financial and strategic command) with specific functional work backgrounds, dependent upon the type of organization.
   The functional orientation of the organization and/or industry often drive the functional focus of expertise demanded of its senior leadership . For example,the concentration of functional leadership skills required in a consumer-oriented entity (Gap, Disney) is likely to differ from that of oil or pharmaceutical companies or other industries, where production, manufacturing, or research may drive the company.

2. While dedication to the mission is key to all managers, a nonprofit organization or a business with a significant orientation toward social responsibility, may require demonstrated passion for the mission as opposed to a strictly for-profit organization, where the ability to meet the bottom line is key.

3. Adaptability, flexibility and cross-functionality. At the rate of change in all of today's organizations, whether from market-imposed or other outside forces or internal change, managers at all levels must be equipped skillwise to assume new responsibility. Personally, they must be adaptable and willing to embrace new ideas and larger roles.

4. Accountability. Managers at all levels must define goals, clarify them to their teams and successfully meet them. Additionally, they must take responsibility for their initiatives to their team, managers, colleagues, customers and the enterprise as a whole.

5. Hiring the right talent, team building, and motivating people. In general, managers should hire people who will fit into and engage with the organization's culture and feel rewarded by the organization's reward system. Managers should provide the enthusiasm, inspiration, trustworthiness and intangible reward systems to garner respect, loyalty and hard work from their teams.

6. CEOship. At whatever level, a leader should be a CEO of his/her area. Even within more formal organizational cultures, there is room to set new standards, develop new ideas and find new ways to motivate people. All managers should be advocates for the organization.

7. Collaborative interpersonal skills. At any managerial level of any complex and sophisticated organization, the willingness and ability to collaborate effectively with bosses, colleagues, and subordinates is essential. The extent of collaboration encouraged depends upon the organization and its culture.

8. Communications and interpersonal skills. Effective communications are key at all management levels, and critical in customer interfacing areas. At the senior levels, where the individual is the "face" of the organization to shareholders, board, partners, other outside constituencies and the public at large, polished and articulate communication and adept interpersonal skills are synonymous with the position.

Yes, your board meetings should be open to the public. However, when discussing personnel matters or litigation, the board can go into executive session. The chair would then announce, in general, what was discussed and then resume the open meeting. The executive session should be included in the meeting agenda, and best practice is to give public notice of all board meetings. That can be accomplished on your web site. We run an announcement on our station.

As you grow, you'll find that governance becomes more formalized. It can be challenging to go from a "worker bee" board that's involved with both the singing part of things to the fiscal oversight, strategy and programmatic review that a board does. But the increased structure will serve you well in the long run.

This is not an area that I have much experience with, so I only have a limited number of resources to suggest. I strongly recommend an organization that will probably be able to help you: Social Venture Network. Here is how they describe themselves: "SVN is made up of more than 420 of the brightest and most innovative engaging socially-conscious business leaders in North America." I suggest that you search their Web site for information. Two of SVN's members who are very active in the socially responsible business movement have written a new book that I also recommend, called "Values-Driven Business." It is part of the SVN Book Series.

Another good source of information is B Corporation, which is an organization run by Jay Coen Gilbert that focuses on "for-benefit" organizations. He was featured earlier this year in The New York Times business section.

Questions about pursuing 501(c)(3) status are best answered by an attorney or CPA licensed to practice in the state where your organization is located. I'm not an attorney or CPA, so I can't give an authoritative answer to your question, but I can tell you that many nonprofit organizations with 501(c)(3) status obtain revenue from business-like ventures that support their public-benefit objectives. Ticket sales revenue received by a community theater group or tuition revenue received by a college are typical examples. So your plans for advertising revenue as your primary source of income are not out of the question, but you need to talk to an attorney or CPA who works with nonprofit organizations to learn the specific IRS requirements. If you are affiliated with Lewis & Clark College, talking with someone in the office of the college's attorney or CPA might be a good place to start.

The IRS code section 501(c)(3) offers tax-exempt status to organizations based on their "purpose" and other considerations, rather than their primary source of income. Here is a summary of tax-exempt purposes from the from the IRS website:

"The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and the preventing cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency."

Questions about registering as an NGO and establishing a corporation are best answered by an attorney licensed to practice in the country where the organization is located. I'm not an attorney, so I can't give an authoritative answer to your question, but I have some questions for you. I recommend that you answer the following before you contact an attorney. Having the answers will help you provide the attorney with a clearer sense of your objectives and constraints.

Question 1: Why do you want to register as an NGO? What do you think NGO status will do for your shawl weaving business? Is it because you want to solicit contributions from government agencies or foundations?

Question 2: What makes you expect that your funding will be quite cumbersome and time-consuming? Why do you think establishing a corporation under the umbrella of an NGO will help you deal with the problem of cumbersome and time-consuming funding?

Question 3: Since NGOs are typically nonprofit corporations, why do you want to establish another corporation under the umbrella of an NGO? Is it because you want the shawl weaving business to be a for-profit corporation? If the primary purpose of your NGO will be to operate a for-profit corporation then you may not be able to qualify as an NGO.

It's very common to get an organization started, especially a small one, under an established nonprofit. You'll have to operate just like a nonprofit in order to not jeopardize the status of the umbrella one. It's important to be clear with the management and board of the host nonprofit what the relationship will be. It can range from full service support, including your office space, for a specified fee, to just being a fiscal agent for grants and donations. You might also agree on a specific period in which this arrangement will be in effect, perhaps a year or six months while your application for nonprofit status is being considered, you are forming you steering committee (which can morph into your board), and completing other tasks involved in starting a nonprofit.

I've often used guides from Nolo Press (www.nolo.com) as a starting point for understanding legal and tax matters. (Sometimes I've ended up hiring a professional after reading the Nolo book, other times not.) Nolo's library includes the following titles:

"How to Form a NonProfit Corporation"

"Starting and Building a NonProfit: A Practical Guide"

I have one more suggestion regarding business planning. Find and contact a few peer organizations (e.g. organizations that are similar to Wine, Women, and Shoes) and ask their leaders about their priorities and challenges. This information will be very helpful when you begin writing your own business plan.

To provide background and context to my response, I'd like to suggest that you read three articles on the Ask ACT Resources page: Mission/Vision/Values, Strategic Planning, and Organizational Development.

Above all, the structure of an organization is a direct derivation of the organization's mission, vision, values and strategy. In other words, who are we as an organization and what do we want to accomplish, both near and long-term? As a result, an organization's strategic initiatives may reflect both business and non-business objectives. For example, "we want membership revenues to increase 15 percent in 2007," or "we want to become an integral part of the community which focuses on childhood education," or "we want to become employers of choice."

Whether starting a new company or restructuring to meet ambitious new goals, the initial process is similar. You need to align the organization with what it wants to accomplish. This means you need to list each strategic initiative and map out what is required to meet it--the necessary functions, systems, processes, inter-relationships, people and leadership to get from here to there. You need to audit the capabilities that you have in these areas, and determine the "gap" between what you have and what you need. When you overlay the gap onto the organizaion, structure and leadership questions emerge. In terms of a new organization, you can start with compiling hiring requirements for a few key people who might spearhead each initiative, either individually or as part of a cross-functional team.

In structuring to meet initiatives, you may consider the following: How may peope/functions should report directly to the executive director/CEO? What constituency does this initiative serve? Internal or External? Customers? Community? All or part? What are the inter-relationships that it takes to succeed with the initiative? For example, an initiative involving customer sales may require the grouping of all functions related to sales--production, operations, marketing and sales. An initiative requiring highly visible community involvement may require one community relations person reporting to the executive director and collaborating with the organization. An initiative to improve internal IT may stay within an administrative area.

Where does the accountability reside for these "clusters" and how senior must the leadership be to achieve the results? Does the organization have the leadership within to lead a large multifunctional organization? If not, can it afford to hire new senior people? Shoud the organization implement the re-structuring in phases, so that it can be changed later? Will the new leadership have sufficient cross-functionality to assume leadership of larger or other areas if needed later on? Is this particular personnel movement sufficiently important to disturb a working / reporting relationship that has worked for many years? How will all of this change effect employee morale? What is the best way to socialize this change through the organization? Is this structure the right foundation for a future organization with broader, more ambitious initiatives.

In the case of a startup organization starting with little structure or leadership, the key question is the relationship between cost of salaries and seniority of leadership. The advantage of hiring senior people to lead organizations is that they can work as a cross-functional team, as well as lead their own areas, and later build larger organizations under them. Hiring below the senior level, while less expensive, can cause considerable displacement later as the organization becomes more complex, requiring new leadership capability.

Cost. Cost of new functions to support initatives is an over-arching factor in any initial structuring or re-structuring effort. Alternatives to developing inside capacity include outsourcing, joint ventures, alliances and partnerships.

Change Management. Any organizational change should be carefully "socialized" through the organization so that employees understand that the pending change is intended to help the organization as a whole best meet its goals.

This was intended to provide an overview of organizational restructuring. You may also wish to explore the subject in the references provided at the conclusion of my Ask ACT article.

It’s not very hard to obtain nonprofit status. You can do it at the federal or state level. There’s some desire to have one process for both, but I don’t believe that’s in place at this time. The process for state nonprofit status probably varies, but you should be able to google “nonprofit status” and your state and find out how to get the forms. I did it a few years ago for a statewide organization that I belong to, and it took me less than eight hours of work over a couple of months.

I suggest you start by reading this article in the The Stanford Social Innovation Review and then writing a "theory of change" for your organization. As the article states, a mission is general in scope while a "theory of change" is quite specific. Once that's done, I suggest you write a simple business plan that outlines what you will do, how you will be funded, and your long-term plan for the organization. I have found that business plans are hard to write when my thinking isn't yet clear, and easy to write once I've done all of the thinking. Your next step after writing a business plan depends on the source of funding. Please write back when you are ready, or if you'd like additional ideas and resources.

I have five suggestions for developing a business plan for your organization:

1. A sample of a nonprofit business plan for helping female ex- offenders

2. Toolkit for developing a social purpose business plan (a step-by-step process)

3. Example winning business plans

4. A great article from the Stanford Social Innovation Review on what nonprofits do and what's at the core of a business plan

5. St. Hope, a community revitalization effort in Sacramento, California, led by former NBA star, Kevin Johnson. I included this because you mentioned revitalizing vacant buildings. Perhaps you could contact St. Hope for more information on their redevelopment process. Such information would be very useful in drafting a business plan.

I have served on several regional and nationwide boards, but most of my experience has been with local ones. I think that there are some differences, but board recruiting and keeping your members engaged are pretty much the same at any level.

You will find strong board members in a couple of ways. The first way is to sift through people who are already passionate about your organization and have the appropriate skills. While you are in transition to being national, it will be very helpful to have some core members around whom you can build a national board. The second way is to identify people who have a passion about the issue your nonprofit addresses, and possess the skill set you need. You will want to use a number of methods for identifying these people—everything from asking your current stakeholders for suggestions, to looking at the websites of similar organizations to see who is on their boards, to looking at the leadership of the top firms in the sector you serve (for instance, we like to have several leaders from the technology sector on our public TV station’s board).

This talent scouting is something that you should do all of the time, keeping a file of prospective board members. Your partner in this work should be the nomination committee of the board. Coordinating the identifying and recruiting will probably be a staff function, but taking responsibility for recruiting a strong board as you transition is the board’s responsibility and one of the most important things they are doing as you grow. Get a weak board, and you’ll suffer for years before you can fix it. Get a strong one, and your organization is probably going to come out of the transition phase in great shape.

Before you recruit anyone, you should establish the criteria for the people you seek. We review our criteria annually as we seek our new slate of nominees, and alter it as the organization’s strategy and the environment in which we operate change. Four or five critical skills or abilities are probably enough. You measure each person under consideration, and develop a depth chart. Be aspirational in seeking people who have the potential to be board leaders; it is part of succession planning. I try to help our nomination committee recruit people who will be in the top third of effectiveness as board members. That way your board is always getting better. Once you have about twice as many potential board members as you need, start with cultivation efforts, whether that’s inviting the person to organizational events, sending materials, or using other ways to help them become more familiar with what you do. This can be a short period, like several months to a year or more. Then we have the person with the strongest relationship make the ask. Usually, as the CEO, I pair up with the board member or other person who is making the invitation. We invite them to our station to show them what we do. We also create a briefing book which has board member duties, strategic plan, expectations for financial support, annual report, by-laws, audited financials and board meeting dates. We talk about the interest of the potential board member in the work we do, trying to probe the passion level, learn about nonprofit board experience that our background checks haven’t turned up, and go over the briefing book materials, which they can review at their leisure. The person with the relationship makes the invitation.

I would suggest that you look at the books about board development and pick one that you like, share it with others in management of your organization, and with the leadership of your board. You may also want to seek out organizations that have gone from local or regional to national, and have some peer to peer conversations. You could also search on the internet for people who are writing about this issue.

My own experiences lead me to believe that it's important that you are phsyically together several times a year, and that you work hard as the national board takes shape to do some teambuilding work to get to know and trust each other. When you have that in place, you can work electronically. If you don’t do that, I’ve seen boards limp along without coming together as a group, and not much gets accomplished. The board leadership and the senior managers also need to be willing and budget for travel to connect with the board members where they live. I try to see our own board members quarterly in their communities, and that strengthens our relationships for the work we do on behalf of our organization. We have e-mails that go out with weekly updates about our work product—which is television programming and outreach—but I also drop them an e-mail about halfway between board meetings to let them know what is going on. When you start doing some of these things regularly, I think you’ll be comfortable with the board, and the nervousness will go away.

The board's responsibility is to hire the CEO, support the CEO, and if necessary, fire the CEO. It's up to the CEO to operate the organization, which includes evaluating the senior managers. It would be wise for the CEO to seek feedback from board members who work closely with particular senior managers. But the board wouldn't evaluate senior staff directly.

At the minimum, the board leadership should evaluate the CEO annually. I like to have some sort of formal check-in halfway through the year, too. At our organization, we link the staff reviews to accountability for the organization's progress toward goals, which helps underline the fact that that we derive our individual goals from the goals of the organization.

Boards approach the evaluatory process in a range of ways. Some have a committee on compensation and governance, which does the evaluation. At our place, the executive committee does it. Some do it as a committee of the whole. I think a smaller group can be more focused and frank in their assessment. But it is important to seek feedback from all of the board members.

There's nothing magical about an evaluation. In our organization, we have one form for managers and another for line workers. Both involve a self-evaluation, and the supervisor fills out a planning form, too. Each person describes the primary responsibilities, greatest achieivements in the evaluation period, areas for improvement in the next year, a handful of goals, and training that would be appropriate. We like to have at least two training opportunities that relate to job duties, and two that improve technical skills, since technology is impacting the workplace.

When I evaluate one of my senior managers, I ask for informal feedback from peers and that person's direct reports. (We do a formal 360 degree evaluation every three years for our senior managers.) We also do an annual staff survey in which every staff member comments on his/her department head in four categories, the division head, and me. So I have that feedback in hand for the evaluation. And, as I stated above, if the senior manager works closely with one or more board members, I'll ask for feedback. For instance, I'll ask the finance committee chair about the working relationship with the CFO.

So a good evaluation of a CEO examines the standard skills that you desire in a nonprofit leader (evaluation forms are pretty easy to find on the web or through HR service firms) and should include vision; ethics; communication, planning, evaluation, and other core skills; recognition of significant achievements; areas for improvement; whether training was completed; and individual goals for the year met. Ours is about three pages long, has check off boxes for ratings, and space for specific comments in each category. As for the goals, I believe there should be no more than six, and they should relate to the organization's goals. I draft mine, and the executive committee reviews them and usually adds a couple. They often include one or two relating to our nonprofit's financial performance, a couple about use of services we offer, and something which advances the organization strategically. I like to have a couple of stretch goals. All goals need to have a deadline for accomplishment and be quantifiable, that is, measured with a number. And the deadlines should be spread out. If all of your goals are supposed to be accomplished in the first quarter of the year, you're probably not thinking far enough ahead.

All of this is prelude to having a candid conversation with your CEO about how she/he is doing. All of us, whether you are a rookie or a veteran nonprofit leader like me, need a good evaluation process and candor from our supervisor(s). My feedback comes from the board chair, and I look forward to the conversation every year. We also do a half-year check-in with the board on the organization's progress toward its goals, and I review my own progress at that time, too. All staff members have the same half-year sit-down with their supervisor. By doing it formally twice a year, we avoid surprises at the year's end, and make sure we're all moving in the same direction to advance our nonprofit. A solid review process is one of the greatest ways a board can support a CEO. It takes time and must be a priority for all board members. But doing this well will pay dividends for your leadership and all of the people whom you serve.

It’s great that you’re thinking strategically about the knowledge and skills you want represented in your board members. So many nonprofits fall short of thinking about whom to recruit and end up with boards who are less useful in terms of meeting the organization’s goals. That said, you’ll find that life doesn’t quite provide candidates in the proportions that you lay out. And you need more than one attribute per board member. All should have a passion for the work your organization does. All should make financial support a priority, even the ones coming from constituencies. They may not be able to match the dollars of the average board member, but they need to be giving at a “sacrificial” level.

Your mission and your by-laws can serve as a guide for the categories. The mission should talk about what you’re doing and with whom you’re doing it. The by-laws will describe standing committees, so you’ll need people with specific skills to do a great job in the committee work. If you create standing committees on 1) oversight for the programs you provide, 2) development, 3) strategic planning, and 4) finance and governance, then you'll have good matches for the four categories you listed.

I’m not aware of a source that would help you define the categories. You might find some models in books about high-functioning boards. But you’re off to a pretty good start already, and I’d just go ahead and execute your concept. By the way, I tend to favor a few more board members with development skills and a few less in the other three categories. For most nonprofits, it’s challenging to raise funds, and if you’re going to have a little imbalance, better to have it in development than to have too many people with financial expertise (unless you’re broke and the board’s focus is on getting out of hock).

I think you have a legal question that’s also an ethical one, and poses practical problems as well. I would refer you to counsel who can advise on the legalities. My sense is that taking oneself out of decisions affecting the sibling might observe the letter of the law. But look at the problems it could create for staff members and the organization as a whole.

It’s tough enough that a major donor has a sibling in the management of the nonprofit. Questions could be raised about whether actions by the management person are affected by the donor’s desires, whether the siblings are exchanging information about the organization that’s not appropriate, and whether the situation is having a chilling affect on the rest of the staff. If the donor joins the board, it would only be more of an issue. And besides the actual conflict, there is the perception that something untoward could be happening.

That could compromise the organization’s effectiveness internally, but the bigger risk is the public's perception. Donors, the media, and people using the nonprofit’s services may lose confidence in it, even if the siblings and everyone else involved acts responsibly.

I don’t see an upside to this. While preventing him from joing the board may unnecessarily limit the donor’s opportunity to serve the nonprofit, it’s a small sacrifice compared to the problems it might cause.

I don't know of a Consumer Reports equivalent for social innovation, but I do have one idea for you. Visit Ashoka, the global association of social entrepreneurs, and look through their database of Ashoka Fellows to see how they compile their list of best social initiatives. The Fellows are their award winners who have gone through a rigorous screening process to win financial and organizational support from Ashoka. Their database is searchable, so you can find winning social initiatives by geography, topic area, etc.... If you want to create your own categorization methodology, the Ashoka process and its database categories seem to be a good place to start.

I'm not in a position to judge whether your governance structure is sound. It may be what the founders wanted, and so they drafted the bylaws to reflect their desire. If you have concerns about the practical aspects, I suggest you consult an attorney with expertise in nonprofit law to see whether the bylaws are sound. If they are sound, then you are stuck with them, unless a number of the founders, as described in the bylaws, want to change them. Based on my experience, this is an unusual structure for nonprofit governance, as there will be challenges as the founders pass on, unless the bylaws address that problem as well.

Based on a couple of Google searches, I think that you are in the NYC area. I suggest you contact one of the following local organizations to find assistance in fundraising: the Robinhood Foundation, which funds anti-poverty programs, or The New York Community Trust.

Ask for a "Program Officer" (pogram officers are responsible for making grants), and tell that person what your organization does. Find out the process for applying for a grant, and if the foundation doesn't support your type of organization, get a referral to a donor that does. Both of these organizations are large, and the people working there should have lots of connections and resources to help you.

If I understand you correctly, you are asking how to help your group develop a solid draft list of core values, and a plan for how to use them. Without knowing more about your group, its history, and its underlying level of agreement on your vision/values, it's tricky to propose a generic meeting design. That said, here are a few ideas that you may be able to use to move the organization forward:

1. Tell the whole truth and nothing but. Only identify and list core values that the organization currently practices. These are values for which the organization has paid some sort of price. Why? Because nothing breeds cynicism faster than a list of core values that are contradicted on a daily basis. For example, if you say "honesty" is a core value, and your group regularly discusses how to spin things to the media, nobody will believe that honesty is a real value. On the other hand, if your organization owns up to its troubles, as Johnson & Johnson did during the 1982 Tylenol crisis, honesty would be considered a credible value.

2. Aspire to more. You may want to also create a list of Aspirational Values - those that you wish you lived up to, but don't currently. This can provide a good focal list for improvement efforts.

3. Talk them up and use them often. If the values aren't incorporated in the actual decision making processes (e.g., "How will that decision further our values?"; "Will that decision go against our core values?"), they won't have any teeth. Leaders and others must walk the talk of these values in visible ways every day.

4. Put your money where your mouth is. Make sure that rewards and recognition flow consistently with your published values.

In my experience, it's helpful to write multiple business plans to address the needs of multiple audiences (e.g., service providers, employees, banks, co-founders, etc.). Of course, all of these business plans are consistent; what differs is the level of detail provided in each plan. Often the language of the request itself will tell you what level of detail is needed in the document. In a situation like yours, I would provide a one-page, high level document describing the history, people, and goals of the organization. If the designer says it's not enough information, then you can ask him why he needs more detailed information.

I sometimes joke that board terms ought to be 18 months. It takes about a year for a volunteer board member to get up to speed, unless you have a really strong orientation program. The next year is usually pretty good, and then some board members seem to lose focus and tail off. The great ones have passion all the way through, but how many superstars are out there?

One year is definitely too short. There are some boards that are using one-year terms for first-time board members; if things go well, the person is invited to do two more. But my experience is that the first year is a learning curve for most folks. Two or three years seem to be the norm. A lot of boards allow members to serve two terms. Our by-laws allow two terms of three years, and then a third term after a year or more off the board. The record for hiatus may be held by a former board member of our nonprofit who was on for two terms in the late 70’s, and then came back for a third when he retired a few years ago. He was great the third time around.

I have to admit that I have never heard of a Chief Volunteer Officer. But there are lots of articles and books on the role of the board, and many have portions devoted to leading the board. I have used Jossey-Bass and BoardSource books before. I’d just do an online search and select a couple that look like they’re on target. Or go to your local nonprofit resource center if you have one and thumb through the materials they have. You could also network with some of the board chairs of the well-managed nonprofits in your area. A little coaching might be more useful than reading about board leadership.

The role of each board member should be clear from the time you recruit him or her. A summary of board responsibilities is part of our new board member orientation. One board member actually went so far as to summarize what in the by-laws is relevant to board member responsibilities. When a couple of the board members seemed to have forgotten their duties a few months ago, I pulled out the summary and attached it to the board packet for the next meeting, saying that there had been a question about duties and that they are spelled out in the document. It had a salutary effect.

In my experience, setting annual goals for the board as part of the organization’s goals is effective. Schedule time at your board meetings every three or six months to review progress toward goals. Last year we took another step and created annual goals for every committee. These are derived from the organization’s goals, and like all good goals, are quantifiable (can be easily measured) and time certain (have a deadline). We review committee goals halfway through the year and again at year’s end. You can also have each committee chair rate the committee members annually and share those ratings with the board leadership. We also put out a grid of board attendance each year.

You can also have individual annual goals for each board member. We take a portion of each annual retreat for the board members to state what they expect to do in terms of time, talent, and financial support in the upcoming year. And we give these planning sheets back to them at the end of the year, when each board member does a self-evaluation. Some boards have just one-year terms for new members, and then the board leadership discusses with the board member whether they want to and should continue for a two-year term. Others have a probationary period for the first year of a three-year term, and a check-in at the end of that first year.

If you have some or all of these steps in place and some members are still nodding off, then I’d suggest a survey like one our board recently took from a national organization that focuses on nonprofit boards. It asks questions about the primary areas of responsibility, testing to see if the board members know what is expected, and whether they were getting the information they need from staff. They also rate their own performance in each area. Fiscal oversight, strategic planning, the mission and fundraising are some of the items addressed in the survey. Then show the results to the entire board and have a frank discussion about the results. If that’s too painful for you or the board chair, hire a consultant to do the survey, interpret the results, and facilitate the discussion. By the way, the board leadership should be the ones enforcing the expectations, not you or the executive director. If that’s not happening, you have a leadership issue. Peer-to-peer works best in keeping the board functioning at a high level, just as it does in fundraising itself.

If it makes you feel any better, this same national firm studied my industry and concluded that boards in our sector generally tested low on fundraising. So you’re not alone in looking for something like No Doz to cure the problem.

I can recommend the BoardSource survey. I’ve taken it twice now, once as a board member of a regional planning organization, and last year as part of our organization’s board development process. It takes about 20 minutes to complete, but the questions are comprehensive, and you end up with a lot of good information that highlights the areas in which your board is functioning at a high level, and the areas that need attention. From the survey that our board took last fall, we’ve made a number of changes in how we plan and do the board’s work. We also found that in most areas we were following best practices. That's useful to know, too.

You raise several issues that I’ve recently heard discussed by board members and managers who are trying to increase the effectiveness of their boards. There is no magic number for the members of a nonprofit board. But when I was teaching nonprofit management, I looked into this question, and 8-14 seems to be the right range. At a meeting on board effectiveness this year, a BoardSource consultant cited a similar range--10-16 or so, I think. When you go above the teens, I think you’ll run into problems managing the board, and conducting meaningful discussions at meetings. In my experience, the executive committee ends up making all the decisions, while the board meetings are just window dressing.

There is one model in which I’ve seen large boards--for fundraising purposes. In those cases, the board doesn’t meet very often, the staff works closely with the members on fundraising, and the executive committee makes most of the decisions. I’m on two large boards right now. One is a chamber of commerce and the other is a university foundation. The real decision making comes at the executive committee level, and the board meetings involve mostly listening. They fail to take advantage of the expertise around the room.

As for conflicts of interest, best practice is to have a policy in place, and on an annual basis, have board members either declare conflicts or state that they have none. Conflicts are usually an issue when a board member is doing business with the organization, but they can include any situation in which the board member’s ability to make a decision in the best interest of the nonprofit is compromised because she or he could stand to benefit. Conflict of interest policies are fairly common and you might find a range of them via the internet or by contacting peer nonprofits. You could select one that fits your needs, or consult a lawyer who specializes in nonprofit boards.

If you actually are operating under a sunshine law, then there probably are requirements for public notification, or at least general practices to guide you. However, sunshine laws are generally aimed at government bodies, not nonprofits. If you’re attempting to honor the law's spirit rather than an actual law, here are some things you might do:

1. Communicate the meeting dates and times to stakeholder groups on a regular basis, generally a week or more before each meeting. This could be by newsletter, e-letter, on your Web site, or by other regular communications with those you serve, staff members, advisory boards, donors and/or others who have an interest in your nonprofit and the services it provides.

2. Put the commitment to have open meetings in your by-laws, and develop policies about public comment, including how long the public comment period will be, and how long each member of the public can speak. My experience is that few members of the public actually are interested in attending open board meetings. But when you have a “hot” topic, it is very helpful to have guidelines in place so all who attend are heard and treated fairly, and you are still able to get other business done as well.

3. After each board meeting, post a summary of your action items and significant reports on your website or places where stakeholders can easily view them so interested people can see what the board has been working on. The summary can include when and where the next meeting will be held, and you can state your policy on open meetings, too.

4. Public notice can be given through the media. Some Web sites and print media have calendars of events where your meetings can be posted. You could buy ads, but that’s pretty expensive and my experience is that the cost doesn’t match the increase in public participation.

Best practice is for nonprofit boards to have conflict of interest policies in place. The general thrust is that any time a board member has a relationship with the organization that could benefit him or her personally, the conflict has to be declared and the board (or leadership of the board) decides whether it is acceptable or not. pplying for a job with the organization while on the board is definitely within the realm of conflict. It’s also ethically wrong because it puts the board members making the decision in an unfair position. I’m not a fan of former board members going to work for nonprofits in general, but it happens more often than one might expect. There should at least be separation so the decision is made in an ethically sound way.

Generally, you need to reach a certain point in the size of your annual budget, or want to apply for a grant that requries the nonprofit undergo an annual audit. A million dollar budget might be a good milestone. Many firms that conduct audits have a nonprofit practice. Some have a nonprofit rate, too. I would suggest that you ask some of the larger nonprofits in your area for a recommendation.

Your questions about social entrepreneurship are very timely because the Stanford Social Innovation Review has a relevant article called "Social Entrepreneurship: The Case for Definition" in the current issue. It is available for free on the magazine's Web site. In addition to this article, you'll find a link called "Social Entrepreneurship", which will bring you to many other articles on the topic. Some of these are free while others require a subscription to SSIR. I hope the variety of perspectives and experiences presented will give you a good sense of this exciting and still-emerging field.

Your idea to hold a competition to create items that support the theme of your organization, then sell the items as a fundraiser, sounds good. Selling items, especially ones that support your mission, is not a conflict with your nonprofit status. A nonprofit organization can actually earn a profit and not pay income tax, because what we commonly call "nonprofit" status is actually "tax-exempt" status granted under Section 501(c)(3) of the Internal Revenue Code. There are some limits on the ways you can generate tax-exempt profits, and I am not an expert in the tax code, so please consult a Certified Public Accountant in your state for a formal opinion before proceeding. The CPA can also answer your questions about sales tax on the items you sell.

In addition to considering the tax implications, you should think carefully about the time and effort your organization will have to invest in this fundraising effort. You probably will not earn a large profit on the bookmarks and greeting cards that you sell because these are typically low value items. Prepare the best estimate you can of your expected total revenues, costs, and net profit before you decide what to do. It might make sense to just hold the competition as a way to increase public recognition of your organization and mission. You may decide to skip the manufacture and sale of the items if your revenue-cost-profit estimate shows that you would be better off doing some other activity as a fundraiser.

I spoke with the CEO of Wikia, the for-profit arm of Wikipedia, and he suggested PBwiki (www.pbwiki.com) and Wikispaces (www.wikispaces.com) as providers of private wikis. Both companies provide the wiki software, hosting, and backup for a monthly fee.

My quick response to your question--based on how you worded it--is that it is not worth charging your clients because the small fees will produce so little income. However, there are several assumptions built into your question, and they raise some important questions. How "small" does the fee have to be in order to avoid discouraging your clients from using your services? If the client fees "cover very little" of your costs, what are your realistic options for covering the remaining costs? Is there a good reason to charge a small fee even though it generates very little income? (Perhaps clients would use your health services more thoughtfully, for example.) Would charging a fee be a simple first step for your organization to try and evaluate, before undertaking the additional effort of finding other income sources?

Not knowing your specific circumstances, I'll suggest some general guidelines for generating income by charging your clients for your services. First, you should be clear about your objectives and your financial projections for the future. How much fee-based income do you need or want in each of the next few years? Is your fee-based income target based on an expectation that your other sources of income will not meet your future needs, or do you simply have a desire to diversify your income sources? Is your objective to become completely self-supporting and no longer dependent on any grants or contributions?

After clarifying your objectives, estimate the percentage of your fee-based income target that can realistically be provided by charging your clients. I assume from the way you worded your question that it will be a very small percent. What other sources of non-contributed income will you be able to find in order to meet your target? As with so many decisions, it comes down to comparing the benefits and costs of various alternatives. In addition to the "hard" costs associated with the effort needed to obtain additional fee-based income, consider the "soft" costs such as a negative impact on your organization's mission.

Here are some questions you need to answer before moving forward:
1) What are the best two or three opportunities for generating earned income while still holding true to our values and mission?
2) What criteria are most important to our organization in choosing which of the options to implement?
3) What is the potential revenue that we could generate, over what period of time? And at what cost?
4) What staffing and other organizational capacity considerations should we consider in order to be successful?

Ideally, you should plan an offsite meeting (and I really mean offsite!) for at least a day to accomplish the following goals:

(1) Get to know each other better as people so that you can work together more effectively. Create an open forum to discuss how you work best, the type of work you love to do, what you want to do more of, what you want to do less of, two things that make you smile, and two things sure to make you angry. Other fun team building activities will also help the you connect with each other.

(2) Revisit department goals and values to make sure everyone is in alignment. This will give you a chance to surface any potential conflict so that you can address it and move forward as a cohesive team.

(3) Establish priorities and accountability. Once you have agreed on the department's goals, how will you accomplish them? What resources and support are needed? Most importantly, who will do what and by when? Be sure to establish a mechanism to follow up on commitments.

Pitfalls in leadership transition happen when new leaders don't take the time to do the above activities and learn from existing team members. A "takeover' mentality will only alienate team members, resulting in suboptimal performance and increased turnover.

It's important to know how the individual likes to be rewarded, and then respect his/her wishes. (It's the platinum rule, Do unto others as they would have done unto them.) Don't assume that how you would like to be recognized is how they would like to be recognized. Some people thrive on public recognition, while others prefer to be recognized privately. When in doubt, just ask.

The American Society for Training and Development does an annual survey of training programs in general, and provides some valuable metrics. They also have good publications on leading leadership development strategies and programs. I suggest that you talk to peers in your industry to benchmark since practices vary widely from industry to industry, and depending on organizaion size. Finally, your executive team might want to come up with your own benchmarks for success since every organization and culture requires something different (i.e., decision making may be a big issue for leaders in one organization, but no problem at all for leaders in another organization). A question for the executive team to ask is “How will we know that our leaders are being effective?” Then, determine a metric that will best measure that success factor.

I'm not an expert in your industry, so I'm likely to cover ground that you've already examined. Here are the results of a quick bit of research on market data:

There are resources such as the CDFI Data Project (CDP) that claim to have a large dataset on CDFIs. The CDP has datasets for the period FY2002 to FY 2004. The reports include industry trends, impact, and data breakdowns by industry sector:

• The CDP’s FY 2004 Report is based on their FY 2004 survey of 517 CDFIs.
• The CDP’s FY 2003 Report is based on their FY 2003 survey of 477 CDFIs.
• The CDP’s FY 2002 Report is based on their FY 2002 survey of 442 CDFIs.

Perhaps you could piece together information on bankruptcies for CDFIs by looking across reports for three years to find changes in organizational status.

As for nonprofits, Stanford did a survey of 1,000 nonprofits in the San Francisco Bay Area--the Stanford Project on the Evolution of Nonprofits. It may have some data that you would find helpful. In particular, there is data on the ages of nonprofits by size and activity. There may be a way to impute the rate of turnover of nonprofits from the data. Also, you could contact one of the authors to see if more detailed data on bankruptcies is available.

In my experience working for start-up organizations, it's very helpful to make some progress before trying to raise money. I think that people are naturally skeptical of new ideas and new organizations. My suggestion is that you expand the definition of progress to include more than the delivery of your services. Getting endorsements from respected business people and NGO leaders, building advisory boards, and forming partnerships with established organizations are examples of ways that you can further the mission of your NGO. With each incremental bit of progress you make, I suggest you make a point of telling all those who are interested in your work about the good news. A steady string of good news will help build support for your organization. Some companies create a "Good News" schedule to help ensure that they are constantly sharing information about the progress of the organization with the greater community.

I'm familiar with your problem because I've consulted hybrid organizations. To date, I haven't located any compensation studies that address these kinds of entities. I do suggest that you focus on private sector salaries, since your employees will work with those clients, competing with private sector employees in their work product; and you want them to be competitive in skills. However, you may not be able to meet private sector compensation and have to reach some kind of compromise. The balancing factor in attracting people with somewhat lower compensation is recruitment strategy. You might position your organization as highly desirable because it has certain traits that for-profit entities don't.

First of all, congratulations on the work you are doing. Animal welfare is a very personal issue for me, and I believe I've read about your organization. In recruiting an effective leadership team, there are several key factors:

1) Recruitment sources. If you're looking for someone that can mobilize around animal welfare, you need to define appropriate backgrounds and sources for those people and target them accordingly.

2) Behavioral traits. You need to identify the behavioral traits that are mandatory in your organization (they differ from organization to organization). Examples may be compassion, public advocacy, collaborative skills, etc. You need to include among these traits inspiration, commitment, and other qualities you define as uniquely necessary for leading volunteers.

3) Leadership skills. Of course, you need to define required background and skills for the leadership job itself, as well as the skills necessary to contribute to the organization at large.

For a more complete view of targeted leadership selection and development, please refer to my Ask ACT page

Your concern about CPAs tending to specialize in either nonprofit or for-profit tax issues is valid. I'm afraid that I can't help you because I am no longer a practicing CPA. I suggest that you contact your local or state CPA society to see if they can help you find someone. For contact information for all state CPA societies, see this directory.

Passive-aggressive behavior is destructive and should be addressed as soon as possible (particularly when it is affecting the whole team). Don’t wait for performance evaluations – act now! Constructive feedback is a powerful tool in shaping behavior and improving performance. However, many people fail to deliver it effectively, if at all. Constructive feedback can be viewed as overly critical, or is often vague and unclear, leaving the recipient unsure of what to actually do with the feedback. In addition, in an attempt to avoid confrontation or an uncomfortable situation, people may sugarcoat the feedback by downplaying the impact or minimizing the importance of it. In the end, this serves no one.

Schedule some uninterrupted time with the individual. When you meet, create a safe environment. Let the person know that you would like to share some feedback with him/her and state your intent in doing so. (It’s important to make the intent something they can support!) For example, “I’d like to share some feedback with you about some behaviors that I (as well as others on the team) have noticed. I want to talk to you about this so we can improve our working relationship and keep the team focused on the task at hand." With this approach, it's more likely he/she will be receptive to the feedback and hear what you are saying, rather than get defensive. When giving feedback – particularly constructive feedback – it is important to do the following:

1) Make it specific rather than general. Saying, “You have been passive-aggressive lately” is not as helpful as saying, “You agreed to take responsibility for completing the customer survey, but didn’t return any of my phone calls regarding this project and didn’t hand in the report.” The former statement leaves much room for interpretation and can cause confusion about what behaviors are actually expected.

2) Make it descriptive rather than evaluative. This means that the feedback should focus on the facts, as opposed to saying what is good or bad. This also helps the recipient be less defensive. Instead of saying, “Your follow-through is poor,” it is more effective to say, “The team was in a real crunch today, trying to get the presentation slides to the client to be reviewed. I was counting on having the highlights of your report included in the presentation. This caused us to be late in getting the slides to the client. Next time we have a deadline like this, I’d like to see you deliver your portion on time.”

3) Check for understanding and emotion. Make sure the recipient hears and correctly interprets the intended message. Look at the facial expressions: Does he/she look surprised, shocked, confused, angry, or ambivalent? Invite the recipient to ask clarifying questions or have them paraphrase the message to check for understanding. Also invite them to discuss how they are feeling. You might say, “You look rather surprised. How are you feeling right now? Are you clear on what’s expected? Is there anything else you’d like to discuss?”

4) Ask how you can support the person in improving. Asking what the recipient needs from you opens up the dialogue and lets the person know that you are there to support him/her and want to see him/her succeed. Asking, “What do you need from me to help you get your work done on time?” may elicit a response that sheds light on some of the underlying issues.

Feedback shouldn't be a surprise. Hopefully, he has been receiving feedback along the way about specific behaviors that he has needed to change. Start out by stating your intent in giving the feedback. For example, “My goal in giving you this feedback is for you to be able to step up and get that promotion….” Then describe the actual behavior that you noticed and the situation in which it occurred (i.e., “You did not show up to the last three of our staff meetings”), the impact that it had (i.e., “this upset the rest of the team who were counting on getting key updates from you so they could move forward with their projects”), and then articulate the desired results (“I’d like for you to be at all of our staff meetings from now on. If you can’t attend, I’d like for you to let me know and to send someone from your team in your absence”).

If he becomes defensive, don’t defend your feedback or get combative--just notice his behaviors and get curious about what is going on for him. Show empathy for how he is feeling. For example, “You just crossed your arms tightly and got very tense--I can imagine this doesn’t feel good. What are you thinking right now?” Engage in dialogue while upholding your expectations of him.

A few years ago, I worked on a pro bono consulting project for a local nonprofit gym. The gym was having trouble retaining lifeguards and thought that the problem was insufficient compensation. As part of the consulting work, the ACT team called up managers at similar but non-competitive organizations and asked about employee turnover rates and compensation plans. We found that our client was doing as well as other gyms in staff retention, and that paying more was unlikely to solve the problem. This was welcome news to the organization.

Based on my experience and your description of the situation, I don’t think you should write a strategic plan at this time. Before you start writing a plan, you should lead your board through a discussion of your organization’s mission, vision, and values. With broad agreement around these key underpinnings of your organization, there’s a good chance that you can bridge the differences among your board members. The worst fate for a newly written strategic plan is for some of the decision makers to reject it immediately because it doesn’t reflect their beliefs about the organization.

If there’s board-level disagreement about the future of a particular program, consider writing a plan just for that program, rather than a strategic plan for the entire organization. A few years ago I helped write a plan for a local Habitat for Humanity chapter that looked at the expected benefits, costs, and required timelines for a program to resell building materials. By focusing on just a small part of the organization’s activities, the ACT team was able to write the plan quickly. Ultimately, the board came to a consensus around the issue.

It depends. If the board of directors agrees that the mission statement still accurately reflects what the organization stands for (i.e., the purpose and values of the organization), then you can use it to create a clear picture (vision) of the organization two to three years in the future. If, however, the board, executive director, or critical stakeholders don't agree that the existing mission statement provides clear guidance, it would be wise to take the extra time to update the mission, vision, and core values statements.

The mission of the Urban School of San Francisco is a good example of a strong statement: "The Urban School of San Francisco seeks to ignite a passion for learning, inspiring its students to become self-motivated, enthusiastic participants in their education—both in high school and beyond."

• The school’s purpose is clear: “To ignite a passion for learning”

• The values it espouses--“inspiring growth, helping high school students to be self-motivated and enthusiastic participants in their own education”--provide clear parameters within which the organization will function. The mission would clearly conflict with a strategy that called for no student participation in school decisions, as well as a strategy in which parents, teachers, and administrators did not share in that decision process.

• This mission statement is used regularly inside the school and applied in many situations in which decisions are made and resources allocated.

• At the start of each strategic planning cycle, they start by clarifying what the school will look like in X years, at the close of the current planning horizon.

First, you will want to spend some time checking in with your team to see how they feel about the change in strategic direction, and what concerns they may have. How much of the meeting you dedicate to this discussion depends on how well the change has been communicated and received thus far. The conversation will allow you to see who is less comfortable with the change, and where you might need to focus extra energy going forward. It will also allow you to help the group get very clear about what the organizational and team goals are.

In addition, the meeting can be an opportunity for the team to continue to get to know and appreciate each other. Building in activities that acknowledge people’s contributions and that help them understand each other’s individual work styles can be instrumental in motivating the team to execute on new goals.

Finally, you will want to discuss what the new goals mean for each team member by assigning responsibilities and establishing accountability (determining who will do what and by when).

Don’t make the mistake of simply handing out a written plan to your board and your staff, expecting people to read and learn from it. As you write the strategic plan, you need to have a parallel process in place to present your plan to your various audiences. The most effective presentations are rich with stories, images, and analogies. Take a look at “Why Bad Presentations Happen to Good Causes” for ideas on how to present your materials.

The written plan is an opportunity for you and your staff to think through your organization’s future. The future you envision may or may not come true, but that’s not the goal of the effort. The goal of the effort is to hone your skills as an organization and to commit your assumptions and plans to paper so that key personnel know how to contribute to the setting of strategic direction. Think of strategic planning as exercising one of the organization’s muscles – it needs to be done periodically to maintain strength.

Thank you for your question. You're right that some other factor was making retention difficult. The client was a YMCA that offered swim classes in their pool. There was plenty of demand for classes, but not enough lifeguards to monitor the pool; the result was that classes were being cancelled for lack of staff. The client's hypothesis was that a pay raise would help recruit and retain lifeguards. Our ACT team investigated the experiences of other YMCA's facing similar situations. We found that other Y's paying higher wages in the same geographic area had the same problem. Further research revealed that the real problem was that the candidate pool of people certified to be lifeguards (or willing to go through lifeguard training) had shrunk substantially in recent years. My guess is that while plenty of kids swim competitively, few are willing to work for hourly wages at the YMCA when they could be training, studying, etc. Thus, our team informed the client that a few more dollars per hour was unlikely to make a big improvement in attracting applicants and retaining existing employees.

A 2005 survey of nonprofits in the San Francisco Bay Area found that close to half of the operating charities were less than 10 years old Doing a market analysis ensures that you use a systematic process to learn about recent changes in your organization’s external environment. It’s important for three reasons:

1. Donors, potential volunteers, and clients see the entire range of nonprofit organizations, so it’s important for you to understand that same perspective when you think about what makes your organization special. For example, if a funder suggests that your organization is just like “A”, it’s important that you be able to explain the similarities and differences between the two organizations.

2. Finding peer organizations gives you an opportunity to expand your network of supporters and advisors.

3. Market analysis gives you the information you need to support the strategic plan. For example, market analysis of the funding and earned income activities of your peer organizations will help support the assumptions you make in your own funding and earned income projections.

The term "earned income" covers a multitude of possibilities. Put broadly, it indicates almost any income which a nonprofit receives from sources other than contributions and grants. It is most commonly income from services provided or products sold. Many nonprofits (performing arts organizations, for example) generate substantial earned income, but a nonprofit with little or no earned income may want to evaluate ways to increase the amount of earned income it receives, in order to reduce its dependence on contributions and grants. See my ACT page for more information and an approach to evaluating a nonprofit's potential for generating earned income.