Stanford Social Innovation Review

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.

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 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.

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.

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.

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.

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.

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.

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.

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.)

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.

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.

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.

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.

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