Avoiding the High Cost of Ambiguous Decisions

Imagine this: You are leading your weekly team meeting, and you have just five minutes left to galvanize people around a critical decision that will affect many people. After quickly summarizing the discussion, you say that you think all are agreed and check if there are any objections. Hearing none, you close the meeting, feeling relief that the decision has finally been made.

What an Interim CEO Should Expect from the Board

In a previous post I discussed a board’s expectations for an interim CEO. But the interim should also have expectations and set them with the board before engaging in an assignment. Not all successful CEOs (or presidents or executive directors, whichever term an organization uses) will be effective in an interim role. Taking over during a leadership transition is a much more fluid and, at times, more demanding situation than heading an organization as its permanent CEO. With the proper level of cooperation between the interim, staff, and board, however, an interim leader’s tenure can be a positive experience that moves an organization forward while a search is underway for the next CEO.

What a Board Should Expect from an Interim CEO

Interim CEOs (or presidents or executive directors according to an organization’s naming convention), by their definition, serve during a period of transition for an organization. If the outgoing leadership change is unplanned, it may also be a time of upheaval Volunteer board members are suddenly thrust into more details around the organization’s financial and programmatic management, community and donor relations, and staff retention

Opening a Window on Your Nonprofit’s Performance

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As a conscientious leader of your organization (board member or senior staff), you put a lot of thought and effort into developing your strategic plan. Ideally, the planning process resulted in quantifiable goals that will be tracked over the course of the year to measure progress on the plan. Peter Drucker’s quote, “What gets measured gets improved,” is as valid today as when he first said it. But the challenge is how best to track and report on progress, because you’re engaging busy volunteers who are probably only working on portions of the plan, and then only sporadically. Because many people are visually oriented, charts and graphs are natural ways to report measurement. That’s why many organizations regularly produce dashboards as their windows on performance.

Resources for Nonprofits on the New Overtime Rule

new overtime rule will go into effect on December 1, 2016. Under it, an increased number of salaried employees must receive overtime pay for work exceeding 40 hours per week.

A Crisis of Confidence in our Nonprofits

In last month’s blog post, Is Your Nonprofit Prepared for a Crisis?, I wrote about the need for organizations to develop a crisis plan. I wrote the article in response to the September shooting at the Navy Yard in Washington, D.C., an event caused by external factors.

The Importance of Communication in Nonprofit Management

I joined a friend for lunch the other day to talk about a course he is teaching on management and organization. I used the occasion to dig back into my files (I still have some paper files!) to look at one of my favorite articles from the Harvard Business Review - all the way back to March 1978: Zen and the Art of Management by Richard Tanner Pascale. I think the article still holds up. It foreshadows some of the wisdom of Jim Collins and his assessment of the importance of the team to any great organization’s success (or later fall from greatness).

Managing in Tough Times: Seven Steps

Reprinted from

Tough times force hard choices. And these are rapidly becoming the toughest times most of us have ever seen. Even for nonprofit leaders who are accustomed to "making much of little," the repercussions of the unfolding economic downturn are likely to pose unprecedented challenges. It's hard to imagine that many (if any) of us in the sector will escape unscathed.

So what to do? Not surprisingly, there are no easy, or even particularly novel, answers to that question. But learning from what others have done before in the face of less severe financial crises can be extremely useful. To that end, The Bridgespan Group has begun collecting insights and advice from our clients, from other nonprofit leaders and experts, and from our own leadership. The results are sketched below. We'll be adding to and complementing them over the coming weeks and months, as we all learn more about what it takes to manage successfully through tough times.

From the President's Office, September 2008

Dear Friend:

Issues around the management of endowments are an area of growing interest in the nonprofit sector.

For some time now, we've been seeing articles on the eye-popping size of some university endowments. Topping the list is Harvard, whose endowment as of June 30, 2007 (the latest figure available at this writing), was more than $34 billion, larger than the budgets of many countries. Other universities, such as Yale and Stanford, are not far behind, and 76 universities have endowments over $1 billion.

Concurrently, we've been reading about the amazing financial management performance of these endowments. According to the Chronicle of Philanthropy, university endowments had a median growth of nearly 22 percent last year, with Yale leading the pack at 28 percent. I wish my TIAA-CREF account had done the same!

With college costs continuing to rise well above inflation and with the college loan system mired in the credit squeeze affecting many parts of our economy, it's not surprising that the size of these endowments is attracting legislative attention as well. Senator Charles Grassley (R-IA) and Representative Peter Welch (D-VT) have scheduled a roundtable discussion next week on rising college costs and the potential impact of mandatory payouts from university endowments. This should be interesting.

We've already seen some of the largest universities voluntarily increase scholarship amounts. Will this action be enough to deter more Congressional scrutiny? I doubt it. The endowments are so large, and the need so great, that I think we'll see more action over the next year reviewing the obligations of university endowments.

It would be a mistake to think this issue affects only universities. Some national large nonprofits also enjoy enormous endowments. The Shriners Hospitals for Children, the Nature Conservancy, and the Museum of Fine Arts, Houston, to name just a few, all have endowments in the billions. How large an endowment is appropriate? How large does an endowment have to be to give an organization the financial support it needs to be a reliable and secure provider of nonprofit services?

And, while we're on the subject of endowments, let me return to one of my favorite topics: leveraging the power of foundation endowments. We all know that currently almost all foundations adhere strictly to the 5 percent payout required by the IRS. Yes, there are exceptions, and we applaud those with the courage and mission determination to move over the 5 percent line.

We applaud even more foundations that invest small portions of their endowments in PRIs (program-related investments) and MRIs (mission-related investments). PRIs and MRIs are not grants; instead, they are loans extended at below market rates to organizations that have solid business plans and are capable and committed to repaying the loans. Although there is much talk in the sector, the numbers of such loans are still quite low.

PRIs and MRIs could also be the key for providing nonprofits with the desperately needed capital necessary to become scalable and sustainable. At GuideStar, we think they are a logical and appropriate way to make foundation endowments more responsive and a great way to leverage the impact of foundations.

What do you think?


Bob Ottenhoff
President and CEO