Managing nonprofits in an"age of hope"

– Prof. James Post, an authority on corporate governance, teaches “Strategies for Nonprofits” at the Boston University School of Management. The views expressed are his own. –

I am inclined to think the Bernard Madoff affair has blown the lid off the financial madness of this decade.  We have been living in an age of fraud, and now must rethink the way we do business.  As John Kennedy once appealed to the nation’s better angels to call us into public service, Barack Obama’s inaugural address should instruct us on our obligation to serve the greater good.  It’s not just a moral concept; it’s good business.  I offer a corollary as well: Without good business, how far will a moral concept take you?

The management cliché about nonprofits goes something like this: What they lack in business savvy or operating budgets they make up for in passion and vision.  This notion was especially apt in an age of decreased governmental support.  And there’s a private-industry parallel declaring that firms may have a wealth of professionally trained managers but run in the red when it comes to inspiration.  Few organizations have it all, so private and public industry must continue to collaborate to serve the community.

If Obama can keep the lives of real Americans in his sights, despite the overwhelming urge to obsess over Wall Street and Baghdad, he can have a profound effect on reversing the destruction wrought by the age of fraud.  He can strengthen the bond between public industry and the private sector in ways that benefit all of the stakeholders.  In many ways, the time is ripe for nonprofits to set a new example, one that marries sound management and ethics, and proves they can stay together for the long haul.

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How do nonprofits rise to that challenge?

For starters, Obama’s Social Entrepreneurship Agency for Nonprofits and Social Investment Fund Network purportedly will “build the capacity and effectiveness of the nonprofit sector.”  Not exactly a trillion dollar cash infusion, but a seat at the policy table.  That means better lobbying access, governmental R&D/capacity-building support, a streamlined grant-making process, more explicit encouragement of civic involvement, and greater accountability.  More attention will be paid to the energy, education, and training sectors, meaning added incentive for people to get involved in these areas.

Nonprofits, you need to dust off your gym bags.  If you’re finally going to have that equal playing field in the competition for governmental attention and support, you need to hone your skills and get your team into shape for the upcoming season.  Whether a senior manager looking to move up the professional ladder or a new executive director seeking more effective ways to guide and manage your organization, you need to strengthen your skill set, increase your confidence to lead, and join a focused network of people who share a vision of management excellence.

For instance, when was the last time you stepped away from the day-to-day tactical management of your underfunded, overburdened organization to think about long-term strategic planning, more efficient project management practices, or funding innovation?  How often do you network with your peers in other organizations and report best practices?  What steps have you taken to insulate yourself from the consequences of our unhealthy economy?

Most importantly, you must avoid scandal (or the appearance of scandal) by having unquestionable ethics and demanding the same from your team.  You must engage in new and innovative partnerships — with other nonprofits and with corporations; think like an entrepreneur — creatively, resourcefully, relentlessly.  And you must improve your accounting and assessment practices.  These are just non-negotiable, and if I have to explain why, you’re more out of shape than you thought.

In short, nonprofits are not exempt from Obama’s call to change.  Reject low standards.  Raise your sights.  Find new ways to be heard and taken seriously in a communications landscape that seems to have the bandwidth for only two to three stories a week.  Most importantly, get the training you need to run your organization efficiently.  You can’t capitalize on any of these opportunities if you’re out of breath before you even warm up.