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269 posts categorized "Nonprofit Management"

Invest in Leadership Development to Retain High Performers of All Races

March 28, 2015

Leadership_diversityWhile people of color in the United States account for nearly half – 48 percent – of the total student population, leadership in nonprofit education organizations doesn't mirror this demographic fact. In a recent survey, From Intention to Action: Building Diverse Leadership Teams in Education to Deepen Impact, Koya Leadership Partners and Education Pioneers found that at the director level within education nonprofits, only 39 percent of leaders are people of color. At the vice president level, the number dips to 18 percent. At the CEO level, 25 percent of leaders are people of color.

Through our collective research, we concluded that while most nonprofits have the right intentions when it comes to diversity and inclusion, many don't have practices in place to build and retain diverse leadership teams.

The absence of tools for ensuring "fit," a lack of retention initiatives that support employee and career growth, and not enough time spent building strategic partnerships that help attract candidates of color are leading to a less diverse workforce and to poor hiring decisions across the board.

Among other things, our survey found that nonprofits often put too much focus on recruiting, rather than investing in, diversity at the leadership level. While recruiting is necessary to bring talent into an organization, a healthy organizational culture depends on leadership development from within. Without it, nonprofits – including education nonprofits – can expect to continue to experience high turnover.

While few organizations track turnover rates by race, ethnicity, or gender, our survey found that the annual employee turnover rate for nonprofits averaged 20 percent – about 5 percent higher than the national average and 12 percent higher than in most for-profit companies. That turnover rate costs nonprofit organizations dearly in terms of both productivity and dollars. According to Kim Ruyle, who sits on the Society of Human Resources Management's HR Disciplines Special Expertise Panel, the average cost of turnover is 150 percent of a departing employee's annual salary. For a sector with scarce resources, the budget implications of staff turnover – not to mention the cost in terms of morale and disruption – can be dramatic.

At Koya, we know that staff development is key to retention. Team members who feel they have an opportunity to grow professionally as well as a clear path to the acquisition of new skills and responsibilities are far more likely to stay with an organization.

So what does that look like? Research shows that on-the-job tasks which challenge employees to "stretch" beyond their comfort zones, formal and informal training opportunities, and targeted mentoring and coaching initiatives are the most powerful forms of professional development. Bridgespan, a nonprofit consulting group, recommends that on-the-job challenges and targeted mentoring/coaching should account for 80 percent to 90 percent of an organization's professional development strategy, with continued education (seminars, trainings, workshops) comprising the other 10 percent.

Our survey found that organizations looking to strengthen their diversity and inclusion practices typically start by building strategic partnerships with universities, minority associations, and other sources of diverse talent to identify promising diversity candidates and then invest in training to ensure that the interview process for all candidates is fair and impartial. On the retention side of things, organizations that are successful in developing and retaining leaders of color tend to provide them with ample support through formal professional development programs and/or coaching/mentoring.

For organizations that may not be there, a full complement of recruitment and staff development practices — some free or low-cost — are readily available. Here are a few suggestions:

1. The report from Koya Leadership Partners and Education Pioneers includes an Organizational Audit Checklist designed to help organizations create a baseline with respect to their diversity and inclusion practices. The checklist is organized into four categories — leadership, talent management, culture, and performance — and organizations that complete it can begin to see where they are strong and where improvement is needed.

2. Invest in a range of formal and informal professional development tools/techniques such as mentoring, coaching, and education opportunities.

3. Develop and implement a process for identifying and evaluating high-potential employees of color to ensure that your organization's leadership development pipeline includes such candidates.

4. Track promotions and staff development. Hiring and retention stats are nice and can be useful in advancing the conversation around diversity, but tracking actual staff development milestones, while frequently overlooked, often is more important.

5. Take advantage of external resources and help. Find an organization that is already where you hope to be in terms of its diversity/inclusion practices and ask the human capital people there to walk your organization through the steps the organization took to improve its leadership development practices and build a truly diverse leadership team.

One such organization, The New Teacher Project (TNTP), works with school districts and state departments of education nationwide to ensure that poor and minority students get outstanding teachers. Recognizing that it needed to do more to practice what it preached, TNTP created a Diversity Recruitment Committee and tasked it with increasing the number of African American and Latino employees on staff. To that end, members of the committee attended conferences and networking events likely to attract talented candidates of color, mined their own networks for referrals, and conducted cultivation calls with potential candidates. They also worked alongside TNTP’s Staff of Color Affinity Group to create opportunities for professional development and advancement for employees of color.

Headshot_miecha_forbesBuilding a truly diverse leadership team is not easy work, nor does it happen overnight. It requires dedication, commitment, and perseverance in the face of inevitable setbacks. But the work is well worth the effort. The people served by nonprofits nationwide deserve innovative, effective solutions that can only be developed by high-performing, diverse teams of dedicated professionals who reflect the racial and ethnic diversity of the communities whose needs those organizations are striving to meet. For other tips on building diverse, inclusive teams read our full report, From Intention to Action.

Miecha Forbes is the senior director of human capital consulting for Koya Leadership Partners, a national executive search firm that works with nonprofits to achieve lasting social change.

[Infographic] 10 Traits That Make Nonprofits Great

March 21, 2015

This week's infographic, courtesy of the Horatio Alger Association, a nonprofit educational organization "established in 1947 to dispel the mounting belief among the nation's youth that the American dream was no longer attainable," doesn't break any ground when it comes to the traits that make nonprofits great. These are things all nonprofits need to (rather than should) do if they hope to succeed over the long term. But while some (#4, #6 and #9) are more important than others, all contain at least a kernel of good advice....

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[Infographic] The Millennial Wheel of Disengagement

February 14, 2015

It's been a slog, but the economy seems to be healing, with job creation returning to levels not seen since the final years of the Clinton administration. That's a good thing, for lots of reasons — not least of them the fact that every day between now and 2030, 10,000 boomers will retire and start receiving Social Security and Medicare benefits. Is that a problem for the economy? The Social Security Administration thinks so — and not just because 33 percent of its workforce and 48 percent of its supervisors will be eligible to retire this year.

But wait. Despite what you may have heard, millennials, 77 million strong and comprising a quarter of the U.S. population, are eager, ready, and -- we all should hope -- willing to save us.  As the infographic below from Virtuali, a leadership training firm suggests, they just need a little attention and opportunities to show their stuff. 

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Beyond the Kitchen Table: The Board’s Evolving Role

January 22, 2015

Many organizations begin as "kitchen table" groups: a bunch of neighbors sitting around somebody's kitchen, trying to solve a common problem or meet a community need. These folks share a passion for the cause and a willingness to roll up their sleeves and do the work.

They're seldom skilled in nonprofit governance, and, frankly, they don't even think about that stuff. They just want to fix what needs to be fixed.

Sometimes these informal groups continue for years or decades without growing or changing significantly, and their familiar leadership structure continues to serve them well. For example, I belong to an all-volunteer organization that has had no staff for most of the past seventy-five years – and yet the work gets done.

Taking "The Leap"

In other cases, these groups want to expand their impact, so they decide to hire employees and open an office. My colleagues at the Institute for Conservation Leadership call this stage "the leap," and it's filled with peril. Organizations hiring staff for the first time must address issues such as:

  • Now that we have an employee(s), how does our role as a board change?
  • How do we provide supervision without micro-managing?
  • How will we ensure that our staff has adequate resources to do the job well?
  • How do we evaluate our programs, our staff, and each other?

At this stage, other problems may surface. Board members who originally got involved with the organization because they care about the issue or cause are suddenly responsible for personnel policies, staff supervision, a more detailed level of planning, and greater responsibility for fundraising.

Illus_board_schematic
"Four Stages of Organizational Development" adapted, with permission, from the Institute for Conservation Leadership.

The visionary leader(s) who founded the organization may be unwilling to share power with the staff, which can lead to conflict, confusion about roles, and employee turnover. Or maybe the board breathes a collective sigh of relief, backs away, and abandons its responsibilities, assuming the employee(s) will do everything.

As you can see, the skills needed to start a group are not the same ones needed to take it to the next level of effectiveness.

The Sweet Spot: Moving to Shared Governance

As a nonprofit continues to grow, expand its programs, and hires more staff, the board's role continues to change. Because organizations become more complex, board governance also becomes more complicated.

In the next phase, sometimes called "shared governance," board and staff share power and responsibility, are clear about their respective roles, and have systems in place to create orderly transitions as people leave and new ones come in.

At this stage, the board has explicit written agreements that define what is expected of each trustee and what he or she can expect in return. These groups have a culture of accountability and mutual respect; they also have fun together and celebrate their shared accomplishments.

Clearly, board requirements and behavior must evolve as organizations develop and change. The board you need when starting something is not necessarily the same board you'll need to grow it to maturity.

So if somebody tries to convince you there is only one correct model of board governance, beware! No single "right way" will be relevant to all nonprofits, or even to a specific organization at different stages in its life.

Headshot_andy_robinsonTo learn more about how to develop and maintain an effective board at every stage of your organization’s life cycle, join me on Thursday, January 29, from 1:00-2:00 p.m. for the Foundation Center webinar Building a Board That Works. I'll share tips for recruiting the right mix of board members for your nonprofit, ensuring that they fundraise successfully, and keeping them motivated and accountable.

Andy Robinson, a consultant and trainer based in Vermont, is the author of six books, including Train Your Board (and Everyone Else) to Raise Money. This post originally appeared on the Philanthropy Front and Center-New York blog and is adapted from Great Boards for Small Groups (Medfield, MA: Emerson & Church).

Seven Measures of Financial Health

November 24, 2014

Headshot_john_hooverThe Internal Revenue Service is requiring more public disclosure from charities. The industry has data aggregators – GuideStar, Charity Navigator, and the Urban Institute, to name a few – that aid in this process. But a comprehensive analysis of an organization’s finances is the only way to really understand its overall health and viability. And while a verdict of weak or declining health is never welcome, it can be seen as an opportunity to move forward with new strategies, partnerships, collaborations, or even a merger.

Before you can determine your organization's financial health, however, you need to ensure that you are looking at the right measures:

Step 1: Determine what you want to measure. Identify your top measures. Focusing on a handful of top measures makes it easier to take a deeper dive into the data, while too much analysis can compromise stakeholders' ability to focus on the bigger picture.

Step 2: Establish benchmarks and targets. Each area of the social sector is different. To determine a reasonable target range for each of your measures, you need to have a good understanding of your peers and competitors. For example, universities often have significant operating surpluses that they then redirect to their endowment, scholarship, and/or capital funds. Once you've determined the appropriate ranges, establish targets in the top quartile for each measure, and use the bottom quartile as an early warning "time-to-right-the-ship" system.

Step 3: Determine your units of measure. Choosing the right unit – whether it's percentage, a ratio, or time – for each measure will help you tell a story that brings additional donors and stakeholders to the table.

Step 4: Use a consistent period of time. A rolling five-year period is a good length of time for establishing organizational trends. For instance, if four of the last five years resulted in operating deficits and there is no action plan to achieve a surplus, it's likely the deficits will persist. On the other hand, revenues can change significantly from one year to the next. A charity may record revenue in year one but not spend it until year two or three. Looking at year one – or year two or three – in isolation could skew the picture and lead to unwarranted optimism or concerns. Looking at all three years or, even better, a rolling five-year period, will give you a more accurate picture.

Below are some commonly used measures of financial health:

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Taking Stock of Your Nonprofit’s Revenue Potential

November 21, 2014

Headshot_nancy_osgoodIf you've ever worked in retail, you're familiar with the taking-inventory drill:  The store closes early and the employees hunker down and count the merchandise.

Taking inventory is the process of counting and valuing what a store has in stock. Although time-consuming, it has many benefits:

  • It flags issues before they become larger problems.
  • It provides an explanation for bottom-line results.
  • It creates a benchmark.
  • And it helps management decide whether or not to invest in additional stock before expending resources to buy more.

So what do retail practices have to do with nonprofit leadership and revenue?

As nonprofit leaders and trustees, we need to "take stock" of our organization’s revenue on a regular basis. Doing so in a thoughtful, deliberate way allows us to avoid the risk of "buying more"― that is, pursuing new opportunities ― before we've "sold" what we already have.

Several years ago, I developed a tool for doing just that. Imagine a tool that allows you to look at the trends in performance of all your revenue streams at once over a five-year period. The Revenue Inventory™ allows you to see and understand both missed opportunities and growth opportunities through the lens of past performance. 

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Losing the Red Cross Would Be the Real Disaster

November 05, 2014

Headshot_beth_gazleyAs a disaster researcher and scholar of nonprofit management, I've followed the (well publicized) travails and (hardly publicized) successes of the American Red Cross over the years.

I've met its national staff at research conferences and local staff at state and county emergency management meetings, where I've served on the board of my local Community Organizations Active in Disaster (COAD). I participated with hundreds of other invited experts in the governance audit that resulted in the "American National Red Cross Governance Modernization Act of 2007." I’ve monitored the commentary after a ProPublica/National Public Radio exposé of the Red Cross appeared last week. And based on my observations, I have developed a healthy respect and sympathy for the Red Cross.

Bet you didn't see that coming.

There's no disputing the fact that the public needs better results from the Red Cross. The organization has been essential to our welfare since the day it was chartered by Congress to be our national disaster response agency — primus inter pares among hundreds of agencies known collectively as voluntary organizations active in disaster. In fact, the Red Cross predates the Federal Emergency Management Agency (FEMA) by seventy-nine years.

Congress has entrusted a good part of disaster-related mass care and sheltering to the Red Cross. Somewhat less rationally, Congress imposed this public mandate on the Red Cross without much aid; the agency is expected to meet our nation's disaster relief needs largely through the philanthropic generosity of Americans.

Further complicating matters, the Red Cross has been plagued for years by leadership issues — issues that aren't easy to resolve because they are rooted in a number of larger, systemic problems:

Greater forces of nature. Climate change makes it harder for all disaster relief agencies to achieve their mission. In the ProPublica/NPR story, a Red Cross executive observes the challenge of "scaling up" for Sandy, a storm that covered an area half the size of Europe. The organization's inability to do that was due to climate change, not internal organizational problems. In 2005, disaster relief agencies reached the same conclusion when they reported that the impact of Hurricanes Rita and Katrina was many times larger than their capacity to deal with back-to-back disasters. The lesson is clear: As disasters get larger and more complex, we all have to work together to scale our disaster response capacity.

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Weekend Link Roundup (November 1-2, 2014)

November 02, 2014

Your-vote-counts-buttonOur weekly roundup of noteworthy items from and about the nonprofit sector....

Communications/Marketing

On her Social Marketing blog, communications consultant Julia Campbell has some advice for the American Red Cross, which again finds itself in the middle of a controversy over its response to a disaster (Hurricane Isaac, Superstorm Sandy).

Environment

In the fifth part of a seven-part series on the State of the Union offered by Stanford University, Farrallon Capital founder and philanthropist Tom Steyer and former U.S. Secretary of Energy Stephen Chu talk about the environment and climate change. (Running time: 1:33:37)

On the Al Jazeera America site, author and freelance journalist Nathan Schneider (Thank You, Anarchy: Notes From the Occupy Apocalypsereports on the return of an old concept, the commons.

Fundraising

In a link-filled post on her blog, Beth Kanter explains how #GivingTuesday, a global day dedicated to giving back, can help your organization reach Generation Z donors (kids born after 1995).

International Affairs/Development

In a post on the GrantCraft blog, Andrew Grabois, manager of corporate philanthropy at Foundation Center, breaks down trends in funding for Ebola relief efforts in West Africa.

Bill Foege, former head of the Centers for Disease Control and a Presidential Medal of Freedom honoree, argues on the Humanosphere blog that the public health response in the U.S. to Ebola "has been far better than we could have expected, given the cutbacks in the public health infrastructure of recent years [and] by the private care system sometimes making decisions based on cost or insurance status rather than health needs."

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Making Philanthropic Investments Last: The Role of Financial Sustainability

October 30, 2014

Headshot_schneider_kidron_300x600Launched in 2010, the Jim Joseph Foundation's Education Initiative has supported the development and expansion of eighteen degree and certificate programs as well as leadership institutes at Hebrew Union College-Jewish Institute of Religion (HUC-JIR), the Jewish Theological Seminary (JTS), and Yeshiva University (YU).

The foundation provided the resources needed for program development, staffing, student tuition assistance, and marketing/recruitment activities. The investment was substantial – each institution received $15 million over a period of up to six years. As part of its independent evaluation of the initiative, American Institutes for Research (AIR) assessed not only how well the three grantees delivered these programs, but how they planned to financially sustain their programs into the future after the foundation's investment wound down.

Financial sustainability requires careful planning, typically using a dynamic document that is reviewed and revisited periodically. Such a document – the financial sustainability plan – describes strategies to contain costs and to cover them through fundraising and program revenues.

Informing Financial Sustainability Plans Through Break-Even Analysis

A common tool in financial planning is break-even analysis, which identifies the circumstances in which costs and revenues are balanced. To help Jim Joseph Foundation Education Initiative grantees, we developed a program-level Break-Even Analysis Calculator, allowing program administrators to project revenues and expenditures by changing variables such as tuition, numbers of students, and staffing levels. This interactive tool can be used to:

  1. Identify the resources required to implement a program, including personnel, facilities, equipment, and materials, whether paid for directly or contributed in-kind, and subsequently to calculate program costs.
  2. Explore ways to reduce costs.
  3. Identify the effects of different levels of tuition and scholarships.
  4. Calculate fundraising needs and demonstrate to potential funders why their help is needed.

Review of Financial Sustainability Plans

We created benchmarks for reviewing the financial sustainability plans submitted by each institution. The four criteria described below are based on the assumption that financial sustainability is a process, not an end. In other words, although the process aimed at achieving financial sustainability may not yet be completed, the financial sustainability plan contributes to a road map that programs can follow into the future.

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To Increase Your Organization’s Impact, Work With People Who Reflect Your Values

September 05, 2014

Headshot_carrie_richAs consumers, we constantly make purchasing decisions that express our values. A consumer seeking to live a healthy lifestyle might buy organic produce; a consumer conscious of her carbon footprint might purchase a Prius.

Leading an organization provides similar opportunities to invest in our values, especially when it comes to the colleagues with whom we choose to surround ourselves.

Employees, volunteers, and contractors all play crucial roles in the growth of any organization. Indeed, the people on your extended team are as important — if not more important — than your organization's mission and brand. They are the face of the organization, and ultimately their actions and creativity define your brand and activate your mission.

So how do you ensure your team reflects what your organization is all about? Here are some tips to consider:

Understand where they are coming from. Working with people who reflect and believe in the values of your organization doesn't happen by accident. It requires being clear about who you want to work with and why you want to work with them. And it also requires you to understand what motivates an individual to want to work for your organization. What is it about the organization that resonates with him/her? Why do they think they would be a good fit for your team? How will they provide value to the team? The more carefully you consider these questions as you are interviewing, be it a potential new hire, a contractor, or a volunteer, the more confidence you will have in your final decision.

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Four Key Indicators of Nonprofit Success

September 03, 2014

Headshot_richard_brewsterHave you ever "ghost dialed" someone? You know, when the phone in your purse or pocket accidentally dials a number? Well, that recently happened to me with a board member of a human services nonprofit. We were surprised to be talking to each other but continued. The organization was well known in its community and had been successful, but our conversation ended up being pretty depressing: the nonprofit was in the process of shutting down.

I did some research and discovered that the organization's budget grew from $5 million to $10 million in just five years. Then a crisis came, they lost a major source of revenue, and there followed a painful five-year decline.

Why did this happen? A little more research and some reflection on others' experience suggests that four key conditions need to be met in order to survive a crisis like the loss of a major funder:

1. Sustainability isn't just about dollars. A nonprofit's programs need to be relevant today, not for situations or problems that are five or ten years in the past. The human services group above offered only housing, even as other agencies in the area began to provide services such as day care to low-income people, enabling them to keep their jobs (and pay the rent).

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Most Popular PhilanTopic Posts (August 2014)

September 02, 2014

Don't know what it's like where you are, but here in NYC someone forgot to tell Mother Nature that summer is over. Which is okay, because before it ends we want to make sure everyone has a chance to catch up with all the sizzling content we posted on PhilanTopic in August. Enjoy!

What have you read/watched/listened to lately that made you think, surprised you, or caused you to scratch your head? Share your finds in the comments section below....

The 'Overhead' Pledge

August 21, 2014

Cut_costsI was in a room full of international development professionals at the InsideNGO Annual Conference, and the excitement was palpable. Why? We had all just raised our hands and pledged to fully disclose the true costs of our nonprofit operations to anyone who wanted to see them.

This is a breakthrough for our sector, and affirms that we are willing to transparently and consistently report our costs. What's more, the pledge is based on the understanding that the overhead debate actually undermines nonprofits' ability to deliver transformational results. We are convinced that overhead transparency will lead to more open dialogue, real collaboration with funders, and a greater focus on outcomes and results.

Within the core concept of transparency, however, there are two recommendations we are focusing on right now:

Eliminate functional allocation. This IRS requirement allows organizations to allocate costs rather indiscriminately to programs, fundraising, and general administration categories. While the goal is to shed light on organizational efficiency across the nonprofit sector, the relaxed guidelines allow organizations to manipulate their expenses across categories, often inflating their program costs to appear more efficient. Organizational efficiency is never cut-and-dried, however, and more importantly, the guidelines don't take into account organizational effectiveness.

Eliminate direct and indirect costing on grants. Each funder has its own guidelines around direct and indirect program costs. When funders cap the amount they are willing to pay toward indirect costs, organizations are incentivized to manipulate their numbers in order to recover as much as of their costs as possible, or worse, they cut investments in organizational capacity that can result in them having greater impact.

Failure to eliminate these provisions will only serve to:

  • Starve nonprofit organizations from making key organizational investments that boost their impact and increase their efficiency.
  • Create division within organizations between program staff (perceived as "wanted" costs) and operation staff ("unwanted" costs).
  • Limit consistency and distort real benchmarking across the sector.
  • Increase administrative costs (necessitated by having to manage expense reporting in multiple ways to meet a variety of funder needs).
  • Reduce transparency.
  • Place the focus on administrative costs instead of impact and obscure questions around the real cost of social change.

So that day in D.C., we all raised our hands and pledged to clearly and honestly disclose the full costs of our operations, accompanied by explanations about why our investments were essential to achieving our respective missions.

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9 Reasons to Become Powered by Pro Bono Services

July 08, 2014

Headshot_aaron_hurstWhat would your nonprofit do with an additional 20 percent in its budget? What if you could achieve that by securing professional support from marketing, information technology, human resources, finance, and strategy professionals? Still not convinced pro bono service is the rocket fuel you need to achieve your mission? While there are many ways in which pro bono can positively impact your organization, here are nine reasons guaranteed to change your mind.

1. You need a strong voice. In an increasingly noisy world, it's imperative nonprofits make themselves heard. Pro bono resources can help your organization create key messages and visual identities, brand strategies, attractive and user-friendly websites, compelling print collateral, and more -- all of which are critical if it hopes to develop a clear and powerful voice that engages a broad range of stakeholders and reaches across organizations to create impact.

2. The best nonprofits are doing it. Some will tell you pro bono is only for failing nonprofits that can't afford to pay for services. Gerald Chertavian, founder of Year Up, would say that such people "suffer from a severe lack of imagination." Year Up, as it happens, is one of the most successful nonprofits in the U.S. They've worked with more than six thousand young people nationwide and have sites in eleven cities. They produce very successful outcomes (84 percent of program graduates are in school or working full-time within four months of graduation). They operate with a staff of more than three hundred people and an annual budget of over $40 million and have twice been voted one of the top fifteen nonprofits in the U.S. to work for. And they've been pro bono believers since the beginning. Pro bono support from Alta Communications helped kick off the initial Year Up venture, and over the years Gerald has successfully locked in pro bono support from countless sources, including New Profit Inc. and Monitor Deloitte, whose advice with respect to strategic planning helped shape the organization into the powerhouse it is today.

3. It helps foster talent and leadership. The nonprofit sector is the people sector. Nonprofits succeed when they have great people and great leadership. And that requires investment. You need systems, training, and infrastructure to get board members, employees, and volunteers into the right roles. Pro bono projects can help nonprofits build the necessary structures for talent retention and development, as well as for setting appropriate goals and performance management processes that lead to strategically aligned growth and staff development.

4. It generates significant corporate support. Many companies are much more likely to become large donors if they have employees deeply engaged in your mission. Companies like Deloitte hugely favor their pro bono partners over other grantees when it comes to providing significant financial support.

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Most Popular PhilanTopic Posts (June 2014)

June 30, 2014

Summer -- and the World Cup -- are heating up. Before you head out for that well-deserved vacation, here's another chance to catch up on some of the great content we posted in June....

What have you read/watched/listened to lately that made you think, surprised you, or caused you to scratch your head? Share your finds in the comments section below....

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