Executive Pay for Performance
Over the past couple of weeks, there has been much discussion around executive bonuses. Should executives be paid bonuses when their companies had received bail outs from the government? Has their performance justified the bonus?
In the non-profit sector, bonuses are given very discreetly, if given at all. Many people feel that executives in the non-profit sector should not be paid very much so salaries are not readily disclosed. Discussing bonuses could quite possibly be the kiss of death! Is that right?
Personally, I think executives should be paid bonuses, but only if they improve their bottom-line which if any one has followed my blogs means that they have improved client success - not that they have just been financially sustainable. However, I also believe that agencies that are successful with their client results will also inevitably be successful in raising money, if they know how to make the right ask.
Executives, in the non-profit sector, have much to contend with on a daily basis. When you are working with people and your clients are all people, every day is different. There are so many potential issues that can arise and it is the very good executive who can strategically reduce issues and create solutions that will in the end mean greater success for the clients and everyone associated with their success.
Defining and measuring organizational outcomes is a fairly accurate way to measure overall client success. It is a strategic measure that can bring everyone together to focus on a common end goal. Executives who have stated their organizational outcomes and have shown improvement should be rewarded. In the private sector, it is perfectly acceptable and in fact motivational to reward employees that have achieved goals so why shouldn't it also be acceptable in the non-profit sector? Why do we feel we need to keep it quiet?
Something to think about!
Labels: executive bonuses, non-profit
Who is your client?
I had quite the discussion with one of my teaching peers about who the client is for non-profit organizations. Do you know who your client is?
If you are a direct service agency, you will find it easier to answer this question, but if you are an umbrella organization, then is your client the people that you are raising the money for or the service provider agencies that offer the services? To add one more, is your client the researchers or the funders?
My argument was that whoever you are servicing, as stated in your mission, is your client. Well, you might say that is still not clear. Let's use an example. Supposing you worked for the national cancer society and your mission at the head office was "to find cures for patients suffering from various types of cancer. We will do this through extensive research." Who would be your client or possibly client(s)?
This can create quite the debate and has!! I would argue that the client is or are all the cancer patients. My colleague would argue that it is the researchers.
Let me throw something out at you. Supposing we were to take the researchers as the clients, then our success could be measured by finding the reseachers and the money to undertake extensive research. In other words, we could be judging our success by number of ongoing research projects. That is process. Yes, researchers do want to find cures, but...
If we were to take the cancer patients as the primary client, then success would ultimately be based upon finding cures for various forms of cancer or for increasing the survival rate. The focus is ultimately back on the person who is suffering from the disease.
Something to think about!
Labels: clients, non-profit, outcomes
Outcomes
There are a few different outcome development models around. Many of these models tend to focus on program outcomes - very few on organizational outcomes; however, I think the organizational outcome is the most important.
The most read statement in an agency's brochure is the mission statement. In a mission statement you define who the need is for, what the need is, why it is important and how you will meet the need and in some cases where the agency is located.
After reading a mission, most funders want to know how:
What are you trying to achieve and are you achieving it?
Organizational outcomes are about answering the above questions. On the other hand, program outcomes just tell you about the various pieces and whether they are or are not working. You may have some programs that are very successful and others not so. So what? This doesn't make you as accountable to your funders because piecemeal results don't tell funders whether overall your clients have achieved what you have stated in your mission.
Organizational outcomes, if properly measured, will also keep you constantly reviewing your organizational alignment. Checking alignment will keep you focused on offering programs or services that are aligned with your mission. Everything is integrated.
Something to think about!!
Labels: NGO, non-profit, outcomes
bottom line for non-profits
Have you ever been in a fundraising meeting and the funder has asked you what your bottom line is? Most funders expect you to answer in financial terms because to the corporate sector, bottom line means net profit or net surplus (some use the expression to force you to get to the point, but we will save that for another discussion).
I would like to challenge you to think about what the bottom line equivalent really should be in the non-profit sector. Businesses are typically in business to make money; otherwise, why would you be in business? We won't get into tax havens or write-offs here!
So, the bottom line for the corporate or for-profit sector is whether or not you did. Excuse the pun, but that makes sense. If your goal is to make money, then your bottom-line should be showing whether you have or not.
In the not-for-profit sector, what is the goal? Since most agencies deal with people, I think the end goal for most agencies is to have as many clients succeed or meet the purpose of your agency. So, I think the bottom line for non-profit agencies should be based upon how many clients have succeeded. This is also be known as the organizational outcome.
Since most non-profit agencies are established based upon meeting some kind of societal need, would not the bottom line be whether or not you have come closer to solving that need? If your mission states that you will find jobs for homeless youth, then shouldn't your bottom line be whether or not you have?
I am not saying that financial stability is not important. It certainly is, but I believe it is a means to the end, not the end. If you agree with my thinking, then think about how much time you devote to client success versus how much time you spend towards raising or cutting funds.
Many agencies that I have worked with over the past eight years have not really figured out their end goal in terms of client success. They are unsure of how to define it. They can tell me how many clients are currently using or have used their services, but they can't tell me what kind of success they expect from clients as a result of using their services or programs.
Consequently, it becomes easier to define the bottom line as financial stability.
Something to think about!!
Labels: bottom line, client success, non-profit, outcomes
