Joan M. Renner, CPA, CGMA, Director 501(c)(fit!)

A few weeks ago, we had a bit of nice weather so I wanted to wear something light and springy. Fortunately, I found the nicest outfit. It fit with my accessories and I even got a few compliments. Did I find a new boutique, a new website for current fashion? No, I found my latest outfit right in the back of my closet. Now you know something about my closet.

You know those beautiful closets you see in magazines? They have several hanging rods, shelves that spin around and plenty of compartments to keep things handy and organized. If you long for an organized closet, then you understand one of the key concepts of long-term sustainability for your nonprofit. Stay with me on this.

I bet you can name one or more people in your organization that seem irreplaceable. What would you do without her? Some organizations rely on that long-time volunteer who handles an entire area of responsibility with expertise. Some depend on the resources of a strong founder who attracts support and directs activities. Sometimes a larger organization runs a smaller, but independent, affiliate, dominating the management and governance functions.

That champion is like your closet rod, providing needed structure. You’re lucky to have that person, but the source of your good fortune may also be one of your organization’s biggest risks. What will you do when your champion moves on? Without that person, a lot of things might fall into a heap. Your nonprofit’s long-term sustainability depends on your ability to design and install a governance structure to act as your new closet organizer for the future.

Like many other sectors, nonprofits are passing the torch to a new generation of leaders. Newer organizations may not have a leadership succession process to transfer relationships, processes and institutional knowledge. What will guide your new leaders into the future? According to our own strength assessment tool, the Six Strengths of FIT Nonprofits, a FIT Nonprofit is guided by the elements of its organizational structure.

In his book, Built to Last, author Jim Collins calls it “Clock Building”. Rather than telling your organization the time, build them a clock. Collins says, “Build an organization that can endure and adapt through multiple generations of leaders and multiple product life cycles…” In nonprofits, that means build a committee structure and adopt policies to help your leaders be engaged, involved and effective.

With a variety of committees, no one person bears all the burden.
• A finance committee ensures that you make the best use of your resources.
• A program committee oversees mission-related impact.
• A development committee attracts support from a variety of sources sustaining programs into the future.

With good governance policies and procedures, committees analyze issues and bring recommendations to the Board. Board meetings run smoothly, they don’t take forever; you’re running like clockwork.
What can we learn?

Assess your risks and address them. Do you have a powerful individual or entity acting as a major driver of your resources, capability or leadership? Consider your options for mitigating that risk. Learn more about risk assessment in “WHAT IF: Risk Assessment for Your Nonprofit” at the 2017 FIT! Nonprofits Annual Conference—Sustainability and the FIT Nonprofit; Your Long-Term Staying Power, coming up soon. Lead your organization’s risk assessment process through our 501(c)(FIT!) NEXT Guided Solutions: Your Nonprofit Risk Assessment six-part webinar series, Examine your governance structure and update it if necessary. Consider what most often drives your actions, the decisions of an individual, or your governance policies and procedures. Learn more about governance for long-term sustainability at the 2017 FIT! Nonprofits Annual Conference—Sustainability and the FIT Nonprofit; Your Long-Term Staying Power, coming up soon.

Consider your plan for leadership succession including your plan for transferring relationships, processes and institutional knowledge. Learn more at the session “Your Leaders—What’s Their Five-Year Plan?” at the 2017 FIT! Nonprofits Annual Conference Sustainability and the FIT Nonprofit; Your Long-Term Staying Power coming up soon. Assess and address your organization’s long-term sustainability and learn more about the Six Strengths of FIT Nonprofits at the 2017 FIT! Nonprofits Annual Conference—Sustainability and the FIT Nonprofit; Your Long-Term Staying Power, coming up soon.

So next time you dream about updating your closet system, think about whether your nonprofit’s organization system needs an update as well. Keeping your governance structure up to date will keep your organization running like clockwork.

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