The Seven (actually nine) Rules of Bureaucracy

I would guess that every American has contact at least once a week with that creature known as The Bureaucracy.  The chief lament of the nonprofit sector regarding The Bureaucracy is the maddening arbitrariness of rules, regulations, service contracts specifics, reports and other various hoops.  This drains away massive amounts of energy, time, money and enthusiasm.

Harry E. Teasley, Jr. is Chairman Emeritus of the Reason Foundation and a man with a long and successful career in business management.  In that context he spent considerable time interacting with The Bureaucracy and has come up with what he calls the Seven Rules of Bureaucracy (actually nine, but who' counting?)

Harry Teasley's Rules of Bureaucracy

Rule #1: Maintain the problem at all costs! The problem is the basis of power, perks, privileges, and security.

Rule #2: Use crisis and perceived crisis to increase your power and control.

Rule 2a. Force 11th-hour decisions, threaten the loss of options and opportunities, and limit the opposition's opportunity to review and critique.

Rule #3: If there are not enough crises, manufacture them, even from nature, where none exist.

Rule #4: Control the flow and release of information while feigning openness.

Rule 4a: Deny, delay, obfuscate, spin, and lie.

Rule #5: Maximize public-relations exposure by creating a cover story that appeals to the universal need to help people.

Rule #6: Create vested support groups by distributing concentrated benefits and/or entitlements to these special interests, while distributing the costs broadly to one's political opponents.

Rule #7: Demonize the truth tellers who have the temerity to say, "The emperor has no clothes."

Rule 7a: Accuse the truth teller of one's own defects, deficiencies, crimes, and misdemeanors.

Read the whole thing here...

Trends Shaping the Nonprofit Sector

Change is not coming....change is here.  As I repeatedly said, the time to change your buisness model is not now, it was 2008. 

Rob Reich at Stanford Univeristy puts forth five Tetonic Shifts in the nonprofit sector.  I would argue about the impacts of #3 and #4, but #1 needs to be on the agenda of every staff and Board meeting.  How will you deliver services that many people rely upon?

1. Deep budget deficits at local, state and federal levels. These deficits beg the question: how will public institutions deliver services that many people rely upon?
2. Fundamental tax reform at the federal level will reconfigure the manner in which the federal government collects tax revenue for what it does. This threatens the manner in which the incentive structure works for how charity in philanthropy operates.
3. A deeply dysfunctional political system at the federal level where polarized politics routinely wins out over the elected representatives doing something for the common good.
4. The idea that the 2010 Citizens United Supreme Court ruling has dramatically changed campaign finance in the U.S. and introduced a new way that the deployment of private resources can enter into the direct political arena.
5. Boundary blurring going on across all sectors: nonprofit, for-profit and government.

Learn To Delegate Please

The Next Generation of Executive Director will have to be serious about delegation.  Success comes from focusing one’s energy upon high value activities and then delegating down everything else.  It is the failure to delegate properly which kills most EDs….they get burned once or twice and then begin to pull back everything under their control…adopting the attitude “If you want something done right, do it yourself”.    That’s a career killer.

If you have to delegate a task or project,  understand these key principles in delegation

• Can they do the job?  Be sure to select someone capable of performing the task under typical circumstances and the period involved.
• Do they need any additional training to do the job?  What support do you have to put in place to ensure they “have what it takes”.
• Do they have the authority to do the job?  Make sure they understand the freedom they have to make decisions as well as the boundaries.  This includes budget authority.
• Do they want to do the job?  Not every task has to be joyous, but if you’re delegating the unpleasant jobs to the same person time after time you may encounter morale problems.
• Do they understand the desired outcome? Everyone should agree upon the specific results to be achieved.
• Is there enough time to  achieve the goals?  Nothing kills morale like being challenged with a goal but not given enough time to be successful.
• If they have to supervise or coordinate others, do they have the people skills to lead?  Note that the Executive Director was hired to lead people…so you better be sure those you delegate to can lead too.

"ReThink The Pink": breast awareness industry runs amok

Pink is now a marketing titan.  In the cause of beating breast cancer, the color permeates all sorts of consumer products as well as events.   Even the NFL made the leap in a big way, devoting a whole weekend slate of games this year to a pink theme (even as pink trimmed equipment looked ridiculous on 350 lb linemen).

What's often left unsaid is what a rich and lucrative industry breast cancer awareness has become.  Six Billion Dollars a year.  To put it into perspective, fundraising  in the aftermath of Hurricane Katrina topped a little over $7 Billion.  But that was a one-time event.  This is $6 billion year after year after year.

Naturally this type of money is like chum in the water for sharks.  One example is the Coalition Against Breast Cancer. CABC offers virtually nothing to the cause after taking in millions. This charity offers all the pitfalls of charitable giving. The New York Attorney General called the charity "a sham." Over a period in which they raised $15 million the leadership of CABC took home $9.1 million in salary and benefits. The telemarketing firm took $3.5 million for its services. You can do the math on the rest.

But The Big One....the one with the Top Of Mind brand name is the  Susan G. Komen Foundation.  The Komen brand can be found cross marketed with a wide array of consumer products ranging from yogurt to automobiles.   You've seen it.  In fact, recently you've seen it in a different light due to one of those occasional flare ups in America's Culture Wars.

While the debate raged around women, abortion, and whatever, a number of people began to comment on the internal operations of the Komen Foundation. According to financial documents Nancy Brinker (founder and sister of the late Susan Komen) took home $417,000 in salary in 2010. This is not an extraordinary salary for  an organization which grossed $420 million, but $3 million for travel and $28 million in office and consulting fees is.

While the problems at Komen are not exclusive to this type of nonprofit,  the Foundation suffers from what ails many other breast cancer charities.



Among the 1%

Nancy Brinker not only founded the effort in 1980, but presently serves as Komen’s Board Chair and its CEO.  This creates a  Founder's Syndrome , which can be a serious problem for a nonprofit, just ask The Second Mile.  The Board Chair must have an arms-length relationship with the management operations of the organization. In her dual leadership roles at Komen, Nancy Brinker is both recommender and decision-maker on all foundation matters.   Highly unethical....bordering on illegal. 

To exacerbate the problem Nancy Brinker is able to pack both the staff and board of Komen with those that are of similar mind. Members of family of leaders are on the board. This gives the appearance of an insiders club similar to the interlocking loyalties which have governed Wall Street.

So while the Susan Komen Foundation tries to repair it's image in the wake of the Planned Parenthood fiasco,  donors and supports should be asking much tougher questions about the ethics and values of its leadership....and whether it is time to withhold support until they ReThink The Pink 

Stop acting like a deer in the headlights and get busy reinventing your nonprofit

We Are Out Of Money ....and if your nonprofit isn't working to reinvent itself you're going to get left behind.

The federal government is facing record budget deficits and interest payments to service its rapidly accumulating debt.  When you factor in that 1/4 of state government funding and 1/3 of local government funding come from Washington, D.C., the pinch will be felt everywhere....from highways to schools to local parks.

The Boomers are starting to retire, which means Social Security and Medicare will chew up larger percentages of an already bloated budget.  Moreover, state and local governments have their own pension bomb to address...$3 trillion in unfunded pension and retirement liabilities.  As early as 2017, these will be eating up 27% of the Pennsylvania state budget.

Finally, American households are saturated with debt....nearing 95% of GDP.  They lack wiggle room to give more.

Economic growth is needed, but don't expect that alone to cure your ills. In order to make good the losses from The Great Recession as well as bring the federal budget into balance, our economy would need to grow at 7-8% annual rate for the next 15-20 years....an unheard of level, even during the boom following the Second World War.

The world is screaming at us: The Status Quo Is Not An Option. With shrinking dollars and growing needs, every nonprofit needs to reinvent its business for the coming austerity.  Even if you’re not the direct beneficiary of public funding, please don’t assume that you don’t need to think about these cuts. The competition for foundation grants, major gifts, and fee-based contracts will skyrocket as those whose public monies are cut look to other funding sources—like yours. Performance is the best way to protect your organization and meet the growing demands that are coming your way.