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Nonprofit Radio for December 13, 2021: Is A Social Enterprise For You?

My Guest:

Tamra Ryan: Is A Social Enterprise For You?

What are these and how do you decide whether to take one on—or even consider it—at your nonprofit? What kinds of businesses lend themselves to social enterprise and how do you structure the relationship? Tamra Ryan makes sense of it all. She’s CEO of Women’s Bean Project.


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[00:01:55.34] spk_1:
Hello and welcome to Tony-Martignetti non profit radio big nonprofit ideas for the other 95%. I’m your aptly named host of your favorite abdominal podcast. Oh, I’m glad you’re with me. I’d suffer with Spagnolo arthropod earthy If you disjointed me with the idea that you missed this week’s show is a social enterprise for you. What are these And how do you decide whether to take one on or even consider it at your non profit what kinds of businesses lend themselves to social enterprise and how do you structure the relationship? Tamara Ryan makes sense of it all. She’s ceo of women’s Bean project. tony state too. Congratulations core africa. We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c o here is, is a social enterprise for you. It’s a pleasure to welcome Tamara Ryan to nonprofit radio She is Ceo of women’s Bean project, a social enterprise that provides transitional employment to women attempting to break the cycle of chronic unemployment and poverty while operating a food manufacturing business. She’s a former partner and board member for social venture partners. Denver and currently serves as part time interim ceo for the social enterprise alliance. She’s at Tamara Ryan and the enterprise is at women’s bean project dot com. Tamara, welcome to nonprofit radio

[00:01:57.34] spk_0:
it’s great to be here.

[00:02:01.24] spk_1:
It’s a pleasure. Pleasure to have you. Yeah. Why don’t you first explain what women’s bean project is all about because it’s an example of what you and I are going to talk about for a while

[00:03:01.04] spk_0:
Okay We are a food manufacturing business. We started with Bean Soup in 1989 and that’s where our name comes from. But today we have 50 different food products that we sell all across the country. What makes us different is that we employ women who are chronically unemployed. So a typical woman we hire hasn’t had a job longer than a year in her lifetime. Though the average age is 38. They come and work for us as for a full time job for 6 to 9 months. And during the time they’re with us, we teach basic job readiness skills and then we also in 30% of her paid time. We teach her life skills, we teach problem solving and goal setting and budgeting and planning and organizing. And so this whole thing is her job for these 6 to 9 months at the end she graduates our program and moves on to mainstream employment in the community. So we’re kind of two businesses were running a food manufacturing business and a human services business,

[00:03:18.54] spk_1:
which is exactly what the type of model we’ll be talking about. What I admire about that I found very interesting is that you said it. Um Well you’re used to saying it, but I want to call it out for 30% of their paid time. The women’s paid time is not spent working. It’s spent learning the soft skills of employment.

[00:03:39.04] spk_0:
Yeah, we call it the huge job. The y ou job. So she has the being job and she has the huge job and she’s paid for all of it. Mhm.

[00:03:45.74] spk_1:
Uh Well, so I see the value and you’ve had uh you had a lot of success with folks. Women having jobs longer than a year after they’ve they’ve I’m going to say graduated, but

[00:03:56.70] spk_0:
we use that term also the

[00:03:59.88] spk_1:

[00:04:32.34] spk_0:
Yes. So we track them at 6, 12, 18 and 24 months. We track them. What makes it easier to track them is that we pay them for those check ins. So we pay them $50 to check in at six and 12 months, $75 at 18 months and 100 bucks. Said two years to check in with us. And what we found that is that at a year uh 95 plus percent of the women are still employed. And I think what makes what’s significant about that is that again, the women we hire haven’t had a job longer than a year in their lifetime before they come to us. So what we really want to know is are we setting them helping them on a path for long term employment? You know, being able to sustain that employment.

[00:04:58.54] spk_1:
So what kinds of nonprofits are our listeners are all in small and mid sized nonprofits. So I think this is an ideal subject for listeners. What what types of nonprofits could consider having a social enterprise as part of their part of their work.

[00:06:06.44] spk_0:
I think organizations that are serving people who are using, you know, by necessity on public benefits and really who for a variety of reasons, whether it’s because of a felony background or it’s because of uh, low education levels or because of the history of addiction, you know, a variety of things that get in the way of, of getting and keeping employment. And so if you’re serving those people anyway, one way to help them, in addition to helping them build their foundation of, of soft skills is to employ them in a social enterprise. So that’s just one way that a social enterprises run. But it’s, you know, it as adults, we learn by doing so. It’s a really great way to work with the people that you’re working with anyway. Two create a business where you’re helping those same people in the long run be able to be successful,

[00:06:19.34] spk_1:
you’re a partner of social venture partners in Denver. What, what did you look for when you were investing in these types of organizations?

[00:07:07.94] spk_0:
Well, we specifically in Spp Denver, we’re looking for small organizations that both needed some funding, but also needed some technical assistance. And the reality is that we don’t, if you’re, if you’re running a human services organization, you don’t necessarily have somebody on staff that has the skills to launch a business, for instance, you know, even to do the market research to figure out what kind of business that might be um have the operational skills, you’re you’re running a human services business but you’re not necessarily running, say in our case of food manufacturing business. And so Spp really looked for organizations that needed the skill set of our partners and also could benefit from the funding that we were providing that. And then SVP’s model the funding and the technical assistance go hand in hand.

[00:07:42.74] spk_1:
So what what about organizations that uh don’t have the expertise that they need? Uh Let’s let’s let’s assume most of our listeners are not in Denver, so they don’t have access to S. V. P. Denver. What how can they how can they fill that void? And even just start like you’re saying like initial market research, how do they know where to get, how to get started?

[00:09:46.04] spk_0:
Well, every nonprofit has a board and I would venture to say that most nonprofits have business people on their board. So there are a lot of resources either through board members or through people that board members know. The one great thing that I’ve observed and I didn’t come from the nonprofit um world for my entire career. I was in the private sector before. And what I love about being in the nonprofit world is that there are lots of people who want to help and and just need to be need, they need help knowing what you need. And so I’ve been I’ve seen lots of ways we’ve been able to engage, uh, professionals in it for us, in, in food manufacturing, um, who have expertise that we need to sit on fair business development committee and help us look at uh, new product ideas. And I think that same concept could easily be applied to any organization that’s trying to figure out what kind of business they might run because that’s the key. You could decide to start a business, but it still has to be a viable business. The just just starting a business, you’re not going to get the halo effect of, you know, you’re doing it as, as a non profit and therefore it’s going to succeed. All the same market factors come into play that do for any business. And so you, you really do have to still find a viable business. That makes sense. That is needed. That you can price appropriately. Um, one of the things about the research for social enterprises or whether or not consumers are going to buy from a social enterprise, whether it’s a product or service. One of the statistics is that all other things being equal? So in other words, quality, price, etcetera. People more and more have a tendency to purchase products and services from a mission based organization or a mission based company. But the most important part of that statement is all other things, other things equal. All

[00:09:54.18] spk_1:
things being equal.

[00:09:55.24] spk_0:

[00:09:58.54] spk_1:
you have to, you have to be able to compete with your private enter, strictly private enterprise, market driven, profit driven competitors.

[00:11:20.24] spk_0:
Yeah. You have to be able to compete. And yet at the same time, you also need to figure out what your competitive advantages yourself. So for instance, in our case we are able to, uh, we’re right now in the holiday season, you know, september to december for women’s bean project, 70% of our sales are made. So, you know, we really peaked during this time of year. One of our competitive advantages is we can bring in volunteers to help us say pack boxes or help us, you know, get shipments out the door or help with with prep of product. And that’s something that is a bit of a competitive advantage because if we were just, you know, in the, in the private sector running a regular food manufacturing operation, we really, I don’t think we could, you know, look somebody in the eye and get and get that kind of assistance. But for us it’s a way to engage donors to get people really invested, get new customers. You know, there are so many ways that, that bringing people from the community in to help us is advantageous not just to get the work done, but to get additional support for our organization.

[00:11:49.34] spk_1:
So you’ve opened yourself up to a whole new set of metrics as, as having a social enterprise and we’re gonna get to what, what the relationship is between the company and and a nonprofit or, you know, how that could be set up by different, by different organizations. But you’ve, you’ve got to measure, you’ve got to measure the company’s profit and the company’s output and productivity, productivity per employee hour or you know, whatever, you know, the, the key metrics for the business are as well as the social outcomes of of your graduates and your employee members and your and your graduates.

[00:12:34.94] spk_0:
It’s a, you know, I joke sometimes it’s a horrible way to run a business, right? Because we intentionally everyday hire women, we don’t know if they’re going to come to work every day. I mean that’s part of their barriers to employment and we work with them and they help, we help them become great employees and as soon as they become great employees, we let them go off and become somebody else’s great employee and we start all over again. Uh, and it’s so it’s super inefficient and we also over higher. So if we were a for profit company and we were trying to be as efficient as possible and, you know, squeeze every penny out of our margin. We absolutely would not hire as many women as we do. But that’s not the point. The point for us is to use our business to advance our mission. So we hire as many women as possible as we can justify based on what our sales are going to be.

[00:13:09.24] spk_1:
So what are some of the things that nonprofits need to think about, uh, beyond all right. What’s a, what’s a viable business? What other, what other factors are important?

[00:13:16.04] spk_0:
Well, maybe the biggest thing is it’s hard. And I joke sometimes with our team, like if this were easy, everybody do it. Do

[00:13:20.79] spk_1:
we really want to do it? Do we really want to do it as an important threshold?

[00:15:30.84] spk_0:
Yeah, absolutely. And it’s hard because you have to have the ability to entertain two opposing ideas at the same time, right? We need to run an efficient manufacturing business and we also need to deliver on our mission. And those two things actually often don’t go together very well. And so being able to both entertain those ideas and acknowledge that perhaps today the business wins. Maybe we, um, the women instead of, um, Spending 30% of today’s time in a class say financial literacy, they’re on the production floor for the whole day because we have a lot of work to do, But tomorrow maybe it’s the, it’s reversed and they’re spending the whole day in some sort of training and not making any product at all. And so our job is every day to, to balance that out. And so that’s, I think one of the hardest things is, uh, is having that ability to understand that if not for the mission, your business doesn’t really exist, but yet your, your business has to be profitable in order for to make sense and contribute to the mission and, and that, you know, balancing act, you know, is a constant. So that’s part of what makes it hard. I would say another thing is that you, you still have to find all the other, I mentioned this before, All the other market forces still prevail. So if you have a product that nobody wants to buy, you’re not going to have a successful business and there’s no amount of mission that’s going to forgive that at least not in the long term. And you know, at this point, women’s bean project is 32 years old and I think in a lot of ways we’ve just been lucky. There was no initial market research that said, you know, being super. I think that’s the key to success. Nobody, nobody did any kind of research at the beginning. Our founder just noticed she was in her late fifties, she’s gone back to school to get her master’s degree in social work and she noticed a lot of her friends who were around her age were eating bean soup for health reasons. And so she invested $500 of her own money and bought beans and put two women to work making 10 bean soup. The crazy thing is that’s still 32 years later, our best selling product,

[00:16:45.14] spk_1:
it’s time for a break. Turn to communications. Do you have all the time. You need to do all the writing. You need to do social posts, blog posts, newsletters, the annual report, website updates, board reports, fundraising appeals. Acknowledgment messages, staff, communications, process documentation, training documents. Do you need help with writing in 2022? Turn to communications, your story is their mission turn hyphen two dot C. O. Now back to is a social enterprise for you. All right. That’s a terrific story. But it’s, it’s, it’s more or less than or what not to do in in determining what, what, what businesses gonna survive. Because, you know, you said it, I’m just gonna amplify it. No amount of mission is gonna forgive, uh, bad, bad marketing or a bad bad entry choice or, or any of the, any of the market forces.

[00:17:02.44] spk_0:
Yeah. And I think you also have to have either a product or service that has a decent enough margin margin to sort of forgive the inefficiency. And I also wouldn’t choose food for that reason the ship sailed for us. But you know, that’s not the highest margin. Um, you know, product category. For sure.

[00:17:22.24] spk_1:
Right now, food is notoriously low margin. Um, but you know, you said you gave an example of hiring many more women than you need, then you would. Well, maybe then you do need, then you would, if you were strictly market driven.

[00:17:28.84] spk_0:

[00:17:36.24] spk_1:
Yeah. All right. Um, before, before we move on. Any other advice about the, the opening questions to talk about with your board, with your leadership?

[00:19:18.34] spk_0:
Well, another aspect of balance I think is uh, is balancing being opportunistic and, and um, and not being so bullish on an idea that you ignore, um, other signs. So as an example, uh, years ago we were approached by somebody who had a whole bunch of equipment for canning and they were willing to give us all the equipment, let us have access to the facility, a whole bunch of things. But what we really had to analyze and I think this happens actually a fair amount to organizations that are thinking of starting businesses. Somebody thinks I’ve got a great idea, I’ll just give this to them. But the thing was, we weren’t in the canning business, we are a dry food manufacturer and what it would have meant for us just, you know, pivot and create another business. You know, really wasn’t worth that. What seemed like a super generous donation. Um, it was forgive the pun, but it was a whole can of worms that we didn’t necessarily mean I need to open. But that’s an example because when you start talking about this, all manner of people are gonna surface who are interested and willing to help. And one of the most important things you might, I need to do is say no thank you because you know, sometimes gifts are not always gifts in the, you know, when it really comes down to it, it’s maybe not the best strategy and it’s sometimes hard not to get all, you know? Um Starry eyed about something that seems like a fantastic gift and the next thing, you know, you’re in the canning business and you never intended to be in.

[00:19:42.74] spk_1:
Now you’re doing wetsuits instead of instead of dried soup. That’s a that’s a huge pivot. Um And yeah, I mean, that’s and that’s in the nonprofit, the straight uh non profit sector as well. You know, there are gifts that come sometimes with strings. You know, if you’ll if you’ll adopt this, create this program or

[00:19:46.62] spk_0:

[00:20:33.44] spk_1:
school, but if you started admitting boys, I’ll give you the seven figure gift. You know, that’s those are the gift size can be transformational, but that doesn’t mean you you sacrifice your mission and transform your mission to accept $1 million dollar gift. Um So All right. But, you know, Mhm interesting. You know, you you you evaluated from the nonprofit perspective, but also from the market forced perspective. You know, now we’re entering, it’s a whole new business. Now we’re gonna be competing with uh um Campbell’s, you know, Campbell’s and Hunts and Hormel, you know, whoever, whatever that be, whatever the soup manufacturers are. Um All right, So value right, important lesson to sometimes the better answer is No, no, thank you, gracious. No.

[00:20:38.85] spk_0:
Yes. All right.

[00:20:47.24] spk_1:
All right. Um advice on types of businesses that that could lend themselves to this.

[00:22:15.84] spk_0:
I’ll start with um service businesses because sometimes those can actually be really great supports for a really great social enterprises and supports for human services organizations. The nice thing about service businesses are very localized. So you could serve one community and then an example of a service business might be a uh, landscaping business or there are several social enterprises around the country that do uh go to business districts and clean up trash and snow removal and leaf removal and those kinds of things. Again, those are very localized. And what’s nice about that is that you could do it in this city and then maybe you pick it up and you do the same thing in another city. Those are really cool ways to be able to employ a lot of people and engage in multiple communities. Uh and there are, you know, other businesses um, like uh, has control is another one where, you know, that’s a pretty expandable business, um, cleaning services, especially in offices and things like that. Um, so those are some examples of businesses that actually could be really great businesses for people. And when you’re selling a service, that’s a really different dynamic than, say, you know, consumer packaged goods where, you know, you’re competing with marketing dollars from companies, it’s just much more challenging um, area to be in. You

[00:22:51.64] spk_1:
also, you also have the advantage of being able to, as you said, start local. So you can say initially the impact of our work is local. And so there’s a there’s an appeal to an appeal to the mission with your caveat that uh lots of mission is not going to overcome bad, you know, uh not being competitive market market wise, but you can say that you have that you have that local impact at least as you’re, as you’re getting started and then as you’re suggesting, you know, you can expand.

[00:24:09.44] spk_0:
And I think, you know, if you’re making a product, one of the potential challenges is that if you make a product that in our case our products consumable, so we can have repeat customers, you know, of course it has to be a good quality and taste good and all of those things. But we have customers we’ve had for 30 years and who keep coming back over and over again. If you end up making a product that’s not consumable. The challenges that, you know, say you’re making uh cutting board, there’s only so many cutting boards, somebody needs or only so many gifts you can give, you know to other people. And so you always have to be finding new customers to be able to grow your business. And that said, there’s, you know, when you start out, your customer base is so small that the world really is, you know, is pretty large of possible customers. But there’s a point at which without spending a lot of marketing dollars or advertising dollars to get noticed that you really sort of tap out the people you can access and that’s, you know, so that’s an interesting challenge of making a product where you can teach some really amazing skills, but at the same time, you know, you might have a limited customer base.

[00:24:21.14] spk_1:
Can I get these uh can I get these meals and just add water? Are they, are they that are there that simple from women’s bean project?

[00:25:19.44] spk_0:
Pretty straightforward like that. So a soup mix, you would at water, you put it in a safe crock pot and let it cook for the day. And at the end you are 10 being soup, you just add a can of tomatoes or you could add vegetables and hope into other things if that’s what you wanted. But just to finish off the recipe, it would just be adding a can of tomatoes. We also have baking mixes. And so in that case it’s everything that you need. You would add an egg and some oil or butter and you’ve got brownies or corn bread or stones. So it’s a nice thing about like a baking mix for instance is you don’t have to buy a bag of flour and buy a bag of sugar and all of those things and then have them left over. You can use our mix and use the eggs that you have and the butter that you have. And next thing you know, you made these yummy brownies and you look like a total baker. No one’s the wiser,

[00:25:20.98] spk_1:
right? You don’t have, you don’t have four and three quarters pounds of flour

[00:25:25.05] spk_0:

[00:25:30.94] spk_1:
Okay. A little digression. But I was interested in and how simple the meals are. Okay,

[00:25:31.49] spk_0:
we do have an instant,

[00:25:33.37] spk_1:
we have,

[00:25:47.84] spk_0:
yeah, we have instant beans and rice cups also, which literally are adding water. Um and then and we also have some ready to eat snacks. So you know, just keep them in your desk and you know, nosh on them whenever you feel like it. So we have a pretty wide variety of different products.

[00:25:58.84] spk_1:
Ok, I’m going to check women’s bean project dot com. Um So, okay, so service businesses were, you’re suggesting service businesses, what what else, what else could folks consider?

[00:27:43.74] spk_0:
Well, there’s some great social enterprises. Again, these are pretty localized that to screen printing. So you think about your inner city and you have your screen printing business, you’re able to employ people and you’re able to serve all the companies locally for, you know, their employee t shirts or you know, races or things like that. Again, very localized but also scalable As well. Um there’s a really awesome social enterprise out of Boston called more than words and more than words serves youth 16-24 who are either aging out of the foster system or justice involved and they sell books, they sell books have been donated from the community and the the youth learned the skill of scanning the I. S. P. N. Number to make sure it’s marketable. And they recycle the books that don’t have uh aftermarket value. And then they sell the books that do and they sell both online. They have a couple of bookstores. The cool thing is all these youth are you know they’re helping them find homes, they’re helping them with their academic goals helping them sort of adult you know into the community. Yet at the same time they’re also learning these skills of running a book business. So they have measurable uh um outcomes that they have to achieve. They have certain sales goals they have to meet for their various channels. It’s a really amazing business that that they’re operating in the youth. Stay with them for a couple of years.

[00:27:47.64] spk_1:
What’s the name of that 1?

[00:27:51.14] spk_0:
It’s called more than words? Okay.

[00:27:53.24] spk_1:
Yeah back on the service side I’ve seen uh copy copy services copy and print and print shops.

[00:28:33.54] spk_0:
Yeah A bank of America actually has their own social enterprise that they operate in the house. And they serve people with developmental disabilities are they employ people with developmental disabilities but they do all the printing for their own needs. Um There’s also electronics recycling. Uh you know the statistic is that people who are on the autism spectrum have an unemployment rate of about 85%. And and yet they are uniquely talented to disassemble electronics. So there there are electronics recycling organizations that employ people on the autism spectrum to just disassemble and um and then they part of so they’re providing the employment, they’re getting the donations of the electronics um and in some instances they’re being paid by the companies to take the electronics and then they also they sell the commodities of all the things that come out of those electronics,

[00:29:00.49] spk_1:
metals, plastics.

[00:29:01.67] spk_0:
Yeah, so you know when you think about that as a we use the term triple bottom line, it’s helping society, it’s helping the environment and it’s you know, it’s it’s making money. That is a really awesome example of of a business that hits at every level.

[00:29:24.54] spk_1:
Yeah, excellent, excellent. Another these are good another example or category.

[00:29:52.54] spk_0:
Well there are some social enterprises that instead of employing people provide employment services. So there is a social enterprise that here in Denver that specifically helps people who are bilingual, english spanish get jobs in the community with employers who need people who are bilingual, but that could apply to kind of any language or not even be bilingual, you know, so they and so companies come to them when they need people who maybe it’s customer service people who can speak another language other than english. Um and so again a service business but not where they are employing people.

[00:30:11.34] spk_1:
Right, right. And and so companies pay for the for the referral for the screening.

[00:30:16.04] spk_0:

[00:30:16.58] spk_1:
the placement basically they’re paying a placement fee,

[00:30:20.94] spk_0:
yep, exactly,

[00:32:45.74] spk_1:
it’s time for Tony stick to Core Africa, the Core Africa Ceo and longtime non profit radio Fan Liz Fanning announced last week a three year $17 million collaboration with the Mastercard Foundation. Outstanding, congratulations Liz, congratulations! Core Africa. This is going to allow Core Africa to expand from four countries, 2, 8 countries in Africa. and initially Mastercard Foundation was funding 56 young volunteers That’s going to scale up to 500. Almost 10 fold. This is, you know, talk about scaling, it’s just terrific news. Um and I think the real lesson here is in what the Mastercard Foundation Ceo cited in his quote, he says quote, Core Africa has proven its impact in rural communities and demonstrated the value of deploying a network of service minded young Africans to solve pressing issues across the continent. Their vision aligns with our young Africa works strategy end quote and he goes on. So he’s talking about the proven impact and vision alignment with what Mastercard Foundation is looking for. It’s just terrific news to scale like that, a $17 million, three year collaboration with a marquee name. Foundation for Core Africa, it’s terrific. You know, it’s a, it’s a testament to the work that they’ve done the impact that they have proven. So again, congratulations to Core Africa on this monumental funding for your important work That is Tony’s take two, we’ve got boo koo but loads more time for is a social enterprise for you.

[00:33:12.54] spk_0:
But there’s, you know, there’s just so many different kinds, there are cafes that’s a fairly popular kind of social enterprise. Um here in Denver we have a cafe called same cafe and same stands for, so all may eat and they, it is a pay what you want model. So you walk in and the menu is listed for the day and you decide how much you’re going to pay. You

[00:33:18.46] spk_1:
have heard of them.

[00:33:37.74] spk_0:
Yes. And, and so you might be sitting down and having, you know, decide that you want to pay $10 for your lunch, but you also might be sitting next to somebody who is um experiencing homelessness and didn’t pay anything and if you decide if you don’t have any money to pay for your lunch, then you work in the kitchen or you clean or you know do dishes and um and so again, it’s a really cool concept that serves people all, you know, it’s beneficial to the community at multiple levels.

[00:34:06.14] spk_1:
Excellent. These are cool examples. Yeah. Um so, all right, so we talked about services, uh some some product, I love the recycling example too. Uh any anything else before we, before we move on to organizing these these entities.

[00:35:37.54] spk_0:
Um well, the last one I’ll mention is one that’s been around for a long, long time, like women’s bean project is called Grace and bakery. They’re out of Yonkers new york and they make the brownies for Ben and jerry’s ice cream. So a big, the bulk of their business is brownies for Ben and jerry’s and they also have now gotten into doing some retail sales and corporate sales. So you might see your listeners might have seen them in some for instance whole foods at sort of a point of sale or point of purchase with a little brownie and it says these brownies changed lives, but Grayson is a for profit company. So this is a nice segue into the next part of our conversation. They are actually a B corp a benefit corporation and they they have an open hiring model. So instead of specifically going out and trying to recruit people experiencing chronic unemployment, like we do, they are always accepting applications and when they have an opening they just hire the next person on the list. So they hire, they don’t, you know, interview or you know, look at qualifications, they just hire the next person and uh you know, so they will have more turnover than a normal company would, but they’re also within that community in Yonkers, they’re they’re really changing people’s lives give by giving them an opportunity for employment that they might not otherwise have had.

[00:35:42.64] spk_1:
Okay, that’s interesting. First, that’s Grayson, G. Like

[00:35:46.56] spk_0:
G. R E Y S. T O N.

[00:36:23.63] spk_1:
Kristen bakery. Yeah, these brownies save lives. Okay, so listeners, we might, we might see those at at checkout sounds like point of sale places. Okay. Um, but then, you know, there’s the issue of, you know, giving a job versus teaching job skills in addition like, like, like women’s bean project is doing, it seems to me that the, the training beyond the skills for the job is more empowering than then giving a job and just giving a job.

[00:36:49.83] spk_0:
Well, I think that’s consistent with our philosophy at women’s bean project that there are because we acknowledge that there are lots of things that get in the way of somebody being able to get and keep the and keep I think is the important part, right? Like in a weave prior to the pandemic and I think we’re back to a, there’s a lot of jobs, but um, and so you could go from job to job to job in an environment where there are lots of jobs. But the important thing is, are you going to a job where you are a contributor where there is opportunity for advancement and benefits and all the things that make it more of a career than just a job. That’s what we’re trying to do and how we’re trying to change the, are the women we serve. That’s the trajectory we want them to be on when they finished.

[00:37:27.13] spk_1:
All right. So, you know, of course, different missions. I mean just like nonprofits that Grayson has uh, has a different model, but but there there generously hiring, they just hire the next person on the list.

[00:37:33.13] spk_0:
Yeah, Yeah. Sorry?

[00:37:34.33] spk_1:
All right. So, yeah, as you suggested, and I wanted to talk about the how to organize and structure these, you know, like what’s the relationship listeners already are in non profits? Most of our listeners are uh, you know, how what would that relationship look like if they did start a social enterprise?

[00:37:52.13] spk_0:
Well, I know as as the interviewer here, you you will hate to hear this answer, but it depends. Okay, listen

[00:38:00.16] spk_1:
now, don’t hold back on. Don’t

[00:38:02.29] spk_0:
don’t tell

[00:38:04.31] spk_1:
listeners of nonprofit radio what you think they want to hear?

[00:38:06.87] spk_0:

[00:38:07.71] spk_1:
an educated self selected group.

[00:38:09.80] spk_0:
So yes, so nuanced

[00:38:12.28] spk_1:
answers are very welcome.

[00:40:13.71] spk_0:
Well, it it does depend and it depends on what you want to do and how you might want to structure it and and honestly tolerance, risk tolerance of your board and you know, of your team. So, um Women’s Bean Project is a five oh one C three. A big reason for that is because we were founded in 1989 and if you wanted to do good, that was the choice, right? That’s all you had. Um, today there are lots of different structures. You could, or opportunities. You could be a for profit company, um, and become a benefit corporation, B Corp you could be a subsidiary of a nonprofit. Um, you could be an LLC, you know, there are just so many different ways. And so generally what I tell people is first figure out what you want to do, then figure out what the corporate structure makes the most sense. What I will tell you is that I wouldn’t necessarily change our corporate structure because we’ve made it work for ourselves. Our the way we have structured ourselves by having everything under one roof. The huge job in the beam job is that we what that’s done is that it has allowed us to have a mixed revenue uh pie, so to speak. So about 60% 60% of our operating budget comes from our product sales. What that does is it supports the business that supports women’s time while they’re working in the business. And it gives us the ability by the beans and the flour and all those things and makes a small contribution to our program operations. And then we fundraise to support program operations because again when a woman is in a financial literacy class or working on a resume or even in job search, looking for the next job, we’re paying her still. So we fundraise to both support those classes but also to be able to pay her. And because we’re five and one C three we have the ability to do that. It also probably gives us a little bit of wiggle room in terms of our inefficiency. Um you know I would if we were if if all of our revenue had to come from our product sales. We would probably have to compromise the mission a little bit and hire fewer women because we have to run a business with much better margin than we currently do

[00:40:27.55] spk_1:
more efficient.

[00:41:28.61] spk_0:
Yeah. But I will also say that there are plenty of situations where the, a board of a nonprofit, they might be interested in this idea of having revenue that’s basically unrestricted revenue, but they don’t want to risk the larger organization or they do or they want to just sort of run it on the side as sort of a separate entity and maybe not have it be a distraction within their main business, so to speak. There there are risks in that as well though. I’ve seen lots of uh, non profit big human services organizations that run social enterprises and they sort of treat them like the red headed step child. And, and look at him like what have you done for me lately? Little, you know, business, Why are you not contributing more when the reality is they’re kind of stifling the growth of that, that business. Um, and, and perhaps, um, you know, causing it to, you know, not prosper. Yeah, that’s

[00:41:48.11] spk_1:
a mistaken, well not only organization, but just in, in culture, in you think that the way board members and I guess the organization collectively thinks about its social enterprise as, you know, as uh, the ugly step child.

[00:41:50.51] spk_0:
Yeah. And that’s the risk, right? If of creating a structure where you sort of set it off to the side. I mean I understand that sometimes that’s done to avoid risk, but sometimes it creates more risk for the survival of the business. One of the things I worry about having been in this field for a long time is that, you know, uh we’ve now come to a point where social enterprise is kind of cool. It’s kind of come into its own, I joke that it’s like women’s bean project has been wearing a velour tracksuit for 30 years and now suddenly velour track suits are in uh but you know, so

[00:42:24.27] spk_1:
stay behind me with bell bottom suit.

[00:42:27.61] spk_0:
Yeah, exactly. Behind long enough, if I hold on to these

[00:42:30.51] spk_1:
things long enough they’ll come, they’ll come my dozen bellbottoms suits will come back.

[00:43:14.10] spk_0:
It turns out that’s happening for social enterprise. But what I worry is that organizations will start a business and do that and sort of cut it off at its knees and not even maybe recognize that and it won’t survive and then they’ll look back later and say, yeah, we tried that. It didn’t work. But I can tell you that if it it’s not always because it’s a bad idea that it doesn’t work. It could be because you just didn’t give it the opportunity for us, we in the nonprofit world are notoriously risk averse. That’s not a news flash to anybody I know. And so the challenge is to be willing to take some risk and balance at risk. You know, it’s a risk reward ratio in a business and balance that risk a little bit um With with what the benefit could be a long term.

[00:43:36.70] spk_1:
Yeah you started the transition again. I love it the way you segue easily uh lessons you know, lessons learnt things to look out for things to be sure you you’ve considered You’ve been doing this for 30 what 32 years?

[00:43:39.70] spk_0:

[00:43:40.60] spk_1:
two years.

[00:44:59.49] spk_0:
Yeah, Well I often say we have 32 years worth of mistakes. We could totally help somebody else avoid and leave them free to make all their own mistakes. Um you know it’s I would say the lessons learned are are consistent with what I’ve been saying, which is you really do um If you want a social enterprise to survive, you really do have to embrace it as as being a means through which you’re going to deliver on your mission and not set it on the side and say well you know someday you’re gonna make me some money and I’ll be able to use that money to advance my mission. They have to be interwoven. Um so you know, we don’t exist to make bean soup yet we can’t exist without it. And that idea that the two are inextricable um is probably the most important thing and the most important, honestly lesson that I’ve seen. I watched a social enterprise um be formed out of an organization that was providing initially providing the same service for free. And then they formed the social enterprise too monetize the service, but yet they kept offering the service. So they had this business and they kept offering the service for free. So

[00:45:01.07] spk_1:

[00:45:46.09] spk_0:
And um, and then eventually decided that the social enterprise wasn’t working. And the, the problem I thought, you know, it’s, it’s easy monday morning quarterback, admittedly, but you know, was that they set it up to be a complete, you know, be its own competition. So of course it was, there was always going to be that tension and that conflict. You’ve got enough tension and conflict, just trying to advance your mission and advance your business without setting yourself up for failure. So, you know, that’s another lesson which is be prepared for there to be tension between the business and the mission. But be okay with that because that’s part of what you’re doing is you’re trying to change the world by using market forces. Uh, and you know, we are, we’re a country of consumers. So let’s take advantage of the fact that we are a country of consumers. Everybody needs to buy products and services. So what a great opportunity to, um, to, to, for lack of a better word, exploit that.

[00:46:16.38] spk_1:
I love the way you say, you’re working to change the world by using market forces. Um, all right. Any anything else? You wanna, you wanna leave folks with anything that we didn’t talk about that you feel is is important. Anything I didn’t ask about,

[00:47:21.58] spk_0:
you know, I would say, uh, the last thing would be that if you are thinking about, um, starting a social enterprise, start looking at other models and seeing what other groups are doing. And especially if they’re localized, there’s, you know, there’s no reason to that. You wouldn’t be able to learn from their mistakes. Um, so you we have been asked often whether or not we would expand women’s Bean project out of Denver across the country. What we have chosen instead is to be more open source where we look forward to sharing the things that we’ve learned because I think ultimately, if we want to lift up the whole field, not just, you know, aggrandized women’s Bean project, that’s not our goal. Our goal really is to help other organizations create or prosper with their social enterprises, not just have us get bigger and bigger. There’s enough need to go around.

[00:47:27.88] spk_1:
Mm hmm. What about social enterprise Alliance? Is that a resource for folks?

[00:47:41.68] spk_0:
It absolutely is. And that might be a great place to start to figure out what is out there. They have social enterprise alliance has, uh, you know, members all over the country who are involved at various levels of social enterprise. So they might be running social enterprises or they might be consultants to social enterprise. Um, if you need an attorney to talk with, for instance about what your corporate structure might be their resources there. Um, but the nice thing about that is if you’re in the initial stages of just doing research is a great place to start.

[00:48:12.47] spk_1:
Okay, good value. You can have conversations with folks, you can, you can, it’s a good place to start your research and, and, and grow if you decide to

[00:48:14.13] spk_0:
mean, you

[00:48:23.87] spk_1:
might start your research and decide. It’s not really, you know, you can’t tolerate the risk or the tension. Uh, it was just something you don’t want to take on, but at least you do it, make that decision informed.

[00:49:44.67] spk_0:
Yeah. I always think that fear is not a reason not to do something right. Like you can acknowledge the fear and sort of do the things that, that you need to do to, um, to try to overcome or, you know, address the fear, but staying noticed something just because you’re afraid. It’s maybe not the best reason. Uh, and I think also, you know, we have a tendency to sit at the, at the starting line and try to anticipate all the problems we’re going to have. And, and I guarantee, first of all, we’ll be wrong about what problems we think we’re going to have and whatever solution we decide it’s gonna not be appropriate for whatever problem you end up having. And so ultimately you just got to start and and have faith that you have gather the resources and the expertise enough that you can address the problems as they come up. But I think that that tends to be and in my experience, just going to lots of, you know, speaking on lots of panels and talking with lots of organizations that are thinking about starting social enterprises is they, they often get stuck at that starting line and have a hard time pulling the trigger. Um, the reality is, it might not work, but think about it. I, I think you learn more from failure than you do successful a lot of times.

[00:49:57.67] spk_1:
Yeah, too much ready, aim, aim, aim and, and, and no firing. All right, outstanding. Thank you Tamara, thank you very much.

[00:50:00.34] spk_0:
Thank you

[00:51:23.16] spk_1:
my pleasure. Thanks for sharing. Thanks for sharing the women’s Bean project story and and beyond. Uh, tomorrow Ryan Ceo women’s being project. It’s at women’s Bean project dot com. You want to look at their dried foods and other products, especially now around the holidays and Tamara is at tomorrow Ryan. Thanks so much Tamara next week. How about our annual replay of zombie loyalists? I think. So, if you missed any part of this week’s show, I beseech you find it at tony-martignetti dot com. We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c. O our creative producer is Claire Meyerhoff shows social media is by Susan Chavez Marc Silverman is our web guy and this music is by scott Stein. Mhm. Thank you for that information, scotty You with me next week for nonprofit radio big nonprofit ideas for the other 95% go out and be great.

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Nonprofit Radio, April 26, 2013: A Conversation With Eugene Fram

Big Nonprofit Ideas for the Other 95%

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Professor Emeritus Eugene Fram
Eugene Fram: A Conversation With Eugene Fram

Professor Emeritus at Rochester Institute of Technology, Dr. Fram is author of “Policy vs. Paper Clips,” introducing nonprofits to a corporate model of board governance to cut out the minutia from agendas so your board can focus where it should, on policy and planning.


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Hello and welcome to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent for april twenty six twenty thirteen i’m your aptly named host question have you raided and reviewed the show? I haven’t asked for for many weeks, and if you haven’t done that, i’d be grateful if you did. We increase the ratings and reviews on itunes considerably the last time i asked, and if you haven’t, i’d be grateful if you did if you wouldn’t go over to non-profit radio dot net, start there and click readings and reviews and then give the show one to five stars, hopefully five and an a rating. I’d be grateful for that. Thank you very much. Oh, i hope you were with me last week. I’d suffer acute respiratory distress if it came to my attention that you had missed a conversation with amy. Sample ward part do she’s, our social media contributor and co author of social change. Anytime. Everywhere we talked about your multi-channel plan fund-raising calendar, staffing and budgeting and now you know what a home page hijack is this week. A conversation with you, jean fran lots of conversations professor emeritus at rochester institute of technology dr fram is author of policy versus paper clips introducing non-profits to a corporate model of board governance to cut out the minutia from agendas so your board can focus where it should on policy and planning roughly thirty two minutes into the hour on tony’s, take two ah that’s, a little bit of a toughie because i’m recording this about three weeks in advance, and i don’t know what’s going to be on my block, but i’ll share some gratitude on tony’s. Take two my pleasure now to welcome eugene fran he is professor emeritus at rochester institute of technology he’s, a consultant, board chair and volunteer director for non-profits he has authored a co or co authored more than hundred twenty five journal articles on marketing and non-profit and corporate governance, he wrote the book policy versus paper clips, which you can find on amazon to introduce a governance model that we’re going to talk about on twitter he’s at eugene fram four a m just like the oil filter eugene fran, welcome, welcome good morning to you. Good morning to you, it’s it’s morning in california on the day that we’re recording very early morning. So thank you for joining me this early from the left coast. It’s. My pleasure, jean. Are you are you part of the fram filter family, buddy? Chance. Unfortunately, i am not. You’re not those things still around. I don’t own a car. I haven’t had a car for years. We are fram oil filters still around. Do you know why? I think they’re still on the web. I seen them. Okay, you have but that’s, not you. I’m sorry. And that’s not me. That’s. Alright. I’m not part of the great martignetti liquor family in boston and new england either. So okay. The both of us are suffering from famous names and chronic under representation in the in those wealthy families. Yes, we’ve been born with huge handicaps. I’m still trying to overcome mind. I hope you have overcome your one hundred twenty five articles. Yeah, somewhat. But you know, my ambition is to go to a thousand. Okay, well, now that you’re in retirement, you have more time for that. But yes. That’s true. Professor emeritus jean what? What’s what’s happening with boards? Why? Why do you feel they are missing the mark? Well, boards from a governance point of view non-profit boards from the government’s point of view, frequently have retained the old nineteenth or twentieth century model off of governance, where the board has a multitude of committees and tries to eventually micromanage the uh uh, the staff in the process, nothing gets done or the organization, although it has potential as stunted growth. Ah, if it in that way, because volunteers like myself and again as i talk, i’m not talking as a non ah non-profit ceo or e d i’m talking as a volunteer director, we can’t be there day today, and we can’t, uh, manage the minutia that is no, are they not necessarily monisha or the work that really needs to be done and we can’t really manage truly professional staff, we can help. We can advise we can help. We have an obligation to set policy, but uh, but we’re simply, uh, part timers or some person has described that we’re birds of flight through the through the organization because we’re they’re traditionally three to six years, and the staff stays and works and works under different boards. Your concern is that despite the well meaning board on dh and individual members having great potential and the best interests of the organization heart you feel they’re actually through these old models stunting the organization? Absolutely. And i think it could be proven when you look at any number of organizations which has suffered this way. Do you want to give an example or to, uh well, i’ve consulted with a number of them on, but i don’t want yeah, i’ll talk t o generalities specific organizations where the the the board actually got ah, where the volunteers on the board actually got involved to the level that they were, uh, they were managing departments. Eso if the decision had to be made, the department had first went to the volunteer uh uh, advisor or whatever they call him at the time and then went to the d with the advisers either decision or concern or whatever the department had won it. So the organization didn’t grow until they finally change. They finally changed the model full time employees reporting to a parttime volunteer argast person. Exactly. Oh, my all right. Let’s, let’s. Start with the beginning of the process and we will get to the corporate model that you lay out in your book way. We’ll get to that let’s. Take a couple of discreet sort of time line points and along a board members life cycle with the organization and i’d like to start with recruitment. Makes sense, i think. Xero what can we what can we improve around our board? Recruitment? Well, the chief executive officer where, whether they be a nadie or a president ceo, as i suggest, needs to have more contact with the board with the individual board members. I think they they have tto have more contact between meetings that has to be in often and formal. Ah, and they have tio they need to get to know each other. And i suggest, uh, that they actually made quarterly to informally discuss the concerns and the challenges. Ah, that the chief executive officer is facing. I, uh there are various techniques for doing this. I recently read in the harvard business review. Uh, a recommendation. Uh, that the, uh uh uh, we’re one, uh uh, for-profit ceo actually sends a email out to the board every sunday morning. Uh, just laying out very briefly, uh, in this case, his concerns about what’s going. On in the organization and what new ideas? He has a c as he indicated in the article, he says, i don’t worry about grammar right now, gina, i’m trying to focus on recruitment, so maybe maybe in in in this board meeting is often as you’re suggesting they’re identifying gaps in the board, and maybe they can try to fill those gaps with new board members that’s, right? Ok, and but as they’re going through that recruiting process to identifying skills that they need that the board is lacking, how should they be talking to potential board members? Well, they should talk to board members that what they do is to value their contributions of time, the most important thing, and they make ah, meaningful use off the board members time they don’t ask the boardmember the potential boardmember to do frivolous things, uh, such as stuff envelopes or our or get involved with watching slide shows or commenting on slide shows as one. Now that i’ve heard of s so that they focus on, they focus on the policy in the strategic issues of the organization. Okay, we’re going to take a break now, jean and when we return. We’ll keep talking about the little about the life cycle of the boardmember. And then we’ll get into the corporate model that you lay out in policy versus paper clips. So thank you, gene is going to stay with us. And i hope you do, too. Talking alternative radio twenty four hours a day. Are you confused about which died it’s, right for you? Are you tired of being tired? How about improving your energy strength and appearance? How i’m rika keck, holistic nutrition and wellness consultant? If you have answered yes to any of my questions, contact me now at n y integrated health dot com, or it’s. Six for six to eight, five, eight five eight eight initiate change and transform your life. Are you concerned about the future of your business for career? Would you like it all to just be better? Well, the way to do that is to better communication, and the best way to do that is training from the team at improving communications. This is larry sharp, host of the ivory tower radio program and director at improving communications. Does your office need better leadership, customer service sales, or maybe better writing, are speaking skills? Could they be better at dealing with confrontation conflicts, touchy subjects all are covered here at improving communications. If you’re in the new york city area, stop by one of our public classes, or get your human resource is in touch with us. The website is improving communications, dot com, that’s, improving communications, dot com, improve your professional environment, be more effective, be happier, and make more money improving communications. That’s. The answer. Hey, all you crazy listeners looking to boost your business? Why not advertise on talking alternative with very reasonable rates? Interested simply email at info at talking alternative dot com metoo welcome back with jean fran, and we’re talking about policy versus paper clips and focusing your board where the attention, where its attention ought to be on policy and planning and things like that. So jean question about in the recruitment process, the expectations around time and fund-raising for potential board members were still now just talking about the potential member what should, what should a non-profit be revealing about time and fund-raising well, they first ought to be very clear about the time commitment expected, and they ought to delve into a deep discussion with the boardmember on this because i’ve just consulted with a organization that has recruited cem very fine people who are working on people who are building their careers, and they lay out the they discuss the the time commitment for the organisation, but in the final analysis, after being on the board for three to six months of the people have, uh, huge work commitments, and they say, j i just can’t i made the time commitments. Oh, and so they had to restructure the board in a way that allows the chairman much more responsibility, i think, than a board chair should have. And what about the fund-raising expectations? Well, not all board members will enjoy fund-raising i think it’s necessary to find those who might enjoy it or have experience with it to make some commitment to it on dh. Do you want to see that as a dollar amount or more flexible based on the individual based on what the individual strengths are, if they have contacts? That’s one thing, uh, if if they have aa dollars to give or you are in the are able teo network with people of substantial wealth, that is another thing. Okay, but there ought to be. Do you agree with this one hundred percent participation personal at some level for for all board members? Yes. That’s necessary? Because foundations, when you go for grants often look at that as a board commitment, showing board commitment that they have made the financial commitment to the organization. Should these expectations be in writing for the potential boardmember? I think so. But i think it depends upon the culture of the board and they understandings that air developed at the beginning. If you, uh, if they, uh, if the board gets a lot of questions after after being on the board for a while about those commitments, maybe it’s necessary to put it in into writing, but not necessarily a legally binding contract. Oh, no, no, no, no. Okay, but just something that here’s what we’re expecting and please, you know, indicate that you’ve reviewed it. So we’re all have well have consistent expectations, right? We’re all on the same page, okay? Eso then moving. Teo orientation. If you recruited the right people, what should board orientation look like? Well, orientation, uh, should take place. I would say over i again size and complexity of the board about a six month period, andi, in the sense that there might be a half day or a couple our orientation about the organization and its mission is a mission, vision and values. Oh, and any other details that they they have to be concerned with. But then other issues ought to be ah brought up for the new board members as they as they progress through their first six months during this period, the, uh, the board chair and the ceo i need to be readily available to answer questions from from the new board members s o that they become fully apprised of the issues as they go along a two day board, uh, section in which a lot of information is thrown at the person, uh, simply doesn’t stick its a matter of repetition, understanding and going through the process themselves. And as you know, we all learned best when the when the problems are immediately in front of us. Ah, for example, uh, with board liabilities, a lot of boards will bring in a lawyer and and lay out the potential liabilities for a boardmember in their particular situation. Uh, they hear a lot about the laws, but they if you’re not a lawyer, they frequently forget it. Uh, so when an issue comes up ah, that the that there might be a a personal liability in in the situation, it’s up to the ceo and the board chair to remind the new people and refresh the older people that this particular situation might be affected by this particular legal precedent. Would you put new board members on a committee right away? Or would you keep them at large? I would keep, um, at large unless they have a strong desire to go on a committee. And of course, a sze yu know. I suggest that there are really only three committees needed. Yeah, on this is a way of getting into the corporate model. What are those three committees? Well, first that’s. Very simple. You have a planning and resource committee. Ah, that looks forward. It looks towards the strategic plan. It looks towards the resources that i have both, uh, human resource is and financial resource is it looks forward to the planning that is, that is necessary. It also has a special responsibility that the other committees don’t have and that is to, uh, teo ah, monitor and mentor ad hoc committees. Any man as, uh, special issues come up of a strategic or policy nature ad hoc committee need to be formed for that particular issue clearly, because because we don’t, we only have three standing committee, so we’re going to get it right. We’re gonna need ad hoc committee, particularly everything ascot committed to take care of the issues. They come up, come up esso and then that’s is that their their their responsibility. On the other side of the picture is the assessment committee and the assessment committee simply assesses how we have done. Okay on that includes the oddity function and the er in states such as california, where you need a separate audit committee. A subcommittee of that assessment committee performs the audit function, meets with the auditors. This all seeds up to the to the executive committee. The third committee, which has the traditional executive committee duties of of ah, of acting for the board and emergency situations and taking a final review off the various reports that air coming through before they come to the board. So it’ll give you, say, have a board of twenty one people with seven on each. Ah, you will find that, uh uh, by the time it gets to the board, uh, through the process is the large part or nearly all the board are familiar with the issues they may disagree with with some of the proposals and have other ideas at the board meeting. But everybody is full of pretty much everybody is wholly informed. You say twenty one board members as an example. So this is cannes. This corporate model worked for organizations that have just maybe half a dozen boardmember xero their way. We could divide. That in four or however we want to arrange that, depending upon the needs of the corporations of the non-profit, uh, this is a flexible model, okay? And people have used it in different ways. Ah, and, uh, for example, i once met a person, a new organization that didn’t have any standing committees. All committees of the board were ad hoc committees reporting to the entire board. They were happy with it. I would have been happy with it, but evidently it worked. It worked for them. All right. So there’s flexibility is this more what we see in corporations and you have to you have to help me out because i don’t. I’m not familiar with the corporate model. Is. Is this more typical of the way corporate boards operate? Very few standing committees, maybe not exactly the same, but very few standing committees. Lots of ad hoc committee’s. Well, this is being ah proposed by the bye. Some major consultants now, as you as you noted in the book, however, i hate to say, but i’ve been at this for more decades, uh, than i care to admit. And in turn, uh, there are a cz faras. I know, based on the sales of the first two books there, which was the first to additions, which were their sales of over ten thousand copies, i would estimate the thousands of boards have adopted it on dh. However, it is still controversial among some boards and its best used with boards who have, uh, a about a million dollar budgets and roughly let’s, say about, uh, no over ten to twelve, fourteen full time employees. Uh, when it comes to the nation type of non-profit board uh, the i think the traditional model of bored involvement in operations is necessary because, uh, they’re simply not the man power to get it done. The basic problem in the process in the change is that boards begin with board involvement in operations and when they grow, they still sick with the old model stunting the growth of the organization, frustrating the chief executive office operations officer and on dh missing huge opportunities that they could have right in their growth. Gene, i’m not clear on, but i’m not clear on something. Is your recommendation for smaller organizations teo to stick with a more traditional, smaller younger organizations? I guess yes. More traditional sport model. If you have an organization with a budget, for instance, i know one that i’ve been very close to, uh, it has only has a budget and does great work. Charitable work have two hundred fifty thousand dollars a year in that case, uh uh, i would stick with the traditional oer organization, however, uh, in the book. Hey, hey. Still need tohave on audit committee of some sort. And the book describes what there’s a nest starita have that, you know, once or twice a year a cz the accounting issues and financial issues come up. And of course, the corporate model is important to have in mind as the organization grows exactly that’s the transition that they were going in. I’m just saying that’s, the transition that your urine compensation and allows you, teo, to grow two very large uh uh to a very large organization, if you want to go in that direction and it’s sort of mandated once you get a larger number of poise and, uh and, uh and larger finances to handle, if you’re in the area of over a million, if you’re in the area of one point five two, three, four, five, six million so full. I had one client a couple years ago that still had the old model on dh. They had a budget of six million dollars and, uh, the chief executive officer said to may look, i could be running away with this board, you know, they’re just not had supporting me in the way they should be supporting me there, worrying about the details of the operational details that they hear about now. That’s the policy versus paper clips. Yeah. And just there worrying about hypothetically the paper clips just to remind listeners that gene fram is professor emeritus at rochester institute of technology and the author of that book policy versus paper clips. Jean what? What can we expect? Aside from maximizing our growth potential? Sounds like more efficient operations. Um what? What else? Khun kayman organization expect if they adopt this corporate model of board governance. All right, well, uh, one is the the board members feel that they’re doing meaningful things. They think they see that there proposing projects. They’re monitoring their development. Uh, they’re getting to know the staff. Eso if the succession issue comes up, they know who. Uh, who? Ah, who the, uh, prime candidates might be, and they become really maur involved with the organization, as i indicated in policy versus paper clips. Ah, the ideal organization is a partnership between the board, the management group and the staff. They are all working together, there’s communications there, ideally and on. And they’re all focusing on the objective of meeting the needs and the grow, often the growing needs of the clients. Okay, we just have about a minute and a half or so before the break. What about employees who are accustomed to going to board members with with problems that assume that’s gotta stop? Yes, that has to stop that’s what they refer to it is the end run in the non profit organization. So the end runs have to stop, and they and everybody has to understand that it has to stop hyre so that people are not. People are not reporting to board members, they’re reporting to they’re they’re they’re supervisor or maybe it’s the ceo and president. But yes, but we can’t be going to board members for everyday problems. No, we can’t pay, uh, salary levels, uh, problems with promotions and so forth and so on. That’s particularly difficult and smaller community and smaller communities, e-giving where many of the employees might know, the, uh, the board members personally, you know, so that becomes important. So there is a transition period, uh, which can take anywhere from two to three, maybe even four years while this adjustment takes place. Okay, jean jean, we have to take a break. We’ll have plenty of time or to talk after this. After we go away for a couple minutes, i’ll come back, tony’s, take two, and we’ll keep talking to jean frame about the corporate model. Stay with me. I didn’t think that shooting getting ding, ding, ding, ding, you’re listening to the talking alternative network, get him. E-giving duitz are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight, one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com way look forward to serving you. Hi, i’m ostomel role, and i’m sloan wainwright, where the host of the new thursday morning show the music power hour. Eleven a m. We’re gonna have fun. Shine the light on all aspects of music and its limitless healing possibilities. We’re going invite artists to share their songs and play live will be listening and talking about great music from yesterday to today, so you’re invited to share in our musical conversation. Your ears will be delighted with the sound of music and their voices. Join austin and sloan live thursdays at eleven a. M on talking alternative dot com. Dafs you’re listening to the talking alternative network. Yeah. Schnoll i’m christine cronin, president of n y charities dot orc. You’re listening to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent. Oh! Hello, i’m sorry, i can’t send live listener love this week as i’m not live, but you know that i’m grateful for the live listeners out there so lots of love to those in the us and throughout the world we get routinely get listeners from china, taiwan, japan recently ah, the uk, england and ireland of checked in so grateful for wherever you are live listener love and that’s really ah tony’s take to you know i want to thank you for listening to the show and supporting the show. I produce it for you because you’re working in or volunteering for a small or midsize non-profit a charity that’s doing great work that you’re passionate about either is an employee or volunteer and you know, it’s it’s personal i’m saying to you, thank you very much. Thank you for listening and supporting the show, and i’m very glad that you’re with me, maybe through social media, all the places that i am in social media if we’re connected there to thank you for that as well. I am grateful for your support and that’s tony’s take two for friday, the twenty sixth of april seventeenth show of the year gene let’s. Keep talking. Okay, what about you? Mentioned just briefly. Let’s. Talk a little about assessing the work of the of the ceo. Who does? Does that fall under in this corporate model? Well, that’s the, uh, that’s the assessment committee makes sense. Ideally, the assessment committee looks at, uh, two aspects of the of the ceos work and the organizations outcomes. You don’t look for processes. You look for outcomes and these khun b those, uh, those data, which are what we might call ha ha ah, hard data and that’s the data that you have with accounting records, records of membership, what a number of clients, things of that nature that you can easily major. And then there, there qualitative ah, measures that you can measure has should make sure which most or many organizations don’t major, for instance, impact on the community or or excuse me image. Ah, in the community, things of that nature more qualitative. And in that area, i suggest that you do what we call, uh uh, use in perfect metrics. In fact, i have an article out on it. And i’m sure if any of you ah, if you take a look at my website. You will. You will see it there or if you even put it on in under my name, you will find it is available on on the web on. And that is a process that i suggest with the co author, that if you use in perfect metrics over time that you khun dr process dr provoc progress and develop exchange it develop change. Excuse me, jean’s blogged itt’s a little little lengthy. So i’m going to suggest that the easiest way to find gina’s teo, do a google search on eugene fram. Yes, thank you very much. I have now have ah ah. In fact, i have an anniversary right now. I’ve just put out my hundred fifty fiftieth blawg a titled what non-profits ceos think of their boards? Other recent ones air program reductions are mandated. What can a non-profit d’oh okay, another one just for example, is management knows all what does a what’s a non-profit director to dio okay, people find you. Really? I think easiest through google search now, this years have put my name into google and there there’s a lot. A lot of links there for you this use ofhim. Perfect data. Gene, won’t you say a little more about that? Doesn’t doesn’t sound like something we’d want to rely on. Well, if your process is good and you sample reasonably well, you get data. That is not exact, but you get a feel for it. Uh, for, for example, uh, i once, uh, have was on the board of a of a charitable non-profit that was targeted, uh, to counsel. Ah. P ah, various people in the community was heavily supported by the united way. And we weren’t getting many. Ah, ah, uh uh. We weren’t getting many respondents from the inner city, so i suggest it as the boardmember uh, that i, uh, talk with some of the people in the community. What, that time no one was the settlement houses and ah, and see in the inner city, uh, which were community centers, which is a better word for them. And see what they perceived is the problem. Esso i went to them and i found out what i what they thought were the problems. And now you’re only talking to three people, but they knew the communities there and the, uh, the first thing. That happened was the aids of the community centers called, uh ah, my, uh my president and ceo and said, guess what in one of your board members coming down to talk to me? So i, uh and he said, yeah, i know. And we had agreed to this prior to that. And so i listen to these people. I came back, i gave him feedback hey made changes to try to, uh, garner a greater proportion of the clientele from the inner city. And then after a year, uh, went back and talked to the people and i said, as are many changes and they said yes, there’s been modest changes, but there’s still more that needs to be done. I fed this back to the present ceo, he made changes. And then at the end of the second year, there were there were substantial changes, and the board got out of the business of evaluation at that point. All right, so buy some buy some key interviews of the right people, right? Yeah, we don’t have statistical significance and exactly, but on everything that surrounds proper, peer reviewed research. But who can afford to do all that all the time exactly. And and the article contains practical examples. Were both myself and my co author, jerry tally, a sociologist who both of us have been in ah, an end quote in the business a long time have have used the model and have found it very, very helpful. And over time, if you repeat this, asai did and and the example i gave you it was only a about a two year run until the things started to turn around and then the ceo was evaluated on on ongoing from there you mentioned earlier something i wantto spend a little more time with the proper title. Your recommendation for title. For the the chief of the of the organization, you feel pretty strongly that executive director is not sufficient. No, uh, executive director can mean various things because it’s, used in a in a in a wide variety of ways on executive director can be a volunteer who manages the budget of a small church uh uh with a let’s say, a two hundred thousand dollars budget. An executive director khun b, for instance, one i’ve encountered recently. Ah, was the it was the head of a ten. Million dollars ah, charitable organization with over one hundred employees. And i don’t think, uh, the title executive director in the twenty first century, even in the last part of the twentieth century, gives, uh, the chief executive officer of a non-profit the position and stature that that, uh, that he or she needs toe work effectively. So what do you prefer to see? I prefer once you get into the, uh uh, make the make the transition. I prefer president and ceo because people understand their what that means, it’s clear that that person has responsibility for operations except those decisions that have to be made by the board. And that title may have significance for board members also that they recognize the responsibilities of of the president and ceo exactly on dh to add to that. And in many cases, the non-profit president ceo has more management responsibility than a number of the members of the board. For instance, if you’re a professor, you loft and, uh, i don’t have any management responsibilities. Um, never had it. Okay, you worked as an individual contributor. Same thing about a physician. Uh, who is, uh, who has a single practice. The same thing with a, uh a lawyer who is, uh, who has a a single practice or even it’s a part of a major law firm. They just haven’t had the responsibility of the that the president and see the chief executive has of of the nonprofit organization implementing this. A corporate model seems to me there’s a lot of trust between boardmember sze, between the board and the president ceo, between the staff of the organization and the president ceo between the staff and the board. It sounds like there’s a lot of trust required. Yes. You have to have trust it’s it’s. Really? I if you’re and you picked it up exactly. It is a trust model it’s a model in which you have to trust the ceo. Uh, you have to trust the staff that they are professionals. But on the other hand, it also calls for rigorous evaluation. It’s not the traditional evaluation of the border, the staff where they send out a questionnaire at the end of the year and and ask people to return it. You don’t get full returns and the questionnaire is poorly formatted. It takes investigation and robust evaluation and what are we going to do with trustees who are reluctant to give up the managing the paperclips responsibilities? How do we manage those people with difficulty? Yeah. Go hope you got something better than that. Otherwise, i’m taking you off now. I’m going to cut your mic down. If that’s the best you can do. No, uh, some people you have to give them what they might consider meaningful activities such as chairing the annual dinner on things of that nature who are not working, who are not interested in the policy. For instance, if you have a major donor who, uh, just is not interested in policy and strategy and wants to do that over time. What you hope will happen with the ah corporate model with my model is that, uh, the, uh, board will turn over to people who have these dynamic interests and understand that they have to do a robust evaluation, not a cursory one, and that the majority of the board will be those types of people. We got to take a break. Jean fran stays with me, and i certainly hope that you do, too. You’re listening to the talking alternative network. Buy-in are you stuck in your business or career trying to take your business to the next level, and it keeps hitting a wall? This is sam liebowitz, the conscious consultant. I will help you get to the root cause of your abundance issues and help move you forward in your life. Call me now and let’s. Create the future you dream of. Two, one, two, seven, two, one, eight, one, eight, three, that’s to one to seven to one, eight one eight three. The conscious consultant helping conscious people. Be better business people. Have you ever considered consulting a road map when you feel you need help getting to your destination when the normal path seems blocked? A little help can come in handy when choosing an alternate route. Your natal chart is a map of your potentials. It addresses relationships, finance, business, health and, above all, creativity. Current planetary cycles can either support or challenge your objectives. I’m montgomery taylor. If you would like to explore the help of a private astrological reading, please contact me at monte at monty taylor dot. Com let’s monte m o nt y at monty taylor dot com. Talking alternative radio twenty four hours a day. Buy-in durney welcome back. We’re wrapping up. We have about another five minutes or so and want to continue with with jean for the that time and talk about some of the advice that you have around week board practices. There’s there’s. Something on your blogged. There are a few posts on your block about overcoming week board practices. One of those is one of those bad practices is overlooking absences. What do you suggest there, what’s the problem. And what do we do? Well, you have boardmember sze uh, who? Uh uh, fill a board members, uh, board position and they’re consistently absent. And this is a very touchy situation. They may be very fine. People have great skills, but they simply don’t have the time to attend board meetings, which obviously critical to the organization. Uh, i think the best thing you can do is to try to talk to these people, try to retain them on the board or understand, uh, what they’re missing by not attending the board meetings in some instances. Ah, it’s it, khun b a a termination discussion. For instance, i just recently encountered one and which, uh, the board chair had this discussion with the person and she said, i’m just sorry i like the organization. Ah, and and i’m i’m tied to the mission, vision and values, but i’m doing international travel and my best, the best i can do is to open up the position and resign in other cases if you can find the root cause of it and do something about it for them that’s that that could be ah, that could be another alternative, but it’s very situational on dh. Very individual to see what you can do. Teo, handle the situation you had suggested earlier. There may be a different role for the person. Maybe it’s not. Our board will be something else i can do to support the organization. Yeah, in this one, they’re, uh instance, that i just mentioned. I i had talked to this individual and i said to her, well, look, uh, it’s obvious that you can’t do anything immediately, but your role made in your job may change again. Uh, have you asked about taking a leave of absence from the board on da ah, future time. A year, year and a half. Two years, maybe. Things during that change around and so she’s still connected to the board in some way. I may even get minutes of the board and so forth. So on as a way of retaining that person’s interest in the organization because she was there. She’s, a very fine person. Thoughtful, analytical, does critical thinking and had very broad experiences. In-kind of the dream, the dream boardmember. So you try to make these accommodations. What about insufficient due diligence on the board first? How do we how are we going to recognise that? Well, i think that’s again the, uh the, uh the board chairs responsibility along with the chief executive officer. When things are not discussed in an adequate detail, that they bring the issues up that they pride to do some of the due diligence for the people. Because again, the boardmember zehr not being compensated by large they are. They have other jobs jobs that are their main main concern. And so you may need to help them along on the dew dealings. Due diligence side jean has other identified board weaknesses and and how to overcome them on his on his blogged jean what is it that you love about working on boards? Well i, uh i like the people on dh i’ve served on a number of human services are, you know, charity type boards as well as, you know, trade associations and so forth, but on the boards that especially those that are charitable in nature, you see in these organizations, people who figured early stand ten feet tall, they do much more than they are compensated for, they do it willingly, and they really have the client’s interest that mind, a tte heart, and and then in their mind, you know, i’ve seen ah, social workers in on and homes on group homes, uh, take take some of their clients to their own homes on weekends, or even take them on vacations far beyond what is required of the people in order to ah, help them overcome the handicaps that they have. You know, those are just examples, and when you see people like that really dedicated it and you can contribute in your way, you know, i can’t do those sort of things, but i can contribute to they’re doing it, we have to leave it there. Eugene fram, professor emeritus at rochester institute of technology, google him remember it’s like the fram oil filters fr am googling to find his block. His book is policy versus paper clips it’s on amazon jean, thank you so much for being a guest. Well, thank you for having me been my pleasure. I hope you will be with me next week. Consultant and author amy eisenstein returns last time she was here, we talked about her book, fifty asks in fifty weeks that was april first, two years ago, and her new book is raised more with less took her two years to write it. I hope that was time well spent, and we’re going to find out next week we’re all over the social web, you know that you can’t make a click without testa dura lisp arika smack your head hard on tony martignetti non-profit radio twitter, for example, use the hashtag non-profit radio. Check out the hashtag follow me, i’m at tony martignetti you want to know what’s coming up before the show sign up for our weekly insider email alerts that’s on the facebook page, click alerts. Our creative producer is claire meyerhoff. Sam liebowitz is our line producer and assistant producer is janice taylor shows social media is by regina walton of organic social media and the remote producer of tony martignetti non-profit radio is john federico of the new rules were gonna be remote starting starting season in june at fund-raising day in new york city. I hope you’ll be with me next friday, one two to eastern on talking alternative broadcasting at talking alternative dot com. Hyre no. Durney i don’t think that’s a good ending. You’re listening to the talking. Alternate network duitz getting anything. Think xero cubine hi, i’m donna and i’m done were certified mediators, and i am a family and couples licensed therapists and author of please don’t buy me ice cream are show new beginnings is about helping you and your family recover financially and emotionally and start the beginning of your life. We’ll answer your questions on divorce, family court, co parenting, personal development, new relationships, blending families and more dahna and i will bring you to a place of empowerment and belief that even though marriages may end, families are forever join us every monday, starting september tenth at ten a m on talking alternative dot com are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications? Then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com way look forward to serving you! You’re listening to talking alternative network at www dot talking alternative dot com, now broadcasting twenty four hours a day. This is tony martignetti athlete named host of tony martignetti non-profit radio big non-profit ideas for the other ninety five percent technology fund-raising compliance, social media, small and medium non-profits have needs in all these areas. My guests are expert in all these areas and mohr. Tony martignetti non-profit radio fridays, one to two eastern on talking alternative broadcasting are you fed up with talking points, rhetoric everywhere you turn left or right? Spin ideology no reality, in fact, its ideology over in tow. No more it’s time. 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