Planning to survive

by Jini Stolk

I confess. Sometimes I’ve felt good about the fact that Canada has far fewer big charitable scandals than the United States. Whether the story’s about financial malfeasance (United States Navy Veterans’ Association), shady use of donated funds (Wounded Warrior Project), dramatic loss of trust and supporters (Susan G. Komen for the Cure) or the abrupt closure of a much-loved institution (Sweetbriar College and the San Diego Opera) Canada’s been relatively immune.

And then along came Goodwill Toronto, reminding me not to be so smug.

At this time, there aren’t many reliable details on why Goodwill spiralled so quickly out of control. But a few things are immediately obvious, even at this early stage. Creative Trust included planning as one of the key characteristics of strong and healthy arts organizations. “Organizations that plan and learn are able to respond, adjust and take advantage of changing realities” we said in our Year 3 Evaluation Report. “Each Creative Trust company details its commitment to take specific steps towards health and sustainability in a written Work Plan.” Analyzing and balancing risk, ensuring that each organization understood the financial, human and other resources needed to fulfill their mandates, and planning for expected and unexpected financial difficulties were all part of our program.

Where was the planning at Goodwill?

You’ll notice that my baffled outrage doesn’t include questioning the CEO’s approximately $200 – 250,000 a year salary. Here’s where the critics have it wrong. This seems like appropriate, even modest, compensation for someone managing a $28 million a year organization…as long as their skills are up to the job.

By the way, while it’s a drastic error to stumble into a crisis without any plans in place, planning is also essential when the good times roll around. Any major change to an organization’s environment or business model requires thoughtful and detailed planning – in writing – or it won’t go well.

Surprising fact: Thinking and planning skills are centered in the prefrontal cortex section of the brain. Eat your Wheaties, with blueberries on top.

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After the chill

by Jini Stolk

Many of us are feeling a bit warmer…and freer…since Minister Diane Lebouthillier’s announcement calling off the Canada Revenue Agency’s political activities audits. This much criticized review of charities’ involvement in public awareness and advocacy was unveiled in the 2012 Federal Budget which provided CRA with $13.4 million to track down charitable scofflaws. The program always looked to me like a nationwide SLAPP suit, meeting its goal of silencing unwelcome political disagreement just by existing.

As expected, the audits uncovered few actual examples of charities breaking the rules around allowable political activities. Of the five completed audits that resulted in a determination to revoke charitable registration, my guess is that all five organizations will be exercising their right to appeal.

Ever since my August 2015 post on Fear of Advocacy I’ve been meaning to write again about why charities need to be free to contribute to public debate. I was going to re-emphasize that the CRA itself acknowledges (in its published policy CPS-022) that Canadian charities “have experience, expertise and ideas that should be used to help government develop better public policies and programs,” and that BoardSource just added advocacy to their list of the Ten Basic Responsibilities of Nonprofit Boards. In honour of the rule that charities devote no more than 10% of their resources to allowable political activity, I was going to call my new post Getting to 9.9%.

But I couldn’t write it. I found that the political activities regulations and reporting procedures were so loosely defined, subject to arbitrary interpretation, and onerous that I couldn’t in good conscience advise organizations to push the advocacy boundaries. Schedule 7 of the T3010 charitable return requires charities to detail all “political activities” (without clearly defining what that means) and to assert that they haven’t engaged in anything that “explicitly communicates to the public that a law, policy or decision of any level of government inside or outside Canada should be retained, opposed, or changed” or “encourages the public to contact an elected representative or public official” and urge them to do so.

These requirements remain on the books, and serve to contradict the CRA’s assertion that “Canadian society has been enriched by the invaluable contribution charities have made in developing social capital and social cohesion.” Can we still do this while self-censoring and scrupulously monitoring our twitter accounts, blogs, and LinkedIn profiles to ensure that no one – not even in the comments section – urges public action or makes a statement that could be interpreted as partisan?

The next step for our new government is to rethink the role of charities in public discussion and advocacy for social change, and bring CRA’s rules more closely in line with countries like the Netherlands, Britain, and the United States. It’s another welcome change to see that Minister Lebouthillier is planning to do just that.

The Ontario Nonprofit Network will be much involved in this process but anyone with a lawyer/activist on their board might want to dive into this discussion. I’d be very glad to see arts organizations play a leading role: our sector, after all, has a long history of fighting legal challenges to free expression. Gallery owner Av Isaacs, who died this month, was a warrior for the right of artists to create and exhibit according to their own aesthetic and perspective, no matter how unpopular, shocking or even “disgusting” – or how far they went “beyond walls.”

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Exploring the Feasibility: 10 Feasible Tips

by Jini Stolk

You have a great idea. It’s been percolating for a good while now and you’re ready to take action. Does this idea have legs? Can you accomplish it? How do you move forward? It’s time for Exploring the Feasibility.

At Creative Trust we were very careful to figure out whether our ambitious Working Capital for the Arts plans made sense for Toronto. There had been other arts sustainability programs across Canada and the U.S. We did a lot of research, spoke to a lot of people, learned as much as we could about the successes and drawbacks of these other initiatives, and thought very deeply about how to create a program uniquely suited to Toronto’s performing arts community. In the end, the success of our 9-year $7 million Working Capital for the Arts program rested on our initial, thorough feasibility study.

The following tips are taken from the Creative Trust/Toronto Arts Foundation Open Source Took Kit Exploring the Feasibility – part of a larger initiative to share knowledge and learning from the Creative Trust experience with arts and other non-profit leaders in Toronto and beyond. Feel free to explore, borrow or adapt from it!

  1. Determine if there is a need. Research the field and be sure that there’s a need/desire for the work you are proposing. You don’t want to be duplicating work that another organization does well, or creating something that isn’t a high priority for your community.
  2. Research other models. Look at similar programs in other places. What’s worked? What hasn’t? Talk to people. Learn from them. People are your best resources.
  3. Begin to build a base of support. Begin outreach into your community. See if you can get people on board as potential champions, advisory committee members or even, down the line, board members. This will test your idea in the real world and help you begin to market the project.
  4. Decide whether your vision has legs. Is it practical? What’s the business plan? If funding is needed, do you know of any potential funders? Speak to colleagues and funders and figure out if there is financial support for your vision. Begin to make your case. Talk to the field and advocate for your project.
  5. Succinctly express your values and vision. Begin to articulate your specific values – the guideposts that will help you stay true to your mission. Map out your vision. What are your high-level goals? What is the ultimate change you want to make? Write this down! This will help you formulate the right model for your needs, help you keep your supporters close, help solidify your ideas and ultimately help you get needed funding.
  6. Outline your model. Once you know that your project is necessary and supported you can begin developing your specific methodology and model. Apply what you’ve learned from your research and adapt it to your specific situation. Make sure the model works for you, your constituents and your audience.
  7. Refine your model. Don’t let your first draft become set in stone. If it works, that’s great! But if you and your supporters have new ideas give yourself the freedom to refine. Always be sure to check in and make sure that the model is reaching the right people and doing what it is intended to do.
  8. Stick to a timeline. Determine a timeline for implementation and a launch date. Stay true to this timeline, but make sure you leave room for unanticipated events. We all know that nothing works perfectly, so give yourself space, but have that timeline always in the back of your mind – and share it with others! It will help you actually commit to fully launching your project.
  9. Determine your structure. What is the structure best suited to this project? Is it volunteer led? Will you need staff, an ED, a steering committee, a board, etc.? How can you put your plan into action?
  10. Report on your findings. Start building the case. Create a document that you can share with potential funders, board members, and advisory committee members. Make sure it articulates the genesis of the project, why your specific project/approach is needed, what your values and vision are, how your model is unique to your context, what your timeline for implementation is, how your ultimate structure and end vision will look. This document should outline all the important thinking that went into “exploring the feasibility” and will be your statement to the world. So make sure that it is well written, well designed and engaging.
  11. Good luck!

To learn more visit creativetrust.ca and read the full Exploring the Feasibility open source toolkit.

 

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Hiring well

by Jini Stolk

Hiring can involve both anticipation and anxiety. If you do it right, you can look forward to sunny days, basking in achievements and successes. If you don’t…it’s yours to fix.

Here are a few pieces of advice for managers and for board members undertaking what might be their most important job – hiring the right artistic or managing director.

This wonderful piece from Nonprofit Quarterly discusses the impact, positive or negative, of how a board handles a leadership hire, and provides step by step advice on how to get it right.

I’m entirely convinced by Vu Le’s arguments in favour of disclosing the position’s salary range in your job posting.

Apple’s Angela Ahrendt has developed guiding principles for hiring. She probes a candidate’s skills at collaboration and leadership, asking questions that reveal whether they’ll focus their energy on being an individual contributor, or on connecting and enabling a wider group, and whether they care more about their own success or about the greater good of the whole.

Adam Thurman suggests we borrow some of the criteria NASA uses to select astronauts when we select leaders and members of our artistic or administrative teams – including the ability to relate to others with sensitivity and regard; a sense of humor; an ability to form stable and quality relationships; and the ability to function normally despite imminent disaster (so genuinely useful in most arts organizations!)

This recruitment specialist emphasizes the need to listen, treat every interview as a meeting of equals, and stop asking stupid interview questions. Liz Ryan says that the interview as interrogation is a tired paradigm long past its prime, and that today’s employers need to “sell good candidates on your company,” helping them understand the culture and working style of the place from the get-go.

Here’s a hiring guide that discusses how to persuade candidates to leave their current jobs and work for you.

After conducting 10,000 senior staff interviews, executive recruiter James Citron still loves “the art of the interview”. This is a good and helpful read, whether you’re doing the interviewing or trying to land the perfect job.

Hiring for Keeps by Janet Webb was one of the Globe and Mail’s top leadership books of 2015. “One of the many ways we go wrong in hiring is not understanding the notion of fit; this book…explains what fit is and isn’t, how to build a job description that illuminates that critical feature, and how to conduct interviews that will reveal whether candidates actually fit the job and organization.”

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Gifts for you

by Jini Stolk

The joys of giving and receiving loom large at this time of year. And to my mind the pleasure of giving is much more rewarding than that of getting – happily for those on my seasonal gift list…and equally happily for those of us sending out our year-end donation requests.

I think most of us understand that charitable giving isn’t really about money. Fundraising is a way to “help…people follow their own interests, express their values, and advance their own aspirations” according to Simone Joyaux; our work as fundraisers is about emotional fulfillment. Studies have shown that giving makes people happier, and even improves our health.

So, for my personal well-being and because I wish to share the delights of the season with you, I’m offering the following hand-picked gifts:

This is for those of you who love opera, and are especially fond of Mozart’s Magic Flute.

Many of you have embraced the chills, thrills and sheer fun of improv; this will hone your competitive edge.

Orchestral music has a timeless appeal ; as does the magic of dance.

This package combines theatre, film, music and movement, with cats  – what more could anyone desire, in this or any other season?

Happy holidays to all.

 

 

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Mistakes

by Jini Stolk

We all make mistakes, but these are some I hope we can avoid in 2016.

Dropping past board members like hot potatoes. A number of people have told me they’ve been mystified when a charity they’ve been deeply involved with seems to forget them when they leave the board. Communication dwindles…invitations dry up…their major interaction now seems to be with the Development Office. (Trigger alert! I am NOT speaking about personal experience; fear not, my beloved former boards.) I’m pretty sure I’ve done this myself, without meaning to and perhaps without fully realizing it. I believe that Managing and to some extent Artistic Directors tend to focus on the things retiring board members will not miss (frequent meetings, committee obligations, financial worries, persistent fundraising from friends and family) rather than on the things they will (camaraderie and friendships, being close to artists who inspire them, collaborating with people they care for, and pride in helping an organization grow and thrive.)

It’s easy to avoid or reverse this mistake. DO forward special board communications and invitations to past members with a “thought you might be interested” or “hope you too can join us” note; always personalize fundraising requests to past board members; make time for an annual lunch; get their input into new strategies and plans; and ask for help (such as important hosting at openings and events) that they’re uniquely positioned to provide.

Best of all: Ask past board members to mentor incoming members – sharing organizational history, board processes, and advice enriched by years of close participation. This is a great way to keep past board close to your core, and to use their experience and wisdom to bring new board members closer.

Adding an in camera session to every meeting agenda. This was recently suggested as a way to ensure that arts and non-profit boards are fulfilling their governance and oversight responsibilities; I gather it’s a strategy gaining currency in the U.S., and moving into governance discussions in Canada. Before I had fully formulated my own objections to an idea that reaffirms hierarchy in a sector that thrives on trust and creative collaboration, I came across a piece entitled In Camera Board Sessions: Securing Confidentiality or Cultivating a Culture of Secrecy? There are certainly times when board member(s) or staff should leave the board room (when they are in a conflict of interest on an item being discussed) or when a board might want to discuss something in private (such as salaries or the evaluation of the managing director.) It’s also a tactic that can be used, once in a lifetime, to encourage a senior staff’s resignation.

Other than that, I can’t think of many reasons to forego a trusting relationship of professional equals, mutually responsible for the health and mission of the organization, in order to quell fiduciary and accountability concerns. While the details of board discussions (who spoke for and against a motion, for example) should be confidential, the article makes a neat differentiation between confidentiality, which “requires, but does not strain, trust” and secrecy.

It also offers some excellent advice about what should and should not be included in meeting minutes – a rarely discussed topic.

A friend whose arts organization adopted the practice, for a time, of regular in camera board sessions said that discussions at board meetings became muted and constrained. It turns out that board members were saving their important thoughts for the in camera sessions, rather than engaging in open and transparent debate about the complex issues facing their organization.

Using Raiser’s Edge: I know some organizations are happy with the program but this piece (from a competitor!)  summarizes many of the complaints and dissatisfactions I’ve heard over the years from Raiser’s Edge users: too big, not user-friendly, difficult and expensive to learn, not flexible, hard to design and pull reports.

Let the Fundraisers in our midst debate.

 

 

 

 

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Wanted: master storytellers

by Jini Stolk

This is the right time of year to acknowledge the power and lasting impact of well-told stories.

I was recently electrified by this interview with FrameWorks Institute’s Susan Nall Bales (author of the paradigm-changing, for those who were paying attention, Wanted: Master Storytellers), about how nonprofits frame the issues they’re engaged in. “What’s really important”, she says, “is telling a complete story over time and using that story, that same story, to explain multiple policy objectives. What we are doing wrong is thinking we have to have a different story for every policy ask. What a core story does is to create a way of understanding how an issue works that would then allow you to see why multiple policy prescriptions would address that reality.”

So simple but so true – and so helpful when you’re engaged as I have been in trying to reframe how people think about the role of non-profit organizations in our society, or about the impact and importance of the arts.

The environmental sector, as an example, continues to struggle with how to talk about climate change so it inspires change rather than depresses and overwhelms: warnings of imminent chaos and destruction don’t seem to work. As another example, I wish that Premier Wynne had found a better way to frame Ontario’s new sex-ed curriculum before all hell broke loose. Pioneer sex educator Meg Hickling, who championed and delivered sex education in Vancouver 40 years ago, called her topic “body science” and ran into remarkably few problems in convincing parents and schools of its importance. I love this interview with Anna Maria Tremonti of The Current, and I love that Ms. Hickling started her classes by telling the kids that “scientists never say ‘ewwww….gross’; they always say ‘interesting….’”

Tim Jones of Artscape has been honing his story for many years, and I think we can all learn from what he’s been doing. Tim long ago moved from a narrative of needs to one of opportunities. His recent talk with MaRS’ Global Leadership series, called Culture as Urban Acupuncture , told a convincing story about the role artists play in city-building, as change-makers and active network builders. He talked about culture as providing “pinpricks of urbanism that can create big change…,” healing cities, solving problems and transforming challenged neighbourhoods into vibrant and healthy ones – and he called upon the enlightened self-interest of policy-makers, developers and community activists to put culture at the heart of city-building.

It’s a simple, true and powerful story, and judging by Artscape’s success and the number of projects in its pipeline, a very effective one.

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Financial leadership for Executive Directors

by Jini Stolk

Fair is fair. In my last posts I wrote about the Board’s financial responsibilities – so I’d like to say a few words on the Managing or Executive Director’s crucial role in financial strategy and oversight.

The invaluable Nonprofit Quarterly published (on Christmas day four years ago, I just noticed) an exceptionally helpful Executive Director’s Guide to Financial Leadership. It comes squarely down on the ED’s responsibility for developing a business model that sustains financial health while achieving the organization’s mission. This is a much larger role than merely collecting financial data, producing financial reports and solving day-to-day financial issues, and requires an array of executive skills:

  • Strong annual budgeting, aligned to a written annual plan
  • A focus on the net financial result (in other words, the desired balance between income and spending)
  • Diversifying income as appropriate and possible
  • Risk identification and management
  • Anticipating and resolving cash flow issues
  • Planning for and building reserves; and more

This, of course, debunks the mistaken idea that once an Executive Director identifies a financial problem, it’s the board’s role to solve it! That’s too much to expect, and expecting it leads to disappointment and trouble. But knowing how to “help your board to help you” is definitely a core ED skill and responsibility, well-covered in the Guide.

This includes providing thoughtfully prepared and useful financial reports that “communicate information specific to the organization’s size, complexity and program structure in a format that matches the knowledge level and role of the board.” There’s no one-size-fits-all financial reporting format, especially when boards need to be looking at compliance with financial standards, organizational effectiveness, planning and any necessary urgent action.

As with all things governance, financial leadership involves both mutual and separate, but reinforcing, board and staff roles and responsibilities which should be discussed, defined in writing and understood by all.

A reminder: check out the extensive financial resources on the Young Associates website, which contains tips, links and advice on budgeting, accounting, financial management and reporting, tax and legal requirements for arts organizations, and much more.

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Let’s hear it for the drama teachers

by Jini Stolk

This post was written in May 2013 shortly after Justin Trudeau became Leader of the Liberal Party of Canada. Why repost it now? Because it’s 2015.

Who knew that being a drama teacher was such a contemptible career choice? Or that choosing to inspire children to express human emotions through the arts makes a person unfit for leadership?

In Canada today, you live and learn.

I am a bit surprised that the response from artists and arts lovers to the recent ads making those points hasn’t been more forceful. Maybe it’s taken us a while to get over our astonishment at the implication that anyone involved in the arts is not strong enough, smart enough, or perceptive enough to make firm and wise political decisions. (And that the people who teach our children to understand themselves and others by means of creative expression aren’t worthy of appreciation and respect.)

Most of us are intimately aware of the profound impact an experience of theatre, dance, painting or music can have on a child’s confidence, perspective and sense of his or her future. We also know (see the Performing Arts Education Overview among many studies) that a childhood experience is the most important determining factor in a lifelong immersion in the arts as a means of self-expression, joy, or understanding.

At the wonderful recent (April 2013) Summit in Edmonton, called to discuss “How do we speak for the arts in Canada today?”, a key theme was the need to have a strong united voice on the essential role of arts education in building the type of compassionate and innovative society we want to live in

I will say more in future about the exciting and hopeful Summit discussions. Incidentally I was happy to reconnect at the Summit’s final reception with director and artistic director Ben Henderson, who is now an Edmonton City Councillor – and an excellent one, according to the locals. (I wonder if that’s because of or despite his impressive achievements in the arts…)

But first: speak out on social media if you feel that teaching drama or any of the arts is one of the most important careers a person can choose in Canada today.

And note this from WolfBrown’s November 20, 2012 issue of On Our Minds: “Having just attended a public event in Chicago key-noted by Mayor Rahm Emanuel, cellist Yo-Yo Ma, soprano Renee Fleming, and others that announced the decision to make the arts a core subject in the school curriculum, I wondered what convinces a mayor to become the public champion of arts education. Turns out Emanuel studied dance very seriously and believes in the importance of the arts in human development. Had the arts been a core subject in the communities where some of our other public officials were educated, one wonders whether we would need to rely on economic impact studies to garner their attention.”

 

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Boards and finance

by Jini Stolk

Arts board members clearly feel a strong desire for information and training on non-profit financial analysis and oversight. This was one of the most frequently mentioned requests (after, not surprisingly, fundraising) for future sessions following my recent Art of Good Governance sessions with the Toronto Arts Foundation.

The idea of having “fiduciary responsibility” for an arts organization is definitely a bit anxiety-producing in our world of government funding uncertainties, fundraising shortfalls (see above), intermittent cash flow crises, and unpredictable box office returns. Keeping a careful watch on an organization’s financial health and future viability, while assessing and managing risk and planning for success in a rapidly changing environment, requires a cool head and a keen eye. The Toronto Arts Foundation will no doubt be including financial learning opportunities for board members in their Get on Board series, but in the meantime I’ve written about the wonderful financial resources on the Young Associates website. It contains a wealth of tips, links and advice on budgeting, accounting, financial management and reporting, tax and legal requirements for arts organizations, and much more.

For a review of the fundamental differences between non-profit and for-profit financial assumptions, this piece by Clara Miller is thorough and enlightening. “Not only are nonprofit rules that govern money—and therefore business dynamics—different from those in the for-profit sector, they are largely unknown, even among nonprofits and their funders. Or at the very least, they remain unacknowledged and unspoken.” Like what? Oh, for example, that price covers cost and eventually produces profits, or else the business folds. Or that cash is liquid.

She also makes a strong argument for investment in infrastructure for growth – something that consistently shifts to the bottom of the list for many non-profit arts organizations, to the detriment of the sector.

Many of us harbour the mistaken belief that general operating funds and administrative expenses should be kept low and squeezed tight in order to direct all possible funds to expanding programming. This seems to be an increasingly top of mind consideration for donors, but what’s been called the “Non-Profit Starvation Cycle” is counter-productive and limits our ability to truly achieve our missions. “It is unreasonable to expect any business to operate and grow with out-of-date technology, inadequate office space and untrained, underpaid staff. Yet, when donors ask the question about overhead, that is exactly the reality that continues to permeate charitable systems.”

Vu Le of Nonprofit with Balls takes this argument a step further, making a heart-felt pitch for unrestricted funding: “Imagine… what it would be like if a bakery ran with the same funding restrictions as a nonprofit: ‘I need a cake for some gluten-free veterans. I can pay you only 20% of the cost of the cake, and you can only spend my money on eggs, but not butter, and certainly not for the electricity; you have to find someone else to pay for the oven’s electricity. Also, you need to get an accounting firm to figure out where you’re spending my money, but you can’t use my money to pay for that service…’ The amount of time and energy we nonprofits spend trying to figure out which funder is paying for what part of which program under which phase of the moon could be better spent actually helping people, improving outcomes, expanding programs, etc…”

A lot of non-profit managers and board treasurers reading this will be quietly cheering.

Here’s Imagine Canada’s persuasive input into changing the overhead conversation: (Sadly, we have a long way to go. A 2013 Muttart Foundation survey revealed that nearly three-quarters of Canadians believe that charities spend too much on salaries and administration. Another recent survey found that 51% of Canadians believe that between 81% and 99% of money should go ‘to the cause’ with 32% of those surveyed actually believing the number should be 100%.)

And here’s a sobering case study on what can happen when the need to build financial reserves is ignored.

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