Welcome to my first blog posting. My intent is to inform those who work, volunteer or manage in the non-profit world on trends and ideas that I encounter through my experience running and managing two non-profits as well as running the Non-Profit Purchasing Group (“NPPG”). I hope you find my posts worth reading and sharing with others.
When I launched NPPG in January 2010, I assumed that non-profit executives would make educated decisions to save money. My premise was that if I could demonstrate to the non-profit that they could save multiple times the membership fee to join NPPG (I have a savings calculator on our website), they would gladly pay the membership fee. NPPG launched with 21 best-in-class vendor partners and is up to over 50 today, offering non-profits nationwide the opportunity to save up to 55% on their everyday purchases.
Boy was I surprised, and in more ways than one. Most significantly, it seems that executive directors and other decision makers are not being granted the authority they need to make decisions for which they have been hired. I have been told countless times “I need board approval to spend $99, even if I can demonstrate that we’ll save that fee many times over.” In my opinion, this clampdown on expenses is an unhealthy reaction to the decline in non-profit donations.
While I understand that times are tough and non-profit organizations need to watch every penny, this kind of micro-management hampers the ability of organizations to serve their constituents. I advocate for board approval of spending above a certain level and for select expenditures such as capital investments. However, executive directors must have the authority to make decisions on expenditures that impact daily operations. When boards get involved on this level of review, they not only stray from their stated role of providing oversight and strategic direction, they reduce their time available for relevant high-level expertise and guidance. If a board can’t trust an executive director to spend $99 wisely, then I ask why that executive director was hired in the first place? I’m not advocating that executive directors be fired, but I’m pushing for granting more autonomy so executive directors can do their jobs right and serve the mission of their organization.
When boards micromanage, everyone loses. When boards manage properly and executive directors are free to operate within reasonable bounds, everyone wins. In difficult times, this is more important than ever.