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Rewards from Nonprofits

RN Associates met recently with Dr. Janice Frates, a professor of health care administration at California State University Long Beach. Thoughts shared by Dr. Frates could provide direction for a CEO looking to enter a not-for-profit board, as well as those looking to differentiate their careers by building a not-for-profit resume while pursuing a corporate track.

RNA: The holiday season is a busy and joyful time – when we give thanks for the goodness in our lives and are encouraged to make a special effort to help those who are struggling or less fortunate. Why is this “spirit of giving” especially important during a recession?

JF: The current economic downturn has affected almost everyone, but it has hit many nonprofit organizations doubly hard. Due to layoffs, home foreclosures and stock price drops, both individual and corporate donations and philanthropic organizational support have declined while requests for help have increased. Many health and social service agencies report that some of their former donors and volunteers are now service recipients.

RNA: Businesses are struggling too these days, and have cut back or eliminated their corporate giving programs. Is this wise?

JF: I think everyone understands that we’re going through tough times and we’re all cutting back on spending. But I would hope that businesses don’t completely eliminate their charitable activities, for a couple of reasons:
1. Contributing to the community is good PR, especially during a recession.
2. Continuing to contribute in tough times sends a message to the community, and to employees, that the firm is strong and has confidence its own brighter future.

RNA: But if revenues and profits are down and the company has had to reduce its workforce or lower compensation, doesn’t it also need to scale back on charitable contributions?

JF: Yes, but there are other ways to contribute that may be even more valued and valuable in the long run. I’m talking about gifts of talent and time, by both businesses and individuals.

First of all, nonprofit organizations need business acumen and expertise. Many nonprofit organizations are very well run by exceptionally talented executives. Frances Hesselbein revitalized the Girl Scouts of America during her tenure as CEO there, and so impressed management guru Peter Drucker that he recruited her as the founder and first CEO of the Peter F. Drucker Foundation for Nonprofit Management (now known as the Leader to Leader Institute). But most nonprofits, especially smaller ones, could use more expert guidance and direction from board members with knowledge of finance, marketing, human resources and other basic management functions. Walks, runs, toy and food drives can involve all employees and family members as well.

RNA: Since time is money, what’s the return on investment for companies and busy individuals on time and talent contributions to nonprofit organizations?

JF: For the company, it’s positive public/community relations and some opportunities for business-to-business networking. For individuals, I think the benefits can be broader than just generally expanding your network of contacts:
• When you are working voluntarily to help an organization that you wholeheartedly believe in and support, you will perform at your best because you care about the cause – and the people who get to know you through that organization will see you at your enthusiastic, dedicated best.
•  For new grads and early stage careerists, volunteering in a small organization will often lead to a leadership role on a particular project (typically a fund-raising event) and an invitation to serve on the board of directors in a relatively short time (2-3 years, sometimes less). Serving on a governing board affords an opportunity for young people to gain insights about management and leadership experience that can bolster their resumes.
•  For managers looking to move up to C-level positions, serving on a nonprofit board can be an important point of differentiation for personal brand enhancement .
•  For senior executives looking for a new retirement career or anyone considering a career transition, nonprofit engagement can offer opportunities to develop skills and gain experience in the new field or function.
•  Volunteering in a different capacity or in a different type of organization than where you work allows you to use talents or explore new fields that aren’t a part of your life now – the creative arts, the environment, global issues – there is no shortage of worthy causes!

RNA: As our practice concentrates on senior executive level talent search and management, could you elaborate a bit on the benefits of nonprofit board service for people at this career stage?

JF: If you can document some impressive fund raising, how you contributed to a major turnaround of a struggling nonprofit, or how you helped an organization overcome a crisis, it demonstrates that you have what it takes to move up to a C-suite position. These days, in almost every community, there are nonprofits in survival mode – especially smaller organizations – so there are a lot more opportunities for involvement that will benefit you as well as the nonprofit. ______________________________________________________

Janice Frates, Ph.D. teaches health policy, management and marketing classes in the Health Care Administration Program at California State University Long Beach.  Dr. Frates received her Ph.D. in Public Administration from USC, with a concentration in Health Services Administration. Her recent research and publications focus on Medicaid managed care and state health policy options to expand health insurance coverage for the uninsured. She is also a Licensed Clinical Social Worker, holds a Master of Social Work from the University of California, and was a social work practitioner and administrator in the San Diego County Department of Social Services and the Orange County Department of Public Health. www.csulb.edu/~jfrates

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