1. FIVE STEPS TO MAKING YOUR NONPROFIT MORE COMPETITIVE!
Peg Jackson, DPA, CPCU
Peg Jackson & Associates
San Francisco, CA and Alexandria, VA

2. Agenda Why the nonprofit world is a competitive industry
Nonprofit Management: Old Model vs. New Model
Today’s economic challenges and their implications for capacity building
Five steps to making your nonprofit more competitive
Dr. Peg Jackson

3. Why The Nonprofit World Is A Competitive Industry
Compete for funding
Compete for the best leadership and talent
Management
Board
Key staff - including IT professionals
Compete for the most visibility
Compete for strategic alignments and contracts

4. Nonprofit Operations Old Model vs. New Model
The Board is responsible for EVERYTHING
Internal controls are vital and must be configured to appropriate technology
IRS 990 – NEW VERSION
Governance section
Sarbanes-Oxley best practices are the platinum standard for management
Nonprofits operate in a competitive environment.
OLD MODEL
Board is window-dressing
“Mom and Pop” financial system
IRS 990 – file if you feel like it
Don’t have to run like a business because we serve poor people
Implementing solid business practices means we are selling out to the Establishment.

5. Today’s Economic Challenges
SF Business Times 1/1/10 – Nonprofits mergers on the rise.
BERNIE MADOFF!!
Impact on the nonprofit world including nonprofits, foundations and universities
Overall reduction in individual donations including high wealth individuals
Nonprofits often lack the financial acumen to aggressively manage expenses and revenue.
Nonprofit scandals such as United Way have made the public skeptical.

6. What does all of this mean for your nonprofit?
Dr. Peg Jackson

7. CHANGE!!!
To be competitive in today’s nonprofit environment, you need to CHANGE
Your ideas about how a nonprofit should be run.
Your ideas about the role of your board.
Your ideas about technology and its role in your nonprofit’s operations.
Your ideas about who are your trusted advisors.
Your ideas about cleaning house and clearing dead wood.
Dr. Peg Jackson

8. “The only person who looks forward to change is a wet baby
“The only person who looks forward to change is a wet baby.” Mark Twain
Dr. Peg Jackson

9. Overview Five Steps to Making Your Nonprofit More Competitive
Step 1 – The Board needs to be fully engaged in its new role as the governing entity responsible for everything that happens in the nonprofit.
Step 2 – Introduce best practices from SOX and other private-sector sources.
Step 3 – Leverage the features from the new IRS 990 that can facilitate a more competitive outlook.
Step 4 – Prepare an Enterprise Risk Management Plan that includes a business resumption and emergency fundraising component
Step 5 – Tell the world! Utilize your commitment to the new operational model as a marketing tool.

10. Step 1 – The Board needs to be fully engaged in its new role
The Board is responsible for EVERYTHING that happens in a nonprofit.
Board Accountability Standards including:
TERM LIMITS!
Establish Board member requirements and metrics to measure the quality of their work.
Volunteers – including board members - can and should be “fired” if they don’t play a positive role in moving the organization forward.
Financial support – 100% of your board MUST support your organizational financially.

11. Step 1 – The Board needs to be fully engaged in its new role
Must be financially literate – or at least trained in reading/understanding the financials.
Must vote on the Executive Director’s compensation package.
Conflict of Interest Policy
Audit Committee
Code of Ethics
Read and approve the IRS 990 before it is filed with the IRS.
See new IRS 990 section on Governance
Dr. Peg Jackson

12. Step 1 – The Board needs to be fully engaged in its new role
Board members must be recruited with the understanding that they will have a significant role in the welfare and advancement of the nonprofit.
How will their business and social contacts facilitate the nonprofit’s goals?
How will their business and professional acumen facilitate improvement of the nonprofit’s programs and operations?
How will their networking skills facilitate recruitment of top-quality board members?
Dr. Peg Jackson

13. Step 2 – Introduce SOX Best Practices
Best Practices from Sarbanes-Oxley include:
These two elements are required for all organizations including nonprofits
Whistleblower Protection Policy
Document Preservation Policy
Board and ED are personally responsible for accuracy of all financial reports.
Audit Committee (or Financial Review for small nonprofits)
Internal Controls – particularly financial systems.
IT and databases – quality of interaction and security issues.

14. The Role of Your Trusted Advisors
Insurance Professional
Banker and/or CPA
Attorney
IT Professional
Public Relations Professional
Dr. Peg Jackson

15. Step 3 Leverage the Governance requirements from the new IRS 990
Governance Section in the new IRS 990 asks:
Does your board have a Conflict of Interest Policy?
Does your nonprofit have Whistleblower Protection and Document Preservation Policies?
Has the Board reviewed the IRS 990 before it was filed?
Did the Board vote on the Executive Director’s compensation package?

16. Step 4 – Prepare an Enterprise Risk Management Plan
Work with your trusted advisors to prepare a Enterprise Risk Management Plan that addresses risk areas in governance, human resources, operations and reputational areas.
Leverage the Enterprise Risk Management Plan to reduce Workers Comp claims, insurance premiums and cost of securing financial services.

17. Step 4 – Prepare an Enterprise Risk Management Plan
The Plan is essential in :
Identifying and addressing operational risks.
Preparing a crisis management plan that includes emergency fundraising.
Establishing a framework for resumption of operations.
Dr. Peg Jackson

18. Step 4 – Prepare an Enterprise Risk Management Plan
Literature and web resources available to assist in this type of planning.
Enterprise Risk Management need not be cumbersome, time-consuming, expensive or labor-intensive!
Dr. Peg Jackson

19. Step 5 – Tell the world!
Utilize your changes and upgrades as a marketing tool.
Include mention of your new practices in your nonprofit’s literature.
State that your Board is committed to ensuring a platinum standard in nonprofit management.
Present the following on your website-
Post your most recent IRS 990 (leave out the pages with the contact information on donors)
Indicate your nonprofit’s commitment to SOX best practices such as Whistleblower Protection and Document preservation.

20. So What Does All of This Cost???
The five steps can be implemented at nominal or even zero cost.
The nonprofit and its board need to assume a more professional viewpoint in terms of strengthening its resolve to adapt and thrive in this new competitive environment!
It costs nothing to change your perspective!

21. CHANGE!!!
To be competitive in today’s nonprofit environment, you need to CHANGE:
Your ideas about how a nonprofit should be run.
Your ideas about the role of your board.
Your ideas about technology and its role in your nonprofit’s operations.
Your ideas about cleaning house and clearing dead wood.
Often the biggest hurdle is resistance to change…
but it costs nothing to change one’s outlook!
Dr. Peg Jackson

22. SUMMARY Nonprofits operate in a competitive environment.
The quality of your nonprofit’s governance, management and internal controls are integral to effective organizational change.
Embracing and leveraging change is key in competitive positioning.
It costs nothing to change your perspective!
Dr. Peg Jackson

23. Alexandria, VA 22304 peg@pegjackson.com
Peg Jackson DPA, CPCU
6300 Stevenson Ave. #403
Alexandria, VA
John Wiley & Sons, Inc.
Dr. Peg Jackson