“NCF’s Structure in 2001”
A Motion to be Considered at the Dec18 Board Meeting

This is a motion to define what organizational structure will use to best serve NCF’s member-owners in 2001 – giving them most benefit for their donations and volunteer efforts.

Background:

NCF’s circumstances in Dec 2000 give the organization an opportunity to review its structure, to be sure that it will be appropriate in 2001.

Current situation:

· Chris Cope, who served as Executive Director in 2000, will be taking a job with X (not public info yet, but it’s a job that relates to ‘connecting our community’, with exciting synergies for Chris and NCF).

· Thus NCF starts 2001 with no Executive Director. There are two full-time paid staff positions, Office Manager (Sheila) and System Administrator (Andre), dozens of volunteers, several projects underway or in the works with partners, many corporate and institutional sponsors, and about 7,500 member-owners.

· At the start of 2001, there are expected to be about 7,500 members and a $40K cash surplus.

· By extrapolating past trends and with no changes, 2001 would end with about 4,500 members and an operating deficit of about $70K, resulting in a shortfall of about $30K.

Obviously when ‘doing the same’ results in a projected shortfall, it is time to review and improve things. Should NCF avoid the projected shortfall by reducing expenses, or earning increased donations? The forecasted shortfall could be avoided by not having an Executive Director. Could the work expected of the Executive Director be done in other ways, eg., by board members or staff? Or should the now-vacant Executive Director position be filled and a plan developed for earning increased donations to cover the forecasted shortfall?

The chart below analyses some broad alternatives, starting with the board of directors.

The difference between a ‘governance board’ and a ‘hands-on board’ (click to view).

Some criteria by which these alternatives could be evaluated are listed below:

• Benefits – how well would it accomplish NCF’s mission and 2001 focus?
• Expense – how much would it cost?
• Value – benefits per cost
• Sustainability – alternatives calling for heavy burdens on unpaid volunteers may be unsustainable
• Vulnerability – alternatives that rely on an individual(s) may cause vulnerabilities if that person leaves; the fewer people, the higher the risk; the greater the load on an individual, the greater the risk of burn-out and difficulty of replacement
• Realism – alternatives that call for extraordinary commitment may not find people to fill the roles

The governance model with three staff positions (an ED in charge) is favoured by the following:

• Based on recent email, postings, and petitions (and personal experience), volunteers and staff strongly prefer to have a single person in charge, for them to work with, to make decisions, resolve frictions, and coordinate their contributions. A ‘committee in charge’ normally means slow decisions, disruptive conflicts, and poor accountability.
• Volunteers can make considerable contributions, but generally only in bursts, because usually they must put NCF second to other things in their lives. A volunteer is not like a no-cost full-time paid employee.
• For maximum results, pay people so they can contribute maximum time and energy. Good people can easily “earn their compensation” in benefits to the owners.
• A governance board will attract more experienced people if there is a capable person in charge (since the governance model relies on staff to prepare materials for the board, and in the absence of capable staff, the model degenerates into a hands-on board, which will not attract experienced people).
• The detachment of a governance board allows them to act as a ‘board of appeal’ for people not satisfied with the person in charge. The Hands-On model, which has the board in charge as a committee, means people not satisfied must appeal to owners (eg., at the AGM), which is far less flexible. (The current provision allows the board to suppress motions by members at the AGM should be re-examined)
• NCF should aim for strength and size – to better enable NCF to make significant “do good” contributions to the community, and for economies of scale
• Sponsors are more likely to support NCF if it has lots of members and an experienced person in charge that they know and trust.
• Reliance on a ‘commitment’ from an inexperienced person is risky because people without experience at something are likely to underestimate what that activity involves (even professionals often under-estimate in their field).

In a governance board model, the ED (not the board) develops plans with a budget recommendation for the next year, and the board (relying on their collective experience) recognizes the plan as feasible and credible, and (just as important) evidence that the staff is thinking in line with the vision. Also, the plan gives a feel for how clever the team is, and thus how much confidence the board can have in staff to react to unexpected future events and still meet the targets. It is non-productive to plan in great detail – the future is too uncertain – but it is necessary for the board to get a feel that plans are broadly reasonable and that the staff can meet targets.

Once a plan and budget are in place, a governance board can monitor implementation by tracking progress of key parameter(s) that reflect the essence of success. For NCF in 2001, an appropriate key parameter would be “the level of donations from members”, because that is a crucial factor in 2001 and (since donations must be earned) it is a good indicator of whether NCF’s team is doing the right things. Having one person in charge of meeting donation targets, and having a governance board holding that person accountable for meeting those targets, leads to a clean interface between the board and the organization. It helps the ED avoid micro-management by the board, and it helps the board hold the ED accountable for results.

In the governance model, board members (volunteers) are most heavily-loaded (unsustainably) only abnormal times (eg., when hiring an ED). In the hands-on model, the load on board members is continuous, which is very difficult to sustain as an unpaid volunteer.

A governance model is favoured.

Within a governance model, it is not considered feasible that the existing two staff and volunteers perform the roles formerly performed by the Executive Director – there is simply too much work already upon those people.

A three person staff, headed by an Executive Director and complemented by a strong contingent of volunteers and supporters, continues to be NCF’s best bet, if it can be afforded.

BE IT RESOLVED that the preferred organizational structure, if it can be afforded, is a governance board with an Executive Director managing the organization.