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Empowerment and Community Impact: A New Era at the Kauffman Foundation

DeAngela Burns-Wallace | CEO

Dive into the heart of strategic philanthropy with the Kauffman Foundation’s new vision under Dr. DeAngela Burns-Wallace. Balancing a rich legacy with forward-thinking strategies, the Foundation is entering a pivotal phase of strategic planning, prioritizing community involvement and needs. Focusing on education and entrepreneurship, Dr. Burns-Wallace aims to dismantle systemic barriers and foster equitable opportunities, particularly for underrepresented communities. This new chapter signifies a commitment to innovation and impactful philanthropy, aimed at driving sustainable economic growth and empowering communities.

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What Nonprofit Questions are Answered?

  1. What is the current focus of the Kauffman Foundation under Dr. Burns-Wallace’s leadership?
  2. How is the Kauffman Foundation involving communities in its strategic planning process?
  3. What legacy does the Kauffman Foundation carry, and how is it shaping its future strategies?
  4. In what ways does the Kauffman Foundation aim to create equitable opportunities for underrepresented communities?
  5. How is Dr. Burns-Wallace’s diverse background influencing her approach to leadership at the Kauffman Foundation?

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Ewing Marion Kauffman Foundation

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Transcript:

Welcome to KC Cares. We’re Kansas City’s nonprofit voice, and we’re telling the stories of Kansas City nonprofits and the people behind them. KC Cares is the intersection of the nonprofit and profit communities making Kansas City about a place to live, work and play.

00:00:35:04 – 00:01:11:21
Ruth Baum Bigus
This KC Care segment is brought to you by the Ewing Marion Kauffman Foundation. www dot Kauffman dot org. My name is Ruth Baum Bigus. he Kauffman Foundation is a shining star in the philanthropic constellation across the country and probably around the world. Founded in 1966 by Ewing, Marion Kauffman, noted entrepreneur and humanitarian today, the foundation is focused on preparing people for success in their jobs so that everyone has the opportunity to achieve, prosper and do well.

00:01:11:23 – 00:01:45:15
Ruth Baum Bigus
While the foundation is grounded in principles of racial equality, diversity and inclusion, all aspirations of its founder, the Kauffman Foundation, is more than 2.5 billion in assets that invest in the most important projects and organizations focused on people and building practical and workable solutions to today’s challenges. Today, the foundation has a new leader at the helm. It’s Angela Burns Wallace, whose resume is packed with incredible experiences and accomplishments, including stints in state government, the Foreign Service and higher education.

00:01:45:17 – 00:02:14:09
Ruth Baum Bigus
She’s won numerous prestigious awards as well as served and serves on various boards. A lifelong student and a higher education advocate, Dr. Burns Wallace holds degrees from Stanford, Princeton and the University of Pennsylvania, as well as a faculty appointment at the University of Southern California. Dr. Burns Wallace is more than her resumé. She’s a Kansas City native, a working mom and a daughter of older adult parents.

00:02:14:11 – 00:02:22:13
Ruth Baum Bigus
For this ask the Expert episode, we’re so delighted to welcome Dr. Burns. WALLACE Thank you so much for being here.

00:02:22:15 – 00:02:28:10
DeAngela Burns-Wallace
Thank you so much for having me. I am excited to be a part of this conversation today.

00:02:28:12 – 00:02:46:03
Ruth Baum Bigus
Well, we would think that everybody knows what the Kauffman Foundation is all about and what somebody in charge does. But I thought it’d be a good place to start to talk a little bit about what your responsibilities are for, you know, helming this auspicious organization.

00:02:46:05 – 00:03:23:08
DeAngela Burns-Wallace
So like any other president and CEO, you spend your time handling meetings and meetings and meetings, but in a good way. The work of this foundation and the Kauffman Foundation is really about empowering communities, about being in places, in spaces where we are working to break down systemic barriers, where we are working to help communities with solutions so that they have the power to control their economic stability, their economic prosperity and growth.

00:03:23:10 – 00:03:49:13
DeAngela Burns-Wallace
And so our investments over time, particularly over the last few years in education and entrepreneurship in this region and also around the world has really been about how do we help ensure that more people have access to opportunities that allowed them to have that control over their own economic future through that sitting at the helm of the organization?

00:03:49:18 – 00:04:42:17
DeAngela Burns-Wallace
It means that particularly right now, that it’s about us being in line with the communities that we serve, that we’re able to understand and match those needs of that community with the investments that we have with the research and the learning that we do with the convenings that we host and that we bring into various conversations. So my role on a day to day is to listen, is to learn, is to ensure that we are in collaboration, in partnership, in community, to be able to help those that need that access, need to be able to access those opportunities that historically there have been barriers to equitable access.

00:04:42:19 – 00:05:19:16
Ruth Baum Bigus
Gosh, I think back, you know, 1966 when Mr. Kay started this journey, and you would think by now we would made these great strides and great leaps, which we have to some extent, but still so much work to be done. What can you share at this point? What is the state of the Kauffman Foundation and under your leadership, what kind of priorities focus points are out there for you?

00:05:19:18 – 00:05:49:03
DeAngela Burns-Wallace
So I would say that we but also around the nation, in conversations around access and opportunity and economic prosperity, I don’t see that going away for us. I think it is part of the priorities. If we think back to Mr. Kay and the work that he wanted to happen around the country, he said in some of his remarks that we would find solutions to tough issues here in Kansas City and to be a model for the nation.

00:05:49:05 – 00:06:18:24
DeAngela Burns-Wallace
And we continue to work with our community partners, whether it is peers, funders, nonprofit organizations, those on the, you know, the civic side, our our public sector partners, educational partners to understand the circumstances and issues in our community and then again, to solution around them. Right now, that’s a part of the work that we’re doing. We are in as many organizations go through when you change leadership, a strategic planning phase.

00:06:19:01 – 00:06:39:09
DeAngela Burns-Wallace
And so like any other leadership change, when you have that, it actually creates an opportunity for you to refine the work. And for us, we have a beautiful legacy of the investment in the work that we’ve done in and around the community and around the nation. And in this moment, it allows us to better understand that legacy and its impact.

00:06:39:11 – 00:07:05:08
DeAngela Burns-Wallace
It allows us to kind of stand on that legacy. But the beauty of, you know, doing strategic planning for your organization is that you don’t have to be constrained by that legacy. It informs it helps you think about. But our work and thinking about what does this work need to evolve into in the next 5 to 7 years to continue to meet the needs of the communities that we serve?

00:07:05:10 – 00:07:16:02
DeAngela Burns-Wallace
That for us in this moment is what strategic planning is all about, and it allows us to refine our funding priorities coming out of this work.

00:07:16:04 – 00:07:19:15
Ruth Baum Bigus
Where are you in that process?

00:07:19:17 – 00:07:41:24
DeAngela Burns-Wallace
So we are kind of chugging along. What I will say is, is that we are close. Our hope is that as we move through our strategic planning, that we are able in the near future to talk about what those priorities are. And again, we are grounded in education and entrepreneurship in the work that we have invested in over the last few years.

00:07:42:03 – 00:08:06:13
DeAngela Burns-Wallace
And we know that that will continue to be a part of that of the work that we do going forward. But the question is, what does that work look like from a future lens, not kind of a backwards lens. So we are just kind of thinking about our own horizon of in that this spring we’re in a place in space where we will be able to talk about what those strategic priorities are going forward.

00:08:06:15 – 00:08:17:05
DeAngela Burns-Wallace
Looking to set a 2030 vision for the work that helps to drive our direction, and we’ll be excited to share that coming soon.

00:08:17:07 – 00:08:38:00
Ruth Baum Bigus
Well, we we can’t wait to share what you do as well. That’s kind of be invigorating to come into an organization, as you say, is is built on a legacy of a man who has become was larger than life in life. And I think is even larger. You know, after that, anybody who met Mr. Kay, I think, would agree with that.

00:08:38:02 – 00:08:55:03
Ruth Baum Bigus
But how fun to get in there And like, dabble Dream kind of, you know. And so are you bringing lots of folks to the table? Is this an exercise of board and staff? How does it work?

00:08:55:05 – 00:09:23:23
DeAngela Burns-Wallace
It is an exercise with an in partnership community. So we have over the last few months, spent time in various communities with partners, bringing them to the table, asking them in different ways. And so we as I started in this role, we did an open house where we opened the doors of the foundation and welcomed over 300 partners to an evening of just celebration.

00:09:24:03 – 00:09:45:07
DeAngela Burns-Wallace
And that night, even we launched a survey asking them, as we start to think about our strategic planning, what are some of the priorities? Where do we need to align, where do we need to be careful? But then we built on that and we then pulled together key stakeholders in the community at various levels all throughout the Greater Kansas City region and a few of our national partners.

00:09:45:10 – 00:10:07:21
DeAngela Burns-Wallace
And we asked them similar questions, going a little bit deeper. Right? We started to talk about, you know, where is this work? Where’s our work been? Where does it need to go, How does that fit with the work that you’re doing and your strategic priorities and alignment and how can we support and how does it along? So those voices have all been a part of shaping the work as we go forward, but also our team.

00:10:07:23 – 00:10:32:24
DeAngela Burns-Wallace
And so we have an amazing, dedicated group of associates that work at the foundation, and they have also been integral in this work. Sometimes when you do strategic planning and as someone who was a strategic planner would come into other organizations and do this work with them. A lot of times you start at the leadership team, right? You take that CEO and their executive team and you put them in the room and they’re like, All right, what are your priorities and how do we want to structure it?

00:10:33:03 – 00:10:56:20
DeAngela Burns-Wallace
Then you roll it down to the team and say, okay, here’s the priorities. Like what do you all think and how do we tweak them? We didn’t do that. We put all 80 plus. We are around about 84 associates in a room together. And we kicked off our strategic planning process together with all of us starting to design and to think about what should be these headlines that we’re working toward.

00:10:56:24 – 00:11:16:18
DeAngela Burns-Wallace
What what, who are the communities that we want to ensure that we are serving? What are the outcomes and impacts that we want to see in this work as we move forward? And every single member of our foundation staff was in the room as we started that conversation. Then we did the same thing with the board, took them through the similar exercises, right?

00:11:16:18 – 00:11:37:21
DeAngela Burns-Wallace
So it has been a wonderful journey to see the evolution of this work and to hear and to work with people who have said to me, as we are getting further along and starting to test some of our ideas and and make sure we’re going back to those and say, okay, do you hear yourself in the work that that’s coming out of this?

00:11:38:00 – 00:11:56:11
DeAngela Burns-Wallace
You know, as we starting to shape some of our goals and levers, are you hearing what you put in? And to hear people tell us internally and externally, I see myself and I see what what I gave as something that was taken into consideration. It means that we’re on the right path. We still have a ways to go, right?

00:11:56:13 – 00:12:30:14
DeAngela Burns-Wallace
But that idea that we’ve built a process where people have felt that they have been able to give really good feedback and insight and that we are truly echoing that back and how we are crafting. Again, still testing some things, still making sure that we have that alignment. But it is good to hear along the way from various stakeholders, internal and external, that they believe that our process even has ensured that that various voices are being taken into consideration.

00:12:30:16 – 00:12:56:04
Ruth Baum Bigus
I’m so excited now to hear all about this and how how validating for your associates to know that they are not just sitting there waiting for things to come trickling down, but a percolate percolate up. I want to switch for a minute and and take you and our our audience to what I was able to learn. We’re talking with Angela Burns Wallace.

00:12:56:04 – 00:13:30:12
Ruth Baum Bigus
She is the CEO, the woman in charge at the Kauffman Foundation. And from personal observation, very vivacious and exciting. And I want you to know that I have my sparkly tennis shoes on. This lady has got style. At any rate, I want to talk about leadership. You did a presentation for the Midwest Center for Nonprofit Leadership, and there were four areas that you spoke about about that I thought were just really enlightening for those people in the room.

00:13:30:12 – 00:13:44:14
Ruth Baum Bigus
And I wondered if you might you might share those for and I could go and give everybody a sneak peek. It was be kind, be ready, be great, be intentional. Yeah. And how that became your your package of leadership.

00:13:44:16 – 00:14:04:08
DeAngela Burns-Wallace
Yeah. So for me, you know, when we do this work and when I do this work, you know, my career has always been in public service. So I am a public servant from day one, and I bring that with me as I move into this space. So, you know, this philanthropic space, because I believe that our work is in service as well.

00:14:04:13 – 00:14:39:11
DeAngela Burns-Wallace
Right. And but irrespective, there is something about for me, leaders that we really can shape how our organizations move, how we are motivated or unmotivated, the impact that we have. And I love being able to join, you know, the Midwest Center for Nonprofit Leadership’s event, because I love when we take the time to be one of my BS, be intentional about thinking about our own leadership, Right?

00:14:39:13 – 00:15:01:12
DeAngela Burns-Wallace
I see that it’s really important that we have to create capacity and space to be intentional. I start with the end and work my way back because we are our best selves when we give ourselves that grace and space to be creative, right? We are our best selves when we have the time to think deeply and thoughtfully about the work that we do.

00:15:01:18 – 00:15:17:15
DeAngela Burns-Wallace
And if we get caught up in the day to day operations of just moving things over and over and over, we are not bringing our best selves to our leadership. And that means we’re not our best selves for our teams, which then our teams can’t be the best selves for those that they serve and what they are trying to deliver, Right?

00:15:17:17 – 00:15:43:19
DeAngela Burns-Wallace
So when we talk about be intentional, particularly as a leader, being intentional about your time, your space, how you move, how you show up, what you share can be a true game changer because you never know who is looking at you, watching you as a motto, listening to you, being inspired by you.

00:15:43:21 – 00:16:19:03
DeAngela Burns-Wallace
Leaders that I have worked under and I’ve learned so well from are those who didn’t do it well, because you learn what you don’t want to do right and who you don’t want to be in those moments. Right. So be intentional with something that is really, really near and dear to me being kind. Going back to that beginning of that list, the way that we show up and being kind, being human, being authentic, being real in our spaces is really, really important.

00:16:19:05 – 00:16:48:10
DeAngela Burns-Wallace
As leaders, we set the tone of how we move to and three spaces how our teams feel about the work that they do, those that we serve. And so it does not take much to be kind, but it is one of the most powerful things a leader can be in terms of how they show up and how they engage both with peers, with their teams and with those that they serve.

00:16:48:12 – 00:17:20:06
DeAngela Burns-Wallace
And it really has tremendous impact to the work. Right. Be ready is is something that I love because I do believe as we do this work, being ready just means that we are positioning ourselves always to be ready for the opportunity that we’ve done, the work that we challenge ourselves, that we have invested in team members, and that next level of leadership so that they’re ready to take advantage of the opportunities that are available.

00:17:20:07 – 00:17:43:14
DeAngela Burns-Wallace
Right. And so this concept of being ready is something that really is a way that as leaders, we should walk ready for the opportunity, ready for the partnership, ready for the challenges, ready to engage. But to do that, you got to prepare, right? You you have to make sure that you are putting yourself in places and spaces where you’re learning, where you’re being challenged, where you’re growing.

00:17:43:19 – 00:18:08:21
DeAngela Burns-Wallace
You can’t just be ready overnight. You have to put in the work. And as a leader, that can sometimes be a challenge for us because we have to create space, begin to invest even in ourselves, and be intentional investing in that next level of leader so that when I talk about be ready, it’s about us as an individual, but also our organizations, right?

00:18:08:23 – 00:18:42:07
DeAngela Burns-Wallace
And if we’re not ready, our organizations can’t be ready. And if we haven’t done the work, our organizations can’t be ready and then that be great. It can be be great. It could be be bold, right? Like showing up in the work with a manner of just excellence. Right? This idea that we are going to do good work and that we take up space because we are ready to lead and engage in lean in and that we can sometimes be bigger than our dreams.

00:18:42:09 – 00:19:11:15
DeAngela Burns-Wallace
And the important piece of that is not about us, but when we are bigger than the dreams, because we are in service, it means we are dreaming big for the communities that we serve. It means that we are calling new and innovative ideas and creative ways to deliver, to serve, to create space and solutions for those who we are trying to serve, and that those that our work has the most impact on.

00:19:11:17 – 00:19:32:11
DeAngela Burns-Wallace
So we have to be great because when we are great, it means that we are having a deeper level of impact. The greatness is not about us as individuals. It’s about how we do the work, how we show up. So I hearkened it that morning to the Beatitudes, right? So that these are ways in which you live your life.

00:19:32:11 – 00:19:51:13
DeAngela Burns-Wallace
These are ways in which you show up. And people, lenders stand how you move to and through. And as a leader, we need to take time to make sure that we are thinking about how we lead because it truly impacts what we do and those that we serve.

00:19:51:15 – 00:19:53:01
Ruth Baum Bigus
I’m ready.

00:19:53:03 – 00:19:54:07
DeAngela Burns-Wallace
Let’s go.

00:19:54:09 – 00:20:21:16
Ruth Baum Bigus
I’m ready. I I’m so grateful that you shared that because I think it’s something that can translate to any nonprofit, any organization of any size. And I and I love how earlier you used the word grace and allowing ourselves some grace, you know, to not be necessarily great every day all the time, but finding some space to be able to kind of sit and live in that.

00:20:21:16 – 00:20:25:03
Ruth Baum Bigus
So thank you so much for that.

00:20:25:05 – 00:20:49:20
DeAngela Burns-Wallace
You know, I’m is one of those things, Grace is my word. And people know intentional and grace like those are things that like, just sit with me. But Grace is necessary. It’s necessary for us as leaders. It’s necessary that we give it. It’s also necessary that we receive it in the work that we do. And it is something that I think that we don’t have enough of right now in our society.

00:20:49:23 – 00:20:54:00
DeAngela Burns-Wallace
But it makes boy, that it really, really does.

00:20:54:02 – 00:21:06:14
Ruth Baum Bigus
That is that is for sure. Yeah. The foundation’s website, I think, has a lot of language that talks about opportunity, equity, community.

00:21:06:16 – 00:21:07:24
DeAngela Burns-Wallace

00:21:08:01 – 00:21:14:14
Ruth Baum Bigus
Can you share with us a little bit of the importance of those and and how they intersect?

00:21:14:16 – 00:21:38:13
DeAngela Burns-Wallace
So what I will say is that part of that harkens back to Mr. K, right? When he talked about the work on the foundation, he specifically talked about the work being that we were looking for solutions, that we were working to take down systemic barriers for those that traditionally that those barriers blocked their access, blocked their opportunities, or that their ability.

00:21:38:17 – 00:22:26:06
DeAngela Burns-Wallace
So when we use that language, it’s an important piece of kind of a nod and a recognition that our work is not just about kind of overall economic prosperity in the greater good, but it is about gap closing. It is about, you know, creating equitable spaces. It is about looking at systemic, you know, structures and policies and, you know, conversations and ensuring that we are working to invest and to find solutions and to convene conversations that help us better understand and and to dismantle, you know, some of those pieces that systemically have created barriers or created siloed lanes where, you know, okay, this group of individuals can access this set of resources, but not this

00:22:26:06 – 00:22:57:15
DeAngela Burns-Wallace
set of resources, right? So those words I think we use them opportunity, equity, community in different types of ways. But it’s the idea of the concept that the work that we are doing is about how do you increase these amplified, newly identified opportunities for communities that you know from an equitable lens over time have not had an equitable access to those types of opportunities.

00:22:57:17 – 00:23:41:04
DeAngela Burns-Wallace
And then that means those communities are ones in which we serve, that a lot of our work is targeted on that we are looking for partners that do that work, that impact those communities so that we are, again being a part of the solutions to break down those barriers. It’s not necessarily like us doing the work always in community, but it’s it’s and I say that because our work, a lot of our work is us investing right in it’s investing in other entities because those other entities are the ones who are in those communities that are removing barriers on a day to day basis right there in those communities that are working and standing alongside

00:23:41:08 – 00:24:21:15
DeAngela Burns-Wallace
those that know what that community needs and are that again, we play a role sometimes of amplify, right? Of right. Doubling down into an entity that we know is going to have a certain type of deep impact in a particular community, in a particular space, a particular group of individuals or a sector like a lot of the work that we’ve done in the entrepreneurship sector, like knowing that business ownership creation, profitability, sustainability and having that in the hands of the communities that traditionally haven’t had access to capital or the starting of entrepreneur, you know that those business spaces and places, right?

00:24:21:19 – 00:24:32:09
DeAngela Burns-Wallace
That is that through line of when you talk about opportunity and equity and community, that’s when it comes together in a beautiful way.

00:24:32:11 – 00:24:53:15
Ruth Baum Bigus
I have so many questions and so little time. We’re going to have to have you back. This is a tremendous job. You have a tremendous resumé. How do you how are you pulling from past experience to inform current and future experience.

00:24:53:17 – 00:25:29:10
DeAngela Burns-Wallace
Every day and three times a day? Right. You know, I I’ve had a career where I have been in federal government, state government, higher education. I’ve served on numerous boards and commissions and with organizations and still do in various capacities. What I will say is and and let’s not forget, I am born and raised from this community, grew up on 67.

00:25:29:12 – 00:25:52:11
DeAngela Burns-Wallace
That is also a piece of what helps inform the work that I do. It’s all of my lived experiences, but every day what I try to do is I think about the lessons I’ve learned, whether it’s in making the connections and understanding those connections and how I leverage them into the work and how we framework to understanding communities.

00:25:52:13 – 00:26:40:02
DeAngela Burns-Wallace
I have lived and worked all over the world and being a diplomat for a part of my career. You live and work in other countries and you sit in different places in your life, right? So every every day I work to make sure that I’m pushing myself to say, Am I bringing my own or am I ensuring that I am listening to my perspectives as we think about the work, but also my work in the public sector across my career has been about tackling issues and looking at how you allocate resources and whether those are dollars.

00:26:40:02 – 00:26:59:23
DeAngela Burns-Wallace
It might be policy, it might be technical assistance, it might be capacity building like that’s the type of work I’ve done in various different environments. And it is a synergy to the work that we do in different ways in that we fund into. So when I say I tap into my past work, like every day, I mean it.

00:27:00:01 – 00:27:27:24
DeAngela Burns-Wallace
And then sometimes I literally tap into it in that I will pick up my phone and text someone and say, Hey, we are thinking about such and such. You know anybody who’s doing that? Is there some research we need to look into? There’s somebody I should call and that that text can span from that colleague who is sitting at the, you know, Department of Defense right now as an assistant secretary and say bring work to a really close friend who has been my best friend since seventh grade.

00:27:28:02 – 00:27:49:20
DeAngela Burns-Wallace
But she is a senior leader in health care here in Kansas City right now today, and transforming work over at St Luke’s Hospital. Right. So but it runs the gamut of of all of those lived experiences that I try to leverage into the work that we want to get done for the betterment of the community.

00:27:49:22 – 00:28:12:16
Ruth Baum Bigus
Well, I say Kansas City is so lucky, first of all, to have you as a native daughter. Second of all, to have you at the helm of the Kauffman Foundation and I think is a real transitory time in society in general. So we are so grateful and grateful that there’s a listener there which is just wonderful. So thank you for spending time with us.

00:28:12:18 – 00:28:49:18
DeAngela Burns-Wallace
Thank you for having me and welcome the opportunity to come back. I will say, particularly for your population, I just if I can do one quick kind of shout out in there that people may not realize, but this is the 25th anniversary of our building and the opening of the conference center. And so I am trying to take every opportunity that we can to remind, particularly the nonprofit community, if you are a501 C3, you know that our conference center is free for you to hold meetings.

00:28:49:20 – 00:29:18:13
DeAngela Burns-Wallace
And if you have, you know, of course your food and beverage is something that we cover covered and cost, but that is also something we try to keep at a reasonable level so that that is not a barrier. But I want to highlight it. After 25 years when that facility was created, it was specifically and very intentionally as a tool for the convening of our nonprofit community so that they had a space that they thought was their own to do their work where they didn’t have to pay for it.

00:29:18:19 – 00:29:43:23
DeAngela Burns-Wallace
And so we want to continue to that celebration of what that tool is into the work. So I say to those who are listening of the KC nonprofit community, just remember that the Conference Center, the Kauffman Conference Center is your home and a place that, you know, we hope that you will use to convene to me small meetings, big meetings.

00:29:43:23 – 00:30:13:15
DeAngela Burns-Wallace
I mean, we have multiple rooms. You can do a very small group of like your board or a small conversation or you can, you know, book out the very large room where you can have 250, 300 individuals as part of a conversation. But just please know, check us out because it is a tool that we we are we are finally getting close to our pre pandemic levels, but we’re still not there, which lets us know there is still more need in the community for that utilization of space.

00:30:13:20 – 00:30:19:02
DeAngela Burns-Wallace
So please think of us as a home and a tool for the community.

00:30:19:04 – 00:30:43:10
Ruth Baum Bigus
We’re happy to let you plug away on that. Thank you to the Kauffman Foundation and to check out information on it. It’s W WW dot Coffman dot org and you can spread the love and find us on Facebook and Twitter at KC Cares Radio and on Instagram at KC Cares online. Don’t forget Saturday mornings you can catch us at 8 a.m. on ESPN, 15:10 a.m. and 94.5 FM.

00:30:43:16 – 00:30:46:17
Ruth Baum Bigus
Thank you for joining us on KC Cares.

Previous Episodes!

Exploring Followership with Elizabeth Ireland: Insights for Nonprofit Success

Elizabeth Ireland | Assoc Director of Training

Elizabeth Ireland, Director of Training at the Midwest Center for Nonprofit Leadership, discusses the crucial yet often overlooked concept of followership in nonprofit organizations in her interview with KC Cares. She explains the evolution of followership, distinguishing between role-based and social process perspectives. Ireland highlights key traits of effective followers, including autonomy, high standards, and a purpose-driven approach, which are vital for nonprofit success. She also delves into the interplay between leadership and followership, emphasizing how effective followership contributes to positive organizational dynamics. This interview provides valuable insights for nonprofits looking to strengthen their team dynamics and achieve greater mission impact by recognizing and nurturing effective followership.

visit them here: https://info.umkc.edu/centers/mcnl/

 

What Nonprofit Questions Are Answered?

1. What is followership and why is it important in nonprofits?
Ans:- The interview answers this by defining followership and its significance in shaping organizational success, particularly in the nonprofit sector.

2. How has the concept of followership evolved over time?
Ans:- Elizabeth Ireland explains the historical context and evolution of followership in leadership studies.

3. What are the characteristics of an effective follower in a nonprofit organization?
Ans:- The discussion focuses on key traits such as autonomy, high standards, and purpose-driven nature.

4. How does followership impact leadership and organizational dynamics?
Ans:- The interview explores the relationship between leadership and followership, highlighting its impact on organizational outcomes.

5. Can understanding followership improve nonprofit management and team dynamics?
Ans:- Insights from the interview suggest how embracing followership can enhance management and team dynamics in nonprofits.

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Transcript:

00:00:02:21 – 00:00:17:15
Ruth
Welcome to KC Cares, Kansas City’s nonprofit voice. We’re telling the stories of Kansas City nonprofits and the people behind them. Casey Cares is that intersection of the nonprofit and profit communities making Kansas City a better place to live, work and play?

00:00:17:18 – 00:00:44:12
Ruth
This KC Cares segment is brought to you by the Ewing Marion Kauffman Foundation. www dot Kauffman dot org. I’m Ruth Baum Bigus leadership is the ability of an individual or a group of people to influence and guide followers or members of an organization, society or team. Well, that sounds so simple. Yet there are so many things involved with leadership on this.

00:00:44:12 – 00:01:06:01
Ruth
Ask the expert episode. We’re exploring the concept involving leadership that may be new to some of us. It’s called followership. Here to explore followership is someone who has been studying it for some time. We welcome Elizabeth Ireland, who is the director of training at the Midwest Center for Nonprofit Leadership at the Henry Bloch School of Business at the University of Missouri, Kansas City.

00:01:06:03 – 00:01:15:06
Ruth
Elizabeth recently presented a session on this topic as part of the center’s Leadership Conference. Well, welcome, Elizabeth. I feel we’re ready to dive into followership.

00:01:15:08 – 00:01:18:15
Elizabeth
Thank you for having me. I’m very excited.

00:01:18:17 – 00:01:28:19
Ruth
All right. We got to start at a base, right? So what is followership? And when did this term arise?

00:01:28:22 – 00:01:50:03
Elizabeth
Yeah. So I think it’s really a good spot to start at, like defining how we generally think about followership or how it’s been relayed to us in the literature. And so there tend to be two different camps that followership falls into. And the first is a role based, and that one emerged first. And then the second one is this social process.

00:01:50:03 – 00:02:20:17
Elizabeth
Camp And so role based really is this idea that individuals enact their followership based on having a formal or even an informal role or position. In this case, we talk about organizations, but it could really be in various different aspects of their social life. The other side is a social process camp and that says that it’s socially constructed and that it’s more relational between leaders and followers.

00:02:20:19 – 00:02:33:12
Elizabeth
And there tends to be a little bit more flexibility in who is considered the leader and who is considered the follower. And they’re able to kind of switch back and forth based on the context.

00:02:33:15 – 00:02:45:25
Ruth
How did this a science, this this new area of thought under the umbrella of leadership even come into being? How did folks just kind of dive into this?

00:02:46:02 – 00:03:15:29
Elizabeth
Yeah, because we’re so heavily focused on leadership all the time. That’s a really great question. So as you know, for much of our leadership studies, it’s really been focused on the leader themselves, right? Their traits, their behaviors, their characteristics. Are they charismatic? Are they intelligent? Are they tall? Believe it or not, that was one. But then as it shifted forward, there was always some conversation of followers inside the literature.

00:03:16:02 – 00:03:53:07
Elizabeth
So they were regarded differently depending on the perspective. So somewhere around the mid eighties, towards the end of the eighties, Robert Kelley put out a article called In Praise of Followers in the Harvard Business Review. And that really sparked this emergence of followership and talking about what it means to be a follower, what it means to be an effective follower inside organization, and really began to say, Hey, we have been thinking about followers for weight or leaders for way too long, and it’s time that we actually start giving some attention to followers and giving them the credit that they deserve.

00:03:53:07 – 00:04:17:03
Elizabeth
Because more often than not, we’re going to serve and a follower role rather than in a leadership role. And so we really do need to focus on followers. It’s also a role based approach. His approach is model and then moving forward into the mid-nineties, Eric, Caleb said, Hey, this is a really great idea. And he kind of built that out a little further, though he looks at it slightly different.

00:04:17:05 – 00:04:44:05
Elizabeth
He looks at whether or not followers are supportive of leaders and of their organizations, but also this idea that they need to be really courageous, which means they need to stand up for their leaders, but they also need to be able to stand up to their leaders. We move a little bit forward. We have Barbara Kellerman in 2008 and she actually kind of says, hey, let’s pare this way back and just look at one dimension of being a follower.

00:04:44:05 – 00:05:09:08
Elizabeth
And so she looks at just that engagement piece, and she says that followers really are individuals that don’t necessarily have power or influence. So they may have some degree of authority. Beyond that, we start shifting into those more social process perspectives, which says, you know, this really is a process where leaders and followers are agreeing to be that identity, right?

00:05:09:08 – 00:05:29:20
Elizabeth
In some instances, I’m a leader and in some instances I’m a follower. And if I choose to be a follower, then that means I’m granting you the ability to be the leader. And we have this more code constructed or co-produced. Look at what it means to be a leader and what it means to be a follower.

00:05:29:22 – 00:05:31:17
Ruth
That’s a lot to unpack.

00:05:31:19 – 00:05:32:29
Elizabeth
If you know, where.

00:05:32:29 – 00:06:03:10
Ruth
Do we start? So I like that you had mentioned, I think sometimes people feel if I’m a follower, you know, the Chiefs, the Indians and the Indians are just slogging through the mud. You know, Carrie hitting the packages while the leader is upfront. Charismatic. Yeah, but as you describe this, the father really has a very important role to play in organizations.

00:06:03:16 – 00:06:13:23
Ruth
Let’s talk about that a little bit. What are those characteristics or what are those commonality that followers should have to be? Good followers, I guess.

00:06:13:25 – 00:06:34:22
Elizabeth
That’s a really great place to start. So I tend to, when I’m explaining this or I’m talking to individuals for the first time, because first off, most people are like, what is followership and why are we talking about followers? I tend to have them start with those role based approaches, and Robert Kelly’s is usually the first one I introduce just because it is familiar.

00:06:34:22 – 00:06:55:15
Elizabeth
Whether or not we realize it, we understand what these follower types are because we’ve seen them in organizations, we’ve seen them in our social lives, we’ve seen them on movies and TV, right? So they are kind of familiar to us. And so he looks at followership in terms of whether or not there is engagement and whether or not there’s critical thinking.

00:06:55:22 – 00:07:23:05
Elizabeth
And so to Robert Kelly, he says that, you know, really effective followers, which is what we should all strive to be, are individuals who are able to manage themselves well so they’re able to do their work with a high degree of autonomy. And in fact, they absolutely need that in order to do their best work. They’re also individuals that have really high standards, and so they’re not necessarily looking to get the job done quickly with a lower quality product.

00:07:23:05 – 00:07:47:16
Elizabeth
So they’re going to really have those high standards and strive to do the absolute best for the organization. They’re also individuals who are purpose driven, and so they have this strong need to have to support someone other than themselves, which makes it a really natural fit for the nonprofit context. Because, you know, we all seem to be purpose driven in this work.

00:07:47:16 – 00:08:09:15
Elizabeth
And so it’s just a really good connector because we’re already kind of bought into that piece. Initially, individuals who are effective followers also really work on building their confidence. So they’re going to be those lifetime learners. If they don’t know something, they’re going to go out and be self-motivated and want to learn it, because again, they have really high standards and they want to do what’s best for the organization.

00:08:09:17 – 00:08:30:24
Elizabeth
And they’re also going to focus their efforts for maximum impact, which means that they know what their strengths are and they play to their strengths. Although there are certainly opportunities to grow in the areas that we’re less strong in, they know how to make the most impact inside their organization. And then finally, they are individuals that are courageous, right?

00:08:30:24 – 00:08:54:22
Elizabeth
So they’re willing to stand up to their leader when they need to. And we use leader loosely there. Right. So it could be all kinds of different individuals, especially in the nonprofit context. They’re also really honest. Right. So they’re going to be authentic and they’re going to kind of tell you like it is, although they’re definitely tactful and because they are honest and because they are authentic, they are viewed as being more credible.

00:08:54:24 – 00:09:01:06
Elizabeth
And so they tend to be experts inside their organizations or inside their field.

00:09:01:08 – 00:09:04:22
Ruth
And you be a bad follower. Yeah. Yeah.

00:09:04:23 – 00:09:29:10
Elizabeth
You can definitely be a bad follower. And that kind of brings us into this idea of, you know, how do we think about ourselves as a follower? How do we think of others as followers and these ideas and sort of conceptions of what it means to be a follower are things that we started early in our life, and we’ve kind of just built them as we got it, and now we’re bringing them into our organizations.

00:09:29:10 – 00:09:49:07
Elizabeth
So for some, you know, being a bad follower means that they’re really passive, so they’re not engaged in the work. They just come in, they do the bare minimum and, you know, they get their paycheck and they’re just really not looking to make any waves. But they’re also not making any great impact because, you know, again, they’re very passive.

00:09:49:09 – 00:10:10:05
Elizabeth
Others might be alienated followers. And so the interesting piece there is that you could actually be a really effective follower. But if there’s a miss or a misalignment between leaders and followers, and that could also include how leaders think individuals should follow, because for some leaders, they have this more hierarchical view. And so they think that you should be passive, right?

00:10:10:05 – 00:10:32:10
Elizabeth
You should be obedient. And we definitely don’t want that inside organizations because that’s not how we grow and thrive. So if you were an effective follower, there’s that miss that you might actually slip into being alienated, which just means that you’re really critical of the leader, but it also means that you’re more likely to look at looking for another job.

00:10:32:10 – 00:11:06:20
Elizabeth
And so that turnover and tension grows within you. But there are also just individuals that refuse to follow, and that’s just kind of their conception of it. And they they just want to be a leader and so they will not follow anyone. So yes, there are bad followers, but I hope with more education and more intentionality behind strengthening who we are as followers, but also as leaders strengthening who others are as followers and letting them have more leadership opportunities, We can kind of help resolve some of that.

00:11:06:23 – 00:11:36:05
Ruth
I remember sitting in your presentation, which was so interesting and such a diverse group of people in the room. So when we did group work, it was interesting. You could kind of tell what kinds of organizations and what role people played and if it was working well in terms of leaders and followers. At any rate, how much does personality and who you are playing to, what kind of a follower you may be?

00:11:36:07 – 00:11:39:00
Ruth
Yeah, that’s absolutely fair.

00:11:39:02 – 00:12:03:23
Elizabeth
So it’s kind of a multi pronged approach, right? So we need to understand what is our quote unquote native follower style, although it’s a spectrum and we shift in that. But we also have to compare that with, you know, are we an introvert or are we an extrovert also? How do you what are those implicit feelings that we have towards leadership and who leaders should be and what makes a good leader?

00:12:03:25 – 00:12:24:08
Elizabeth
All of that, our willingness to speak up, but also providing opportunities for people to speak up. It all plays a part in to creating a more effective followers, but personality is definitely an aspect to it, just as it is with leadership.

00:12:24:10 – 00:12:48:17
Ruth
Okay, you get that that Debbie Downer or David Downer in there, Is there is there a way to ask the leader, let’s say work with those followers to raise up and try to mitigate that, maybe how they learn to be a follower?

00:12:48:19 – 00:13:26:09
Elizabeth
Yes. And they need a lot of support from you as a leader. They also need a lot of peer modeling. And so for person, they may have that perspective because they’ve had other leaders in the past that have said, you need to be obedient and you need to be passive because that’s the conception that they had. And so you may actually just need to show them a different way, but it does take a lot of time because you’re going to have to build that trust first, to create that safe space for them to be able to challenge or to even get them engaged enough to the point where they’re wanting to take on more challenging

00:13:26:09 – 00:13:48:16
Elizabeth
task and kind of grow that sense of autonomy. So yes, you can improve them. It just takes a lot of work. But there are also other perspectives that look at it that are kind of more from that engagement piece. And they say, you know, this is how you more strategically move individuals along that follower spectrum. And a lot of that means you have to get important to the purpose of the organization.

00:13:48:18 – 00:14:08:15
Elizabeth
You had to build those relationships among peers and then also with the leaders and just model the way for them so that they know that they can kind of grow in this way. And hopefully it improves, although again, there are some of those individuals that are just never going to follow. And so we don’t always need people to challenge.

00:14:08:15 – 00:14:29:25
Elizabeth
Sometimes we just have people to come in and do the work. And so that’s fine when they get more disruptive or they’re constantly challenging a leader or they’re really confrontational, that’s where you kind of have to start working those more performance management pieces to either help them get them on board or get them to a different opportunity, if you will.

00:14:29:28 – 00:14:59:29
Ruth
You mentioned a big five letter word, I think trust. Yeah. Sounds like that is absolutely key in in being a follower and being the leader in being a follower, is trust something that can be challenged or inspired, perhaps so that you play the game, as it were?

00:15:00:01 – 00:15:25:10
Elizabeth
Yeah, I think you could definitely look at it from your perspective. So first off, trust underpins everything that we do in that organization. So individuals have followers, if you will, who trust their leader, are going to have higher performance, they’re going to have less turnover and hence they’re going to have greater satisfaction and commitment to the organization. So there’s all of these really great benefits that come from building trust.

00:15:25:13 – 00:15:51:29
Elizabeth
But if you are an effective follower and you’re willing to challenge a leader and you have a leader who maybe is less than ethical or maybe you see that the organization is going in a direction that they shouldn’t go in and the follower in the leader shut you down on that. That is going to erode your sense of trust that might actually propel you from going from effectiveness, like being an effective follower to being an alienated follower.

00:15:52:02 – 00:16:08:04
Elizabeth
And then you’re going to start again looking at that turnover intent or having a higher sense of burnout, whereas you have that drive to kind of push through. Now things are kind of you’re feeling the effects of it more because the relationship between the leader and you is strained.

00:16:08:06 – 00:16:19:10
Ruth
You’ve been studying this a while and when you look at leadership, do leaders need to have been followers?

00:16:19:13 – 00:16:22:15
Elizabeth
Yes, Yes, absolutely. Be the.

00:16:22:15 – 00:16:22:26
Ruth
Best.

00:16:22:26 – 00:16:43:09
Elizabeth
Leaders are individuals who are really effective followers. And it’s funny because if you look at the different traits and characteristics and behaviors of followers, they mirror that of leadership. It’s just that you look at it from more of a partnership perspective or like we’re working together. And in this instance, I’m the leader. And in that instance I’m the follower.

00:16:43:12 – 00:16:59:29
Elizabeth
Instead of this like command and control style that says I’m always the leader, you need to be passive and obedient and just be a yes person and do your job. And so, yes, the really great leaders are also really great followers.

00:17:00:01 – 00:17:22:13
Ruth
We had a colleague of yours on the show a few months ago, Tom Van Saki, talking about Founder’s Syndrome. So I’m wondering, you know, in that founder’s syndrome, do they have a missing gap of followership where maybe they you know, they’ve never been the follower? You know, they’ve always been the leader.

00:17:22:15 – 00:17:42:16
Elizabeth
Yeah. And then, you know, it’s a very complicated issue there. There’s a lot of emotions and feelings around that. But if they are the type of leader that doesn’t like, again, to be challenged, right, that sort of wants to have everything rubber stamped by the board or rubber stamped by the staff, they’re going to be really used to that.

00:17:42:16 – 00:18:02:04
Elizabeth
And that’s going to be hard to let go and to kind of look at leadership from a different perspective and kind of say, hey, I’m going to bring this person on in order to have a succession plan. But we’re really we’re going to be partners letting go of that leadership piece, if that’s a really strong piece of their identity, is going to be really hard for them.

00:18:02:06 – 00:18:16:25
Ruth
You mentioned a few moments ago to another word that kind of stuck out with me is that’s partnership is is that key to be a good follower in the whole dynamic, you know, of an organization?

00:18:16:27 – 00:18:42:06
Elizabeth
Yeah, I would say that there’s a time and place, right? There’s a context and situation for both leading and following, but that the most effective forms tend to be those that are more of a partnership where they’re treated more not necessarily as equals, right? Their supervisors and their subordinates, even though we don’t love that word, followers. So there is a hierarchy there.

00:18:42:06 – 00:18:59:00
Elizabeth
But from that social process angle, they’re partners, right? They’re creating leadership and followership together because it’s what’s in the best interest of the organization, and it helps them achieve their mission in a more effective way.

00:18:59:02 – 00:19:23:01
Ruth
We’re talking with Elizabeth Ireland. She’s the associate director of training at the Midwest Center for Nonprofit Leadership, and she is the guru on followership. Our organization’s talking about this. Is this something now that nonprofits, when they, you know, take time to to look at how they’re run? Are folks talking about this and are they embracing it?

00:19:23:03 – 00:19:45:13
Elizabeth
I think that they are talking about issues related to followership and followers. So they may not be looking at it from an academic followership lens. Right. They may not actually know that’s what they’re doing, but they’re certainly talking about the issues at hand. One of the things that we need to do a little bit better as an academic community is include followership.

00:19:45:13 – 00:20:13:03
Elizabeth
And with our leadership coursework, I have been through or leadership classes than I can count. And I think I only heard the word followership once in all of that time, although I certainly use for all of my projects and every speech I did in class. But within organizations, we just need to start talking about it a little bit more, in particular with the nonprofit organization and nonprofit sector.

00:20:13:05 – 00:20:46:09
Elizabeth
So in general, Followership Lags Leadership studies, right? We go to Barnes and Noble or another bookstore. We’re going to see far more books on leadership than we are on followership. And if we look even, we kind of select out even more and look at just the nonprofit sector. We’re going to find far less information out there about what it means to be an effective follower inside nonprofit organizations, which is the reason why I’m specifically looking at that with my dissertation, because there’s a need to have a sense of what it means to be a follower.

00:20:46:09 – 00:20:57:26
Elizabeth
And followership looks like, and all of those behaviors, expressions and characteristics. But that’s grounded inside the unique context of nonprofit organizations.

00:20:57:28 – 00:21:23:12
Ruth
It would seem to me if you don’t have followers, then you’re not going to move the needle forward towards your mission and I know that sounds very basic, but and I think there’s something unique I’d love to hear you address as a nonprofit. Hopefully has staff or whatever followers that are part of it. But then you have volunteers and you’re driven by boards.

00:21:23:12 – 00:21:33:13
Ruth
So how does followership play into that and how do you infiltrate in a good sense to get those folks on board?

00:21:33:16 – 00:22:02:05
Elizabeth
Yeah, So it’s not actually that basic a place to start because while we tend to think that we fix some of those issues with, you know, command and control and authoritative leadership, right? They pop up in organizations of all types and of all sizes because we’re just humans and we bring with us what we think of leadership should look like in terms of looking at specifically like segmenting out what it looks like with your staff.

00:22:02:08 – 00:22:18:09
Elizabeth
Again, you would start with Robert Kelly, Eric Taylor and just kind of look through and assess what kinds of followers you have amongst your staff. How do they naturally lean? What do they think of being a follower? You can just ask them, what does it mean to be a leader and what does it mean to be a follower?

00:22:18:11 – 00:22:39:12
Elizabeth
And that gives you a really good idea at how they approach leadership and how they approach followership. But when we look at how we have relationships with board members, there really is a need to have that sense of shared leadership. And so for that, we really need to lean and heavily towards those social process approaches that says, you know, we’re in this together.

00:22:39:15 – 00:23:05:01
Elizabeth
And again, we’re claiming the role of or the identity of leader or we’re claiming the role of our identity a follower and we’re, you know, working together towards that common purpose or that common goal. If we look at volunteer management, we are we may not need our volunteers to do a ton of critical thinking. We may not need them to challenge the leadership or, you know, challenge others inside the organization.

00:23:05:01 – 00:23:26:16
Elizabeth
We may just need them to show up and be engaged in the work that we do and be, you know, a supportive element inside our organizations. And so for that, I tend to recommend individuals look towards Barbara Kellerman’s model of followership so that they can just look at that engagement piece, right? How do we move people from that very beginning?

00:23:26:16 – 00:23:53:05
Elizabeth
Like I’m not even necessarily familiar with the organization to where they’re an activist or a diehard for the organization, although diehards can go either way, right? They could be resolved through organization or they could just you know, they could be yes. People because they’re so bought into it that they they can’t necessarily see the impact of what they’re doing if it’s not necessarily ethical or beneficial to the organization.

00:23:53:08 – 00:24:16:18
Ruth
How do you keep followers from that tipping point, as you mentioned, of being so gung ho that they think they can run it all that and I guess sabotage leadership? That’s a pretty hard word. But how do you navigate it? What is what does it say in the literature and academic circles?

00:24:16:21 – 00:24:35:18
Elizabeth
I think it’s more like the gut level of what you do there. And it’s it’s you got to look at them as a human being and just say, you know what? What are the quality of interactions that I’m having with this person? Right? Do I have positive interactions? Are they always or mostly negative interactions? How do I build the relationship again?

00:24:35:18 – 00:25:02:11
Elizabeth
So they have to be really mindful and intentional of how they respond to you as a leader and how supportive they are of you. But it also means that you may need to think about what your own conceptualization of followers are, because if you’re having a lot of individuals that are, you know, pushing back constantly, it may be that you have a different view of what follower should be than what they do.

00:25:02:19 – 00:25:27:04
Elizabeth
And so the more we can educate individuals on, first off, what followership is and all of the different types and models and ways in which you can use that to your benefit, the more we’re able to say have those tools and resources that we need when we have individuals that we may need to move, you know, advance them in that followership spectrum so that they’re more effective for the organization.

00:25:27:07 – 00:25:47:01
Elizabeth
But it’s also knowing that if we’ve gotten to the point where we’ve tried all of these things and we’ve tried to build that relationship and it’s just not working, how do we leverage those performance management tools or how do we encourage them to maybe find something that’s more fulfilling for them so that they’re less likely to be alienated.

00:25:47:03 – 00:26:01:24
Ruth
Or be a roadblock or any number of things that can cause trouble? In your studies, have you seen is corporate America embracing this versus nonprofit? Is it about the same that everybody’s getting to the this is worth looking at?

00:26:01:26 – 00:26:30:25
Elizabeth
Yeah, I would say that they’ve probably been using followership and just the different models more heavily in corporate America just because they tend to also embrace those leadership model quicker. Right? With there’s more literature about them. If you go and look at the academic literature, there’s far more out there about corporate leadership in corporate leadership, although I will say that followership in general has been looked at, you know, within military because of that position and rank.

00:26:30:25 – 00:26:55:20
Elizabeth
And everyone kind of knows what that looks like. But there’s also that need to be somewhat obedient because you need to follow orders. But then also having the ability to know, hey, we’re going in the wrong direction and I need to speak up now. It also tends to be look at followership does in areas where there are a higher percentage of female staff members or female workers.

00:26:55:22 – 00:27:29:25
Elizabeth
And so you’ll see a lot of research out there about nurses, which also kind of speaks to this. You know, there are leaders, right? Or there are those that consider themselves leaders in that environment. But really the work is done by nurses and they are actually enacting both leadership and followership in their work. And then it’s also looked at a lot in academic institutions, in particular in higher education, although we’re starting to see it kind of trickle down into K through 12 and also pre-K, there’s a strong need for it to be there.

00:27:29:28 – 00:27:52:11
Elizabeth
But again, there’s a definite need for it to be explored more inside nonprofit organizations because we have so much a greater need for shared leadership. And so we really do need to look at how do we embrace followers and how do we strengthen them so that we can leverage the most from our individuals. So we can achieve our missions?

00:27:52:13 – 00:28:11:11
Ruth
Elizabeth, this has been fascinating followership. She’s provided us with some great resources. So dig into this. It’s something that’s really important for organizations and let’s let the nonprofit sector be the leader, right? And then follow the great things that you can do as a follower. So thank you again.

00:28:11:13 – 00:28:15:18
Elizabeth
And thank you so much for having me. I have enjoyed this.

00:28:15:20 – 00:28:37:14
Ruth
Thank you for joining us for KC Cares. We’re Kansas City’s nonprofit voice, and we’re produced by Charitable communications, also a nonprofit. This KC Cares segment was brought to you by the Ewing Marion Kauffman Foundation. WW W Kauffman talk if you’d like to be a guest on KC Cares or underwriting opportunities, go to our Web site, KC Cares online dot org and spread the love.

00:28:37:14 – 00:28:54:17
Ruth
You’ll find us on Facebook and Twitter at KC Cares Radio and on Instagram at KC Cares online. And don’t forget, you can catch us Saturday mornings at 8 a.m. on ESPN, 15:10 a.m. and 94.5 FM. Thanks for joining us on KC Cares.

00:36:15:01 – 00:36:25:02

Previous Episodes!

Philanthropic Trends Giving USA Report

Dr. Una Olisi | Assoc. Dean of Research

In this insightful discussion, Dr. Una Osili, Associate Dean at the Lilly Family School of Philanthropy, unpacks the findings of the Giving USA report. Despite economic headwinds, American generosity stands firm, with corporate and foundation giving witnessing an uptick. However, individual giving, traditionally the backbone of American philanthropy, is seeing a reduced share. Dr. Osili underscores the need for nonprofits to adapt their engagement strategies to meet donors where they are, given the economic shifts and increasing donor diversity. She also emphasizes the power of authentic storytelling in fostering donor relationships. This conversation offers valuable insights for nonprofits seeking to navigate the evolving philanthropic landscape.

visit them here: givingusa.org

 

What Nonprofit Questions are Answered?

  1. What are the key findings of the Giving USA report?
  2. How has the pandemic affected philanthropic trends in the US?
  3. What strategies can nonprofits adopt to engage donors effectively?
  4. How important is storytelling in building relationships with donors?
  5. What future trends can we anticipate in philanthropy?

Find us on

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Transcript:

(00:00) were telling the stories of Kansas City nonprofits and the people behind them cares is the intersection of the non-profit Community making Kansas City a better place to live work and play this KC care segment is brought to you by the Ewing Marion Kaufman Foundation www.kauffman.

(00:21) org I’m Ruth Baum Bigus. it’s that season again when the giving USA report comes out providing National philanthropic Trends the giving USA annual report is the longest running and most comprehensive look at philanthropy and provides an in-depth analysis rather of charitable giving where it comes from how funds are used and more insights from the report are a great tool for those of us in the world of non-profit fundraising and their programming Partners well for the last several years KC cares has highlighted the significant report that’s produced by

(00:56) the team at the Lilly Family School of philanthropy at Indiana University we are delighted to welcome a new guest to chat about the report and what it means it’s Dr Una Olisi, the associate dean of research and international programs and the euphrymanson share of economics and philanthropy at the Lilly school it has been her job to oversee this massive project and welcome we’re so happy to have you with us well hello everyone I’m thrilled to be here thanks for hosting me it’s really a pleasure

(01:30) well I have to tell our audience we are honored my gosh you have quite the resume a scientist and economics person everything maybe a good base would be to start how did you get into this kind of world to begin with it’s a great question I grew up with parents who are very deeply involved in generosity and family and taught us very early how to get involved how to give back how to serve others and it was no surprise that in college I actually started working in a neighborhood right close to where I went to college in

(02:10) Boston tutoring kids raising money for the non-profit and spending summers in Boston so that got me interested in the more formal side of the philanthropic sector fast forward the tape when I started my research as an economic student and a doctoral student I picked a dissertation topic that was very closely aligned to these issues around how people give and make decisions about their philanthropy how much they save but how much they give to others and I was very fortunate to start my career here at Indiana University and we have

(02:45) here the world’s first school on philanthropy it’s quite an exciting place if you’re interested in generosity what drives people to give but also how to serve and how to lead and how to collaborate with others so this is really a wonderful place and if you haven’t visited the lily family school either virtually in person or on the web please feel free to do so we have academic programs we have students here we have online programs but we also have lots of research so the data is there and it’s available so I feel like I was

(03:19) very blessed to merge my academic interests with my own passions and get to do that every day here at the Lilly Family School well how lucky for the school to have you and it’s so interesting how long has the school been in existence now so the school was formally inaugurated in 2013 it became the school but before that it was the center on philanthropy at Indiana University and also the world’s first academic center that started in 1985 and many people may know we have the fundraising school and that’s quite

(03:55) unique because you can take classes non-degree certificate programs Executive Education programs on all sorts of topics from fundraising to leadership to board engagement um all topics are covered ethics and fundraising so I I do encourage all of your listeners to if you don’t know much about this school please feel free to reach out to us we’re always happy to talk to our non-profit colleagues we’ll give you that those two seconds to do a commercial where is the best place for folks to go find out information

(04:29) about all the things that you do at the Lilly school well visit the school’s website I think that’s really the best place to do that and I will share that website at the end maybe the link we can include that terrific all right well let’s get back to what we introduced everybody to and that’s the annual giving USA report before we do the big reveal of numbers and trends I wanted our audience to understand what goes into putting together a report like this give us that Peak behind the curtain how this all

(05:04) comes together well I’m excited to do that because this year more than ever I have felt the enormous responsibility that we have here to provide these numbers giving USA is the longest running report in the charitable sector it dates back to 1985 and if you look behind my desk I have many uh many of those initial editions right here on my shelf but I wanted to even better understand this report so for this year’s report I went to our library we have a philanthropic studies library and looked at all the early editions from

(05:38) the 50s 60s and even 70s back then philanthropy was not as complex and sophisticated as it is today we have more than 1.3 million non-profits maybe 1.8 million non-profits in the US and we cover all of the giving that goes to those charitable organizations in addition America has changed since the 50s we have many of course more people it’s a more diverse economy and we also have many more tools on vehicles associated with giving which means tracking giving is not so simple as tracking down those large organizations

(06:17) there are smaller organizations they’re medium-sized organizations of all different types so we track the giving from the donor side so who gives individuals foundations corporations but also charitable because so all of that has to be understood and estimated and we use for some of those estimates we use very sophisticated models reflecting just how complex philanthropy is and then turning to the other side where does all the giving go and that has also changed since the 50s because we have new sub-sectors that

(06:52) have emerged environment giving to environmental causes has grown in the 50s and 60s that was a timing tiny tiny and wasn’t even tracked as a standalone sub-sector similarly giving to International causes something we take for granted with the war in Ukraine and disasters and crises around the world that also didn’t exist in the 50s and 60s so a lot has has happened since then and we have to do the uh I’d say the challenging but exciting work of keeping track of all those changes but at the same time what has stayed consistent and

(07:28) that’s what the inspiring message for today’s conversation is the generosity of Americans is one thing that has stayed the same we’ve seen that during good times we’ve also seen that during very challenging times how even during the past crises how Americans really stepped up to help their neighbors their their friends but even strangers that needed assistance and that’s been the Common Thread through our tracking of giving USA what really binds all this together is the generosity the expressions of caring for others that we

(08:02) see and then we get the fun but challenging tasks of keeping track of the numbers so it’s not enough to just say we know that giving went to this organization we have to know how much and ultimately how that giving is changing and it is changing so how many people touch the things that go into this report and you know I I just imagine somebody churning now nobody uses adding machines that’s really dated but sitting at computers with formulas and everything else how many folks and for how long this is a year-round project I’m glad

(08:41) you asked that question most people don’t don’t recognize that from the day giving USA launches to the next year we start working on it it’s almost right away so it’s a year-round project we have a research team of about 10 to 12 full-time staff that work on the report but we also have a team of graduate students that are involved with the report in one form or another and a team of volunteers from the giving USC Foundation remember this is a collaboration between the lily family school and our colleague yes giving

(09:16) Institute and so many other colleagues volunteer to read chapters to provide comments and so it is truly a year-round project but your kind of image is correct we have um very dedicated staff members but a lead statistician who works on this project John Bergdahl and then the leader on the writing side and the Productions side is my colleague Dr Anna Pruitt who works on all things related to the giving USA chapters and numbers so when we say it is a true collaboration it really is and we feel this tremendous of course responsibility

(09:55) to tell the story of American philanthropy because the report has been published continuously since the 50s so through all the upheavals that we’ve had and even more recently through the covet crisis where we had to um like many other non-profits around the country truly wrap our mind around how giving was changing and what that meant for American non-profits and households all over the country and in Kansas City as well there must be a big cheer though that goes up once that’s sent to the printer or the final thing I would imagine

(10:29) there’s a big woohoo it’s a lot of work absolutely and in fact the celebration usually starts um I’d say once we announce the results so on June 20th is the launch dates as you already know and throughout that period we are interfacing with non-profits with the media with many others but the launch date signals the essentially the completion of the project so that’s the time when all of us can actually just get excited and celebrate the contribution that all of us make to this work I wanted to go back and ask one more

(11:05) little technical question and then we’ll get into the big reveal of what’s happening and where we’re going you had said there’s about 1.8 million non-profits give or take I know in the Kansas City area alone we have about 8 000 non-profits kind of what role do the non-profits play in that where do you get these numbers from is it from the taxes is it from websites how do you find it you are asking some excellent questions and you are exactly right all non-profits are required to file a form 990 and that’s

(11:39) true for most organizations there are some small organizations that Grassroots may not file non-filers those exist but the majority are required to file a form 990 so we have access to all that data on the nonprofit side on the donor side it’s more complex because as you know although Americans all submit their taxes generally speaking of all income levels with tax reform we have only a small slice of that pie because only about 10 percent of Americans now itemize on their taxes which means for 90 we have to rely on other data sources

(12:16) fortunately for those of you who are data people in the audience since we have a tremendous resource here at the lily family school called the philanthropy panel study it tracks the same Americans over time about 10 000 families and that gives us what we call the non-itemizer estimate for charitable giving but on the foundation side on the corporate side and charitable because we also have some government data so a simple answer to your wonderful and thoughtful question is we have both government tax-based data sources for

(12:49) giving USA but we also lean on other data sources to fill in the gaps and that’s especially important for studying household giving where we know that not all households actually itemize their charitable contributions but many are still giving even when they don’t itemize because they take the standard deduction so this is uh inside baseball for those of you necessarily data people but for those who are there is a lot of complexity to charitable giving as I try to remind people this is not uh what it

(13:23) looked like in the 50s and 60s but it’s also fashionable yes it’s exciting to see how much the sector has grown and how complex but also very sophisticated and it also requires all of us to keep learning and keep growing because if the field is dynamic it’s not static at all okay so the big reveal how much and this is reporting for 2022 correct correct I’m glad you noticed that so the big reveal is that in 2022 giving reached a new level of 499 billion dollars that’s a big deal because this is uh really the first time

(14:07) uh during the pandemic that we saw giving cross the half a trillion dollar Mark so there’s a lot to celebrate in this year’s report but there’s also a lot to to be concerned about um what we also saw is that the economic environment in 2022 led to a decline in giving and this is after having several consecutive years of growth where giving actually fell so while we had this new record in terms of crossing the half a trillion dollar Mark when we look at what has happened during the pandemic it does look like giving

(14:43) has declined slightly and in that is mostly due to the effect of the economy inflation many of you know that we have a 40-year record Being set in terms of inflationary pressures as well as the stock market declining at the year end so when you put all these economic factors together giving actually overall giving fell however during the pandemic we set new records in terms of generosity so there’s both good news there to celebrate but also some challenges ahead as we navigate a lot of volatility and uncertainty not just here

(15:21) in the U.S in terms of our economy but in the global context so I want to make sure I understand it we raised more money than ever but giving in terms of across the board was down yes we did not keep it’s one way to think about it is we did not replace with inflation is a very simple way to put it I think most people know that uh our uh inflationary pressures have meant that when we go to the grocery store we’ve seen higher prices across the board so the economist to me would just say uh giving did not keep Pace with

(15:59) inflation and so that’s why we’re seeing uh that uh decline for 2022 however during those pandemic years we did set new records in terms of generosity so the numbers in 2022 have to be interpreted with all of that context that we had some record growth taking place during the pandemic and also that inflation and the stock market did have um an impact on the results for 2022 and for those who’ve been following the economy and listening to those uh caters I’m paying attention to all of those um

(16:37) both the good news and the bad news I think these numbers will resonate they won’t be that surprising okay so we know we have more money but less giving who are the winners where did we see okay we stayed the course or we even got a bump up then we’ll talk about the folks that weren’t so lucky okay so in general what we see is when we look at the cumulative picture and that’s important between 20 uh 2020 and 2022 in general total giving did go up but as as I mentioned when we adjust for inflation it didn’t keep Pace however uh

(17:15) where we actually saw the brightest spots are around corporate giving corporate giving um many of you know this corporations across the board did see overall increase in corporate profits on Aggregates of course not all companies are going to have this result but generally speaking we saw many companies step up in their generosity during the pandemic and even when we adjust for inflation this is looking over that two-year period 2020 to 2022.

(17:46) yes how did we do how did we uh how does the uh giving environment reflect all of the changes that we’ve seen so corporations really stand out as a White Spot because even after we adjust for inflation they’re still coming out ahead much of this is due to the increase in corporate pre-tax profits and the fact that many corporations leaned in to helping others during the community not just um health related but other types of racial and social justice giving and many other causes foundations are also a very bright spot in this year’s report even

(18:23) after we adjust for inflation looking over that two-year period Foundation giving also is still in the positive and the big uh reveal there is also that many foundations saw their um endowments increased right yes with the stock market growth and many of them increased their giving during the pandemic um relaxing payout rates in order to meet needs we saw not just large foundations but also small Family Foundation step up so for the non-profits and fundraisers who are paying attention we’ve emphasized that

(19:00) this is the time to really understand that full map of giving individual giving is still the Lion’s Share but foundations and corporations are an important part of the of the pie of the puzzle to figure out Okay so we’ve heard the bright spots who didn’t do so well as we look forward what what sectors really you know took a dip not even stay flat okay so that’s a good time to kind of turn our attention to changes in giving by destination this is where the giving goes and during the pandemic we know

(19:36) that a lot of non-profits found uh some success actually they saw that donors were giving more in response to the pandemic so 2022 if we look at those results once again over that two-year period the areas that seem to come out ahead in general when we look at that two-year period we’re really giving to International causes is one and here I will highlight that the warn Ukraine is a big factor there because many Americans have given to support the humanitarian efforts in Ukraine and keep in mind that is not just a one-year

(20:15) effort it has sort of unfortunately continued but we’ve also seen donors persist in their giving be consistent in their giving and similarly International Organization innovate in other words find new ways to motivate and Inspire donors including subscription-based giving Which has found some resonance in that sector similarly when we look over that two-year period uh giving to foundations in other words people giving to their own foundations has also grown during this time responding to the stock market

(20:50) and many of the other economic factors throughout the pandemic I will also stress that um giving to Human Services increased during the pandemic years and while we’ve seen some tapering off of that with the abatement and also not being front and center in the news Human Services as kind of a you know relatively maintained during this period so I will just mention that in general one other area that we’ve seen um some persistence over time in terms of the last few years is giving to religion where religious congregations

(21:32) as you know did have a harder time during the pandemic simply because people weren’t attending services but as um Services have resumed in-person events have resumed we’ve seen as some return of giving to religious congregation so the growth rate over the two-year period which is kind of the way of looking at who’s lost ground who’s gained ground right see it it’s a at least um not not such a pessimistic picture when we look at religious congregations what had what surprised you as you looked at this year you know this

(22:12) 2022 I guess is the tail end of quote-unquote pandemic before now we get post pandemic anything that jumped out to you and your team of wow that’s a surprise yes um here the biggest finding I think that has we’ve spent a lot of time on is the pie chart in the past individual giving has always been the largest slice and it still is however we’ve seen it shrink as a share of overall giving uh when giving USA started in the 50s 60s even the 70s individual giving was over 80 percent of all giving today that’s down to more

(22:57) like 64 percent um so what has changed is that foundations are now a bigger slice of the pie in fact 20 of all giving comes from foundations now I want to put this in context because as I mentioned individual giving is still the Lion’s Share of American philanthropy and if we were to add individuals half of family foundations and charitable because we still have that individual’s control something like 88 of all giving however it’s important for non-profits to understand that how individuals give is

(23:36) changing they have many more options many more vehicles to make those contributions and for the non-profit sector it’s important to understand that changing landscape and also the role that foundations play whether those are foundations that are managed by professional staff or foundations that are organized by families which means it’s important to build relationships with those two types and understand those differences as well and I believe last year was the first year that you had included was a Donor

(24:11) advised funds yes so this year we have a standalone chapter again on Donor advised funds and that is a place where we’re seeing more America there’s been a tremendous amount of growth in doing advice funds more Americans are using them we’re also seeing shifts on the institutional side where it used to be that only wealthy households could open up dafts well today we have no minimum dapps at banks at other types of Institutions that allow the donor to set those up and use them to fund their charitable interests causes and

(24:48) organizations once again I think the shift means that uh non-profits have to engage donors understanding that they can give from many different sources we’ve got it’s a huge package of stuff I would like for you to take kind of your crystal ball now knowing all this past knowing what came in this year what does this say to those of us toiling in the field of non-profits what do we take away and try to put into our friend and fundraising efforts yes there’s so much to digest in this year’s report I think the biggest

(25:29) takeaway is to understand that generosity is a core value for many Americans and that we’ve seen in tough times in uh good times but also in very difficult times Americans give as we navigate what happens in a world that’s so different from the one we knew even before covid I think it’s the takeaway here is that nonprofits are also going to have to adapt their methods their tools of Engagement to meet donors where they are and embedded in this report is the understanding that we’re dealing with significant shifts in the economy

(26:06) certainly but also in the American uh in American communities where we have a much more diverse donor Base by age by Race by ethnicity but also uh the causes that donors care about and so one takeaway from me as we look ahead 2023 I’m even looking ahead to 2024 we’re hearing a lot more about the risk of a downturn recession recessionary risks but also even with the inflation continues to be high even with the tapering off so for fundraisers and non-profits I think the main thing is while you can’t control the macro

(26:43) economy you are not the one setting policy around interest rates are inflationary uh policies however what you can control is your relationships with your donors yes and more importantly than ever technology is playing such an important role in how donors learn about non-profits how they engage with causes and how they get involved and during the last few months we released a report of the lily family school called what Americans think about philanthropy and non-profits the surprise there is that most households

(27:18) don’t know very much about non-profits and they don’t know very much about how they work so what that tells me me is in this era of information and so much available at our fingertips we’re going to have to work really hard to tell our story storytelling is very important this is coming from someone who’s a data person data is part of that data is part of telling the story but authentic communication and engagement is going to be really key with donors having of course more economic concerns

(27:50) to think about but also wanting those opportunities to engage with their Community we know that um during covet we saw an uptick in pro-social behavior and some of that is really still very much evident in our communities where people of all different backgrounds are looking for ways to get involved so the challenge and opportunity for non-profits in Kansas City and throughout the country is to tell their story to get their message out and also to find ways to authentic quickly build relationships with donors of all

(28:27) different backgrounds because the Common Thread what really unites us As Americans is this commitment to generosity and and this giving us a report emphasizes that point all right this is your couple of seconds to plug where we can go what website to learn more about the Lily School okay well first of all let me just say if you want to learn more about the Lilly Family School uh you can go to www.

(28:59) iupui dots lfsop.edu that’s certainly one place to go um the other place to go is the givingusa.org website because that giving USC Foundation is our partner in all these things and uh specifically if you’re interested in research we have a standalone website called generosityforlife.org that has all of the data about generosity everything you could possibly want to know at your fingertips so feel free to search that website as well we’re excited to share all of this information as you can see Dr osely thank you so much this has been

(29:36) a great conversation I know our audience has learned a whole lot about how this comes together and how they can use it so thank you for joining us it was my pleasure and honor and thank you and please uh feel free to reach out with any other questions you have thank you for joining us for KC cares Kansas City’s non-profit voice this KC care segment was brought to you by the Ewing Marion Kaufman Foundation www.kauffman.org.

(30:04) org spread the love and you can find KC cares on Facebook and Twitter at KC cares Radio and on Instagram at KC cares online and don’t forget you can catch us Saturday mornings at 8 A.M on ESPN 1510 a.m and 94.5 FM thank you for joining us on KC cares

Previous Episodes!

Nonprofit Leadership Transition Insights

Mike English | Vice President

In this insightful interview, Mike English, a seasoned expert in non-profit leadership transition, shares his wisdom on the challenges non-profits face due to high turnover rates among executive directors. He discusses the importance of finding the right leader to fulfill an organization’s mission and offers strategies to navigate leadership transitions smoothly. From setting up a search committee to conducting rigorous interviews and managing internal candidates, English provides a comprehensive guide to non-profit leadership transition. This interview is a must-watch for anyone involved in non-profit management, offering valuable insights to ensure the long-term success of your organization.

visit them here: morancompany.com

 

What Nonprofit Questions are Answered?

  1. Why is the turnover rate for non-profit executive directors so high?
  2. How can a non-profit find the right leader for the organization?
  3. What should a non-profit leadership transition process include?
  4. What are the potential challenges in a non-profit leadership transition, and how can they be avoided?
  5. How can a non-profit manage internal candidates during a leadership transition?

Find us on

Facebook:@ Kccaresradio

Twitter: @kccaresradio

Instagram: @Kccaresonline

•••••••••••••••••••••••••••••••

Also available on

Itunes || Spotify || Stitcher || Soundcloud || Youtube 

•••••••••••••••••••••••••••••••

KC Cares, Kansas City’s nonprofit voice, tells the stories of Kansas City nonprofits and connects them with the community.  

Produced by Charitable Communications 

•••••••••••••••••••••••••••••••

In partnership with: 

Ewing Marion Kauffman Foundation

Take risks. Own success. Be Uncommon.

TW: @kauffmanfdn FB: @kauffmanfdn IG: @kauffmanfdn

Transcript:

(00:00) looking Kansas City a better place to live work and play this KC care segment is brought to you by the Ewing Marion Kaufman Foundation kauffman.org. as an executive director running a non-profit organization is no easy task they are staffed to manage or a lack of Staff fundraising Financial oversight programs and events to attend a board to work with and volunteers to recruit and work with and so much more it’s running a business despite the tax designation statistics indicate the turnover rate for executive directors is between 18

(00:36) and 22 percent the expectation is a non-profit board can look to navigate a leadership transition every four to five years so how can a non-profit find the Right leader for the organization and fulfill its Mission what should a search include what are the bumps in the road and how can you avoid them well we’ve gone to an expert in this space as part of our ask the expert series and we welcome back Mike English he’s vice president for search strategies and Senior search consultant for the Moran company which is based here in Kansas

(01:07) City and conducts these searches on a daily basis Mike comes to us having been a guest on the show a few years years back as an executive director himself turned the page so welcome back Mike we’re glad to have you thank you Ruth it’s great to be here all right well we want to share with our audience uh you navigated your own search for your replacement and then I decided it was so much fun you wanted more right yes I had been an executive director for for some different non-profit organizations for oh gosh

(01:40) about 20 years and most recently was executive director at Turn the Page KC a local non-profit organization um I was there about eight years um you know I I was ready to move on I think it was good for the organization too as this happens I think at a for a lot of people in in that role and so um we conducted kind of our own search and and um I was a big part of that and really enjoyed it so like you said I I’ve made that transition to to working in executive search for non-profit organizations uh full-time uh with the

(02:11) Moran company what was that transition like for you you had been at the home for so long so I wonder jumping the fence right it you know it was it was it was good I I really enjoyed uh the non-profit culture and the people in nonprofit organizations and that includes staff and board and so that in this role I get to work with um non-profit boards all over the country and so it’s been it’s been pretty seamless because it’s it’s you know that’s a role I know really well and so um as I do this work it’s um I really

(02:50) enjoy kind of trying to make that match between what the organization needs and and people out there that can do it well well let’s Dive Right In I I started the show with some statistics that I think might surprise some folks you know changing a leader every four to five years what’s behind that that seems like not long tenure right it is you know it’s it’s not easy work being an executive director and so there there is certainly I think some burnout that that executive directors face um after a number of years and so

(03:29) um I think that’s that’s certainly part of it and you know what we you know and and the person hired isn’t always the the best fit and so what we really try to do is make sure that that match between executive director and board and organizational culture is really strong and really the right fit so that we get a longer tenure in that in that organization so yeah I think it’s the the reason behind that turnover is probably simply just it’s not easy work and um it really is important to find a

(04:02) really good match between organization and and or um executive director this might be an odd question but I’m wondering what’s like the failure rate overall kind of in the industry when you do go and you hire somebody and it just doesn’t work out right it’s a good question it’s it’s you know for search firms like ours um typically executive search firms provide a one-year guarantee and so if the individual leaves in under a year the company does that surge again for free and so um typically firms measure that

(04:43) as the success rate so you know what are the um percentage of placements that last the year and also once a person lasts that first year they’re um more likely to be there long term for for us I think it’s over 95 percent of our placements uh last over a year and of course we’re doing more and more searches each year and so um we’re not quite sure you know how long people will last because they’re still in the role and hopefully won’t be a long a long time but you know when an organization invests in a search and

(05:14) brings in professionals to help conduct that search in my experience it’s more likely to end up with a long-term placement all right let’s start at the very beginning you’re that board president and you get that call that letter that email that says I’m leaving for whatever reason right how do you begin as that organization take us through that kind of thought process right the first the first kind of um variable is how long um is that person going to stay what is your notice in terms of when is that

(05:54) person going to leave if you have if you have ample notice and it’s maybe it’s a retirement or it’s a person who’s um just decided to to move on but is willing to stay several months until a replacement can be found uh that’s ideal and so what that board president um would do and what we recommend that person do is is establish a search committee and so that’s a committee of board members typically sometimes with staff as well uh to serve as that um representation of the board when conducting a surgeon at this point

(06:27) and this is how we get work of course those search firms will determine they want to hire a firm to to lead the search and so that’s when we kind of come in the process and um and help the organizations um in some cases or in a lot of cases unfortunately there may not be that sort of notice so that executive director maybe has found a new job and it’s going to be leaving in a few weeks or maybe they’re leaving abruptly and in those cases what most nonprofits will then do is um find an interim executive director

(06:59) and that’s that’s an important step in order to provide some stability into to find that interim executive director uh that non-profit May identify a senior leader within the organization so maybe your CFO or a chief development officer someone who who they can ask to serve as that interim a lot of cases that’s the board member will offer to serve as that interim executive director and then there there are people out there that um that are Pros that are maybe that are retired directors or Consultants that

(07:30) can come in and be hired to serve as an interim so if it’s an Abrupt departure an interim can really help to provide that stability while that surge takes place so so those are the two scenarios longer term or more urgent search and those are kind of the first steps the the board president would take how critical is it to find the right person to be that interim it’s it depends on the circumstances of the organization so um it in some cases you’ll have a non-profit that’s really in um chaos or in flux

(08:08) um and if that’s the case uh it’s really important to find the right person to help provide stability maybe clean up any issues there might be because you don’t want a new permanent executive director to come in uh to a situation that is that is chaos and so that would be the most important time to find a really solid interim is when there are things that need to be stabilized um in other cases where it’s maybe it’s a the organization is in really strong shape a lot of non-profits boards will

(08:44) see this as an opportunity maybe to test somebody out right so you’ve gotta okay in your leader that could be a great internal candidate and by appointing that person the interim executive director and then conducting a search at the same time they can really you know see if that person is successful so um there may be some um uncertainty there by appointing a current staff member as the interim but it’s a good opportunity in some cases how often do you all encounter uh you know being involved in a search where

(09:15) they say we don’t want that interim as our executive director we we want a caretaker keep things stable I’m just curious where that lands it’s a good it’s it’s a good question I would say about 50 in my experience will will have a board that um uh if there’s an interim in place that person is uh is going to be an internal candidate for the position um and and you might be thinking well why would you even do a search if you’re gonna point an interim that you may end up hiring well for for one one things

(09:50) that what I mentioned before it’s an opportunity to give that person a chance to prove prove themselves but then also I think by um it’s it provides credibility to that person if they are ultimately hired as the permanent executive director because they they provided area they conducted a search so in in other cases there the expectation is that the interim executive director will not be a candidate for the job it’s important to be upfront about that uh with that interim executive director um and so uh in those cases that’s about

(10:25) another half of the searches that at least I’ve been a part of where there is an interim the expectation is that person will um be there Just As a caretaker I want to Circle back you had said you know setting up that search committee it’s usually some board members may include staff what’s your opinion about also bringing in I guess I would say clients recipients the people that you actually serve with what your nonprofit’s mission is is that part of the mix it is and I I think it’s that’s a really

(10:57) important part of the mix in terms of gathering feedback and input on the attributes that the organization should be looking for and so in all of our searches we conduct uh interviews and surveys of recipients of clients of um of stakeholders at the very beginning and then develop what we call the position profile that then helps us uh work on that search um and so I think no matter what that’s a very important first step in terms of the search committee itself that’s the committee that it’s going to

(11:32) be interviewing and ultimately making the decision about who to make the job offer to and so um in most cases that is limited to board members um and in some cases staff will be a part of that as well um to a lesser extent uh General Community stakeholders or clients are part of that so the search committees together you’re doing the homework at the beginning of what do we want in a leader um an attribute survey I guess or uh what is it we’re looking for how important is it in that part of the process is it what we’re not

(12:12) looking for very important very important so so that once that recruiting starts or that that posting of the position is is made then um everybody understands what you’re now looking for because there may be some very strong candidates on paper that um that the organization there there’s there’s maybe some you know it could be a management style or a personality style that the organization knows would create conflict with staff and you do know that and then that may be a management style you can avoid for

(12:48) example if um an organization and a lot of non-profits are this way or really looking for a collaborative leader then um you know that you’re not looking for sort of a very top-down my way or the highway away type leader and so then during that Outreach and those interviews the the search committee knows okay well this is probably not the best fit for our culture how do you really ascertain that as you said people look great on paper how how do you find that out if somebody’s uh this is how I run it this is how it goes or I love to sit

(13:26) around and have that cup of coffee and really find out what it’s all about right I think the first thing you do is you ask them and there are clever ways to do that in an interview is it because when you when you ask about a person’s leadership style um most people are going to give an answer that they think you want to hear right and maybe it’s true maybe it’s not but but by by asking about scenarios and and practical examples there are ways to really uncover what their management style is and and those questions that I

(13:57) find are most helpful about conflict so how have you how do you handle a certain conflict give us an example and those questions can can help ascertain what that person’s management style really is and then of course once if it’s a finalist candidate and you’re doing references that’s something that you can really find out by checking references so we kind of jumped over the uh you’ve got the job description you put it out there in whatever places and and are there places that you would recommend that you should

(14:26) absolutely be posting these kinds of positions yes for sure if it’s Kansas City the the non-profit connect is is the probably go-to place for posting non-profit jobs and executive director jobs um since we work in cities all over the country uh we typically try to find that um that type of non-profit Association organization to post that position um and then the um there are a number of different job sites nationally that we typically use um that help us to find um candidates by sector or um some that are good at helping to generate a more

(15:10) diverse portfolio of candidates and then of course LinkedIn is is really emerging as a a great place to circulate positions and get candidates you know I would say for our searches we probably get over 50 percent of our our candidates see the job or hear about it from LinkedIn that’s interesting we’re talking with Mike English the Moran company filling Us in on all those critical things that we should be doing if you’re looking for an executive director Mike so you’ve got the job description out

(15:39) there it’s floating around in all the appropriate places how long do you wait to start you know saying okay we have enough and what is that critical number well so we put a time limit on it so we put about a six week recruiting period so once that position is posted we have it posted an application portal open for six weeks and during that time we’re doing active Outreach as well so um the some of the best candidates you’ll find for a job aren’t necessary they’re not necessarily looking and so

(16:16) um by getting the word out talking to lots of people we’re able to kind of uncover or um uh I guess uh new candidates that may not see that on a posting so after about six weeks uh we then move quickly into that Final Phase which is evaluating applications identifying who we want to interview and then moving through a few rounds of interviews and to kind of narrow the field and find the perfect candidate so I wouldn’t put a necessarily a number of applicants uh numbers out there but a but a time period is is a good way to

(16:51) you may have you may have a hundred you may have 200 candidates you may have 20 but if you’re doing you’re recruiting you’re an Outreach well you’ll have the right person at the end okay so going back to that search committee then who conducts the interviews you know sometimes search committees are really big sometimes they’re not so big right who does the talking are they asking I like a search committee that’s got maybe four or five people on it and and so during the interviews with the

(17:24) candidates and to do multiple rounds of interviews we find it’s it’s it’s a good start to do it over Zoom um and so over Zoom or whatever platform you use um and so that way you can you know interview several people um over zoom in a first round and and um sort of divide up the questions or the topic areas uh is a good way to make sure that the full committee is engaged in participating and talking on on the call and asking those interview questions so um and then after that sort of what we call the zoom round that

(18:00) maybe that initial round or that semi-finalists around candidates then it’s important to bring them in in person and so then that search committee again will interview maybe two or three kind of finalist candidates and then um at that point a non-profit has to decide do we want the full board to have a say in this higher and be part of that interview process or are they delegating that uh decision-making power to the search committee and that really varies by the type of organization and the size of the board if the full board is going

(18:34) to be a part of that interview um then there’s uh then there’s typically a nut you know structuring that around a board meeting meeting maybe the most sort of convenient way to set that up and then at the uh and then it’s just up to the nonprofit how they want to handle that that interview at that point let’s talk about questions what do you ask and what can’t you ask yes that’s good that’s a good question we have a we have a whole list of questions that we can’t ask that we always provide our clients and so

(19:08) um those are you know obvious legal questions like you can’t ask a person’s age or their marital status privilege and those kind of things um and then in terms of questions to ask um I like to match up we talked about that position profile that’s developed at the beginning I’d like to make sure we’re matching up our questions with what we’re looking for and so um the the jobs usually entail some leadership working with Boards of directors um managing people raising money um understanding finances communicating

(19:46) internally and externally those are sort of those General topic areas that we try to ask questions about and then as I mentioned before those questions um are most effective when you can really drill in and ask for concrete examples of um how much money has the person been responsible for raising that’s a that’s a usually an important question for a smaller non-profit they want to make sure that the person can raise money so um matching up those topic areas with what you’re looking for and then asking

(20:18) for a person’s experience maybe their um their point of view perspective or strategy and then trying to drill in on specific examples is a really good way to make sure you’re you know you’re getting what you want an executive director how long should that interview last the um I would say that are that the so the way we handle interviews is we like to interview a lot of people and so our initial round of interviews we may have 20 people and so each of those interviews are usually about 30 minutes

(20:50) and then we kind of narrow the field to maybe five or six people and then that next round of interviews will take um we schedule those for about 45 minutes to an hour and then have a final round which is usually over an hour with the individual and because it’s a executive director role um it’s it’s also important to make sure that there’s an opportunity for that person to really ask a lot of questions so um at this point of the of the interview you know the candidate is is in a way interviewing the organization as well

(21:24) and so um setting that interview that final interview where there might be two or three candidates for about about an hour and a half to two hours um that’s a good length of time to make sure that you’re getting everything you need to know about the person but also they’re getting an opportunity to make sure they want the job I’m so glad you brought that up you know I’ve heard people talk about going through interviews like this and they come out they they feel like they’ve been interrogated but nobody really you

(21:51) know allowed them to ask a few questions so that’s such a key critical point how important or I’m trying to find the right way to ask this how critical is it for that final candidate or two to be able to have some interplay with the staff it’s it’s really important on both sides so for the again you’re going to make an if this is the person you want you’re going to offer them the job and you want them to accept the job and most people are not going to be comfortable accepting that job until they’ve met the

(22:30) staff and so um there should be an opportunity for them to to meet the staff um and then uh on the other side you really want to make sure that the staff um feels part of the process like they had a chance to the person before they’re being hired that can be a little tricky setting it up in a way so that the staff has input and has a role um but but may not be a formal interview with the staff and so I like to set those meetings up as um somewhat less formal uh where the the candidate meets the staff um and so that uh ultimately when that

(23:11) person has hired the staff feels comfortable um and the the candidate takes a job because they’ve had a chance to meet the staff and they feel good about where they’re going I’ll ask this question I think I probably obviously know the answer but I’ll let I’ll let sport answer how does a non-profit decide whether they do this internally versus going to a company such as Moran yes um we get a lot of inquiries from organizations that are um trying to decide that and so a lot of it depends on a budget

(23:51) and whether they uh you know they have the resources to to pay a search firm to do the search and as well as their own capacity to do it so um if a non-profit feels like they have the expertise on their board and the time to put in the process uh then in a lot of cases they’ll decide to do it on their own and um one of one thing I want to stress about the time commitment is that to do a search and get a good result there really needs to be a lot of effort into that recruiting and that Outreach to find candidates because you can post

(24:25) a job and you may just not get a lot of interest in it um because like I said before a lot of the best candidates aren’t looking they’re not looking at those job boards since you need somebody to do that outrage and so if the board has um the time and the capacity to do that they could do that on their own um but if the organization um is really uh you know wants to bring in professionals and that’s where we get hired to come in and kind of lead them through the process because it’s it’s probably the most important thing you’ll

(24:54) do as a board member um for a non-profit organization is to make a hire of a new executive director and so um obviously I’m biased but I think that search firm isn’t is really important in order to to make sure it may cost some money but you’re making sure you’re getting that right person it’s an it’s an investment you’re getting you know you’ll it’ll really benefit the organization in the long term if you find the right person all right we’re at the point that you’ve

(25:22) got the candidate that’s the person you want how long should it take between we want you Mike versus Mike giving a decision right I would say not more than a few days so okay um it’s because what’s happening at this point too is you have gone through this process and you’ve narrowed the field down to maybe two or three people and in most cases uh there’s a favorite but there are also others that would also be great so when you make that offer uh you don’t want it to drag on too long because if you do in the personal but

(26:04) ultimately declines the offer then um you may have lost your other individuals that you also like and so setting a so what search committees often do is prepare prepare an offer letter um with a date by which they expect a reply in a decision um and so if it’s a you know if it’s a Friday or that offered is made uh maybe giving that person the weekend to think it over and make sure that that they’re all in and then hopefully get that decision by Monday gotcha I was going to ask what’s the percentage of people that get offered

(26:41) and say oh thank you I don’t know that’s a good question it does happen um what the searches were involved with uh there’s it’s a pretty rigorous process and so and we do a lot of um have a lot of discussions with candidates to make sure that their um they’re committed to this that they’re really all in the other thing I try to do is make sure that we’re upfront about the salary from the get-go and so the salary I I think can be that can be one reason people decline an offer probably the most probably the

(27:17) biggest reason but if if that person really knows and we remind them throughout the process this is the salary range are you comfortable with that does that does that work um then when the offer is made that’s not going to be a reason they decline that offer um but what what can happen is a person may you know if they’re looking for a job they’re they’re they might be entertaining other opportunities as well and so right in some cases they’ll decline your offer because they’re taking another job so

(27:45) um that’s another thing to be cognizant of when conducting a search is you may not be the only Suitor for this person and so um again that’s another once those interviews start I think it’s important to kind of be um efficient about the process otherwise you may lose candidates we’ve just got a couple minutes left tell us some real big don’ts instead of dues what are the domes well I think so um one big don’t I would say we talked a little bit about internal candidates before um and so I think it’s important to be

(28:23) very um transparent with that internal candidate about about the process so um one don’t I would say is to um uh treat an internal candidate um unfairly or poorly during the process or um you know allow them to have the perception that they were treated unfairly or poorly because that person would often will then leave um the organization and that’s probably a valuable part of your your organization and so um we try to make sure that those internal candidates it might be the CFO the development director whoever it is

(29:01) um feels like that feels good about the process um so that they don’t leave so that that would be one one don’t the other I would say um is uh and this is my personal opinion don’t hide the salary um because again that’s the probably the biggest reason why this can fall apart at the end is if a candidate had different expectations about what that that salary is going to be um and then uh finally I would say don’t let it drag on um we have our props that takes about about 12 to 14 weeks from start to

(29:35) finish um once it’s posted I mentioned we have a six week recruiting period and then once interviews take it’s you choose only three weeks or so from when we schedule interviews to when an offer is made um and so what can happen with a busy board of directors is that scheduling gets in the way and then all of a sudden it’s you know three weeks in between each round of interviews that’s that you’re going to lose candidates during that time and so um I always recommend setting up your schedule right at the

(30:08) beginning for everybody so put that you know semi-finalists and finalist round of interviews on your calendar right now um so that um nothing gets in the way once you get to the end because if you drag it on too long your your um more likely to lose really good candidates just because they find something else he’s Mike English he’s with the Moran company check out their website www.morancompany.

(30:40) com my thanks this was great I’m so glad to get you on as the expert appreciate your time my pleasure thanks for having me thank you for tuning in to KC to KC cares Kansas City’s non-profit voice were produced by charitable communication you’re saying what was brought to you by the Marion Kaufman Hoffman Foundation www.kauffman.

(31:01) org to be a guest on KC cares or to go find any of our ask the expert or other episodes go to our website KCcaresonline.org and spread the love you can find us on Facebook and Twitter at KC cares radio and Instagram at KC cares online and don’t forget you can catch us Saturday mornings at 8 A.M on ESPN 1510 a.m and 94.

(31:23) 5 FM thank you for joining us I’m KC cares thank you

Previous Episodes!

Starting Managing Nonprofit Organization Danielle Merrick

Danielle Merreck | Attorney

In this insightful interview, Danielle Merrick, a law professor at UMKC and director of Kansas City volunteer lawyers and accountants for the Arts, shares valuable knowledge about starting and managing a nonprofit organization. She discusses the wealth of resources available in Kansas City, the legalities of nonprofit formation, and the importance of planning, budgeting, and setting up a board of directors. Merrick also explains the difference between a nonprofit corporation and tax-exempt status, emphasizing the need for internal controls and annual filings. This interview is a must-watch for anyone considering starting a nonprofit or seeking to improve their existing organization’s management practices.

visit them here: https://law.umkc.edu/

 

What Nonprofit Questions are Answered?

  1. What are some resources available for starting and maintaining a non-profit organization?
  2. What is the difference between a non-profit corporation and tax-exempt status?
  3. What are some common mistakes made by non-profits?
  4. How can non-profits amend their bylaws?
  5. What is the annual event mentioned that pairs non-profits with attorneys?

 

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KC Cares, Kansas City’s nonprofit voice, tells the stories of Kansas City nonprofits and connects them with the community.  

Produced by Charitable Communications 

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Transcript:

(00:00) City nonprofits and the people behind them KC cares is the intersection of the non-profit and the profit communities making Kansas City a better place to live work and play this KC care segment is brought to you by the Ewing Marion Kaufman Foundation www.koffman.org I’m Ruth Baum Bigus many non-profits are started because of the passion of the founder to help the community in some way while Noble and purpose there are many things to consider including legal issues and obligations when the word legal is mentioned in the same sentence

(00:33) as non-profit it may send shutters up the spine but our guest today on this ask the expert episode is here to ease your worries and break things down for us KC cares welcomes Danielle Merrick she is a University of Missouri Kansas City professor in the School of Law and a director of the Kansas City volunteer lawyers and accountants for the Arts and many other things that Danielle is involved in that’s just a snapshot that I thought we’d start with so welcome to the show thank you I’m doing well well as I said uh legal

(01:10) may send those shutters or spook or Scare some folks who go in and they you know they want to help heal somebody raise money for some other where does someone start with legal issues and a non-profit where’s bring us in so the first thing is is that um there are a lot of resources in the Kansas City area that can assist you with um both information about how to form a non-profit and do it properly and then also with maintaining that non-profit so one of the places that I recommend on a regular basis is the Midwest Center for non-profit leadership

(01:56) um also non-profit connect um so the Midwest Center for nonprofit leadership is a program that’s actually through the blocks School of Business through UMKC and it puts on I believe it’s quarterly um they put on a quarterly a um basically so you want to form a non-profit class and I believe it’s maybe an hour and a half or two hours long and they have illegal non-profit expert that comes in and just talks about the basic building blocks about setting up a non-profit um they also talk about kind of the

(02:32) um sorts of planning that an individual or group of individuals needs to go through to successfully form a non-profit so if you are someone that’s in the very beginning stages in the what I like to call you God told me to do X stage then that’s a great resource is to start there to kind of get some of that exposure to that um non-profit connect and Midwest Center for nonprofit leadership nonprofit connect is basically an affinity group for individuals who are already either involved with a non-profit whether that

(03:08) be as Board of director members or executive directors or Founders or whatever and it provides a few things it provides a um networking platform they have events where you can network with other non-profits so that you can kind of uh compare War Stories they also put on classes and events that are designed to educate people on non-profit best practices um so like the Midwest Center for nonprofit leadership has a fundraising certificate so if you have a board or an executive director member who wants to be more Savvy at fundraising there’s a

(03:41) fundraising program that they can go through non-profit connect puts on similar classes like that so I always say you know do that first if you’re starting at that the next thing I would suggest is that one of the things that people don’t really understand about non-profit is that um well two things one is that non-profits are owned by the people of the state in which they’re formed they’re not owned by any one individual so one of the things that I tell people when they’re thinking about forming a non-profit is

(04:15) you have to decide whether or not your primary goal is for this to be your baby and you control it or your primary goal is whatever the mission is and the mission might go on without you and you might not be involved with your non-profit at all in the future so you have to decide which is more important and there’s not a right or wrong answer to that because some people are like no this is my baby I want to always be involved in it and I never want to be parted from it and if that’s the case then a for-profit

(04:50) structure is probably a better structure for that um but if it’s more Mission driven and your personal affiliation with it is not as important then a non-profit structure might be the right way to go the second thing that a lot of people don’t understand about nonprofit is that their the legal work to set up a non-profit is like the last 10 percent ninety percent of it is all y’all like you’ve got to come up with your budget you’ve got to come up with your program and you have to figure out your board of

(05:22) directors you I mean you have to do all of that the lawyers are not going to do any of that for you nobody nobody’s going to come to me and go I’d like to set up a homeless shelter and we go okay yeah I know exactly how you want to run this and let me just you know dictate everything to you I’m gonna go okay great tell me all about your homeless shelter and if you say uh well I don’t know I haven’t decided I’m not charging for my services with all of my clients so you’re all you’re doing is wasting some

(05:50) time but if you’re paying an attorney they’re charging you for you to Fumble around and not be able to tell them what your program is so you know really kind of doing that research ahead of time and really knowing a lot of those types of things before you go consult with an attorney to start setting things up will save you money it will save you time and it’ll save you frustration um so I recommend all of those things when we first are setting up a non-profit um just as a total complete site and you’re

(06:28) probably aware of this already um given that you interface with non-profit stuff on a regular basis is that um Kansas City has a lot of non-profits like a lot we do yes I do a lot a lot um and you know some people could say that that’s the generosity of the Midwest and the generosity of the city as a whole um but it does create problems um there was a study by Midwest Center for nonprofit leadership I believe it was in 2019 Maybe 2018.

(07:00) uh all I’ve noticed it was before the pandemic this is after the pandemic um and it basically said that due to the number of non-profits in Kansas City all these existing nonprofits are essentially competing for the same 43 individual donors so my thing when anybody approaches me about starting a non-profit the very first thing I ask them is have you volunteered with a non-profit that’s doing what you’re doing is it possible there’s a nonprofit you could already partner with and be a program under an existing non-profit as

(07:33) opposed to setting up a fully formed secondary non-profit and that should always be anybody who has a great idea that they want to help somewhere in the community that should always be their primary problem of focus is there somebody already doing this or something ancillary to this that I could expand on and just assist that mission as opposed to diverting Dollars to the administration of another non-profit so um you know that all being said when I get a non-profit client in I usually spend the first 30 to 45 minutes trying

(08:06) to talk them out of forming a new non-profit oh no oh no but you know sometimes there are reasons that partnering with another organization doesn’t work or maybe you know they have part maybe they have been very involved in what they’ve been doing and have been doing in a grass level level for several years and they just want to formalize it and so there are reasons why they might want to form a non-profit anyway um non-profits in both Missouri and Kansas are under corporate law um which seems a little weird but that’s

(08:44) how it is Missouri and Kansas are slightly different Missouri has set all of their non-profit corporate law into a whole separate section Kansas and Kansas is stupid sometimes and I can say this because I live in Kansas Kansas was like no we’re just gonna smash the non-profit corporate law into the for-profit corporate lawn we’re going to call it zero par Value stock that gets issued so Kansas nonprofit law is a little bit more strange a little less straightforward than Missouri is because you’re in this

(09:18) inside of a for-profit law so if you are someone who’s interested in forming a Kansas nonprofit I absolutely suggest that you not try to do that on your own only because there are so many nuances in Kansas non-profit law because it’s mashed into the for-profit law that makes it a little less straightforward um so both of them are under corporate profit law or Corporation law um the main thing we do is what we we file Articles of Incorporation with the secretary of state to set up a non-profit Corporation now the nonprofit

(09:54) corporation form on the Secretary of State’s websites um they have gotten so many people who form non-profits and don’t actually know what they’re doing that they have put the language in the instructions of the PDFs of those that has all the language that the Internal Revenue Service requires for your non-profit to be considered eligible for tax-exempt status now that’s the next misconception that people have is that there is a non-profit Corporation and then there is tax exempt status and these are two separate things

(10:35) you could have a non-profit corporation that is not tax exempt you can have a tax exempt entity that is not a non-profit Corporation so most people when they tell me they want to start a non-profit what they actually mean what they’re colloquially referring to is a charitable non-profit corporation that is eligible for tax exempt status under 501c3 of the IRS code so the IRS requires specific language in your Articles of Incorporation and in your bylaws for you to be eligible to apply for tax-exempt status

(11:17) so if upon forming your non-profit Corporation you fail to put that language in whatever attorney you meet with is going to have to tell you that we’re going to have to amend your Articles of Incorporation and amend your bylaws before we can even apply for tax-exempt status so it’s really important if you are not aware of what that language needs to be in the Articles of Incorporation go look at the instructions on the Secretary of State’s website for those the PDF of those forms it’s right there the

(11:49) language is right there um or ask someone try to find out what the language is supposed to be because that going back and having to amend that that sets off a whole series of processes that delays your application for tax exempt status [Music] um so you know we’re always trying to make sure that you know if you’re going to do things on your own you’re we’re giving you the best start you’re trying to you know get as many things squared away properly to begin with [Music] um so once you’ve set up your Articles of

(12:21) Incorporation Missouri and Kansas have different requirements for the number of board members Missouri requires that you have three board members at all times Kansas requires one um both require that you have a president a secretary and a Treasurer and those can be three individuals that throw that fill those roles or it can be one individual filling all three roles like the trinity and so normally the persons who are filling those roles are members of the board of directors but they don’t have to be they could be

(12:53) outside persons that are not on the board of directors that does create a level of complication that I don’t most attorneys would not recommend that but it’s not illegal to do it that way um so what happens if you have less than three board of directors in Missouri or what happens if you have less than one Board of director in Kansas that means that technically you’re not in compliance with Missouri or Kansas statute which means that your limited liability under that non-profit Corporation no longer exists

(13:29) so what that means is if you’re a Missouri non-profit operating with only two board members instead of three your board members and your executive director are now personally liable for anything that happens yes exactly so it is very important that you understand in whatever state you’re formed what the requirements are to maintain your non-profit Corporation as well um one of those is the board of directors but then the other thing is that Missouri and Kansas both for non-profit corporations require an annual report uh

(14:04) with the secretary of state if you fail to file that annual report they will administratively dissolve your nonprofit corporation and then you’re back to individual personal liability for everyone affiliated with the organization so once you’ve done that you’ve got your thing set up you’ve solicited your board of directors now you need bylaws and now you need a conflict of interest policy and your bylaws are the best way I can describe bylaws is they are a contract between the board of directors and the non-profit

(14:38) organization as to how the non-profit organization is going to be administered and so the bylaws are describing like here’s how often we’re going to have board meetings and here’s how we’re going to elect people and here’s how we’re going to remove people if we need to and here’s how we feel if someone just leaves or or whatever and it’s a whole layer of things two hints about bylaws number one non-profit corporations that are tax exempt um have a higher level of required disclosure than a privately held

(15:11) for-profit Corporation that means that as a taxpayer in the state of Missouri I can ask any existing non-profit for a copy of their bylaws or a copy of their Articles of Incorporation or a copy of their recent tax returns with the IRS or copies of their most recent board minutes and they have to provide them to me so one of the things that I tell people who are trying to figure out how to set up buy-loses I’m like find a big organization that does something similar to you and requests a copy of their bylaws because now you

(15:47) know they’ve paid an attorney to look at them and now you can kind of see how they structured stuff that doesn’t mean you have to structure everything the way they did but it gives you some insight into right well how do I want to do some of this stuff the biggest thing that happens that I see client the biggest mistakes I see with bylaws is the bylaws are drafted and don’t account for proxies or electronic participation in meetings yes um so you know if you’re by less don’t contain that you technically can’t have

(16:21) a zoom board meeting you technically can’t have a teleconference board meeting you technically can’t have someone vote on behalf of somebody else and so making sure that those are included in new bylaws if you’re drafting is very important in this day and age to make sure that electronic communication proxy all of that stuff is in there um the second most common mistake I see with people with bylaws is they don’t follow them so yikes yes so whatever your bylaws say you have to do I would say that the most

(16:59) common question I get from existing non-profits is they’ll say can we do X and my most common response is what do your bylaws say and if they’re bylaws say they can do X they can do X if their bylaws are silent on that or say they can’t do X they probably can’t do X and so you know being familiar with your bylaws and knowing what you can and can’t do and then abiding by them is very important I find that I have to go back because it’s not something I think that you easily memorize I’ll speak to myself

(17:38) it’s not something I keep top of mind because you’re busy doing your mission if though it isn’t in your bylaws and you want it in your bylaws can you amend them and how difficult is that to do so yes you can um even if you’re bylaws do not have a stated Amendment policy most bylaws do but for some reason if they are silent on the amendment there is never a situation in which you cannot amend a document um so let’s pretend it’s silent the default rule is that you can amend it as long as a majority of the board of

(18:19) members agree to amend it in writing so those are the key things a majority and in writing they can amend the bylaws now if you have a membership-based organization that’s a little different if it is a membership based organization and let me be clear there’s a difference between membership for marketing versus membership in a legal structure membership for marketing is like I’m a friend of the zoo and I get a couple of zoo passes but I don’t get to have any power to vote in the board of directors that’s a market membership

(18:54) legal membership is I have a membership based organization like um a homeowners association or a country club or a social league and the members get to vote in the board of directors so if you have a legal structure that has members then amending your bylaws will also require the members the majority of the members to approve in writing the amendment to the bylaws um and then you call a meeting you present all the Amendments people vote bam your bylaws are amended the most common amendments that I’ve done in the

(19:33) last you know I’ve been an attorney for about 20 years now the most common amendments I do is adding proxy and electronic communication like electronic meeting that’s the most common um occasionally we’ve done some things where we’ve either added in term limits or removed term limits but for the most part the most common thing is is changing the way that voting and meeting structures happen because especially organizations that were formed you know early odds or before electronic meetings and electronic communication just was

(20:05) not something that was regularly included in bylaws something at this point again that you would recommend that you go ahead and do I mean we’re in this world of zoom and teams and everything else and I know for us for example during the pandemic we had to I mean you couldn’t gather unless you decided you’re gonna go stand on a driveway and you could all vote and and do that I don’t think any of us probably did that um so tax exemption status you really need to be clear about you really need to

(20:38) know your bylaws you really need to know your articles what are those big you know step in the mud kind of things that you see non-profits kind of just either don’t pay attention to or aren’t you know what are those big mistakes we make um so I see a few um non-profit boards tend to have a decent amount of turnover and so in that turnover if there is not someone who is The Keeper of the records sometimes records just get lost in the turnover um one of the ways that I suggest nonprofits can help avoid that

(21:27) is um having or non-profit organization pay for a business Dropbox or business OneDrive or a business box or whatever Google whatever file system you like to use whatever you know one is your favorite they’re all these are like they’re all apples right it’s just like whether you like Galas or Pink Ladies or honey crispy they all have the same security they all have the same functionality it’s whatever one you prefer setting up something like that paying for the business subscription so you don’t have to worry about

(22:07) you know we’ve run out of room or whatever right and then every person who is a member of the board has a login to that business you know online file system that way when Susie Smith leaves the board we just deactivate her from OneDrive but all the stuff that she ever put in there is already up there so the next person who comes in your place can go in and be like oh we’ll hear all the minutes and here is the bylaws and here all the amendments to the biologic here are all the tax returns and all of that

(22:43) type of stuff so having some measure of internal controls in terms of document retention and things like that that makes your life so much easier and digitizing we have so much readily available technology to digitize that stuff at this point and the more you can digitize it the easier it is to keep everybody on the same page and to have everybody have access to the same thing so um that’s one thing I see happen a lot like especially organizations that were formed prior to the pandemic but I’ll have organizations that come in

(23:21) that they were formed in the 90s and they’re like we know we have bylaws but no one can find a copy where are they so we pretty much have to start over and draft new bios because nobody can find a copy of the original bylaws and we have no idea what they are um and so that’s one of the things that happens a lot um the next thing that I see happen a lot is uh just general internal control issues with um um one person having control of the social media accounts and then that one person for whatever reason right being

(23:56) not a good person and yeah uh or one person having access to the bank accounts or one person who controls all the funds and nobody’s really overseeing that or you know anything that could potentially have an adverse negative effect on the organization ideally should have a point person and an overseer and those should be two different persons um so you know for your social media accounts you have two people manage it you have two administrators for it one person might be the one who’s doing 99 of the posts and the other person’s just

(24:38) there if something goes wrong but you have two people same with your bank account you’ll have two people every time you know for the Kansas City volunteer lawyers and accounts for the Arts for example I am the executive director I’m the one writing all the checks I’m the one charging all the things on the credit card Etc but we have a Treasurer who every month is looking at all of my transactions and every time I write a check he sees an image of it every time I cash a check he sees an image of it and if

(25:08) something doesn’t line up or something I didn’t like make enough of a note to make it clear what it is he will email me and he’ll be like this 21.25 in miscellaneous what is that for and then I’ll be like oh yeah sorry okay yeah I did our annual report with the Missouri Secretary of State and I didn’t notate that when I put it in there but he’s you know just over there kind of making sure he’s like hey let’s you know where’d you spend that money and and I it’s not particularly onerous

(25:37) for me and it’s not particularly onerous for him and I’m not really interested in embezzling but it’s a way to have that check in Balance to kind of make sure that that doesn’t happen um so those are a couple of things that I see a lot um and then the other thing that I see a lot is people just um failing to file annual reports failing to file tax returns with the IRS missing deadlines and things like that um the IRS if you are granted tax exempt status if you fail to file your 990 return for three consecutive years so

(26:17) three years in a row they’ll revoke your tax exempt status and getting that reinstated most of the time means you start over I and so you know having I have on my personal Google Calendar for example reminders like every March 1st it pops up and it’s like file the 990. you know and so something like that so that somebody is making sure that all of those you know T’s across your eyes are dotted um because we want to maintain that tax it’s upset us that that was what a lot of the nonprofits have really worked for

(26:55) because they’re soliciting grants they’re soliciting donations or corporate sponsorships and the way that they are able to obtain those things is by having a tax exempt status with the federal government so maintaining those things is very important and it’s really easy to let those slip through the cracks and and and nobody’s meaning to and it just happens right so having a process for that is important crisis is always important we’re just about out of time but I wanted you to share that

(27:23) there’s an upcoming uh event in June that folks can try to participate in give us the the quick stick yeah so there we do annually um the UMKC School of Law who I represent um Stinson Law Firm which is one of the larger firms here in Kansas City and the American Association of corporate Council we put on an event annually as well as with Kansas legal aid and United Way a um event where we pair non-profit organizations with a team of both Stinson attorneys and American corporate Council attorneys to address

(28:06) some non-profit issues in a one-day clinic so the attorneys and the clients meet for two and a half ish hours and so whatever the issue is it needs to be something we can kind of wrap up in two and a half-ish hours um we um if you are an attorney that it has a limited license and you’re interested in doing some transactional work and you’re not a member of the American Association of corporate Council if you become a member you can participate if you’re a Stinson attorney listening you should participate

(28:37) um and then if you are a non-profit um there is the we’re actually at this point our applications we’ve actually I think we’ve exceeded the number of people that we can take this year but we will do it again next year so be on the lookout in like March April um an invitation will go out and you can apply and you if you have something like we need someone to review our bylaws and tell us how to amend them that’s a great project for this Tech clinic or um we’re thinking about hiring employees

(29:08) and we don’t know what we’re supposed to do like what are some tips with that great thing for this clinic so you know that’s some types of things that you’d be consider doing um it’s completely free um the legal services are free they give you lunch at the end um where’s the best place for people to go check so that maybe next year they can stay in the loop or you know in between they might be able to reach out so um this year and last year we have posted it on um non-profit connect they have kind of

(29:43) like a bulletin board sort of thing um it’s on nonprofit connect it’s also been on Stinson’s LinkedIn page and the American Association of corporate councils LinkedIn page as well as Stinson’s website Stinson markets it pretty heavily but if you’re not following Stinson you’re not going to necessarily run across it people can always contact me um and I can get them hooked up with that but then the other thing is is that if you are a non-profit and you have a legal issue please just reach out to me

(30:17) um I do non-profit issues through um KC’s school of law clinic and so there’s some stuff that I might be able to help you with through the UMKC School of Law I might be able to tell you to participate in this Clinic coming up in the summer with Stinson and the ACC or I might have other resources for you so um I’m pretty open to taking emails and answering people’s questions and at least trying to direct them to the right resources for them if I can’t personally help them through my clinic

(30:46) will you share how they can reach you I assume by email is the best yes um so um my per my direct email is Merrick my last name D.A the first two initials of Danielle at umkc.edu or the clinics email is e l s clinic at umkc.edu so the acronym for entrepreneurial Legal Services clinic at umkc.edu um you can call and leave a message I will eventually return your message but I tend to be in meetings a lot of the day um but the phone number is 816-235 -6341 um and that’s the best way to reach me and like I said I’m happy to answer

(31:39) questions direct to resources um I actually go and speak to non-profit boards on a somewhat regular basis so if you’re a non-profit and you’re like I’d like someone to come and talk to my board about board responsibilities support liabilities I’m like yeah I can come and do that so um I I speak to non-profit boards about legal issues as well just to give non-profit organizations a better understanding of everything that’s required of them Danielle thank you this has been great I feel like I just went to a mini Law

(32:08) class and and you didn’t charge me which was even better so thank you for sharing your expertise we’re really grateful for For All You’ve shared with us yeah you’re welcome thank you for joining us for KC cares Kansas City’s non-profit voice we’re produced by charitable Communications also a non-profit this KC care segment was brought to you by the Ewing Marion Kaufman Foundation www.koffman.

(32:34) org you can spread the love and find us on Facebook and Twitter at KC cares radio on Instagram at KC cares online and check out our website at www.kccaresonline.org you can find Danielle and all of our expert podcasts right there and don’t forget you can catch us Saturday mornings on ESPN 15 10 a.m and 94.5 FM 8 A.

(32:57) M thanks for joining us I’m KC cares [Music]

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Nonprofit Fundraising Trends with Dr Jeffrey Byrne

Dr Jeffrey Byrne | Nonprofit Expert

Explore the latest trends in post-pandemic fundraising with Dr. Jeffrey Byrne, a renowned philanthropy expert, in this insightful KC Cares interview. Dive into discussions on the resurgence of events, the untapped potential of social media, and the power of Donor Advised Funds (DAFs). Learn about the importance of effective communication and the role of virtual solicitations in today’s fundraising landscape. This interview also touches on innovative fundraising methods like crowdfunding, e-commerce, and gaming for good. A must-read for nonprofits seeking to optimize their fundraising strategies in a post-pandemic world.

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