1 Managing People in Social Enterprises

2 Outline Volunteers Staff Boards

3 Are Americans More Likely to Volunteer Than Others? Source: Curtis, et al U.S.SwedenNetherlandsNorwayAustraliaCanadaUKIrelandGermanyBelgiumSpainJapanFranceItaly SwedenNorwayAustraliaNetherlandsU.S.CanadaUKGermanyBelgiumIrelandFranceJapanItalySpain All volunteeringNon-religious volunteering 1983 data

4 What Affects Volunteering? Country-specific effects Demographics –Volunteering increases with Age Education Employment Rural residence Religion

5 Why Use Volunteers? Benefits Service delivery at reduced cost Contact with community Costs Control and reliability Supervision and recruiting expense Impact on paid jobs Ref. J-B 22

6 Designing an Effective Volunteer Program (1) 1.Staff buy-in 2.Clear job design and expectations –Job categories (direct assistance, administration, …) –Meaningful and significant –Part-time equivalent –Fits with overall strategic goals 3.Effective recruitment appeals –Importance of job to clients and community –Importance of job to NPO –Importance of job to volunteer Ref. J-B 22

7 Designing an Effective Volunteer Program (2) 4. Interviewing and matching –Fit –Fitness 5. Training 6. Supervision –Clear performance standards –Performance measurement and evaluation –Clear chain of command –Firing volunteers? Ref. J-B 22

8 Volunteer Recruitment “Warm body” recruitment –Lots of people, low training and skills –Good for large events –Campaign: mass market to large groups Targeted recruitment –Few people, specific skills –Good for long-term volunteer staffing –Campaign: specific, targeted outlets Concentric circles recruitment –Steady flow of a few volunteers –Good for smaller organizations –Campaign: Word-of-mouth Ref. J-B 22

9 Volunteer Attrition Even if staff don’t know volunteers’ opportunity cost, volunteers do Volunteers consider –Market work value –Next-best volunteer effort –Value of leisure time Ref. Young & Steinberg

10 Size of the Nonprofit Workforce Holland Ireland Belgium Israel USA Australia UK France Germany Spain Austria Argentina Japan Finland Peru Colombia Brazil Czech Republic HungarySlovakia Romania Mexico Percent of employees Source: Salamon 1999

11 Career Models Steady state: one job, one career Linear: Job changes serve an upward progression in pay and responsibility Spiral: Job changes serve changing interests and sense of self-development Transitory: Job changes for the sake of job changes Source: Driver 1980

12 Nonprofit Staff Motivation Reasons for entering NP sector –Commitment to social change: 62% –Commitment to a particular cause: 56% –Hours/location: 32% Reasons for taking current job –Interesting, challenging work: 66% –Extend personal skills: 65% –Salary: 19% –Prestige: 14% Source: Onyx & MacLean

13 Problems: Attraction and Retention Nonprofit hospital executive: “Competing with for-profits for top talent is getting harder… …the “A” talent turns over quickly... …but the “C” talent stays forever.”

14 The Compressed Salary Structure Compensation Ability Nonprofits For-profits “C” talent has perverse incentives “A” talent has perverse incentives, and is difficult to recruit

15 Hiring and Firing: Laws Illegal to make decision: –based on “irrelevant criteria” –based on “inappropriately subjective” criteria –without making allowances for disabled applicants Ref. J-B 23

16 Compensation Factors Importance of position to organization Importance of person to organization Internal equity External competitiveness Ref. J-B 23

17 Compensation Schemes Flat Merit Seniority Incentive

18 Identifying “A” Talent in the Organization Importance of position Productivity of employee Talent to keep Jack

19 The Merits of Merit Pay 90% of nonprofit employees consider their contribution to be “above average” Merit pay rewards the truly above average employees 40% of nonprofit workers will feel cheated Lower morale, lower productivity

20 Seniority Pay Advantages Reliable and objective Cheap to administer Encourages long-term retention Disadvantages Encourages survival, not excellence Inequities grow regarding merit External competitiveness can suffer Ref. J-B 23

21 Incentive Pay Skill-based pay Programs that share cost savings Performance bonuses Ref. J-B 23

22 The functions of an effective Board Oversight of organization –Avoiding abuse and neglect –Keeping organization on its mission Administration –Hiring/firing executive director –Planning for the future Expertise on technical matters Fundraising –Use of personal resources –Connecting with community members with resources –Marketing the organization for potential new givers Caring for the organization’s public image –Promoting the organization –Representing the organization

23 Standards for Board effectiveness American Red Cross 1.Board adopts bylaws, and governs according to them 2.Board conducts annual performance review of ED 3.Board annually adopts a 3-5 year strategic plan 4.Board reviews and approves annual budget and financial statements 5.Board conducts annual self- evaluation 6.All Board members are also donors

24 Characteristics of effective Boards, according to data 1.Formal structure 2.Members know and can articulate a common vision 3.Low conflict with staff 4.Engage in strategic planning 5.Involved in organization with respect to time and money

25 The higher standard of board responsibility There are many people with needs, and we are called to serve them All people need to give, and we are called to serve them, too. Our leadership helps our organization connect givers with the needy. Understanding the service we provide to donors –Brings us to full stewardship –Motivates people to truly give Makes us not a supplicant, but a partner in their goodness