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A Lesson for Nonprofit Leaders. Posted by Gail McGovern

 

Today the Red Cross is proudly hosting the White House forum on nonprofit leadership at our headquarters building in Washington, D.C.  I had the honor of welcoming about two hundred guests to the event this morning in our Hall of service, where 100 years ago women volunteers rolled bandages for wounded soldiers during World War I.

Participants at the day-long dialogue will discuss the important role of nonprofit organizations and how to develop leadership within the sector to drive the expansion of community-based solutions to our nation’s most pressing social problems and create jobs.  The nation’s 1.6 million nonprofit organizations employ 13.5 million workers, nearly 10% of the American workforce.

Co-conveners include The Annie E. Casey Foundation, The Aspen Institute Program on Philanthropy and Social Innovation, Center for Creative Leadership, Commongood Careers, Independent Sector, Public Allies and American Express.

I believe my road to the Red Cross illustrates an important lesson for future leaders in the nonprofit sector.  What drew me to the American Red Cross after 28 years in the private sector was a desire to help a national treasure deal with a series of challenges, the most glaring of which was a $209 million deficit and a mountain of debt.

I walked in to the job with a preconceived notion that the Red Cross could simply benefit from some private sector-like leadership.  But in truth, I was only half right.

We did deploy many of the techniques and initiatives that the for-profit sector would recognize and employ.  We eliminated our deficit within two years and have actually delivered a surplus for the last two years in a row.  We paid down some of our debt as well as consolidated back-office operations and centralized procurement.  Today, we’re ten percent smaller than we were 6 months ago, and last fiscal year, 92 cents of every dollar went to the people we served.

These changes were necessary, but certainly not easy.  We lost many of our valuable employees in process.  However, none of these actions impacted our ability to deliver our mission.  And let me tell you, we were tested by anything Mother Nature could throw at us—floods, hurricanes, earthquakes, tornados and wild fires.

But here’s what I found so humbling: Red Crossers, and I dare say most people who work or volunteer in the independent sector, will do virtually anything to forward our mission.

They are here because of their innate nature to want to give back, to serve others and to be a part of something greater than themselves.  When you explain to a Red Crosser that what you’re doing will forward the mission and make us even better stewards of our donors’ dollars, they actually become change agents.  I’ve never experienced anything like this in the for-profit world.

As a leader, I’ve learned that leading from your heart as well as your head is more gratifying and fulfilling.  It’s the nature of every employee and volunteer in our sector to be mission-driven.  As we seek to invest in building capable leaders in the nonprofit industry, we need to learn to harness our employees’ desire to make a difference and use it to achieve our mission.

At the risk of sounding corny, tapping into the need that so many of us have to make a difference, will not only help our sector flourish, it will make the world a better place.  Investing in talent, leadership, diversity, and our human capital will help nonprofits better serve our neighbors in the long-run.

5 Responses to “A Lesson for Nonprofit Leaders. Posted by Gail McGovern”

  1. IS THIS FOR REAL?? I found this info…

    READ FOR INFORMATION: As you open your pockets for the next natural disaster, please keep these facts in mind: The American Red Cross President and CEO Marsha J. Evans salary for the year was $651,957 plus expenses The United Way President Brian Gallagher receives a $375,000 base salary along with numerous expense benefits. UNICEF CEO Caryl M. Stern receives $1,200,000 per year (100k per month) plus all expenses including a ROLLS ROYCE . Less than 5 cents of your donated dollar goes to the cause.

  2. Shari – this is not true. At least 91 cents of every dollar goes to service delivery. You can see this Snopes article about executive salaries that debunks the chain email you reference: http://www.snopes.com/politics/business/charities.asp

  3. I’ve worked for a number of local and regional not-for-profit organizations in my career. I’m so tired of hearing about executive compensation for those at the top of the largest not-for-profits who provide a plethora of human services to people in need. Services that if Congress has it’s way will be much more in demand with proposed budget cuts. It’s even more important for these organizations to be able to attract smart, savvy leaders because those leaders will have a much smaller staff to work with than at similar sized private-sector businesses.

    What private sector business is expected to opertae with administrative expenses of 10-12%? The insurance companies are screaming about being held to 25% by the health care reform act. And you’re paying directly for that with your premiums. If your house burns down, the Red Cross will be there with the things you need and will help you find shelter, no questions asked. They don’t care how much money you make, whether you have insurance or if you idolize the Flying Spaghetti Monster–they will help you.

    A visit to Charity Navigator will tell the actual story. For these organizations, program spending is more than 90% of the expenses annually. These salaries are not out of line for the size of the organizations. Working for a not-for-profit organization means you make less than what you would at a similarly sized (and often smaller) business, but we do it because we know we’re making a difference in people’s lives–it’s true at every level of the organization.

  4. “When you explain to a Red Crosser that what you’re doing will forward the mission and make us even better stewards of our donors’ dollars,” – This is absolutely nonsense…how are we being better stewards of the donated dollar when we no longer can give food pantry orders with a value that equals $15 to fire victims that have met their needs for years, but, now instead give visa gift cards of $50 or more for food in which they can buy “anything” they want with that $50 and not necessarily items that they need… I nor any of my family and friends will be donating to the Red Cross anymore. Changes definitely needed to be made to get rid of the deficit, however, some don’t make sense and contradict the intent… I just found out this week that I can no longer give fire victims sweats on the night of the fire…so, in most cases I am going out in the middle of the night when people are forced out of their home rapidly because of a fire, they stand around with the fire department and watch their home and everything they have go up in flames, we then put them up in a hotel and they have to sleep in their dirty fire-smoke scented clothes?? Obviously the people making these decisions have never been on the front-line of working with fire-victims…. it’s such a shame…. a crying shame… Plus, I also find out this week that I can’t give them the stocked blankets that we have already procured, but, instead I am only allowed to give them blankets with a Red Cross logo??? What a waste of money and poor utilization of the resources we already have on-hand…. this is absolutely not being better stewards of the donated dollar…. Not to mention all the loyal local front-line employees that are being let go and definitely weren’t working at the Red Cross for the money, but for the cause…. But, hey at least those at the top get the top salary, the paid-for car and get to dictate below things that they have no experience with because they came from the corporate world not the “human sector” world…. – Very disgruntled Disaster Action Volunteer

  5. Kristin-

    First, thank you so much for the work you have done serving those in need. From your post I gather you have spent many a night leaving your own home to help those that just lost theirs….thank you so much. We simply couldn’t fulfill our mission and help those in need without you.

    Obviously you have expressed some very real concerns around changes to the way assistance is provided in your chapter/community. As part of a larger effort to align the organization (One Red Cross) many regions are standardizing their service delivery to local events. In many cases this has meant current practices had to be changed or altered. I’m not completely sure this was the case in your example (I’m unsure what chapter you are working with), however, please know that although these types of changes can be difficult (and we certainly aren’t perfect) it’s our absolute goal to be exceptional stewards of our donor’s dollars and to provide outstanding service to our clients. Any opportunities or ideas – such as yours – that we can identify to improve and learn from…we want and need to hear.

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