Agenda

1. Agenda • Review Staying Fit Case • CEO/Executive Director Role • Board of Directors (Trustees) Role

2. Case Study: Staying Fit, inside and out • Retirement community in Santa Barbara is part of the largest nonprofit retirement living services company in So. Cal. • Santa Barbara location decides to invest in a Fitness and Aquatic center to be used by residents and seniors living nearby. • Center provides exercise pool, strength training and a conditioning room. Physical therapy is provided on site. • Off hours rents the facility to community at large. • Helps to keep cost of services lower for seniors

3. Staying Fit: Meeting an unmet need • Center develops a lifestyle model of services designed to meet both social and physical needs of its client. • Socialization for seniors is a stubborn challenge. • The center promotes more independence, socialization and availability to community at large. • Provides volunteer and back to work opportunities for seniors.

4. Case: Entrepreneurship & Change Thinking about the “iceberg” analogy of organizations: • Can you think of any circumstances/ threats that could cause Vista Del Monte to abandon the new program? • What should Del Monte do ensure the “Vitality” program remains permanent part of Vista Del Monte?

5. Organization is like an iceberg • On surface formal aspects: • Constructed and visible • Policies & Procedures • Technology • Structure • Chain of command • Stated objectives

6. More than Meets the Eye • Beneath the surface organic, dynamic, evolving • Social processes & aspects of the organization • Embedded knowledge/skills • Attitudes • Assumptions • Unhealthy conflict • Underlying skills • Informal interaction • Political behavior • Group norms

7. Strong Culture: Vista Del Monte Vision Preserving the not-for-profit heritage of “Doing Good . . . And Doing It Well” through a human services delivery system that makes a difference in the quality of life of those served. Mission Meeting needs through excellence in human services.

8. Parent Company Values • Customer Satisfaction • Integrity in relationships • Individual initiative, expression and creativity • Teamwork and trust • Fiscal responsibility • Innovative services and products

9. Exercise: Head of Selection Committee for HSO • Interview candidates for a CEO/Executive Director position at an HSO • What qualities are you looking for in the perfect candidate • What questions will you ask in the interview

10. CEO Enigma: Different Type of Leader • The HSO manager has to be proficient in the art of management and in public policy. • The HSO leader must be knowledgeable about the technology the firm provides. • This situation creates a potential source of difficulty and problems in running the organization. • Balancing fiscal and service needs presents employee management challenges.

11. HSO: Management Challenges • HSO are typically “lean” at the management level, therefore the ED or CEO plays a complex role (wear many hats) • Pay is much less than FPO counterpart ($30k-$200k) • If paid too much HSO may loose legitimacy and is scrutinized • 2 primary responsibilities that fall into HSO management. • 1) operational manager-things running smoothly, efficiently, resources being properly used • 2) fund raiser-Securing funds necessary for the HSO to continue operation • Not easy to find both skill sets in one person

12. Role of the CEO (Ex. Dir) • Chief role model: Strive for Excellence • Changing from caretaker of the firm to professional manager. • Moving away from focusing on internal operations. • The future ED/CEO role more strategic and requiring skills associated with professional managers. • Delegating authority, managing the firms relationships with other organizations, developing strategic focus.

13. Changing CEO Role

14. The CEO Job • Implement board policy • Plan & coordinate policies for governing program of services • Guide staff in formulating strategies to achieve HSO objectives • Manage personnel according to HSO policy

15. CEO Job Continued • Manage external relations • Attend all board and ad-hoc committee meetings • Keep Board informed about finances, operations and HSO programs

16. What Makes a Good CEO Staff Perspective: • Accessibility • Availability • Sense of humor • Empathy and concern • Candid forthright • Good listener • Responsive • Hard working • Role model Board Perspective: • Competitiveness • Vision • Leadership • Ability to work with diverse groups • Financial acuity • Most from service provider ranks do not have training in financial management

17. ED/CEO Decision Making:FPO Vs HSO • In an FPO management have a fiduciary responsibility to shareholders to maximize return on investment. • Decision making in FPO is bracketed around responsibility to shareholder interests • aligns the financial survival of the firm with the actions of the CEO. • HSO management decisions are focused on serving the firm reason for being (firm mission) • Beholden to Board of Directors and stakeholders • Financial resources typically do not come from the “customer of services” • Output of HSO does not garner $ directly.

18. How Do Organizations Maintain Public Trust

19. They Operate According to Rules and Honor Agreements and Contracts

20. Board of Directors/Trustees • Organizational governance: methods/practices for ensuring accountability, fairness, and transparency in a organization’s dealing with all of its stakeholders • Follows Bylaws • Nonprofit articles contain the organization’s basic information (name, registered agent, office address, etc.) and tax exemption information • Bylaws: organizations operating manual • Important to ensure HSO is operating within its charter and does not violate tax exempt status

21. Board of Directors/Trustees: Roles • A group of volunteers elected to the position • Acts on behalf of interests and values of the community and constituents of the HSO • Responsible for the general direction and control of the agency • Legally responsible for making sure the organization remains true to its mission

22. Roles of BOD (cont.) • Select the executive staff through an appropriate process • Provide ongoing support and guidance for the executive; review his or her performance • Ensure effective organizational planning • Safeguards assets • Ensures HSO operates in the public interest

23. HSO as Tax Exempt Organizations Tax exempt status allows: • Attract tax deductible contributions. • Access to grant funding opportunities. • Provide officers and directors legal protections. • Exempt from Income and property taxes.

24. Legal Aspects of HSO • Tax exempt status must be approved and changes to mission can potentially jeopardize status. • Must conform to Governance and other organizational practices or lose its status. • i.e. HSO possess Board of Directors or Trustees that over see the firm operation. • Can not lobby on behalf or advocate for any political candidate or cause. • Can not operate for any private enterprises/individual economic benefit. See IRS Publication 4220

25. Informal Role/Behavior of the BOD • BOD can be a source of legitimacy-high profile folks. • BOD can provide status to its members. • BOD members can be active or not involved (giving their name to the cause) • BOD can be symbolic. • RLA had 33 members ’92-’94 & 72 ’94-’97 • Balance of Power between CEO and BOD. • Boards can be weak or strong, personalities determine

26. Homework • Bibb County Case • Why do people need help: bad decisions or social consequences/costs (1-2 pages)