I was at breakfast last week with the founding executive director of a nonprofit and he made an off-hand, joking comment about how he supposed that that meant the organization had “Founder’s Syndrome.” It did make it sound like a disease, like Carpal Tunnel Syndrome. This isn’t the first time that I’ve heard this annoyance from a founder about this term that is used so frequently. Is it really fair, or even accurate, to label all founders with a pejorative term? It doesn’t sound very appreciative – like, “Thanks for having the guts and moxie to start this organization.” Most founders who I know didn’t fully realize what they were getting into when they started the nonprofit. Most start nonprofits because they feel deeply about the program and mission. They didn’t anticipate needing to fundraise, recruit and develop a board, manage staff, and make dozens of decisions every day. They did what they needed to – and now they have this Syndrome.
I won’t deny that there are organizational development issues that frequently occur in organizations with a strong founder/leader that impact decision-making, control, knowledge, and direction. When we call it a Syndrome, though, it sounds incurable. I think it needs a better identity as a leadership problem that can be corrected. I also take issue with the description of Founder’s Syndrome since I’ve worked with many nonprofits with all the same poor practices that were led by a second, third, or fourth director. Whoever the director is, these characteristics describe a common leadership problem that becomes an obstacle to effectively sharing responsibility, authority, and building a strong organization.
Does the founder, or strong leader, have to leave the organization to “cure” the Syndrome? I hope not, and I have seen plenty of examples of founder/leaders taking part in an organizational transition. It takes commitment, effort, and lots of trust – and requires that the board and staff respect the leader for what they have done in the past and what they are capable of in the future.
I’ve had several conversations lately with directors and board members of nonprofits about offering benefits to employees. The question often starts as a budget question - can they afford it? After a while, though, we end up in a discussion about organizational culture and values. Nonprofits often have stated values - a set of guiding principles that have been crafted during strategic planning with the board, staff and other constituents. Our goal and intention is live out our values in every aspect of the organization. Here are some values that are frequently embraced by nonprofits: Respect, Integrity, Cooperation, Teamwork, Dignity. These values statements and employee benefit questions can collide when nonprofits make financial decisions and feel that they have to choose between budgets for employee benefits and wages or budgets for added programs. But what about those values? If respect, teamwork, and mutual support are core values, what about living wages jobs and employee benefits?
How can nonprofits justify spending 70% of the budget on payroll?
I’ve talked to three nonprofits in the last month that are working their way through this question – with difficulty. One of the difficulties is caused by the ambivalence that some staff and board members may have about compensation in general, particularly in young or small organizations. I was recently asked by a new employee of a nonprofit “how can nonprofits justify spending 70% of the budget on payroll?” I asked him how he thought they should spend their budget and he answered, of course, “the clients”. He needed a quick lesson in the financial basics of how nonprofit social service agencies provide their services. This same naiveté leads boards to convince themselves that employee pay and benefits are a less worthy budget choice than other priorities. Every nonprofit with paid staff has to face this question at some time.
Of the three nonprofits I’ve talked to about benefits recently, two of them have been operating for less than three years and are navigating a familiar organizational transition in staff and structure. The third nonprofit is a long-established organization, with social justice as a core value, that’s had employee benefits on the priority list for years. They’re having the hardest time with the benefits question because it has become a critical values clash that’s been avoided for years – and it’s getting worse as time goes by without facing their responsibility to “walk the talk”. So look at your values statements again and make sure that you haven’t been ducking your responsibilities.
To learn more about employee compensation structure and employee benefits in Minnesota, see the Minnesota Council of Nonprofits Salary Guide. The Guide reports overall benefit trends by filed of service, budget size and location, and specific information detailed by benefit categories and positions.
