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Charitable organizations now running more like a business

Veterans of the top management circle, Alan Green and Donald Wilson Jr. offer quality strategy to the philanthropic side of business and organizations.

By Teresa M. Pelham

For two decades, Alan Green developed a national reputation on management issues in the non-profit sector before founding his own management consulting firm. Donald Wilson, who began his career at Hartford Steam Boiler in 1962, concluded a 32-year career with the company with his retirement as executive vice president. Less than a year ago, the two veteran executives combined forces, bringing to a new management advisory venture more than 50 years of combined experience at high levels of corporate and non-profit management. Recently, both executives spoke with the Hartford Business Journal about topics they know inside and out, including strategic planning, philanthropic planning and organizational development.

Hartford Business Journal: Why have many organizations made strategic planning a top priority?
Green: One of the key developments occurring throughout many charitable organizations is the requirement to run the organization more like a business. That's being required by funders and it's becoming more of a requirement by the governing body. The sophistication of individuals who are being hired these days to lead organizations are focusing more on the importance of running charitable organizations in particular as a business. Another issue that comes up is accountability. You will find this in both for-profit and not-for-profit organizations. The accountability to stock- holders, particularly as it applies to charitable giving, as well as to funders, challenges the requirement of organizations to function this way, with goals, objectives and a focus of what the organization is doing.

What are companies doing differently today in terms of philanthropic planning?
Green: In large part we're seeing a company's philanthropy- whether it be in the area of donating money or whether it be the use of volunteer efforts and in- kind contributions- with more of a focus of those efforts being in line with the business of the organization.
Wilson: Companies are much more interested in measurable outcomes of the organizations to which they give. Also, they're more apt to do matching funds.

What changes are you seeing companies make with regard to their boards of directors?
Wilson: In the non-profit sector, boards are becoming more sophisticated. They're looking for a broader, more diverse board.
Green: Because of what I mentioned earlier, there are specific committees of the board that take on these responsibilities and provide a higher level of oversight than you would have seen in the past. We just got off the phone with a not-for-profit and the discussion was about a funder who had an interest in having a senior level employee serve on the board of directors. It's at several different levels that businesses participate. It's not just the board of directors of an organization, but looking at how they can have an impact from a governance perspective on the organization they're seeking to support.

Do you see American businesses ever fully adopting those of Japanese business culture, where it's more of a lateral structure?
Wilson: There is a major trend towards what's called a flatter organization, which is more like the Japanese. It's still an American hierarchical business, but they're going towards having less layers of middle management, and therefore a broader span of control under one individual.

What commonalties do small non- profits and large organizations share in terms of management challenges?
Wilson: The management challenges are very similar. The modern, new, growing non-profit has got to have a sophisticated director who is a business manager looking at things like strategic plans and [the] organizations' structure and efficiencies just like a corporation does. The differences come in when you structure the boards.

How is managing an organization different considering today's trend of shorter length of employment for many workers?
Wilson: You have to learn to deal with turnover. At the moment, in Greater Hartford at least, the not-for-profit world is very short on talent of development directors, meaning people who are in charge of raising funds for the organization. They are in demand because some funders cut back and because those folks move around fairly frequently and you have to learn how to manage that change. This means setting up procedures and systems to allow it not to be so reliant on the personality of the individual.
Green: One of the key issues organizations have to think of is having a clear understanding of what the focus of the organizations is, what the goals are and what objectives they need to have accomplished over a period of time. By doing so, you're matching talents to the organization to make those goals successful. We're now working on a situation with an organization where it looks like they're going to lose one or two key individuals. The question is how do we look at the long-term goals of the organization to make the appropriate fit long-term when and if those individuals might leave. In large part, it's looking at institutional goals and objectives and the kinds of requirements you need to reach them, rather than looking at individuals to see if there's a personality fit.

This article appeared in the Hartford Business Journal on May 22, 2000