Policy & Governance

Mohammad Anas Wahaj | 28 feb 2015

According to National Council of Nonprofits, 'Nonprofit board members are the fiduciaries who steer the organization towards a sustainable future by adopting sound governance and financial management policies, and ensuring adequate resources. The board of directors have three primary legal duties known as the "duty of care", "duty of loyalty", and "duty of obedience".' To make changes to various aspects of the organization and take decisive actions is a challenging task and requires experienced, capable and effective individuals to be members of the board. Professor Eugene Fram of Rochester Institute of Technology, defines three main groups of board members who are part of the decision making process - (1) Directors who want change (2) Directors opposed to change (3) 'Process Directors', individuals who are uncomfortable with major decisions and always want more data or information before voting. The third type of directors, although well-intentioned individuals, can sometime become obstacles in the board's decisiveness. According to Prof. Fram, 'The board has to be careful that these directors don't allow the board to continually examine one angle after another until they lose sight of the board's main job. They can keep action in limbo indefinitely!' Board chair have to optimize the board processes and don't let them go out of hand, as it may result in loss of talented volunteers. Read on...

Huffington Post: How Can Nonprofit Boards Overcome the Inertia of Certain Directors?
Author: Eugene Fram

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Mohammad Anas Wahaj | 30 nov 2014

Nonprofit boards play an important role in providing direction and guidance to the organization by developing policies and plans to achieve their goals. They also bring accountability and oversight to the organization. Eugene Fram, Professor Emeritus at Rochester Institute of Technology, provides outcomes of one of the sessions organized by National Association of Corporate Directors (NACD) focusing on board 'challenges and opportunities expected in the next five to seven years.' According to Prof. Fram, the results of the session, although for for-profit boards, can also be applied to help nonprofit boards focus on culture, leadership and achieve strategic success: (1) Inherent in the board-management relationship is an information imbalance. (2) With an expanding board agenda, process and expectation settings are critical. (3) An empowered lead director... can help mitigate the risk of information imbalance. ... and can break down some of the roadblocks that may develop between the management and directors. (4) Ultimately, the board has to make winning decisions that are informed by data. (5) The board should identify which stakeholders are critical to the strategic plan and target communications to those groups. Read on...

Huffington Post: Strong Culture and Leadership Critical for Nonprofit Board Strategic Success
Author: Eugene Fram

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Mohammad Anas Wahaj | 25 jul 2014

The recent survey of 150 US nonprofit foundations and endowments found that more nonprofits are prioritizing the implementation of effective risk management strategies to preserve the longevity of their organizations and missions. Main highlights of the survey are - (46%) Place greater value on positive risk-adjusted returns than on overall portfolio returns when evaluating investment success; (44%) Not confident that sufficient time is being spent in assessing the impact of potential market shocks on the ability to spend/achieve mission; (49%) Lack confidence that the investment committee has identified all key portfolio risks. According to Mary Jane Bobyock, Director of Nonprofit Advisory Team at SEI, '48 percent of nonprofits are currently using or considering the use of an outsourcing provider to help manage the portfolio.' Read on...

MarketWatch: SEI Poll - Nonprofits Focus On Risk Management In 2014
Author: NA

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Mohammad Anas Wahaj | 30 jun 2014

Businesspeople have skills and expertise that can benefit nonprofits for better operations and governance. On the other hand by joining nonprofits and their boards, business executives not only provide value to themselves but also their employers. According to research by City of London, there are increased skills among volunteer leaders in categories including team building, negotiating, problem solving and financial knowledge. Moreover research by Deloitte shows that among socially engaged employers, 87% of employees had an improved perception of their company and greater loyalty. Nick Hurd, UK Minister for Civil Society, points out that potential trustees should look for opportunities to align board service 'with a social issue they care about.' Read on...

NonProfit Quarterly: The Skills Businesspeople Gain on Nonprofit Boards
Author: Eileen Cunniffe

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Mohammad Anas Wahaj | 27 may 2014

The purpose of nonprofits is to utilize the public donations and contributions in the most efficient manner for their stated causes and in the best interest of the communities they intend to serve. But sometimes this is far from true. According to the Charity Navigator website, 'Many of the charities with CEO's making more than US$ 250000 a year use less than 60 percent on average of their revenue for their stated goals, this means that these organizations are using at least 40 percent of donations for administrative and fundraising costs which includes very lucrative salary packages for Executives.' Some of the negative issues regarding nonprofits that hinder their proper functioning and achieve their social causes include - Greed and misrepresentation at the top; Bureaucratic functioning particularly for large nonprofits; Government regulations, restrictions and bureaucratic hurdles; Multiple regulating agencies. Recent report by Connecticut Institute for 21st Century states, 'The contracting process is difficult at best, it is inconsistent across agencies, time consuming and inherently unfair to nonprofit service providers. This has led to mistrust between the nonprofit community and the state and a nonprofit community resistant to systemic change.' Brookings Institute study justifies the mistrust that people have on charities & nonprofits - 'Just 11 percent of the public think that nonprofits are spending their money wisely and only 19 percent feel that they do a good job of running their programs effectively.' Smart and streamlined regulations that put a cap on executive compensation, limit administrative costs, improve efficiency and innovation, bring transparency and honesty and at the same time protect the whistle-blowers who report wrongdoings, will ensure proper functioning and best possible use of public money by NGOs. Moreover a rating system can be evolved that should be based on the parameters that indicate whether the organization is meeting its stated goals or not. Read on...

OpEd News: For Profit - Why the Non Profit System can't seem to get it right
Author: Cory V. Clark

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Mohammad Anas Wahaj | 27 jan 2014

Harvard University's Center for Nonprofits estimates that US-based nonprofit organizations have about US$ 40 billion fraud losses every year. While a Washington Post analysis of filings from 2008 to 2012 found that top 20 nonprofit organizations have a combined loss of more than half-billion dollars due to unauthorized uses of funds. Professor Eugene Fram of Rochester Institute of Technology have some suggestions for the boards of charitables - Audit committee to review annual audits; Supervise executive compensation & other financial activities; Annual review of conflict of interest policies; Honesty background of new hires; Interactions with external auditors without the presence of management. He also suggest a list of questions that should be asked with the auditors to ascertain any financial wrongdoings and ensure fraud prevention. Alert, attentive and proactive boards can create environment of honesty and deter happenings of fraud. Read on...

Huffington Post: Nonprofit Fraud Robs Charities of Substantial Dollars
Author: Eugene Fram

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Mohammad Anas Wahaj | 21 dec 2013

Tackling water scarcity and carbon emissions are important issues facing the world. There is continuous debate regarding the methods of energy and power generation and their effects that lead to global warming and climate change. According to recent report by US Department of Energy (DoE), some renewable and clean energy sources use more water then fossil fuel-powered plants. About 90% of power in US is generated by fossil fuel and nuclear power plants and they together use half of the total water consumed by US. The report mentions water consumption by each source per megawatt hour of electricity generation - Hydroelectric (15000 to 68000 litres); Concentrating Solar (3000 litres); Nuclear (2650 litres); Coal (1900 litres); Natural Gas (750 litres); Biofuels use water indirectly to irrigate biofuel crops; Wind farms and photovoltaic solar plants almost consume no water. If US has to meet the target of reducing carbon emissions by 80% by 2050, it has to rely heavily on renewable and clean energy sources which on the other hand also create water consumption challenges. John Rogers of Union of Concerned Scientists (UCS) says that water scarcity shoud be taken into account along with emissions when planning new power sources. Read on...

New Scientist: Thirsty clean energy may add to water stressed world
Author: Sara Reardon

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Mohammad Anas Wahaj | 08 dec 2013

There is growing consensus and concern across all the nations rich or poor, developed or developing, that inequality among populations is growing and it is a major threat to the global economy. The latest World Economic Forum report mentions widening income disparities as one of the top trends facing the world in 2014. According to Helene D. Gayle, CEO of CARE USA, the reasons for growing inequality in the world include - lack of access to quality primary and secondary education in some countries; public health problems, like chronic diseases, that exacerbate income gaps; social inequalities like gender discrimination. Recent Pew Research Center survey of general populations around the globe found that in 31 out of 39 nations, 50% or more of those surveyed said that inequality is a very big problem in their country. Read on...

Pew Research Center: The global consensus: Inequality is a major problem
Author: Richard Wike

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Mohammad Anas Wahaj | 08 dec 2013

The latest report released by World Economic Forum, 'Outlook on the Global Agenda 2014', was based on the survey of 1592 leaders from 112 countries that included people from business (43%), academia (21%), civil society (12%), government (9%), other organizations (8%) and international organizations (7%). The study identifies the following top 10 trends facing the world in 2014 - (1) Rising societal tensions in the Middle East and North Africa; (2) Widening income disparities; (3) Persistent structural unemployment; (4) Intensifying cyber threats; (5) Inaction on climate change; (6) Diminishing confidence in economic policies; (7) A lack of values in leadership; (8) The expanding middle class in Asia; (9) The growing importance of megacities; (10) The rapid spread of information online. Read on...

World Economic Forum: Outlook on the Global Aganda for 2014 - Top 10 Trends of 2014
Author: NA

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Mohammad Anas Wahaj | 02 dec 2013

New perspectives and dynamics are being created in the socio-economic environment of the countries due to the rising phenomenon of non-charitable social enterprises. According to a legal expert from UK, charities should consider partnerships and collaborations with social businesses and should view them working on similar agendas. This would create a potent competitive front to counterbalance the powerful business oligopolies that seem to dominate the markets. He mentions that a proper legal definition of a social business with appropriate 'asset locks' in the articles of association are needed for building this partnership with charities. Read on...

Third Sector: Charities 'should see non-charitable social enterprises as comrades-in-arms'
Author: Kate Youde

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