May this find you well....
A colleague consulting firm of ours (Brockman, Coats and Gedelian in Akron, Ohio) has sent the following and asked that we alert our clients to the HR implications embedded in the Federal Recovery Act provisions. We are passing this along in case you are unaware of these implications.
The Recovery Act's Impact on HR
On Tuesday, President Obama signed into law the American Recovery and Reinvestment Act (the Recovery Act). This act will have immediate and possibly long term impact on businesses and their HR functions. One of the areas addressed is the extension of unemployment benefits. The current program that offers an additional seven weeks of unemployment benefits has been extended by nine months.
In addition, the Recovery Act includes temporary changes to the COBRA law. The Act includes a program that offers employees that were involuntarily terminated between September 1, 2008 and December 31, 2009 assistance in paying their benefit premiums. Qualified individuals will receive a 65% subsidy for their COBRA premiums. Employers will pay for this subsidy initially and then be reimbursed through a credit against their payroll taxes. This assistance will be available for the first nine months of the usual 18 month benefit.
These changes will impose a considerable administrative burden. Employers and their COBRA administrators will need to implement significant changes in a short timeframe. The following are some of the administrative processes that will have to be reviewed for potential change:
At this point, the subsidy provisions apply only to terminations through December 31, 2009. After that date the Notices and tracking will have to be changed again, to go back to previous rules.
About the Author
Jim Coats is a manager in the firm's human resources consulting practice, under its affiliate, BCG Resources, Inc. His specialized expertise gives our clients customized, cost-effective solutions to human resource-related projects and issues. With over 13 years of related experience, Jim's extensive HR background includes work as an HR manager in both the manufacturing and construction industries. Jim holds the SPHR (Senior Professional in Human Resources) certification and earned a BSBA in Management from The University of Akron. He is an active member of the national and local chapters of the Society for Human Resources Management (SHRM) and is chairman of the Governmental Affairs Committee for Akron SHRM and is also a member of the Business Development Committee with the Medina Chamber.
Strategic Alliances:
Managing Decision Making Around an
Increasingly Likely Strategic Option for Nonprofits
4-Part Webinar Series
We are very pleased to announce that we will be conducting a four-part webinar series on Strategic Alliances for the American Network of Community Options and Resources (ANCOR). ANCOR is a nonprofit trade association representing and advocating on behalf of the more than 800 private providers of services and supports for nearly 500,000 Americans with disabilities that employ over 400,000 direct support staff in 49 states and Washington, D.C.
Dates: March 5, March 19, April 2, April 16
Time: 1:00 pm - 2:30pm Eastern
Presenters: Jane Arsenault, MBA, Principal, & Anne Yurasek, MBA, Principal, FIO Partners, LLC
Intended audience: Executive Directors, Emerging Leaders, and other interested agency staff
This four session course based on a case study will take decision makers through a strategic management framework that will examine the need for a variety of alliance models as tools to cope with an increasingly hostile environment. As leadership choices within the case unfold, the course will explore the options which are right for an organization and clearly define the roles and responsibilities of all members of nonprofit board and staff in planning and implementing an alliance. The FIO Partners Strategic Management framework provides a clear and useful conceptual framework for managing a nonprofit agency that can respond to increased accountability and rapid change. The model defines the four key tasks as: (1) consensus on vision, mission, values and agreement on strategic management tasks; (2) designing or redesigning the organization’s core; (3) safeguarding and supporting the core; and, (4) improving the core. As organization leadership moves through the steps of framing a plan, opportunities to work with other organizations will arise. Nonprofit leaders will learn to use collaboration as a strategic tool to enhance, rather than undermine, mission. This course will explore the various options for collaboration and consolidation and will provide insight into issues that may arise as a member of an alliance. The course will also include an online learning community throughout the eight weeks to encourage knowledge exchange in between webinar sessions.
If you are interested in pricing and registration, click here. If you would like to learn more about FIO Partners Strategic Management Framework, check out this article (free with registration).
This is the first Ask FIO column, where FIO Partners responds to YOUR questions - it comes from an organization in California that is considering a merger.
"First, our potential merger partners have been told that a merger may reopen their 501c3 to being re-evaluated by the IRS. Second, they are afraid that they may be held responsible for any unknown future liabilities although we have declared all existing liabilities which we are committed to resolving before the asset transfer. I'm unsure how to proceed on these two issues. Any insights you could offer would be much appreciated."
Both of the issues you name are legitimate concerns…that is, they are not far fetched or impossible events. That said, risk is part of life and risk management is often the best we can do. Re: 501c3 status…if the missions of the two organizations are close, this shouldn't be a problem and a review is improbable. If such a review did occur, your merger partner would be vulnerable if some part of their or your activities is not within the scope of the IRS definition for 501c3 status. Is there cause for concern? Have your auditors or theirs ever flagged this as a concern? At worst, that part of the activities would be viewed as UBIT...unrelated business income and would become taxable. To my knowledge, the IRS is not known for pulling 501c3 status outright unless there is flagrant abuse.
Re: future liabilities: the largest areas of potential future liabilities are likely to be personnel and personal injury/negligence claims, with professional liability issues a distant third. I assume you have insurance…your current coverage should extend to claims filed after the merger, if the events occurred during the time when the policy was active. Check with your insurer(s) to make sure this is the case. Your merger partner should be looking at your turnover rate, employee grievances filed, firings in the last few years, any charges of human rights violations, etc. If there are no such incidents, then the possibility of something like that coming up is greatly reduced. Similarly with negligence, personal injury, or professional liability incidents. You should be obligated to disclose any such incidents that are not resolved as well as any that have occurred so your partner can determine if you had a habit of acting irresponsibly. Again, no such incidents, and the risk of their having to deal with something is greatly reduced.
Essentially, there isn't a way for them to entirely eliminate any risk, but you should be able to build a base of information that allows them to clearly determine how much risk they actually have. In the end, how risk aversive they are will determine what they do.
I hope that is helpful.
Jane
Got a question? If you have a question that you would like answered by FIO - just send it over to info@ fiopartners.com!
As the administration of Barack Obama begins to move forward, we are hopeful - along with so many other Americans across the country. There is no way for us to know what lies ahead for our nation, and more specifically, for the nonprofit sector; but there have already been some indications that the sector may be headed for some significant changes.
But is it all gloom and doom?
No, it is not. We are seeing an interest…an inclination…a sense of hopefulness - that if the current situation is as bad as it is - perhaps this is a time to throw caution to the wind, admit that the old way of working doesn't work, and change. Not small changes - big changes. Organizations will be asked to shift their thinking - from competition to cooperation, from operating in a silo to the expansion of partnerships across a community, from leading to win to leading to influence and shape…a new paradigm. We see nonprofits banding together to make better use of their economic purchasing power, to tackle significant community issues in a community or region, to redefine continuums of care for vulnerable populations. Each of us can do a part to contribute to this new way of thinking - this new paradigm of connectedness.
It's a new day - and we are hopeful. Are you?
Photo Credit: PrinceRoy
In planning for the coming year, we discussed what we see as the two
major trends that will drive the sector - retrenchment and
consolidation. For the first time in the history of the nonprofit
sector, we believe that the sector will be forced to contract and that
organizations, of all sizes and across all industries, will be forced
to make difficult decisions about shrinking and/or giving up autonomy
. What does this mean? This means that healthy group process and
evidence-based decision-making are both crucial. In difficult times,
our ability to successfully communicate with our key stakeholders can
go out the window - when, in fact, that communication is critical. It
also means tremendous change for your clients, your staff, your board
members - figuring out how to lead through challenging changes in a
proactive way is another critical success factor. We will be
developing a series of blog entries and digital articles to explore
these challenges and to provide you practical, useful advice. We would
also like to hear from you - what information would be most helpful to
you? What are you facing? What topics are you most interested in?
Please post your comments here, connect with us on LinkedIn or Twitter,
send us an email - we want to hear from you.
So bring on 2009! You are not alone in navigating these times…we are here to help. Reach out and let us know how we can support you.
Photo Credit: Jin T
Contributed by Anne
What a month it has been…for everyone. The economic downturn has many of our clients anxious, rattled, and concerned - and rightly so. This post is inspired by this week's Carnival of Nonprofit Consultants, being hosted by Michelle Murrain, over at Zen and the Art of Technology, on Monday, November, 3rd. She asks: Is the economy changing the way you work, or the way you think about your work? In what ways?
In terms of how we think about our work, there is a sense of urgency and priority that we, as consultants, are delivering high-value, high impact services. This is true in good times as well, but even more so right now.
For all of our clients, there is a choice around how to spend funds -- choosing a third party consultant to support a process or to facilitate a session - or even deliver a training - is a significant decision, even for larger agencies. Given the downturn, this has only deepened our focus and attention on delivering value. What does mean? It means that we will work more efficiently by integrating the use of on-line project management software (we use Basecamp) to continue conversations in between in-person meetings. It means we will ask for feedback on a consistent basis on the progress of an engagement or the effectiveness of a training session. It means that we will do everything in our power to communicate effectively and frequently to avoid missteps or miscommunication that will incur additional cost or confusion. It means that we are offering clients menus of services to select from - realizing that not every agency has the funds to invest in a significant 3-4 month strategic planning process, but a shorter, more nimble process will do the trick. We realize that and support our clients through prioritizing the sets of possible activities - and help them choose the most helpful, most informative, or most impactful.
The economic uncertainty means that we are working everyday with clients to teach them to manage their organizations through uncertain times. From retrenchment planning to building networks with peer agencies, we are helping organizations see that each one of them has a future that they can CHOOSE to define. Instead of running amok and being overwhelmed, we are helping our clients to take stock and to act decisively. It is our hope that through hiring FIO Partners to support them in some way, our clients will ride through the downturn and come out better and stronger on the other side.
In the meantime, it is the mission of FIO Partners to provide each of our clients guidance and support to make them healthier organizations and more able to enact the change they wish to see in the world.
The current edition of the Carnival of Nonprofit Consultants is being hosted by Sherri Garrity at Ready, Aim, Inspire and the theme is "What does it take to be a great leader?". We are very happy to be included in this roundup of great bloggers from around the nonprofit blogosphere. The roundup includes posts written by: Sam Davidson at CoolPeopleCare, Jason Dick at A Small Change, Katya Andresen at Robin Hood Marketing, and Heather Carpenter at Nonprofit Leadership 601. Check them out!
"May you live in interesting times."
Let me start by giving you a sense of three places where our firm has worked with several organizations in a single community. Each has its own distinct and quite exceptional set of challenges and the nonprofit, foundation and government managers in these places do so in particularly demanding contexts.
Rhode Island is our home base and its state government is facing the worst deficit in its history…the state is short $500 million of a $6 billion budget and that number is growing every day. The "Governor's Budget" published in April offered nothing but draconian cuts to social service spending and threatened to de-stabilize several components of the sector. The battle is on to pit one group of vulnerable people against another in a resource war like no other...the elderly in nursing homes, the developmentally disabled, the mentally ill, the children of illegal immigrants, etc. The agencies that serve these constituents are facing losses of 30-35% due to the combination of increased costs of energy and health insurance coupled with revenue cuts of 20-25%...all of which will come due in the next 18 month period. Our Rhode Island work is about retrenchment, consolidation and alliances, about influencing public policy and about managing in a crisis environment.
We have worked in New Orleans for over seven years, watching with horror when much of what was accomplished before Katrina seemed to wash away over night and have also watched with awe at what has returned. Here it can be clearly said that among the unsung heroes of the recovery of New Orleans are the nonprofit managers, both service providers and foundations, who have effectively restructured their services and investments to assist in the reconstruction of an entire city, of an entire society. However, the challenges keep coming: the withdrawal of national funds that flowed into the city since Katrina has begun. The sector will need to continue its reinvention to adjust to a new city with different demographics in an economy that is affected by the housing crisis and the uncertainty of the national economy.
Calgary, has, in the words of some, experienced its own kind of disaster. Clearly, the challenge for nonprofit managers here is keeping a hold on its workforce. The upward pressure on prices of housing and energy coupled with the explosive growth of the City and the inability of immigration to keep up with workforce needs has caught the nonprofit sector in a financial squeeze that undermines the ability of many organizations to provide continuity of care and to maintain the quality of what they do. Most of health and human services are based upon the quality of the relationship between the person at the boundary and the person receiving help...rapid flux inevitably undermines effectiveness. These are the contexts for much of our work.
There is a reason that the Chinese say that "May you live in interesting times." is a kind of curse. Clearly the sector's managers in each of these locations understand the truth in that. It is hard to interact with people who have only known how to build and expand, whose entire careers have been about expanding access, adding services, pushing out to wider geographic areas, inventing new ways to help, building teams of staff that have taken years to assemble and refine, when your message is about undoing, pulling back, shrinking, eliminating services, crafting a smaller, tighter, more nimble organization, letting people go. Too often the people who are adversely affected are not just employees, not just colleagues, but have, through a career of shared proximity, become friends. This is just painful to watch.
Of late, however, we have begun to observe an emerging skill set that nonprofit leaders, in particular, are exhibiting to adapt to these challenges and sustain and allow their organizations to prosper through periods of rapid transformation. I'd like to share with you six skills that seem to be making a profound difference for some agencies.
1. The ability to not confuse the ends with the means
This boils down to maintaining utter and profound commitment to core values, to the essence of what you do, while expressing complete flexibility in how you do it.
2. Knowing when to fold
Faced with significant cuts in one program, several agencies have had to decide whether to give up the program or support it with revenue taken from elsewhere in the organization. Faced with the potential of doing nothing well, we have watched one leader after another make the tough call to shut down programs. Facing up to the bitter truth, and helping others to face the bitter truth, is part of this skill set around knowing when to walk away.
3. Knowing when and how to fight
We have logged several examples of where groups of organizations have found their voice and used their collective power to influence how change unfolds or to postpone or ameliorate the change. This has involved quite delicate and artful negotiation but has also, at times, involved a parallel strategy of demonstrations and/or legal action. There is a time to hang tough and the leaders we see are astute at understanding the timing and circumstance of resistance.
4. The willingness to make tough calls, to place task above relationship in a crisis
Dealing with crisis requires giving orders that may negatively impact employees. It may require decisions to lay off substantial numbers of staff or major realignment of roles and responsibilities. The leaders we know don't quail at the thought of ordering major change.
5. Knowing how to shrink
There are basically two approaches to shrinking an organization. One creates a smaller organization that is exactly the same as the larger previous entity. The other tries to identify the key elements of the organization that are likely to be most adaptable or most capable under conditions of uncertainty. We call this skill set retrenchment planning and it involves the ability to make decisions about who will go and who will stay based not upon something easy like seniority, but on careful thought about who, on the other of the cutbacks, will be best positioned to rebuild the organization. Those decisions can be about identifying the core group of people with the necessary competencies, or the core programs that are most likely to recover quickly, or the core set of values that must continue to be expressed.
6. Playing well with others and the ability to make new friends quickly Networks and collaborative models are emerging in all three locations. The ability to negotiate collaborative relationships and to recognize the need to develop relationships with CEO's who may be viewed as former competitors is our last major skill. And it may be the most important. In two of our three locations there is enormous pressure to consolidate the sector. The skill of positioning your organization within these emerging system changes may be the most important survival skill of all.
In our cynical moments, we think of nonprofit organizations as dependent entities that cannot exist without funder investment. To get that investment in any quantity, nonprofits often appear to be sheep-like and compliant, followers and not leaders. And certainly in all these contexts we see organizations who simply, like deer caught in a headlight, are standing stock still and waiting to be rescued or told what do to. In thinking about what all of these organization leaders have in common and what that list of skills actually imply, I have come to the conclusion that it is largely a matter of locus of control. Nonprofit leaders who see the destiny of their organizations as something separate and apart and clearly in their own hands are far more likely to exhibit these skill sets and to navigate effectively in these very troubled waters. It is certainly our privilege to learn from them and to support them when we can.
Photo Credit: fdecomite
We are pleased to be hosting this week's Carnival of Nonprofit Consultants. The theme is the evolution of nonprofit organizations.
To start off, we would like to share with you FIO Partners perspective on the importance of stage of development in nonprofit capacity building. Understanding the stage of development of our clients is one of the pillars of our practice and integral to our firm philosophy around how to help organizations implement change - let us know what you think!
Next, many of you may be considering at what point in your evolution should your organization engage in social media. Beth Kanter recently posted her thoughts and materials from a one-day social media workshop she delivered for a group of Arts organizations in Philadelphia which you may find helpful. Beth is also one of the leaders of a collaborative effort to create a curriculum for organizations who are considering social media-- called WeAreMedia. A great place to start is: Module 1:Why Should Your Nonprofit Embrace Social Media? (Or Not?). Beth Dunn's post on your option to not engage in social media -- a null hypothesis -- synchs with the ROI portion of WeAreMedia. Over at the Philanthropy Journal, Peter Tavernise points out the importance of social networking with intention, noting the success of two organizations - Youthnoise.org and Teach Without Borders.
For more-established organizations who would like to reclaim a bit of their start-up passion, Kivi suggests getting clear about your "founding story". Alternatively, if you are just getting started, and looking to upgrade your IT infrastructure, NTEN has a helpful post, "How to find good IT help for your nonprofit".
As you consider the evolution of your own organization, do you have a roadmap? A roadmap for change or for growth? A process to explore new ideas and implement them into your practice? How do ensure that your organization keeps evolving -- or doesn't get stuck? Post your thoughts here...
[The next edition of the Carnival of Nonprofit Consultants will be hosted on October 1 by Ready, Aim, Inspire and the theme will be "what it takes to be a great leader."]
