1

Managing People in Social Enterprises

2

Outline

• Volunteers• Staff• Boards

3

Are Americans More Likely to Volunteer Than Others?

Source: Curtis, et al.

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

U.S

.

Sw

eden

Netherlands

Norw

ay

Australia

Canada

UK

Ireland

Germ

any

Belgium

Spain

Japan

France

Italy0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Sw

eden

Norw

ay

Australia

Netherlands

U.S

.

Canada

UK

Germ

any

Belgium

Ireland

France

Japan

Italy

Spain

All volunteering Non-religious volunteering

1983 data

4

What Affects Volunteering?

• Country-specific effects• Demographics

– Volunteering increases with•Age•Education•Employment•Rural residence•Religion

5

Why Use Volunteers?

Benefits• Service

delivery at reduced cost

• Contact with community

Costs• Control and

reliability• Supervision

and recruiting expense

• Impact on paid jobs

Ref. J-B 22

6

Designing an EffectiveVolunteer Program (1)

1. Staff buy-in2. Clear job design and expectations

– Job categories (direct assistance, administration, …)

– Meaningful and significant– Part-time equivalent– Fits with overall strategic goals

3. Effective recruitment appeals– Importance of job to clients and community– Importance of job to NPO– Importance of job to volunteer

Ref. J-B 22

7

Designing an EffectiveVolunteer Program (2)

4. Interviewing and matching– Fit– Fitness

5. Training6. Supervision

– Clear performance standards– Performance measurement and

evaluation– Clear chain of command– Firing volunteers?

Ref. J-B 22

8

Volunteer Recruitment

• “Warm body” recruitment– Lots of people, low training and skills– Good for large events– Campaign: mass market to large groups

• Targeted recruitment– Few people, specific skills– Good for long-term volunteer staffing– Campaign: specific, targeted outlets

• Concentric circles recruitment– Steady flow of a few volunteers– Good for smaller organizations– Campaign: Word-of-mouth

Ref. J-B 22

9

Volunteer Attrition

• Even if staff don’t know volunteers’ opportunity cost, volunteers do

• Volunteers consider– Market work value– Next-best volunteer effort– Value of leisure time

Ref. Young & Steinberg

10

Size of the Nonprofit Workforce

12.6

11.5

10.5

9.2

7.87.2

6.2

4.94.94.54.5

3.73.53

2.42.42.21.7

1.30.90.60.4

0

2

4

6

8

10

12

14

Holla

nd

Irela

nd

Belg

ium

Isra

el

USA

Aust

ralia

UK

Fra

nce

Germ

any

Spain

Aust

ria

Arg

enti

na

Japan

Fin

land

Peru

Colo

mbia

Bra

zil

Cze

ch R

epublic

Hungary

Slo

vakia

Rom

ania

Mexic

o

Perc

en

t of

em

plo

yees

Source: Salamon 1999

11

Career Models

• Steady state: one job, one career• Linear: Job changes serve an

upward progression in pay and responsibility

• Spiral: Job changes serve changing interests and sense of self-development

• Transitory: Job changes for the sake of job changes

Source: Driver 1980

12

Nonprofit Staff Motivation

• Reasons for entering NP sector– Commitment to social change: 62%– Commitment to a particular cause:

56%– Hours/location: 32%

• Reasons for taking current job– Interesting, challenging work: 66%– Extend personal skills: 65%– Salary: 19%– Prestige: 14%

Source: Onyx & MacLean

13

Problems: Attraction and Retention

Nonprofit hospital executive:• “Competing with for-profits for

top talent is getting harder…• …the “A” talent turns over

quickly...• …but the “C” talent stays

forever.”

14

The Compressed Salary Structure

Com

pen

sati

on

Ability

Nonprofits

For-profits

“C” talent has perverse incentives

“A” talent has perverse incentives,and is difficult to recruit

15

Hiring and Firing: Laws

• Illegal to make decision:– based on “irrelevant criteria”– based on “inappropriately

subjective” criteria– without making allowances for

disabled applicants

Ref. J-B 23

16

Compensation Factors

• Importance of position to organization

• Importance of person to organization

• Internal equity• External competitiveness

Ref. J-B 23

17

Compensation Schemes

•Flat•Merit•Seniority•Incentive

18

Identifying “A” Talentin the Organization

Importance of positionP

rod

ucti

vit

y o

f em

plo

yee

Talent to keep

Jack

19

The Merits of Merit Pay

• 90% of nonprofit employees consider their contribution to be “above average”

• Merit pay rewards the truly above average employees

40% of nonprofit workers will feel cheated

• Lower morale, lower productivity

20

Seniority Pay

Advantages• Reliable and

objective• Cheap to

administer• Encourages

long-term retention

Disadvantages• Encourages

survival, not excellence

• Inequities grow regarding merit

• External competitiveness can suffer

Ref. J-B 23

21

Incentive Pay

• Skill-based pay• Programs that share cost

savings• Performance bonuses

Ref. J-B 23

22

The functions of an effective Board

• Oversight of organization

– Avoiding abuse and neglect

– Keeping organization on its mission

• Administration– Hiring/firing executive

director– Planning for the

future• Expertise on technical

matters

• Fundraising– Use of personal

resources– Connecting with

community members with resources

– Marketing the organization for potential new givers

• Caring for the organization’s public image– Promoting the

organization– Representing the

organization

23

Standards for Board effectivenessAmerican Red Cross

1. Board adopts bylaws, and governs according to them

2. Board conducts annual performance review of ED

3. Board annually adopts a 3-5 year strategic plan

4. Board reviews and approves annual budget and financial statements

5. Board conducts annual self-evaluation

6. All Board members are also donors

24

Characteristics of effective Boards, according to data

1. Formal structure2. Members know and can

articulate a common vision3. Low conflict with staff4. Engage in strategic planning5. Involved in organization with

respect to time and money

25

The higher standard of board responsibility

• There are many people with needs, and we are called to serve them

• All people need to give, and we are called to serve them, too.

• Our leadership helps our organization connect givers with the needy.

• Understanding the service we provide to donors

– Brings us to full stewardship– Motivates people to truly give

• Makes us not a supplicant, but a partner in their goodness