A Secret Cause of Your Nonprofit Diversity Problem

 

If you’re a nonprofit leader in 2020, you’re probably taking another look at the org’s diversity, equity, and inclusion efforts. It might be tempting to just add a diversity goal to your next strategic plan and call it a day – but that doesn’t address the real problem. My guest Reid Zimmerman sat down with me to discuss one of the secret causes for the lack of diversity in nonprofits.

Related: [PODCAST] Nonprofit Time Machine

 

Transcript

Jess (host):

If you run a nonprofit right now, then you are likely taking a new look at your work around diversity, equity, and inclusion. It’s pretty tempting to add a diversity goal to your strategic plan for 2021. I mean, that’s the right thing to do, isn’t it? Well, my guest, Reid Zimmerman says, “Not so fast.” Stay tuned to find out why.

Welcome to Charity Therapy, a podcast from Birken Law about building better nonprofits. I’m your host, Jess Birken.

Reid (Guest):

Well, hi, I’m Reid Zimmerman. I’ve been a member of the nonprofit community here in Minnesota in a variety of ways and means for probably close to 40 years, both as an executive director, a board member, consultant, and teacher. I love working in the sector and I’m glad to be with you, Jess.

Jess (host):

Thank you. I’m so glad that you’re here. And you were my teacher, which was pretty great when I did my master’s in nonprofit management. You taught, I think it was research methods, to my cohort at Hamlin and I just fell in love with you and have tried to stay in your orbit ever since. So I’m glad you’re here.

Reid (Guest):

Oh, thank you. I appreciate that. I really enjoyed my time teaching. Jim Scheibel, former mayor of St. Paul, gave me the title of pracacademic.

Jess (host):

Yeah.

Reid (Guest):

And I’ve liked that because it melds the two things that I like doing most, both teaching and learning and researching the sector and being a part of it as a practicing member of an organization.

Jess (host):

Yeah, very cool. I love Jim too. He’s another fave. Aw, grad school was so good. I just want to go to school again now. Well, all right. So since I can’t go to school anymore, because I’ve tapped out all of my student loan opportunities in that realm…

Reid (Guest):

Maybe we’ll get a candidate in office in Washington who’ll take care of those for you.

Jess (host):

There you go. That would be awesome. You should definitely get loan forgiveness if you work with nonprofits.

Reid (Guest):

I agree.

Jess (host):

Because it’s not a get rich quick scheme.

Reid (Guest):

That’s for sure.

Jess (host):

It’s a labor of love. And speaking of labors of love, I wanted to talk with you about…you had shared an interesting story with me that led to a discussion about diversity and org culture and I wanted to see if you could tell this case study about the executive director who got let go. And I think you know which story I mean, so I’m going to let you go ahead.

Reid (Guest):

Well, I’ve got a lot of stories. This one was more recent. It’s an organization that I had been involved with in a number of ways over several decades and was doing quite well. After a search, the organization came up with an executive director and the person was doing what appeared, in all outside purposes, to be a really great job. Strategic planning was moving forward, new things were happening, different bodies were coming into the organization in different positions. Couple of people that had been around for a while and were set in their ways and not contributing well unfortunately had to be let go and it seemed like the organization was doing well fiscally and from a community rapport, everything was going well and all of a sudden, out of the clear blue, or what seemed to me to be the clear blue, the executive was let go by the board of directors. No explanation, given no reasons, and there was no fiscal irresponsibility of major sort.

Jess (host):

Usually when someone’s let go suddenly, you’re looking for what happened there?

Reid (Guest):

Right. What’s going on? And were there laws broken? Were there problems?

Jess (host):

Major gift fail or something.

Reid (Guest):

Exactly, yeah. And nothing appeared on the radar or that anybody affiliated with the organization seemed to know about. While, I still don’t know exactly what transpired or what the conversations were and while I suspect a board member or two got their… in a bun so to speak…

Jess (host):

Sure they did.

Reid (Guest):

And there were some personality issues, it seems like the organization had a set of values that were around fiscal scarcity and fiscal responsibility. And the new executive took some liberties to advance some salaries and to increase spending in a few areas that probably needed to be, but may have appeared to the staff and to the stakeholders to be too much too soon.

Jess (host):

We don’t do that here.

Reid (Guest):

Too quick and too many dollars. And it appears that what we’ve got is a values clash. One part of the organization being very careful about every nickel and dime that is spent. A new person coming in from outside the community wanting to revamp and revise and bring the community marketing, the image of the organization up a notch or two.

Jess (host):

And to be fair, they may have had a board mandate to do just that. The board may have hired them saying, “We need to modernize, we need you to level us up,” and that they may have just been trying to do what they felt like they needed to do.

Reid (Guest):

Certainly, the strategic planning was moving in that direction, and the board was involved with that from the get-go as were community people, et cetera. So what happened is anybody’s guess yet. A few of the board members may understand it, but the rest of the community does not, except that it appears to be a values clash between the executive director and a couple of board members that caused a rift and lost the person their job, and again, created another hole in the community for an organization that’s really, really necessary in that community.

Jess (host):

This brings up this idea of organizational culture and going back to grad school, I remember that being one of my absolute favorite classes. I had Professor Jim Bonilla, who was frigging amazing, loved him so much. Shout out to you, Jim Bonilla, wherever you are, I’m causing all the Missaghie. But as a part of that class, it was very clear to me that cultural change is the slowest type of change that you can hope to have at an organization, because it’s so baked into every little thing that happens.

Reid (Guest):

You’re right, Jess. It’s not only slow, it’s painful and painfully slow. The emphasis over the last couple of decades and rightfully so, has been around diversity. Racial diversity, gender diversity, ethnic diversity, age, religion, you name it. It’s important and has been promoted that boards and staff and leadership be as diverse as possible and look like their clientele and the community that they serve.

Jess (host):

There’s a lot of lip service around it. And then there’s a lot of discussion around whether people are doing it right. I just had Kris Kewitsch here from Charities Review Council, we talked all about their DEI toolkit. It is the hot topic right now for sure.

Reid (Guest):

And it should be. It needs to be, but there is also something I think that gets missed sometimes in that discussion about diversity. And that is, how is the organizational culture going to handle diversity? How is it addressing diversity? What does it need to do that can make the organization more open and more effective, even in the midst of trying to become a more diverse organization? And I think about the culture of organizations, and I’ve worked with hundreds over the years. There are any number of different things that I’ve seen, partly causing me to write the book I did a few years ago, but…

Jess (host):

Oh, which everybody should get. And I will put a link in the show notes, Seven Deadly Sayings of Nonprofit Leaders. It’s great.

Reid (Guest):

Thank you, Jess. I had fun writing it, but there are so many different scenarios that I’ve gotten into and I wonder if people can think about their own organization and ask themselves, “Is it operating out of perhaps a scarcity mode, where that’s the culture that we can’t afford anything at all and all of our supplies have to be doled out because we live in a very fiscally conservative or scarce culture?” How about one that’s rules bound? Many governmental agencies where they’re supported by government are so wrapped up in, we got to obey the rules. And there’s a rule for everything, that innovation has little chance of popping up.

Jess (host):

No, and this happens a lot with organizations that receive a lot of government grants, they become what I refer to as government light where effectively, their entire operations because everything they buy has to follow government procurement standards and everything they do is grant funded and it has to follow the federal two CFR 200 guidelines and the blah, blah, blah, blah, blah, and pretty soon you’re looking at the program, people being like, “I’m sorry, but our grant requirements force us to do it this way.” And you’re sitting there going, “I thought we were getting this money because we’re supposed to be more nimble.”

Reid (Guest):

Exactly. And people end up living in fear, both staff members and board.

Jess (host):

Yeah.

Reid (Guest):

And that fear can come on from the outside as fear of a government entity, or it can come from fear of the executive or the board and fear of reprisal for doing something wrong or inappropriate.

Jess (host):

Well, and I want to circle back to the scarcity one too, because that is pervasive and one of the things in your book that caught my attention is the story about here in Minneapolis, we had the I-35 bridge, which was a major highway overpass bridge across the Mississippi River, right through the heart of the city. And it collapsed in 2007. And nobody knew it was going to go down until it went, but structurally, it was broken. You just couldn’t see it. And I feel like the scarcity culture that you mentioned in particular is one of those cultures that is breaking your organization, little cracks over time because you don’t spend on things and you’re afraid.

You’re afraid to try something new because it might be expensive. And then your 92 cents of every dollar goes to program will be 93 cents and oh my God, what are you going to do then? And the whole mindset that we can’t afford this leads to doing a bad job, going out and sourcing your contract information by Googling for samples on the internet instead of paying a professional to help you. I may know about that one.

Reid (Guest):

And ending up being handcuffed, because you can’t do what you need to do for your clients to support your mission.

Jess (host):

Yes, and causing more expense down the road because you did something poorly, because you thought you were poor. And then you end up spending and that can kill an organization.

Reid (Guest):

And interestingly, as a side note to that, where many of the organizations that I’ve dealt with have to confront their culture, is when you get into a strategic planning mode.

Jess (host):

Sure.

Reid (Guest):

When you start really opening up and investigating and digging into the bowels of the organization, I know whenever I do strategic planning with the group, I usually start with the mainline staff and ask them a variety of questions about what they think are the strengths and weaknesses of the organization.

Jess (host):

Sure.

Reid (Guest):

And they’re very open usually to that, but I always leave a little caveat at the end, giving out my phone number and my email and saying, “If there’s anything you’ve wanted to talk about today or think that it would be helpful for somebody to know about, please send me a note. And if you want it kept confidential, I’ll certainly do that.”

Jess (host):

Smart.

Reid (Guest):

It is very interesting how many times I’ve had some staff members say to me in an email, “Reid, if this ever gets out, I’ll lose my job, but I want you to know about this.” And that little bit of a whistleblower introspection, looking at what the organization is and could be and how it’s being challenged or what are the roadblocks or hurdles that are being put up in the organization by somebody or something or a rule or an executive or a board member, can lead to really breaking open the culture and helping see it for what it is, whether that’s a scarcity or a fear or we’ve never done it that way before culture.

Or whether we’re a learning culture or not. Those are important things to look at. And a board really needs to recognize what the culture of the organization is, in order to find leadership that’s going to fit and work with it and to be able to address changes that are needed for the organization to work in the community.

Jess (host):

That makes the case so well for using third party people to come in and help you with those big moments, because you’re not going to get that disclosure if the strategic planning facilitator is an insider.

Reid (Guest):

Exactly.

Jess (host):

And especially if you have a dysfunctional family style culture where, we know it’s all messed up, but those are our children.

Reid (Guest):

Or that’s crazy Uncle Joe sitting in the corner, we’ve just got to deal with him, because we can’t let him go and he is part of our culture and problem, yes.

Jess (host):

We could never get rid of crazy Uncle Joe. We’re related.

Reid (Guest):

That’s exactly right.

Jess (host):

A lot of organizations unfortunately can fall into that, because people are so passionate and they’re connected over a mission, not over money necessarily, and it can create that problem.

Reid (Guest):

And as Peter Drucker, the business guru of the last several decades, generation said, “Culture eats strategy for lunch or breakfast or both.”

Jess (host):

Yep.

Reid (Guest):

And so knowing what your culture is and how it works, what that culture values, is a critical part of understanding how you can move forward.

Jess (host):

Yes.

Reid (Guest):

And I think many, many strategic plans fail because they’ve not addressed the issue of the organizational culture and they may not even know what it is.

Jess (host):

So circle this back to the diversity thought.

Reid (Guest):

Yeah. Diversity is important because what that does is, if you have an open enough culture, where diversity is allowed to actually speak and be heard, good diversity will offer you different ways of looking at who you are and what you do and how you do it, and they’ll look at it from their perspective. Bringing that idea to the fore, not just the way we’ve always done it. It’s like process improvement. If you’ve always done it that way, you’re probably doing it wrong.

Jess (host):

Fair.

Reid (Guest):

Allowing for more diversity and more opinions, more ideas, more thought to enter the fracas, the better you’re going to be able to come out at the end and make changes in processes that are in place in your organization and the values that are critical.

Jess (host):

So what I’m taking away from this is that doing diversity as a strategy just doesn’t work, because to your point about Drucker’s comment, that culture eats strategy for lunch. If you are like, “And one of our strategies this year is to introduce more diverse people into our world.” Well that’s great, but if you’re not taking a big picture view and looking at how does our culture function, what is our culture? You’re just throwing some diverse candidates into a preexisting mix. And I remember from org development, this idea of X’s and O’s. You throw in a couple of X’s with a whole bunch of O’s, that you’re not changing the culture.

Reid (Guest):

Because the culture of the organization has not been a learning culture to start with. It’s not been open enough to allow for those diverse ideas to actually have an impact or be heard. So just including it in the strategic plan as a goal for the organization over the next five years to increase its diversity is going to go nowhere if that same organization is not looking at educating itself, going out into the community and learning about how organizations can work better, about how processes can be improved, about looking at outcomes, not just outputs. Those are all critical pieces, and diversity will help you get there, will help you do that if the whole organization has the ability to speak up and be heard.

Jess (host):

Yeah. One of the things you say in the book that jumps out at me when you’re talking about this is, “We can often look at a broken process and we don’t need to worry about the people.” You said it more artfully than that, but basically, when something is wrong, sometimes we experience the shame spirals or feel like it’s a certain person’s fault. But your point in the book was that a lot of times, it’s the process that’s to blame and changing the process can be a vehicle toward fixing some things.

Reid (Guest):

Exactly. I remember one specific case in a larger organization, we were dealing with an issue of donor thank you’s.

Jess (host):

Very important

Reid (Guest):

The amount of time…yes, yes, very important. And needing to be timely as the person in charge, I was looking at why do we have such a long time between the donation coming into the organization and the thank you going out? It turned out their initial thoughts were, while there’s a person or two that are sitting on. We mapped out the process and we looked at the time it took to go through all of the various hands and all of the various checks and balances before it got deposited and after it got deposited to the thank you to be written by whom and when. We realized that we had, over time, made the process so complex that nobody really knew what was going on where.

Jess (host):

I’m laughing, because the amount of segregation of duties around the thank you probably far exceeded the segregation of duties that should be there for the finances. That’s backwards. If that’s happening at your organization, you need to fix that process.

Reid (Guest):

And so we did, and we did by mapping and by really talking through with everybody that touched the donation or the thank you. And we made that change from 10 days to get a thank you out down to about one and a half, and we did it with two less people.

Jess (host):

That’s great.

Reid (Guest):

That was an incredibly enlightening opportunity for me to sit back and say, “Hey, let’s just not blame Fred for doing a bad job. Let’s look at what they’re given to work with.” And I believe that most people, especially in the non-profit world, come to work and want to do a good job every day.

Jess (host):

Yes.

Reid (Guest):

And if there’s a lousy process that’s holding them back, if the culture of the organization says, “We’ve got to be so careful,” or we live in fear that we’re going to do something wrong, that we’re going to take plenty of time to do it. Maybe there are other ways to look at how you can accomplish what needs to be done in an expedited fashion and have everybody better satisfied and supportive of what’s going on.

Jess (host):

I love it. Let’s say nonprofit directors listening right now, and this is resonating with them, what can boards do to understand their culture? What can they do to start trying to strategically address some of these things? Introduce…?

Reid (Guest):

One thing that is critical and that is often overlooked is, what are the values of the organization? I’m not talking about just the four or five words or quips on a piece of paper hung on the staff bulletin board. I’m talking about the real values that the organization lives by and maintains. Values significant enough that if somebody breaks out of those values or breaks one of them significantly, they would be terminated.

Jess (host):

There’s this idea in org development that’s like, if you’ve gotten a strong emotional reaction from someone, that means you’ve violated one of their values. That applies in nonprofits in spades.

Reid (Guest):

Exactly. Spades and clubs and hearts and diamonds, all of them, yes.

Jess (host):

All the suits. A full house.

Reid (Guest):

Because we say we live by our mission, we say we live by our values, but if those values are not seen and heard and witnessed on a day-to-day basis, there’s something wrong. Those values need to be the same at the level of the board, at the level of leadership and at the level of staff directly with clients. Where there are different values, that has to be something that’s addressed. And the board should be able to look down into the organizational bowels enough to see if those values are being upheld. For example, a board member just casually being around during provision of services should be able to get enough of a sense of how are the clients being treated? Are they really treated with value and respect if that’s one of the organizational values? Are they cared about and concerned, or are they dismissed categorically?

Jess (host):

Sure.

Reid (Guest):

Do staff go out of their way to make sure that clients are comfortable and heard and listened to or not? And certainly as part of a strategic planning process, and I would say annually, boards need to take a look at that set of values that they have developed, agree that they are still important, or change them to meet what the organization is seeing and doing. And certainly make sure that staff and leadership, leading by example, are adhering to those values as they deal with their staff as well.

Jess (host):

I really like the idea of secret shopping your program, sending in a mole basically.

Reid (Guest):

Yes.

Jess (host):

Because you can survey your participants, you can survey your staff, but I also really like the idea of having a secret shopper because everybody knows who’s on the board and if you show up and are just hanging around watching stuff, you’re probably going to see different behavior than if you weren’t there. So I love the element of really investing in this and having people test your organization for you and report back.

Reid (Guest):

And including those values in the things that the staff and leadership need to live by, that would be including them in contracts, that you expect those people that contract with you to provide services will also carry through on those values and that the contract can be terminated if they’re breaking them.

Jess (host):

Yeah, I love that.

Reid (Guest):

In HR employee handbooks and in HR contracts or end of year or yearly reviews, that there being honest discussion about, are you adhering to and demonstrating the values that we as an organization espouse?

Jess (host):

Maybe you were at your desk eight hours a day and you’re on time every day, but how’s your performance when it comes to treating our beneficiaries, our program participants? And I think that it doesn’t get formalized enough for employees, but really doesn’t get formalized for contractors and especially small nonprofits are often so 1099 independent contractor-dependent, even to the executive director level, they have a lot of outsourcing. And so to have that code of conduct slash values we uphold that we will look at in the performance of your service, I think that’s an amazing idea I’m going to steal from you. But we should probably end there.

Reid (Guest):

Sounds good.

Jess (host):

Well Reid, thanks so much for being here. It was lovely.

Reid (Guest):

Jess. It’s been wonderful. Love to do it.

Jess (host):

All right. Right folks, that’s our show. Be sure to follow me on Instagram or Twitter at Jess Birken. We want to hear from you. Send us a message at our website, charitytherapy.show. And don’t forget to subscribe to our newsletter ar birkenlaw.com/signup. Charity Therapy is a production of Birken Law Office PLLC. Our theme song is by Whale Hawk. And remember folks, this podcast is produced for your entertainment and is not a substitute for actual legal advice.

Birken Law Office – Law firm serving nonprofits organizations, and foundations – Birken Law

Birken Law Office – Law firm serving nonprofits organizations, and foundations – Birken Law
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