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Governance & Management:
Maturation of Voluntary NFP Organizations

ICMCI is a not-for-profit organization, established “to promote a closer working relationship between all management consulting institutes or organizations primarily dedicated to the registration or certification of individual management consultants. The purpose of this closer working relationship is to accelerate the achievement of mutual goals of the national institutes, particularly to assist them in raising the standards of the profession of management consulting.”

Not-for-profit organizations have many strengths; however, because of their implicit requirement for voluntary support, there are also weaknesses that must be understood. As a result of my career in not-for-profit organizations and my experience in governance, including chairman of organizations like UNICEF Canada, I’ve learned that there is a maturation curve for not-for-profit organizations. This curve can be very helpful in understanding the challenges that not-for-profit organizations face in the various phases of their growth.

In this article I will outline the model for the maturation curve of not-for-profits, and conclude with some observations about ICMCI’s current situation, and its implications for our work as a global organization.

Governance in Not-for-Profit Organizations
Governance is concerned with the political aspect of organizations. Who owns the organization? How do these owners ensure that the organization is doing what they intend? How do the owners observe and measure the outputs of the organization?
Management, on the other hand, is concerned with what implementation. How can the organization use the resources that it has to maximize its effectiveness?

Much has been written about governance and management, and it is well understood that there must be a separation between the governance of an organization and its management. Governance is concerned with setting directions, appropriate monitoring and oversight, and measurement of results. Management is concerned with improving operations and maximizing the owners return on investment.

In the not-for-profit world, this separation between governance and management is equally important. The goals of the organization are not as crisp in financial terms since the profit motivation is removed. Not for profits, however, can successfully make this differentiation.

What is not as well recognized is that there is a life cycle or maturation process for volunteer-based not-for-profit organizations. Volunteer organizations are in a constant state of change. This paper identifies five distinct states that a volunteer organization progresses through. 

This model can apply to a program within a large, multi-service volunteer organization, or to the organization as a whole. Understanding these varying states in an organization is important, as any system that is experiencing change, i.e. moving from one state to another, is vulnerable.

Many of the means of operating in the organization change. Roles that still have the same title may have different accountabilities and authorities.  Procedures and processes may change. Individuals may perceive their roles differently in a variety of ways, but these may not be well communicated. This results in confusion in the organization, and in its worst case, turmoil.

I will describe below the maturity phases of an organization as it evolves.  It proceeds through five identifiable states.  Each of these states is discussed from the following perspectives:

  • Maturity State
  • Characteristic Description
  • Volunteers
  • Staff
  • Governance
  • Committees

Figure 1
Volunteer Organization Maturity Curve


Maturity State 0: Unmet Needs
An individual or a group of individuals in a community are increasingly affected by an identified need. This need can be social, economic, or of another nature, but has the characteristic of creating a situation where some individuals are perceived to be less well off than others in their community.

Maturity State 1: Volunteer Action
An individual or a group of individuals recognize the negative impact of this unfulfilled need and resolve to do something about it. They may undertake to raise funds, carry out volunteer service, and encourage others to provide support to the individuals who have these needs.

  • Volunteers: All of the work carried out is of a voluntary nature. Individuals identify the need and work to resolve it because of their humanitarian value set. In the earlier states there is no remuneration, but after fundraising to support the program begins, some out of pocket expenses may be covered.
  • Staff: There are no staff employed to support this service.
  • Governance: There is no distinction between a governance volunteer and service delivery volunteer, as everyone that is involved in making the decisions also carries out the work. There is probably a formal or informal leader.
  • Committees: The individuals do the work also decide what the work will be. Work may be split amongst various groups of volunteers, but in very informal way.

Maturity State 2: Volunteer Operated
The work that is being carried out by the group of volunteers has been positively received by the community and fundraising activities have been successful.  As a result, the amount of service provided has increased dramatically, and volunteers find that there is an increasing amount of administration, which takes their time away from volunteer duties. The first staff persons are hired, first for administrative duties and then for some aspects of service delivery.

  • Volunteers: Those volunteers who originally started the program are normally still involved in all aspects of work, and some of them in service delivery, but some of them increasingly in decision making capacities. The organization is still clearly operated by volunteers. Volunteer meetings are becoming more formal and formal Board meetings are taking on more importance.
  • Staff: Staff are engaged to carry out administrative and support work under the direction of volunteers
  • Governance: The Board of the organization is formalized as the central decision-making body. It is still involved in all aspects of operations from policy making to administrative matters. The Board receives reports on administrative matters from staff persons.
  • Committees: The Board will strike formal committees to carry out certain aspects of the work, and asks them to report back to the Board.

Maturity State 3: Volunteer Directed
The charitable endeavors of the group are increasingly recognized in the community responding to a particular need. The organization has fundraising structures in place, and service delivery is becoming increasingly formalized through the implementation of program materials, training programs, and standards. Full time professional staff are hired with expertise in service delivery, and staff are increasingly being employed to deliver the services.

  • Volunteers: Volunteers increasingly see themselves as implementers of service, and take direction from staff in these areas. A number of these service delivery staff are still also members of the Board and confusion can develop with regard to the capacity in which they carry out their work.
  • Staff: Professional staff are in place and responsible for specific areas of activity. There will an Executive Director who reports to the Board. The Executive Director will be nominally responsible for all staff activities but Board volunteers will have a strong interest in staffing issues.
  • Governance: The Board is normalized as a decision making body, which receives recommendations from staff. Staff  have an increasing influence on the decisions taken by the Board. The Board has committees in place and depends heavily on representatives from these committees in its decision making process.
  • Committees: Committees are in place with delegated power from the Board. In single service organizations these committees may by developed on functional lines. In multi-service organizations, these committees may be responsible for particular services. In any event, the volunteers on these committees take a very strong role in the development of program standards and in many cases take an active role in programming decisions, particularly by directing the staff in the function or geographic area for which they are accountable.

Maturity State 4: Volunteer Auxiliary
The organization has increased in size, and is firmly entrenched as the primary service provider in its area of Expertise in the community. A sophisticated staff structure is in place, and the Board is formalized as a policy-making body. Increasingly funds are received from the government for service delivery, and the public comes to depend upon the services provided.

  • Volunteers: There is a clear distinction between service delivery volunteers and governance volunteers. Those volunteers recruited for service delivery are involved in developing specific tasks, and are clearly seen as supportive to staff. Governance volunteers are recruited specifically for their expertise and generally do not deliver services at the same time.
  • Staff: The services are mature, with standards in place, and are implemented by professional staff. The staff hire additional staff persons for service delivery. The reporting relationship between the professional staff and their Executive Director is clear, and direction is provided by the Executive Director within the context of policy.
  • Governance: The Board of Directors is responsible for policy direction and recognizes that staff, through the Executive Director are responsible for service delivery. Some confusion may still exist with respect to the respective roles of volunteers and staff, but these lessen as the organization matures.
  • Committees: The Board will have fewer subcommittees in place, and these deal primarily with policy matters, for instance a Planning and Budget committee. There will be program committees, but individuals on these committees are in an advisory role to staff, who take their recommendations under consideration in the development of policy recommendations for the Board.

Maturity State 5: Civil Service
The need is recognized in the community to the degree that the government puts in place a program that responds to the need, or completely funds the program which is then still operated by the organization.

  • Volunteers: Volunteer involvement in minimized.  It consists primarily of support staff in administrative areas. Specific peripheral programs may be carried out under a staff person who is a director of Volunteer service.  An example would be a candy-striper in a hospital.
  • Staff: All aspects of service delivery and development are carried out by staff under broad policy direction.
  • Governance: The people of the community still have an oversight role for programs, but through the elected officials of government, or through bodies set up by the government to provide this function. As a result only very broad policy is in place, and his deals primarily with the nature and extent of the service.
  • Committees: There may be informal citizen committees to provide feedback to the government, but these are primarily a means of two way communication and recommendations that are considered by staff and taken into account at their discretion.

The maturation of the organization is often accompanied by the growth of the organization.  This growth will tend to result in a larger, more complex organization with a concurrent need for an increased amount of professional competence.  There may be a need for more professionals, and some of those professionals may need to be able to work at a greater level of complexity than previously required. For the organization, this can result in the need to change some persons in some positions, to recruit additional persons, and in some cases to pay more for staffing.

Similar to the need for increased professional resources in professional staff, it may be necessary to recruit volunteers with different profiles for governance positions. In the previous state, many governance volunteers are typically elected because of their representative nature of functions or geographic regions. Recruiting potential senior level volunteers that can provide policy guidance in the time frames and complexities required may require changes to election mechanisms.

Evaluation of programs and measurements of organizational performance often need to be overhauled.  The Board, no longer involved in day-to-day management, needs to develop mechanisms for gathering information (through the staff network) that will provide it with the basis for decision making. The period between the time when changes are made and new information systems are available can be a frustrating time for both staff and volunteers. The required systems also often impose a cost burden on the organization that did not exist previously.

Observations at ICMCI
Until very recently, ICMCI has been at Maturity State 2. As a volunteer-operated organization, most of our work was carried out by volunteers. Certainly, we could contract individuals to do certain work on our behalf, but as a global operation those that have been elected to lead the organization are also the volunteers that do the work for the organization. This structure served ICMCI well for 25 years. Groups of individuals would come together, make decisions and then they would go away and do their own thing. Then in a year or two they would come back together, compare notes, make course corrections, and so on.

However, with the appointment of a full time Executive Director, ICMCI is in the process of moving to Stage 3, where we aspire to be volunteer-directed and engage staff to do some work under the direction of our governance. Between Stages 2 and 3, it is necessary to tease apart the governance function so that we as volunteers can decide policy and delegate it to staff who can carry on the work.

Experience shows that as an organization matures from one stage to another, there is a lot of angst in the organization. It is simply hard work, because the as the roles change it is difficult to create the distinction between the role of governing the organization and the role of managing the organization’s operations. For example in my role as Treasurer, in the morning I might be working on a policy document that I’m going to be sending to Trustees as part of the Governance process, and in the afternoon I may be approving invoices for payment. In Stage 3 the budget would be approved and monitored by the governing Board, and the approving of invoices would be done by a staff person. Getting this distinction clear, as we transition to a full time full time executive director, becomes really important in terms of getting the accountabilities in the right place.

As ICMCI moves forward as an organization, it is important that member IMCs, through the governance process, elect and hold accountable, a Board to carry out the duties of governance. This Board, in turn, will hold the staff organization accountable for operations. We know that it will not be possible to switch overnight to become a Stage 3 organization. Therefore, for a period of time, perhaps for years, volunteers will partly do Governance work, and partly do Operations work. For Governance work they are accountable to those who elected them. For Operations work, they are accountable to the Executive Director, who is accountable for operations.

Of course we can succeed. Organizations do it all the time. But by understanding these differences, we can have a shorter and less painful transition, and in so doing, provider better results in return for the investment of our precious resources: budget dollars and volunteer time.

With thanks to Mr. D. Lauchlan, who made a presentation to the Alberta NWT Division of the Canadian Red Cross Society circa 1980.  At this meeting he discussed a taxonomy of Volunteer Organizations. He differentiated three states: Simple Volunteerism, Partnerships, and Professional, and discussed the transition issues of moving from one state to another. This was the origin of the thinking that led to this paper.

Dwight W. Mihalicz, MBA CMC
President, Effective Managers™
Treasurer, ICMCI

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