Lecture

Welcome to Organizational Administration for Nonprofit Correctional Ministries. I’m Dr. Wendy Martin, and I’ll be guiding you through some of the different topics in this course. As a bit of background, I spent many years as a manager in two different Fortune 100 companies before I began a career as a professor. I’ve also served as a volunteer in correctional ministry both inside the walls and outside.

One of the reasons I’m leading this course is because of what I learned during my doctoral studies. I heard of many ministries that, although they were serving a great cause, failed because of poor administrative practices. The leaders of the ministry were great at ministering to others, but they didn’t manage change or conflict or money well—or any of the other things that plaque ministry operations. The goal of this course is to help you recognize and manage the multiple areas of your ministry well, leaving you free to spend your time doing what you feel God has called you to do, correctional ministry.

As we begin this course, let me give you a few of the parameters of the class. Most of the concepts we’ll be covering will begin from a base of zero; as opposed to focusing on improving something that already exists. Therefore, start with the idea that you are in the formation stage of a nonprofit ministry with a mission to serve the correctional community. This may be in any area of the community including jail and prison ministry, families of incarcerated, job training, ministry to correctional officers, but a frequent area of focus will be on reentry ministry. This is simply because this course is an important part of the reentry track. I understand you may already be serving in such a ministry, so some of the earlier lectures may not pertain to your particular situation. Likewise, you may find that not all parts of the course will be applicable to your ministry. Hopefully, you will find, however, that most of the course will benefit you in your understanding of the administrational aspects of correctional ministry as well as equip you with the skills to be more effective in the “behind the scenes” aspects of ministry.

Organizational administration for correctional ministries is a huge topic; in fact, some universities offer master’s degrees in nonprofit organizational administration. We’ve included the areas we believe will be the most helpful for correctional ministries. You’ll see that the syllabus covers a broad range of topics. Given that this is an introductory course, we will only cover the basics of each topic. If you find a topic particularly intriguing, you may want to delve into it more deeply on your own. So, with that as an introduction, let’s get started.

As you think about what it will take to make your ministry work, I’d like to review some of the research done by Jim Collins about what leads to any organization working. You’ll see in a bit that the failure rate for nonprofit ministries is very high, so it is important that you have a good foundation on how to make your ministry effective.

Collins identified the factors that were common in highly successful organizations. The first factor, which he called Level 5 Leadership, is that the leaders of these organizations were humble. Success was not about them.

Their ambitions were for the institution, not for themselves. They gave credit to others but took the blame when things went wrong. As you move forward in ministry, this concept is very important. Remember, it is not about you. It is about God and the people He has called you to serve. Follow the example of Christ’s humility. As it says in Philippians 2:3-4:

“Do nothing out of selfish ambition or vain conceit. Rather, in humility value others above yourselves, not looking to your own interests but each of you to the interests of the others.”

Another important detail Collins found was that these organizations focused on what they should not be doing and on what to stop doing. This way they did not waste their energy and resources. Too many ministries fail because they try to do too much or are unfocused in what they do. There will always be a need in correctional ministry—as with any ministry. Your challenge is to stay focused on what the Lord has called you to do and to have the strength to say no to other things.

Collins also learned that technology was not the answer to being successful. While technology can make things easier, all the screens and gadgets in the world don’t guarantee success. My guess is you are operating on a very tight budget. Don’t let lack of resources discourage you from going forward with your call. When you look to the clouds, look to the God in heaven for your power, not to cloud computing.

One of Collins most-referred-to findings he called, “First who, then what,” but most people refer to it as “getting the right people on the bus.” Ministries rely on people to happen, but if you have the wrong people involved, your ministry can be a disaster. Collins recommends you work on forming your team first, getting the right people on the bus and getting the wrong people off. Once you know who you have, then you can figure out where to drive the bus. For example, you may not have anyone who is strong in counseling skills on your team. If that is the case, don’t offer counseling as part of your ministry. As Collins notes, “People are not your most important asset. The right people are.”

If you have a team, work as a team. If you find the ministry is relying too much on you, you haven’t figured out how to effectively use the people the Lord has put in the ministry. If you were to leave, would the ministry still exist? We’ll look more into this later, especially as we talk about effectively using volunteers in your ministry.

The sixth principle Collins presents is that you need to “confront the brutal facts.” You need to be honest about reality. Too often people in ministry are so excited about the cause that they aren’t honest with themselves. I worked with a woman a while ago who had what she thought was a great idea for a ministry, but unfortunately, it just wasn’t feasible. Several of us tried to show her the flaws in her idea, but she wouldn’t listen. Finally, she quit the program because she felt we weren’t supporting her. In actuality, we were supporting her, but our support wasn’t what she wanted to hear.

You need to be honest with yourself and others in the ministry. We’ll discuss this more in the next lecture as I encourage you to look at the strengths and weaknesses of your organization.

Probably the most important finding of Collins’s study is what he calls “the hedgehog principle.” When hedgehogs dig for food, they focus on one thing and ignore everything else. Collins contrasts hedgehogs with foxes that run all over the place looking for food. In your ministry, be a hedgehog. Focus on your calling and ignore other things. Don’t be a fox and run all over the place. Too often foxes are negative because they think of all the things out there that might get in the way. Hedgehogs, on the other hand, keep digging and don’t play “what if.” Remember, you are serving a powerful God. Let Him manage the “what if’s.”

As you determine your hedgehog, the focus of your ministry, look at Collins’s three questions: What can you be the best in the world at? What drives your economic engine? What are you deeply passionate about? I would recommend you change the second question to “What drives your spiritual engine?” but the principles are pretty much the same. Don’t go into a ministry that everyone else is doing. If everyone else is doing it, you don’t need to do it. Where has God uniquely called you to serve?

It will take discipline to stay focused on your hedgehog. This is what Collins calls a “culture of discipline.” There are so many distractions that it is easy to slide out of your hole. When that happens, your impact is diminished.

Collins’s seventh principle, which he calls the flywheel, is really a composite of the previous six. Being successful is the process of continually looking at your people (Level 5 Leadership and getting the right people on the bus), thinking about your thinking (looking at how your team works and confronting the brutal facts of reality), and your actions: Are your remaining a hedgehog and exercising a culture of discipline?

As you can see in the slide, the first steps of organizing your people are the buildup that starts the flywheel moving. What keeps the flywheel moving is what Collins calls the breakthrough. A flywheel starts slowly and then gains momentum as it turns. Likewise, as you set up or change an existing ministry, things will start slowly. Don’t get discouraged. As you keep focused on developing people and being disciplined to stay in the ministry you were called to do, things will get easier as momentum takes over.

While it may seem strange to talk about the flywheel before we’ve even begun to talk about the different aspects of your ministry, I deliberately chose to cover Collins’s material now for one very important purpose: to help keep you from failing in your ministry.

Study after study show that most new ventures fail, whether new businesses or new ministries. A study of the Bureau of Labor Statistics data found that over 50 percent of nonprofit ventures fail within the first five years. In fact, the number is probably much higher than this because organizations that never filed for 501c3 status are not included in these counts. These organizations do not fail because of lack of passion for the purpose, but because of a lack of planning or lack of skills by those running the venture. They may not have had the administrative skills necessary to keep the venture going, or their ideas simply were not as good as they thought they would be. In this section I want to talk about failure in more depth.

There is no “one cause” for failure of nonprofits. In the next few slides you’ll see a laundry list of reasons contributing to the failure of nonprofit ventures. These include being started or run by a single person operating without a support team, poor leadership by those in charge of the organization, lack of leadership by the board, lack of accountability and transparency by the chief executive or core team, lack of skills by those running the ministry, or over-promising and under-delivering on the organization’s value proposition.

Additional reasons for failure include the fact that the ministry doesn’t add anything new but just duplicates existing ministries, drifts away from its original purpose, or underestimates its financial needs. Failure can also result from inadequate spending and financial controls or lack of insurance, which means the ministry has to close if an uninsured even occurs. Ministries have also had to close because of scandals. These can arise because there are no ethical or conflict-of-interest policies for people to follow.

Managerial failure often leads to failure of the entire ministry. This happens when managers fail to set goals and evaluate the ministry’s performance, keep records of what works and what doesn’t work, or plan for and develop resources—financial, human, and otherwise. Managers also contribute to the failure of nonprofit organizations when they fail to develop relational support for the ministry, collaborate with other organizations and individuals, stay current, or in the case of more established ministries, plan for succession when the founder moves on.

Given the high rate of failure, you should consider carefully whether or not you should start a new ministry. Don’t act too quickly. Proverbs 20:25 says, “It is a trap to dedicate something rashly and only later to consider one’s vows.”

Ask yourself, Is this really God’s idea or is it mine? As you decide whether to enter into a venture, seek discernment. Pray. Don’t pray for confirmation of your idea, pray the Lord will show you whether or not it is His idea. When you pray, listen. Also seek the wise counsel of mature Christians you respect.

Don’t forget to consider the cost of beginning a ministry. This doesn’t just include financial costs; consider the costs to your relationships, your time, your emotions, and other aspects of your life. If you can’t see yourself doing anything else, answer the call. If you feel conflicted about entering into the ministry, this probably isn’t the right opportunity.

As you pray for discernment, ask yourself if you have what it takes to start the nonprofit. Do you have the skills necessary to do this ministry and start the nonprofit organization? Do you have the personal qualities necessary to start and run the nonprofit in the long run? For example, I have a friend who is an “idea factory.” She is always thinking of ministries to start. The problem is, while starting new ministries energizes her, after the ministries are established, running them wears her out. She quickly loses interest and goes on to the next idea. Fortunately she is smart enough to recognize this, so finding someone to run the venture needs to be part of her start-up plan.

As you consider the costs, do not just consider your personal skills portfolio; also look at the purpose of the ministry. Is a new nonprofit organization really necessary? Before you begin, conduct a needs assessment. Look around and determine if there are existing ministries already doing the same thing. Ask yourself who will be the audience/client base you are serving. What are this group’s needs and desires? Do not assume your desires are their desires. Two of the resources listed for this class, the books Toxic Charity and When Helping Hurts give numerous examples of ministries that hurt their client-groups by offering services they thought their clients needed.

When you’ve considered these questions, ask yourself if you know of people who will support your idea both financially and with their time. As you saw from the list above, “lone ranger ministries,” in which someone tries to do it all alone, usually fail. If other people will not get on board, perhaps there is a reason.

For example, a few years ago I worked with a woman who strongly felt the Lord was calling her to start grocery stores in the inner city to help alleviate the food desert. While her motives were strong, her skills were not. She was so focused on starting this ministry that she ignored all of her other responsibilities, including generating an income and raising her children. She believed that because the Lord had called her to this ministry, He would take care of all the other needs. Unfortunately, while she was focusing on the ministry, her children were getting into trouble. Ultimately, DCFS was called in and she lost custody of all three of her daughters. The Lord will never call you to do something that is contrary to what He commands: in this case, to take care of your family. If you feel a call that puts you in conflict with scriptural truth, you are not hearing the voice of God.

Now let’s move from a discussion of failure and begin a discussion of what it takes to be successful. First, let’s talk about how to set up your ministry. As a reminder, I said I’m taking the perspective that you are building the ministry from the ground up. Even if this isn’t the case, you should be able to apply what you learned from this next group of slides as I talk about how the ministry should be organized. For most of you, the best way to organize your ministry will be as a nonprofit organization. Just to give you a frame of reference, let’s start with a few definitions.

The main difference in whether your ministry is classified as a for-profit or nonprofit organization, or NPO, is to consider how any wealth will be distributed if you have a surplus. In for-profit organizations, the money can be distributed to the owners, whereas with a nonprofit, the money must be reinvested in the ministry. While you may be thinking this really won’t be a problem because you don’t anticipate ever having extra money, this restriction has led to the downfall of many ministries; even at times resulting in the managing director being incarcerated. By the way, just in case you didn’t know, never take, or let anyone else take, any money from the ministry for personal expenses or purchases; that is, unless you have a desire to do correctional ministry from the inside.

Another definition to consider as you protect your 501c3 status is not engaging in political activities. The government also makes a distinction between nonprofit organizations involved in social welfare programs (501c3s) and those involved in political activities (527 organizations). As a 501c3, your organization may not support, show favoritism to, or donate to any candidate or person in elected office. However, you may be involved in advocacy programs that relate to your ministry (such as education programs) or nonpartisan political activities (such as helping people register to vote).

If your organization does engage in any partisan political activities, you may risk your 501c3 status and therefore your tax-exempt status.

To get an idea of the rules for operating a for-profit versus a nonprofit organization, let’s take a short quiz.

True or false: Can nonprofit ministries make money?

The answer is false. This means nonprofit ministries can make money. In fact, they need to make money and reinvest it into operations if the ministry is to survive and grow.

Most nonprofit organizations cannot survive in the long term on donor funding alone. Even if you have a pool of loyal donors, they usually will not increase their donation levels and some will inevitably have to stop donating because of changes in their life circumstances. If your ministry is to grow, you’ll need to see your funding grow; however, the more time you spend fundraising, the less time you’ll have to minister to others. We’ll look at this seeming paradox in a later lecture.

True or false: Nonprofit ministries must get their funding solely from donations.

This is also false. Nonprofits can get their funding from a number of sources, including donations. Funding can also come from other sources such as grants and from operating income like ticket sales and user fees.

As you consider the funding paradox from question one, this means one of your challenges will be to find alternate funding sources beyond donations. Toward the end of the class we’ll look at different types of fundraising techniques.

True or false: Nonprofit ministries cannot pay people who work for them.

The answer is again false. Nonprofit ministries can have both paid employees as well as volunteers.

This means that as you organize your ministry, you need to determine what tasks will be performed by volunteers and what tasks will be performed by paid employees. In your budgeting, be sure to include salary and benefits for your employees, which may even include you.

Now for our last question. True or false: Nonprofit ministries must have boards of directors.

Surprise, the answer to this one is true. If you are organized as a 501c3 organization, you must have a board of directors. These may go by a variety of names such as directors, overseers, elders, or regents. Whatever the name, you must have one.

The board of directors has oversight authority for the organization. Because of this, it is extremely important that board members are chosen with prayer and consideration. If you run the ministry, the board will serve as your “boss.” Ultimately, they are responsible for your ministry and may even be held criminally liable if something goes wrong in the ministry.

Net, if you are in the early stages of forming your ministry, I recommend you organize as a 501c3. Pay close attention to the rules so you don’t lose your tax-exempt status. It makes sense for most correctional ministries to organize as nonprofits. For example, most for-profit organizations charge for their services since they do not accept donations; however, most of the clients you serve will not be able pay for your services. Finally, if you are operating to make a profit, some clients will question your motives, seeing you as in it for the money rather than to help.

Congratulations. You’ve finished your first quiz. As we get into the specifics of what this will mean for you, let’s look at why it even makes sense for you to be looking into business practices for your ministry. I have heard people argue that ministries are not businesses, so they should not be run like businesses. Let me summarize some thoughts by Peter Brinckerhoff about why you should think about managing your ministry using professional organizational practices.

While your ministry is not a business, most ministries can benefit from the practices developed by business. Too many ministries are sloppy or ignore good ideas because they think of them a “business practices,” rather than practices to run effective organizations.

As you guide your ministry, be sure to stay on mission by using the appropriate tools to do so. Don’t use tools of business just because they are there. Use the best tools when they work for your situation. As we go through this course, some of the tools will make sense for your ministry, others will not. Choose those that will help you be the most effective as you pursue what the Lord has called you to do.

To do this you will need to balance the demands of three areas:

1. People: This includes volunteers, employees, and other constituencies, as well as your clients and their families.
2. Money: You’ll have to manage both your spending and your income, which often means soliciting donations.
3. Buildings and equipment: What do you need to do as far as rent? Maintenance? Parking? How will you cover reoccurring expenses, such as photocopying, Internet, phone, and office supplies?

In the next lecture we’ll examine things to think about as you try to organize your people, money, and capital (that is, your buildings and equipment), as we look as the first step in management: planning.