First, the fundamental concern: will the change of mission jeopardize nonprofit status (and that typically means jeopardize 501(c)(3) status, which means deductibility of donations by donors)? The answer depends on whether the new mission falls within the law’s requirements to qualify for 501(c)(3) status. Easy example: an organization dedicated to educating children about music switches to educating children about art: no problem. Hard example: an organization that switches from operating a homeless shelter to advocacy, lobbying, and litigation about homelessness issues. Maybe that change would institute a review by the IRS to determine whether the rules were all still being followed, but the inquiry is always going to be fact-specific unless the organization changes so dramatically that you already know the answer to the question. (Example: the homeless shelter converts to a bed and breakfast.)

The trap you should not fall into is confusing the mission (“charitable purpose” is the catchphrase) of the organization with its operating model, financial structure, or even “mindset” about the issues. Many nonprofits charge money to at least some of the people who benefit from their programs or services. I gave a talk at a conference this past weekend for AutismNJ, which charges parents, educators, and professional members for attendance. That alone has no determinative effect on their nonprofit status.

Second concern: does this change affect our donors’ view of the organization?

Third concern: does this change affect our employees’ and volunteers’ view of the organization?

These last two concerns are readily handled together because they are essential components of any strategic planning exercise: determining the effects of a proposed strategy on the ecosystem around the organization. This question arises for nonprofits and for-profits alike. The answer for any group is going to be different, based on the particular history, composition of these stakeholder groups, and the rationales for the proposed changes.

I take the original questioner’s point of view to be best expressed as “I don’t like the new changes and so I’m going to complain.” And then that person will probably leave, looking for a new organization with similar goals and models and operations to the old group before it changed.

With detailed information from a variety of sources on the actions taken, not the words spoken or empathy expressed, we parents, grandparents, aunts, uncles, cousins, friends, and especially self-advocates can become vastly better informed about how to cast our votes. Americans have spread out across the states and towns of our nation throughout the last 50 years; few of us live with our whole families in towns where we can influence political processes to the same extent as those who recognize more clearly defined common interests. But our children our everywhere, and there’s no reason my parents in upstate NY shouldn’t be voting to support ASD issues there just like my friends in California or Massachusetts. The problems of those children ARE my son’s problems. This entire class of children and adults, and perhaps an entire burgeoning ASD generation, needs our protection, assistance, and support so we can build in them the power to speak for themselves.

“…to secure these rights, Governments are instituted among men….”

From a technical perspective, I imagine this project as being built in layers as tools rather than documents. What this means is that it starts with a straightforward national layer, since there are a number of good sources to get information about Congress and votes/actions on bills/amendments. It’s also relatively easy to look at something like Autism Votes for a list of important bills to track. Similar tools could be built at the state and then county/local levels to track both legislators and legislation. Then, the system could be expanded to track the executive branch and even judges. A user should be able to designate an organization that maintains a list of the public policy issues that group is tracking (like Autism Votes does here).

So what makes this different than Autism Votes? First off, I see this as a very direct, reductionist verdict, a thumbs-up/thumbs-down on every person tracked. Remember, the premise is that ASD issues are more important to most people in our community than just about anything else. I don’t know at which point this idea crosses over into lobbying and the political influence categories that trigger different regulatory requirements, but it’s not a problem at this nascent stage.

The key to this project is the combination of some straightforward web 2.0 tools with a definite crowdsourced component (only locals will put school board names on a list after each election) and the ability to share judgments OPENLY, so people can advocate for their own views. For example, I would imagine that the science-heavy crowd among parents would diverge greatly from the “warrior mom” contingent on how they would rate people who support/oppose particular vaccine research funding. There’s nothing wrong with that, of course. Politics is how we deal with allocations of scarce resources in a democracy. It might as well work!

(As an aside, if this project were built with an open and extensible design plan, such as using references to open-source/public wiki-style definitions files, it could be expanded into a grass-roots political action tool for people with any particular concern.)

It reminded me of one of the best bits from Al Dunlap’s Mean Business (aff. link) (before he embarrassed himself at Sunbeam) was when he was reviewing a restructuring plan and pushed the team to make all the job cuts at once, “this quarter,” rather than dragging things out. His rationale was that it was better for the company, and even better for the workers as a whole, if the situation moved from old to new as soon as possible. The people left behind would know that they weren’t still at risk next month and could get back to work, and the people leaving wouldn’t be put through the emotional ringer for months before having to look for new jobs. (My recollection is bad on whether he planned t0, and actually did or didn’t, use some of the savings from a faster plan to juice the separation packages.)

I agree with Margaret: good change should start now. In the Army, that was the second part of being decisive: once your decision is made, you put it into action right away. No sense fooling around (or even worse, rethinking it!).

1. If the culture change doesn’t lead to better metrics, what’s the point for the business? The metric might be reduced employee turnover, but “engagement,” “excitement,” and “commitment” should all lead to some kind of improvement in productivity, customer satisfaction, or even revenue. And each of these should be connected to its actual impact on the free cash flow creation attributed to your corner of the business. If you don’t know what’s improving, you need to figure that out before moving ahead too much. In terms of reasons change is slow, almost as strong as “if it ain’t broke, don’t fix it” is “if you’re gonna fix it, you better fix it.” Indeed, they’re probably two sides of the same coin, or maybe even the same side of the coin.

2. Employees need security. Unless you have control over their jobs, they, as you, have reason to fear changes that will inevitably, in their minds, be used to blame them for poor future results. If you want more power in this regard, put your job on the line and negotiate for more budget/P&L control. Put your compensation at risk, and then your employees may feel more open. The Ranger/Infantry version of this is “lead from the front.” Employees take their cues from the top, and there are lots of levels of “top” in a big company.

3. Companies don’t “get it.” They can’t, any more than the Army can “get it.” Parts of the Army get it (special operations) most of the time, but then you realize that even then, it’s about individual leaders. When lots of good leaders find and develop more good leaders, you get organizations that are set up for success, but that’s just opportunity, not a guarantee. So if you get it, then you bring your team along bit by bit and show them “the Mark way” and why it’s better, demonstrably better, than what they were doing before. (NB: this ties to the “what metrics are improving?” point.)

My personal “favorite” leader, the one guy I will follow anywhere if he tells me it’s important , says it very clearly: you lead people, you manage things.

(For those who might not understand the Army, here’s a more famous version of the same thing: be the change you wish to see in the world.)

Non-lawyers, and lawyers new to transactional practice, have probably never really heard of a legal opinion or what it does. Briefly, the legal opinion letter is a carefully prepared document that is designed to allow a third party, i.e., not the client, to “rely” on what is stated in the opinion letter.

Why does someone in a deal want a legal opinion from the other party’s lawyer? There is the stated reason and the deeply true reason. The stated reason is that the lawyer/law firm writing the opinion letter is liable to the third party for what is said in the opinion letter. That might be simple or difficult to prove, and you can imagine that when lawyers draft contracts about their own liability, they are even more stereotypical in terms of drafting convoluted long sentences that exclude all the important things and attempt to remove the liability and responsibility that you were looking for in the first place.

What’s the deep reason? Someone I worked for framed it this way: the purpose of the legal opinion is to put enough fear in the lawyer that it triggers a frank conversation with the client, protected by the other party’s attorney-client privilege, that might reveal important facts unknown to the lawyer that will affect the transaction. In other words, if I’m on the hook, I’m going to be extra sure to ask you for all the documents related to earlier sales of stock, convertible debt, or other money raised. By creating a process for this outside of the inter-party negotiations, the legal opinion balances the tendency for a party not to talk about “bad” news. [As an aside, this is the smartest thing I ever heard that guy say. HT to you know who.]

As for how this affect’s Ted’s proposal: Ted suggested that opinions drive up costs because of firms’ concerns about risk. While good lawyers are going to do the necessary work to track down the operative facts so that their clients do not make false representations and warranties, there are always (a) those who cut corners, for whom the opinion may bring some back on course and (b) those who make mistakes, for whom the opinion process is unlikely to correct anything since I doubt that opinion reviewers are interested in re-doing the work to test a capitalization opinion, for example.

But as an investor, I do want the other party to have the benefit of getting all the legal advice I’m paying for. As a company, it’s almost always better to adjust a deal to work around a few changed facts than try to fix things afterwards when you’re already in the wrong. And, although investors are paying, in effect, for the pre-deal legal advice if the funding goes through, it’s odd that the cases where it matters most are those where the process reveals a dealbreaker.

Where do I come out on this? As a company-side lawyer, I think that the opinion could be dropped without huge problems, but I fall into the class that thinks we should have correct reps and not tread down the “hopefully true” path without some deliberation and frank discussion with the other side. As investor’s counsel, I could see myself legitimately advising clients to forgo opinions to save money when I knew the company lawyer personally. I could not see extending the reputation of one well-known lawyer to an entire firm, but maybe to a small group or team that practices together.

What do you think about not asking for legal opinions? Are there other purposes they serve for you?

This is brilliant insight. Just brilliant. If there’s a post like this in every 20 or 50, this blog is worth reading.

The deep message here is about core competencies (I just saw a reference to an article about companies outsourcing their core competency — have to find it and will update this post later) and how companies can, should, and ultimately will have to rethink how they do business so that they are competing where their competitors are weak and partnering with strong partners to eliminate/avoid/counteract their own competitive weaknesses.

This article reminded me of an idea I had many years ago while interning at the Tompkins County District Attorney’s office during the summer after my first year at law school. The county, unlike some others, did not have a designated public defender‘s office. To meet its 6th amendment right to counsel obligations, the county paid private attorneys to take on criminal matters for appropriate defendants at public expense.

During my few months in the office, and after viewing hundreds of defendants come before the state and local courts, it seemed to me that there were several “frequent fliers” in the county’s criminal justice system. At that time, and considering only the easily measured out-of-pocket costs of providing a free criminal defense to these defendants, I wondered whether the county might make an attempt to provide an incentive for certain residents to relocate, in the form of a cash/cash-equivalent payment. At the time, I thought primarily about the esoteric constitutional law issues (being in law school makes you susceptible to this sort of thing).

Since that time, however, law enforcement tools have gotten much better at tracking crimes through GIS data, meaning the application of geographic information to incident reports, arrests, and related data. Now, municipalities can take a different view of activities by employing data-driven analysis (DDA) as described by ThoughtStorm, to eliminate biases (that are more often subject to court challenge) and instead focus on what is in fact actually happening. Weighted-average analysis is one key component, that allows for correcting for factors that are obvious in hindsight but not at first glance, such as resident population or numbers of visitors. (Was it really more dangerous to be in Saudi Arabia during Desert Shield than in Detroit? Is spring break really a lawless time in Daytona Beach? A comparison with similar populations is almost always more illuminating than raw number comparisons.)

What does this mean for Chuck E. Cheese? Keep making changes, before someone offers to pay for the U-Haul.