Walking for dollars

I've been in my fair share of charity walks, and for many years ran 5k, 10k and half marathons, each of which benefited some charity or other (the point being I can't remember). On our last walk for the breast cancer fight (my wife is a survivor), Chris and I talked about all the energy being expended walking in a great circle rather than doing something actually productive.

Which brings me to today's Op-Ed piece in the New York Times by Ted Gup. I think I agree. I know it's going against the trend, but I'd love to have a development pro write a counter piece to talk about the logic from that perspective.

I've often thought that some fund raising efforts are energy intensive and money more--take for example, schools sending small children out to sell crap....I mean catalog treasures...to their neighbors. How many parent child hours go to the effort, and how much of the money goes to prizes for the kids which is really their motivation?

Development is a huge part of philanthropy. It not only raises needed funds, but invests (literally) people in our causes. I'm not a development professional and I hope if you are, you'll weigh in......Can't we get a bit more efficient?

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When is a fee really a property tax? And, is that OK?

As most readers know, governments everywhere are revenue short, and are trying to come up with new ways to balance their budgets without having to make politically damaging cuts. Every municipality, county, and state has a different (and sometimes dizzying) array of taxes that make up their revenue stream. As a regular traveler, I've seen one hidden one for years; the 12%, 14% sometimes 18% tax on hotels that is added in many cities, taxing the people (visitors) who don't vote. Sweet move for the local pols.

What very few governments have done up until the current recession is force nonprofits to ante up and pay property taxes. Historically, nonprofits have been tax-exempt from all taxes; sales, property, income, etc., but now cities from Boston to Burbank are making efforts to extract "fees" that are really substitute taxes. And, of course the outcry is on.

I have very mixed feelings about this. Of course nonprofits are also in financial straits, and adding another levy to their financial burden could not come at a worse time. But many cities have significant parts of their land exempt from tax: Boston is a great example, with all the colleges, church property and government land being tax-exempt (I've heard estimates of up to 40%) the city still has to provide fire, police, trash collection and public eduction despite to every square foot of the city.

Additionally, this seems like a bad place for nonprofits to put up a fight....we in the sector talk about how important we are to the community, how much we care about the community, how the community would suffer without us, but we collectively whine about paying what every homeowner and business in our community must: our fair share of the tax load.

The trend toward billing nonprofits for their part of the tax burden is not going to go away, it will only accelerate as city managers watch peers tap this new resource. Long term, funders (yes, the governments, as well as foundations and large donors) need to recognize that such participation in the community is a good thing and include property taxes as part of each nonprofit's funded budget, without dunning nonprofits for yet another dreaded "admin" cost.

275,000 gone

Well, now we know. Yesterday, the IRS announced that 275,000 US nonprofits have lost their tax exempt status. These nonprofits did not file the legally required paperwork for three consecutive years, and are now considered defunct in the IRS's eyes.

Certainly there has been enough notice, with repeated announcements from the IRS, state nonprofit associations and the nonprofit press and blogosphere, including here. But up until yesterday, we really didn't know how many nonprofits were non-operational, and it was surprising, at least to me, that it was this many. 275,000 represents over 14% of registered nonprofits, a huge number.

Agencies can apply for reinstatement, but few will, I suspect.

Here's the full article from the Chronicle of Philanthropy.

Remote board participation

Let me start and the end and work back: Should board members be allowed/enabled to attend board meetings remotely by conference phone, conference video and/or Skype?

There's a confluence of events that's pushing us in this direction: A reduction in people's willingness to serve on boards resulting in a lessening of nonprofits dunning (or canning) board members who don't attend in person; the improvement of technology; the expansion of many nonprofits to multiple locations and, as a result, having board representation from those often disparate sites; top flight board members traveling for work less and being used to attending meetings electronically.

So, the next time you revise the part of your bylaws that deal with board attendance and quorums, should your nonprofit allow remote attendance? What's the impact on board cohesion and discussion? What's the policy impact? Is this simply inevitable?

I have a good friend who runs a large nonprofit in Virginia, one that recently merged with a nonprofit in another part of the state. Board members representing both service areas come to meetings with a video hook-up that's hosted at the agency location nearest to them. My friend notes that anyone doing this kind of thing needs a dedicated tech person at each site so that the staff or board members won't be distracted. My friend also feels the technology works well, dialogue is easy since everyone can see everyone else, and that it has increased attendance at meetings.

My question to him was, "..and what about the board member who is on the road and wants to attend via Skype?" He stopped and said, "We can accommodate that, but only to the point that our video screen fills up too much. We'll probably have to set a limit on that."

There you go. You don't want a future where board members never meet in groups, but at the same time, the trade off, if well done can benefit the organization tremendously by increasing board participation.

This will be interesting to watch unfold.