Tuesday, May 31, 2005

Tech and Charity

A really good opinion piece in the current issue of the Chronicle of Philanthropy by Marcia Sharp entitled "A Technological Revolution for the Greater Good". In the article, Sharp discusses how tech is directly bringing together people and issues in need with people and organizations who want to help. Sharp cites.

GlobalGiving and

As examples of this, but there are lots of others as well. Check out DonorsChoose, for example. The key thing here is that the Net has taken out the middleman, putting donors, whether they are individuals or corporations, directly in touch with groups in need, reducing the need for the intermediary. This evolution is being played out across the web, in areas like music (think ITunes) , or travel (I haven't used a travel agent in 6, maybe 7 years), and now it is moving into philanthropy.

I think it's great. The more we can personalize our giving, the more we can see the effects, the more we can connect with the needs of the world, the more we'll care, the more we'll give, the more we'll be involved.

Sharp warns the giving establishment (Foundations and United Way) to get on board--change or become unimportant. I agree, and would only add that this also extends to individual organizations and causes. Use tech to your advantage. Be constantly aware of what's out there that can help make you more mission capable.

This is not about having the coolest cell phone or PDA. It is about using your brain to connect your mission and the people you serve with whatever resources are out there, including all the great ways to do it technologically.

Coincidentally, my June newsletter is about this very issue!

Tuesday, May 24, 2005

Tech Plan Template

The oh-so-amazing people at TechSoup have a great tool for you...a sample tech plan that's available to download and use as you consider more and better ways to apply tech to mission. Take a look....

And thanks to everyone in Ann Arbor at NEW who made my stay there so terrific. Great work, great group.

Saturday, May 21, 2005

Quick and worthwhile

I just finished Rambam's Ladder, A Meditation on Generosity and Why It is Important to Give, by Julie Salamon. My good friend Carol Weisman recommended it to me. Liked the book a lot and it really made me think about the ways that my family and I give, our motivations and what's really best. One quote that got me: "Give a homeless person a blanket and you are killing them."

Hmmm. Really? The quote is not from the author, but from a person she interviews. There are a couple of dozen stories of people through the book, some of which turned out differently than I expected....all of them are intended to make the reader think.

The ladder of the title is a creation of Rambam, a medieval Jewish scholar and physician whose given name was Maimonides. The eight rung ladder starts at its lowest rung with the giver who gives grudgingly and unhappily, moves up through a variety of levels to the top rung, the giver who helps someone become independent and no longer in need of help.

It's a quick and interesting read. And, for those of us in the helping professions, particularly if you are in a job where you have to ask people for donations of their time, talent, and/or treasure, it's a read worth making.

Friday, May 20, 2005

Panel Report--final post

Today, I want to talk about the revisions to the 990 form in the Panel Report.

There is no question that the 990 needs to be revised and improved. It is the major transparency tool for most nonprofits, one whose improvement could really benefit the sector.

That having been said, there is a risk that the IRS and Congress will add SO much to the form that it becomes an administrative burden as well as unreadable by anyone other than a graduate student.

The Panel has made numerous suggestions for additions to the form, nearly all of which I agree with in principle. However, when all of these are combined, I fear for the time and effort the form will take. Again, no single suggestion is bad, but the sum of the parts will weigh agencies down.

Also, the Panel neglected to address one of the key concerns most nonprofits have about the 990, the rules regarding reporting of overhead, or administrative costs. The wide disparity in techniques used to include costs in overhead has resulted in a great deal of variance in how agencies are rated on online watchdogs such as Guidestar.

Finally, I hope that, just like my version of Quickbooks does my tax reporting forms for me at my consulting company, that software makers will improve the ability to have information from a nonprofit's books entered directly into a 990 draft for nonprofit managers. This will insure consistency and ease their workload.

I'm done with the areas of the report that I can comment on reasonably knowledgeably. I do urge you to read the various sections and comment on them to the Panel.

Wednesday, May 18, 2005

Panel Report, Part 3

Today, I want to look at the Panel's report recommendations on two areas:

Periodic Review of 501(c)(3) status, and

Disclosure of Performance Data by Public Charities.

First, the Periodic Review. The Senate has proposed that all 501(c) organizations be required to file for renewal of tax exempt status every 5 years. This, in my view (and the Panel's) is silly, and would be a huge burden on both nonprofits and on the IRS. The Panel has come up with a combination of changes in the 990 and 990PF as well as some recommended best practices that I think adequately address this issue. I've been telling my clients for a number of years to post their 990 in .pdf form on their website, and to be more forthcoming when changing mission statements or other governing tools.

Next-Performance Data disclosure...all of us know that outcome measurement is crucial, and often poorly done. I tell my clients that they WANT to have performance data out there, on their website, in their marketing materials, because otherwise they'll just be judged by their 990 on Guidestar, and other rating organizations.

The panel again has some good recommendations on best practices and a reasonable set of changes to the 990. I wish that they had called for a national reporting form that all funders would use, at least all governmental funders. That would be a huge efficiency boost for the sector.

Tuesday, May 17, 2005

Panel Report, Part 2

Today I want to react to two parts of the Panel on the Nonprofit Sector's report and Recommendations:

Structure, Size, Composition and Independence of Boards of Directors


Travel Expenses

First, boards. Boards need to be independent, have a large and changing skillset, and be free of "the appearance of impropriety". With that background, I agree with the Panel's recommendations, including increased disclosure, a good definition of independent, and the need to exclude convicted criminals (if the crime was in relation to their work with nonprofits)

I also agree with the panel NOT agreeing with the Senate's proposal that all nonprofits have 15 board members. That's nutty. With so much variety in our nation's charitable organization, proscribing a set number is, well, dumb. And I thought a Republican Congress wanted less government, not more! These are good recommendations.

Travel. There is a ton of bad media coverage around travel, usually from excess travel expenses at plush resorts for board and senior staff of large organizations. While I don't recommend that board members be forced to sleep in their cars when traveling for the organization, on the other end of the scale, always staying at the Ritz is inappropriate as well.

First, you need to have and consistently enforce travel policies. SO many organizations have policies and ignore them, or make exceptions for board members, or, or, or. Don't.

The panel makes 5 very common sense recommendations in terms of policies and disclosures. I like all of them, and they are easy to live with---particularly if you are not abusing travel now.

Tomorrow, I'll weigh in on Review of 501(c) status, and performance data disclosure.

Monday, May 16, 2005

We interrupt this program....

I was going to post my second set of reactions to the Panel on the Nonprofit Sector, but instead, this came across my screen...

A terrific article from the upcoming issue of Nonprofit Quarterly, by Clara Miller from the Nonprofit Finance Fund....

The article is really worth your time, and you'll want to pass it on-to your funders, your board, your community. Clara has a great way with words on a critical issue.

The Looking Glass World of Nonprofit Money: Managing in the For-Profit's Shadow Universe.

Back to my Panel reactions tomorrow.

Sunday, May 15, 2005

Panel on the Nonprofit Sector #1

OK, time to put up or shut up. The Panel on the Nonprofit Sector has made its second set of recommendations to the Senate public. I've blogged about them before and urged readers to read and comment. Then it occurred to me....I should put my comments on each area here.

So I will, over the next few postings. What you will see is what I'll be sending to the panel when I'm done with all the postings.

Some of the areas that the Panel looked at are outside of my area of expertise. I'll limit my comments to:

Board Compensation, Executive Compensation, Structure Size composition and Independence of Boards of Directors, Travel Expenses, Periodic Review of 501(c)(3) Status, Disclosure of Performance by Public Charities, and Revisions to Forms 990 and 990-PF.

Today, I'll look at the first two areas of interest:

Board Compensation and Executive Compensation.
Click on the topic to see the Panel recommendations in that area. I'll limit my thoughts to.....my thoughts.

Board Compensation
This one is simple: board's shouldn't be paid-except for travel reimbursement. Period. End of story. Currently a large number of foundation board members are compensated both for their time and travel. I feel strongly that this is flat out wrong. Foundations are nonprofits, just like direct service providers. Foundation board members are stewards, and their job is to make sure that the most money possible goes to direct service providers, not to their own pockets.

I understand that this has gone on for a long time, and I understand that the rationale for this is that foundation board members are responsible for a lot of money and spend a lot of time at their job. Welcome to the world of most nonprofit board members.....members who get no compensation at all.

So, I don't care if it's tradition, and I disagree with the rationale for its existence. It's wrong, and it should stop. Now.

Executive Compensation.
I have no clients who don't have their executive compensation set by the board, but apparently it occurs, which to me seems a grievous breakdown in the checks and balances designed into nonprofits. I agree with the Panel recommendation here, as well as the recommendation that full exec compensation should be shown on the 990. This is just good transparency.

Setting compensation is a bitch, as everyone who works with salary surveys well knows. I like the Panel's recommendations here, particularly the "rebuttal presumption" since it makes sense, and is less prone to hassle from the Feds for well intentioned organizations (which, as we all need to remember, is 99% of nonprofits).

I most fully agree with the provision that penalties for excess compensation should accrue personally to board members who agree to such compensation. This will, more than anything, put a stop to it.

Tomorrow, we'll look the Structure, Size, Composition, and Independence of the Board of Directors, and Travel Expenses.

Saturday, May 14, 2005

Good book, better letter....

I read "Ethical Ambition; Living A Life of Meaning and Worth" by Derrick Bell last week for my book clubs. Liked the book a lot, particularly the chapters on relationships and spirituality. It's a fast read, and I don't think anyone can go through the text and not have their enthusiasm for advocacy renewed. But then....

A couple of times in the book Bell mentions meeting and working with Martin Luther King, Jr., and twice refers to King's "Letter From Birmingham Jail". I hadn't read the letter since college, and went back and looked at it again. Wow. If only our current political leaders could write like that; could express their positions, their desires, their dreams for our nation. I know I got more out of the reading this time, not only because I'm older, but also because I so much more appreciate well reasoned, well written pieces than I did in my twenties. And King's morals and ethics smack you in the face. Not a perfect man by any means, but I long for more leaders of his courage.

Reading the Letter also made me go back and think through my commitment to the things I believe in and advocate for, which is certainly a good exercise for everyone periodically.

If you have 30 minutes, it's well worth your time.

Wednesday, May 11, 2005

Panel Report on Nonprofit Sector---

In previous posts, I've talked about the importance of the work that Congress is doing on regulating nonprofits. Independent Sector put together a panel working on responding to and engaging Congress on this issue, and they've done a great job. Their second draft of work is available for review and comment I urge you to take the time to read and comment on this work.

It is your future, so pay attention now.

Capital posting

In D.C. to do a set of presentations and see some friends. Had a terrific afternoon yesterday in Chicago at the Axelson Center for Nonprofits at North Park University. I did a pre-conference workshop on marketing for a wonderful crowd that had really good questions.

One question stuck with me on the plane: "Quick question", the woman asked, "How do I motivate a board that doesn't want to do its job?"

Of course the answer isn't quick...but what was intriguing was that the other execs jumped in and said things like "Hold them accountable to do their job,", "Get them off the board!", and "Raise the bar on their job description and the ones you want to leave will self-select out."

Good advice. There is no place in a nonprofit today for a board that doesn't work. Boards need to be engaged, knowledgeable, and accountable for their time and stewardship. If they can't do that, they need to leave, both for the good of the organization and their own personal protection: they are fiduciaries, personally responsible for the actions of the nonprofit.

Oh, and thanks to Kris Maldre for all your help and for reading the blog!

Tuesday, May 10, 2005

A code of ethics?

This entire issue saddens me. In a recent post I noted the recent rush in requests for speaking on ethics. Yesterday I got a breathless call from an exec in Arizona, telling me that her lawyer had told her that her nonprofit needed ethics policies or there would be hell to pay with the IRS. I tried to calm her down, sent her to a couple of places online with sample policies, and told her that there will little likelihood that the IRS would be banging on her door, at least in this fiscal year.....

The whole issue of having to discuss and codify our ethics as organizations depresses me. Not because we shouldn't behave ethically, but because it should be second nature. I know, I know, ethical issues are not black and white--there is a LOT of gray, but that's just the point--you can't codify gray. The famous quote from Justice Stewart on obscenity which more or less was: "I know it when I see it" applies here: we nearly always know what the right thing to do is, the tough part is actually doing it.

In a related but total aside, I laughed out loud at the news of a Texas legislator who is trying to ban sexually suggestive moves from high school cheerleading. Good luck. While I don't think I qualify as a prude, I too am unhappy about some of the stuff I see from 15-year-old teenagers at football games, but could I define it? In writing? No chance. And would my definition be the same as someone 20 years older than me or 20 years younger? Nope.

So it is with ethics. You know it when you see it, and you get uncomfortable when you see unethical behavior. But to put it in a policy? What are you going to say? Let's not lie, cheat, or steal? Well, duh, I would hope not. Let's act ethically toward everyone? Again, I would have already hoped so......

My real fear here is that organizations will develop a policy, adopt it, and breath a sigh of relief, saying "Whew, that's done!", and then forget about actually behaving ethically. Then, when something bad gets brought to light, they'll say, "But we had a policy!" as an excuse from having to do good oversight.

I dunno, it just bothers me.

On another note, Firefox now has a security hole. Blah.

Friday, May 06, 2005

Tick, Tick, Tick.....

I turned 53 Wednesday. Birthdays have NEVER bothered me, or even been particularly important to me. In fact, my wife had to remind me that mine was coming up.

This year, though, I am in the throes of reseaching a book on the issue of aging in the nonprofit sector, and all of its implications. As I've noted in previous posts, the Brits are concerned about older board members, and not getting enough new volunteers. Here, we have a retiring baby boom that will stress out a huge amount of our human services network, being new meaning to the term transition on our staff, and require a huge effort to accommodate.

We can accommodate it, of course. Then again we have no choice.

As I flew over yesterday (I'm in Emporia Kansas as I write this) I was just thinking more about it. Expect more posts as the work takes shape.

Monday, May 02, 2005

Who's Who in Online Nonprofit Evaluation

I assume that every reader knows about the many online rating services that look at nonprofits' 990 forms and come up with a rating scale. Donors and reporters use these sites to take a first (and sometimes only) look at a nonprofit.

The National Council of Nonprofit associations and National Human Services Council has a paper out on Rating the Raters that I highly recommend you read.

You can find it here.

In the summary introduction to the paper, the authors note:

Our concern, as responsible nonprofit organizations, is not with the concept of ratings or rankings of Charitable Nonprofit Organizations (CNOs), since we agree that donors should be well-informed about the CNOs they are considering as recipients of their donations. Our primary concern is that donors fully understand the information they are receiving from such ratings and rankings so they can make well-informed judgments and not be misled and/or misinformed. There is great potential for these ratings to be misinterpreted and misused, which would cause more harm than good to both donors and CNOs. In the worst case scenario, donors could withhold vital contributions from a worthy organization based on inaccurate, incomplete or misunderstood information they received from an evaluator.

They go on to list a number of excellent findings (some of which are scary) and make eight very solid recommendations on how to fix the system.

Worth your time.

Sunday, May 01, 2005

Interesting week, good books.

Just realized how long it's been since I posted. Well, interesting week.

Had a terrific time in Fargo, talking to an annual statewide conference of providers of services to people with disabilities. What nice people, not only at the conference, but in the town in general. Great airport, too.

And, I got to pick up my son from UMich in Ann Arbor as part of that trip. Nice to have him home for about a month.

I'm really taken by my book club books this month. I'm just about done with the Contrarian's Guide to Leadership by Steven Sample. So much good stuff, clearly written, some mind-bending ideas. This is really a great read for anyone interested in leadership and new ways to think about it. For example, Sample provides a long well argued position that Machiavelli was not a bad guy--and not wrong, ethically huh?

Speaking of ethics, I'm just a quarter of the way into the second book, Ethical Ambition, by Derrick Bell. It has some really good "re-thinking of what you're doing" ideas.

But, it's Sunday, and the sun is out, so I may not get as much reading done as yardwork....

Last thing--keep track of what the Senate and House are doing. I use the Independent Sector to monitor events. This stuff is important to all of us!