A good resource listing

Got a note a few days back from Shawn Fisher at Online Schools about a listing of resources for students in nonprofit management at various online schools.

This blog is included (if mis-named) along with a ton of great places for you to check out.

In addition, Online Schools offers you a search option to find online educational opportunities in nonprofit management--but only at the Master's level. Since I know of a number on online schools, none of which weren't listed as "recommended, it's hard to tell what drives the recommendations, but still the resource list is good.

Just in time for the holidays

The IRS has announced that they are going to be scrutinizing nonprofits even more in the coming year. Good idea, but poor timing, to say the least.

That said, better oversight is important, and I fully support it, within the context of the new 990, and focusing on both educating nonprofits in how to best report and then going after people who abuse the system.

I read earlier some blogs that decried this "new attack on charities" but really, with so many nonprofits and so much abuse, we need some help in policing the sector. The IRS audits went up 30% from 2008-2009 and another 12% in 2010.

This article from the Chronicle of Philanthropy does a good job of laying out what's coming and what you should be paying attention to. Payroll taxes and loans to executives and trustees (which always falls into the category of what were you thinking?) are high on the list.

Check out the article and be prepared.

Is there an app for common sense?

Got an iPhone? Want to make a donation to a worthy nonprofit via an app that the charity provides? No can do.

What? We're in an era where just about everything except using the toilet is migrating to smart phones and you can't donate from your phone? What's that about?

Well, ONLY if your smart phone is an iPhone, according to this article from the New York Times posted yesterday. An Android phone is fine. Hmmmm, and I thought Apple was always on the cutting edge of awesome.

This is ridiculous, and good for Beth Kanter for spearheading a movement to get it changed.

Nonprofit Culture--a decoding

Just got my copy of a great new book on nonprofit culture. It's called The Nonprofit Organizational Culture Guide: Revealing the Hidden Truths that Impact Performance, by Paige Hull Teegarden, Denise Rothman Hinden, and Paul Sturm.

This book has a ton of good usable information for your nonprofit. Check it out!

Cautionary Tale

Regular readers will remember me discussing the very sad case of Family Connections, the terrific Austin, TX nonprofit that had to close down after its ED stole hundreds of thousands of dollars not only from that nonprofit, but also from her church and the state association of nonprofits like Family Connections. She vanished after an audit, but was arrested last week after returning from Venezuela.

Why discuss this now? Well, millions of people in the US are being besieged now for year-end tax deductible donations from charities far and wide. Stories like this make it harder for nonprofits of all types and sizes to convince people to part from their money.

So, if your organization is out and about asking for donations, one thing not to do is hesitate when someone wants information on your nonprofit's finances, outcomes and impact. And that means you have to have your data and positive stories ready in advance.

A good place to start on Cyber Monday

For many years, our family has exchanged gifts of donations to nonprofits. My wife and kids will make a donation to a charity that they like, and give me a note, or card to open on Christmas day that lets me know about the donation. I love this, and my kids ask for the same thing--sometimes even suggesting the charity.

We also do this for birthdays and other big events, and I know many other families are similarly-minded.

All of which leads me on this Cyber Monday to point you to TisBest Philanthropy. At this nonprofit site, you can purchase a gift card for the holidays, birthdays, anniversary, weddings, whatever. You can get a plastic card to give, or a note, or just have an email sent. Then, the recipient goes back to the website and chooses from one of hundreds of legitimate nonprofits from all parts of the nonprofit sector.

This is a good idea, and one I hope succeeds. In fact, I'm giving my wife a card from TisBest this Christmas...shhh, don't tell her!

Many hands, light work

Most of us donate some of our time, talent and/or treasure to nonprofits.

In the treasure department, I'm all about aggregators for charity donations. Whether loans through Kiva, or direct donations through groups like DonorsChoose, or GlobalGiving, a group of us can help an individual or small group by each pitching in a few dollars. There are dozens of other sites like these, some that get a worthy social enterprise going, or a highly creative idea, like KickStarter.

So, we have a way to micro target our donations of money, but what about our time and talent? I can volunteer on a ton of websites, but that usually means the standard volunteer positions that take up a lot of time and require a longer commitment. What if I just have a little bit of time, or am interested in solving a vexing problem for a nonprofit?

Enter Sparked, a cool and growing solution for just this problem. Not only can your nonprofit post needs, or individuals (or small groups) provide help, but Sparked also encourages and facilitates small business and large corporations to facilitate volunteering through the site.

Very cool...check it out.

Looking at Nonprofits in a better way

Charity Navigator has gotten a lot of press lately for a laudable revamp of its system of grading nonprofits, focusing more on outcomes and less on the totally useless metric of administrative percentage. Good for them, and I hope other online watchdogs as well as foundations and government funders pay attention to Guidestar's process and what they decide to look at.

Here's a New York Times story from yesterday on the subject.

Measuring true outcomes is often very, very difficult; something more funders need to both recognize and fund. Fewer and fewer charities are playing the old game of "we're doing good, so give us money and trust us". Some are still trying to sell their activity levels "we saw 300 people this month as opposed to last month", but more are concerned with outcomes, as in "we got 23 people living wage jobs this month that will help them become more self sufficient."

This is an issue all of us need to keep up on.

Here we go again...to what end?

The entire issue of congress/state legislatures looking and overseeing nonprofit management salaries drives me a bit nuts.

Here is just the latest example from today's New York Times.

I'm mildly torn: some nonprofit CEO salaries do seem high to me in my tax bracket, but so do pretty much all for-profit CEO salaries. I frankly don't believe any business person is worth multiple millions a year. If I were a shareholder of a corporation that pays that much to top management, I'd be rightly upset.

So, should donors be upset about "high" management salaries for hospitals, universities or national charities? Well, they can be, and they can withhold their donations. That's free enterprise. States and the feds can as well, but for congress (with it's free health care for life, I might add) to decide what's "high", or for a state legislature to limit CEO compensation (for for-profits as well, to be fair, at least in New Jersey) bothers me greatly.

Large nonprofits are, well, large, complex organizations, with thousands of employees and huge assets at risk. The people who run them should be paid according to market scale, with the understanding that the market is somewhat ameliorated by the mission satisfaction of what the organization is doing.

The tragedy of all this discussion is that these legislators are only looking at how to cut cost in a high profile way to get a little PR shelter. Most legislatures have been politically cowardly about balancing their budgets (i.e.raising taxes) for decades and their prior acts are now biting them on the butt. They prefer to distract us all by saying "Look at her! She's paid too much! She works for a charity! Take out your angst on her, not us!"

What about the fact that for hundreds of thousands of staff at smaller nonprofits, salaries (even at the top of the organization) have never been close to even adequate, since the same state and federal officials who now pine over .01% of nonprofit salaries have never considered paying a reasonable rate for the very, very needed services these nonprofits provide so that their employees could live reasonably?

In a society that delegates so many of its toughest problems to the nonprofit sector, shouldn't some consideration be made for the people that work there?

The more things change....

Yesterday, I had a great day working with the annual learning event for Ronald McDonald House Charities, a session I've had the good fortune to speak to three or four years running. The staff and board of local Ronald McDonald Chapters from the US and Canada are here, and they are a terrific and fun group of people.

I talked a bit about being a mission-based manager in the morning and then about innovation in the afternoon, and the group was responsive and attentive, even when they were tired in the afternoon.

What intrigued me were the one on one questions during the break. Here's the breakout:

"My board president is too controlling" (3 CEOs)
"My CEO doesn't give the board enough to do." (2 Board Presidents--and no, I don't know if they were the same agencies as the CEO's above!)

"My CEO doesn't ask for enough staff input (2 younger staff)
"My 20 something staff just want to have input on everything!" (4 boomer CEOs)

This is a pretty standard breakout these days of questions from a large group. The first set-regarding board-staff balance--hasn't changed in the 30 years I've been consulting, and I suspect never really will. The second set is coming to a head as more young staff enter the workforce and demand/expect a seat at the decision table.

Today, I go talk to the board representatives. Should be interesting to see what they ask....

For Your Online Viewing....

Two places you can find me online today:

First, the July issue of the Mission-Based Management Newsletter is up. This issue's topic is "Evaluating Volunteers". You can also scroll down and see past single-topic issues. Subscription is free, if you like what you see.

This summer, I'm also doing a bit of blogging for Serenic Software on nonprofit issues. You can see my first couple of posts here.

If you're in the Eastern US, stay cool!

365,000 at risk

No, not dollars, nonprofits.

That's the number of nonprofits who have not filed their 990-N yet, and who need to by later today to not put their 501(c)(3) at risk.

I posted about this before, but today went to the NCCS website about this issue, and looked for nonprofits near where I live who are at risk-there were dozens; 4-H groups, rescue squads, sports leagues.

Some of these groups, no doubt, have gone dormant. In fact, estimates a year or so ago were that about 150,000 (c)(3) organizations nationwide no longer really were in business.

But many are...and are in peril of losing their tax exempt status. If you care about nonprofits in your community, go to the NCCS database, and just search for your state and town.

Then start calling organizations you know that are at risk.

Off to a nonprofit graduation

That's probably a misleading title, but it's true. My youngest child, Caitlin, graduates from Boston University on Sunday, and Chris and I leave today for the weekend festivities. And, like other private colleges and universities, BU is a nonprofit, complete with mission, staff, volunteers, fund-raising and a board of directors.

Universities, colleges and private schools are interesting entities in that they must, unlike nearly all non-educational nonprofits, appeal to the people who have gone through their programs: alumni. These alumni are regularly prodded to give money to their alma mater (I know I am) and offered reminders of how wonderful an institution the college, university or private school is.

And, unlike many nonprofits, these organizations only get one shot at serving their prime clientele: the student. Each student goes through the educational process, hopefully graduates, and then cannot return for more service (unless it's a higher degree or adult education).

Certainly a different mission mix than faith-based or arts organizations who want to serve a person over and over and over and where you never are "done." Many human services organizations wish they could "graduate" a person, but often can't, since the condition that brought the client to the nonprofit in the first place persists.

Interesting.

New Marketing Strategies

Happy Mother's Day to moms everywhere.

If you're into marketing for your nonprofit, you might want to take a look at the May, 2010 issue of the Mission-Based Management Newsletter which is online. Topic? New Marketing Strategies.

Check it out, and if you like what you see, subscribing is easy and free. You can also scroll down to see all the past single-topic issues.

Enjoy!

New Practices in Board Terms

For many years, (probably 30, since I was an ED the first time) I've been preaching the benefits of having board terms. In that time, the concept of limiting board service has become best practice, and even required by some funders.

The standard is pretty much the same everywhere, with a tweak here or there: two 3-year terms for each member. Many organizations, due to a shortage of great board candidates, allow a member to come back on after a brief hiatus, perhaps one or two years.

Over the past two years, I've been getting emails from people challenging my stance on this issue, and I've begun to rethink the whole thing. The basic concern is that by forcing everyone to leave the board, a nonprofit can a: lose historic perspective in their policymakers and, b: lose the few true governing volunteer stalwarts who support the organization with real passion. Certainly both of these concerns are valid and worth considering.

So, what's the solution? Board turnover is still a good thing: it brings in new ideas and perspectives, and allows an organization to root out any policymaker deadwood. It gives board members a graceful exit from their job if they want it, and, like it or not, it is one of the standards by which governance is measured today.

Some nonprofits have come up with what I think is an interesting and innovative solution, one that bears watching. These organizations reserve some percentage of their board seats for exceptional board members who have both demonstrated their passion for the organization, and agree to stay. These members are offered a longer term after their first two terms, say five years, with an opportunity to extend that one more time.

I've seen this eight or nine times now, and the percentage of "reserved" seats ranges from 20% to 40%. The latter seems a bit high to me-and offers the opportunity to slide back into perpetual boards. 20-25% seems about right. On a 15 member board, 20% would be 3 seats. This "experience bloc" would certainly not always vote together, but would serve as a guide to other board members on tradition and prior activities that could be valuable. 3 members would also not be so many as to be "the old boys/girls club" and this inhibit new members from fully engaging.

As I said, I think this bears watching. I'm curious about what guidelines organizations use to pick this class of board members, and how the internal politics play out.


What do you think? Does your board have this policy in place or is it thinking about it? What percentage of seats would be reserved? Do you have guidelines? If so, please share them with us.

File or lose your (c)3

An excellent headsup in the New York Times on the risk that 400,000 nonprofits in the US have of losing their tax-exempt status if they don't file their 990 forms by May 15.

http://www.nytimes.com/2010/04/23/us/23exempt.html

The bottom line is this: If you are a smaller nonprofit and have not filed your 990, or 990N in the past three years, on May 15 your tax-exempt status will vaporize.

Check this out and file NOW.

Innovation, Part 2

Earlier in the month, I neglected to post that the April edition of the Mission-Based Management Newsletter is up. This month, the newsletter covers the second part of a two-part series on Nonprofit Innovation.

Check it out, and remember to scroll down to see the topics of past newsletters over the years.

If you think you or your nonprofit could benefit from reading regularly, subscription is easy and free.

Great reporting on a cautionary tale...

OK, this is a story every nonprofit board member should read. All of it.

The story, from the Austin American-Statesman, is about the collapse of Austin's Family Connections. It is unusually well written and thorough. It analyzes the causes of the collapse of this successful, acclaimed service organization.

And, unlike much reporting on nonprofits that I have seen, it gets to the many (not just one) root causes.

Although there were signs easier to see in the rear view mirror, the ultimate bottom line (no pun intended, since this is a sad tale) is that there appears to have been a basic breakdown in board oversight. No audit, no audit committee, and the board allowed the ED to control all the financial reporting herself. All easy to see warning signs from the outside, but outsiders never got the chance to get in to take a look.

Again, well worth your time to read the entire article. And, a shout out to Andrea Ball for a great job with her story. I suspect it will help many other nonprofits avoid similar fates.

Kiva for college

Regular readers know I am big on aggregation models for philanthropy (as well as innovation). You take lots of people, ask each for a little bit and good things usually happen. Kiva led the way with this a few years back and now there are many similar programs, like SmallCanBeBig or WorldFlix. I'm sure there are many others by now, because the process works and the technology is there to enable the great idea.

I was watching a show on Hulu last night and this in-your-face ad popped up about someone who couldn't go to college because he couldn't pay the tuition.

All $700 of it.

That got my attention, as did the charity name: vittana.org So, I went, checked it out, looked for some background and found articles on it not only from the New York Times but also the Huffington Post.

As with Kiva, you lend money, though in this case to a non-US student (through an in-country intermediary). The student goes to school, hopefully graduates, gets a job and pays you back.

Are there issues of concern? Of course. But it's a great idea and another way to help international development.

A good day for women, a bad day for breast cancer

As regular readers know, my wife Chris is a breast cancer survivor, having been diagnosed last November. She had surgery in December and is going very well. Yesterday, we participated in the first Susan Komen Race for the Cure in Roanoke. It was a terrific event, blessed by perfect weather.

The organizers expected 1,000 people and hoped for $150K in donations at this inaugural event. They got nearly 2,000 souls and over $265,ooo in funds. And, most of that money stays here in the Roanoke Valley, helping fight breast cancer.

I knew Komen had hit the big time last October, when NFL players wore pink shoes, hats, arm bands and gloves for the entire month. Chris and I had also done a walk on our 30th anniversary cruise, discovering that Holland America does such an event on the last morning of every single cruise.

Awesome.

Outcome measures on online watchdogs

Gordon Campbell, the CEO of United Way in New York City provided this excellent post on

Helping Donors Choose: Improving Nonprofit Ratings for the Future

I not only liked Gordon's perspective, but he provided good news on what GiveWell, Charity Navigator, GreatNonprofits and Philanthropedia are doing in this area. Then, he cautions readers (who, I assume, are donors who have never tried to provide "meaningful outcome measures") that doing so takes time and a bit of trial and error.

If you have a donor who is thinking about donating to your organization, read this post and send it to them.

As an aside, I love GiveWell's tag line "Real Change for Your Dollar". Of course real change only happens if someone measures outcomes.....or as the old saying goes "In God We Trust. Everyone else bring the data".

Younger Board Members

There's been a bit of an online discussion recently about why nonprofit boards don't have younger members.

Emily Hearst had an excellent post on her Board Life Matters blog, titled Why Don't More Members of GenX and GenY Join Boards? which got a great response. Then, Rosetta Thurman took her turn in her post titled Do Nonprofit Boards Really Want Younger Members? on the Chronicle of Philanthropy site. Both posts make excellent points, but I'm compelled to add my 2.0 cents here.

First, as is well known, boards, if left alone, tend to recruit themselves (i.e., people who look, act, think, live, etc. as they do). Thus, it's important for board recruitment to be a joint board-staff effort...it's the only way to break out of the homogeneity bubble.

Second, many senior staff have come to depend more and more on boards either primarily or solely for fund raising. (As an aside: This is a very, very bad thing. When boards are concerned only with development, they aren't concerned enough about planning, strategy, financial oversight, etc.) With this increased emphasis on boards as a conduit for incoming cash, staff make the assumption that the board members need to be rich--and that only older people have, or have access to, money.

Wrong--just look at the texting response to Haiti. Younger people bring huge networks of friends and associates with them. They (and their friends) are nearly bottomless resources of volunteering and donations--even if only in small amounts individually.

Lastly, boards often don't have two-three-four board slots open at once, and younger people tend to stick together. Imagine, if you were 28 and invited to join a board whose average age was 58, how you'd feel, particularly if you were the only face under 50 in the room....oh goody, I joined my parent's Rotary Club......

We DO need to age down on our boards, and we need to do it soon. Age diversity needs to have the same priority as other kinds, and it's just as difficult to achieve. But that doesn't mean we don't need to get to work and try.

Charity at the Ballpark?

I'm off to Spring Training in Florida with my son, Adam this weekend. Adam (now 24) and I had a 15 year quest to see the Atlanta Braves (his team) play in every National League Stadium by the time he graduated from college--which we successfully accomplished. Much fun, and some great father-son moments. We've never been to Spring Training, and we'll see two games in Orlando this weekend.

My point? I was talking to Adam recently about how many musicians offer space to charities at their concert venues and then urge their listeners to donate time or money to that charity during the concert. It's a great connection to the community, and a good role model.

So where are the similar charity tables at pro sports arenas? I can't think of one place Adam and I went where one or more nonprofits was providing information, or handing out schwag, or taking donations.

I know many athletes do great things in their communities with nonprofits, and that most sports teams provide some donations, but why not this free, very visible way of supporting the nonprofit community?

Money for nothin.....

It's baaaccccckkkk, the regular hoopla over nonprofit CEO's being paid too much.

I get pretty sick of this, both when the criticism is justified and when it's not. When it is justified, I get angry at the CEO (and, of course the board of directors who are accessories before the fact) for bringing disgrace on the hundreds of thousands of hard working and very underpaid nonprofit management staff.

When the critiques are off base, I get angrier, because the media should do its work and know better.

The interesting and infuriating thing about this is how often the spotlight goes on smaller local nonprofits and so rarely on foundations and large nonprofits such as hospital groups or universities. I know the salaries are in the Chronicle of Philanthropy, but it seems the same prejudice about salaries that exists about endowments. For big nonprofits--no problem. For small ones, horrors!

But, back to the news---the CEO of Boys and Girls Clubs of America apparently scored over $1million in total compensation in 2008, over twice the average for CEO compensation at nonprofits of similar size. If true, that's worth some investigation and calling out, particularly since the Boys and Girls Clubs get 40% of their income from federal funds.

When people forget it's about the mission and not the staff, about the mission and not the board....bad things happen.

As always, the rule of unexpected consequences....

One consequence of the recession no one foresaw--lots of unemployed or underemployed people volunteering in US nonprofits. Awesome. Troublesome (for the unprepared nonprofits), but awesome.

One unforeseen consequence of the Disney volunteering promotion (Give A Day, Get A Disney Day) is the sheer number of people who have responded. Side note: are they truly volunteers? Or compensated citizens?

Whatever the answer, this wave of volunteering encouraged by Presidents, employers and other corporate and public figures is only going to grow as the number of Americans interested in volunteering simultaneously rises. Younger Americans (those 30 and under) have been trained from early on to volunteer a LOT. Now that they are in the workforce (and more and more in management) the link between business and charities are being strengthened.

My point? For nonprofits that have weak volunteer management programs, now is the time to strengthen them. For nonprofits that have no volunteer programs, now is the time to consider them. Do you have enough funds to do all the mission needed? I didn't think so. Why not expand your mission resources to include volunteers?

Coming Out of The Recession Stronger

The March edition of the Mission-Based Management Newsletter is online....this month's topic is "Coming Out of The Recession Stronger". Check it out!

A deal for book lovers....

I just learned that Fieldstone Alliance is having a winter book sale. 30% off all titles, and since all of those titles are focused on nonprofits, it's something you should take a look at.

Go here to learn the details.

Truth in advertising...I have two Fieldstone titles: Nonprofit Stewardship: A Better Way to Lead Your Mission-Based Organization, and Generations: The Challenge of A Lifetime for Your Nonprofit.

That said, there are dozens of great books for sale. Check it out.

The power of small donations

You may remember that in past postings, I've talked about the power of small donations, and how younger donors come with a network of friends who, if asked, can often make a $5 or $10 donation...instantly. 500 $10 donations total, of course $5,000, and may be a heck of a lot easier to get than one $5,000 gift.

A story in today's New York Times on the results of the many small fund-raising efforts for Haiti is a bit different, but related in the idea that small donations add up.

And, it's good news from the perspective of Americans' undying generosity.

Nonprofit Innovation, Part 1

The February issue of the Mission-Based Management Newsletter is (finally) online. This month's topic is "Nonprofit Innovation, Part 1". Check it out when you get a chance.

Tech "fun", conference fun.

I've been dealing with tech crap for the past few days and have thus been too busy to post-my laptop power source died, so after tearing it apart and finding that there was not, as advertised, an easy, plug in fix, I reassembled the computer and took it to ship to be repaired.
Then, my Carbonite backup was, to put it mildly, poor. So, I'm using a variety of workarounds.

That, however, is my problem, not yours.

I just came back from New Orleans, at a conference for organizations that work with people with disabilities and had a refreshing experience: I spoke on the topic of how to grow your nonprofit, which was a fun change from repeatedly telling people how to deal with the recession and cutbacks. Most of these nonprofits are associated with NISH, who I do a ton of training for, and I know lots of them, so it was great to see many familiar faces in the crowd. And, New Orleans is always fun.

More later--I'm snowed in again this weekend.

Awesome Day in Trinidad

I've just finished an amazing day with the WorkAbility Americas conference in Trinidad, speaking this morning on innovation and social enterprise, but more important, listening this afternoon to a group of Western Hemisphere nonprofits who provide jobs to people with disabilities.

Always fascinating to see how people do great work in environments that make life in the US seem a breeze.

Much fun, and very, very energizing.

Should nonprofits be taxed?

We now stand in unprecedented territory. All 50 state governments are in a deficit situation with 2011 and 2012 looking worse (since the federal stimulus funds that many states have used to plug budget holes will run out).

This, of course trickles down to counties and municipalities, nearly all of which have their own budget woes.

Which leads us to our question of the day: Should real property owned by nonprofits be taxed at the same rates as that owned by for-profits? Before you scream bloody murder, think about it for a moment. Take a city like Boston, with many, many hospitals, universities and church facilities (and hundreds of other nonprofits) living side by side with other owners who pay property tax. Some estimates of the percentage of Boston land owned by nonprofits are as high as 20%...meaning that the cost of police, fire, roads, trash, etc for all city properties have to be picked up by only 4 out of 5 owners. Fair?

On the other hand, there is no doubt that nonprofits contribute to the public good in many ways. Does that compensate enough?

And, government is often a key (sometimes mojority) funder of nonprofits--and it certainly doesn't overpay. Does that underpayment for services compensate for the property tax lost?

Obviously, I come down on the side of keeping nonprofit property tax-exempt. But the voices FOR taxation are growing louder. In Camden, New Jersey, a move to tax nonprofits on a per-employee basis just died, but the fact that it was even introduced shows the desperation of some governments to fill their budget gaps.

Here's a few readings on the subject.

http://www.i2i.org/main/article.php?article_id=463
http://www.nonprofitmaine.org/all_about_nonprofits.asp#why_exempt


Keep yourself informed about this growing (and concerning) trend.

More tech, more $ for Haiti

In yesterday's post, I noted that the majority of funds raised so far by international charities for Haiti relief had come online, as a reminder to all nonprofit s to make sure that they focus much of their fundraising online.

Today, the Chronicle of Philanthropy notes that, as of Friday, nearly $12M of the $150M received came through texting, "an unprecedented amount" according to the Chronicle.

Last night, I was watching an NFL playoff game and the announcers noted at least 4 times that viewers could donate $10 to the American Red Cross for Haiti relief simply by sending a text to 90999.

Wow. How many $10 donations went in right there and then?

And, I would put money on the fact that no 50 year old thought that up. Yet another reminder to empower your younger staff to get tech to help your mission.

Lessons for nonprofits from Haiti

Before we get to the point of this post, let's get to the real point:

If you and your friends, and their friends, and everyone's families haven't yet given to Haitian disaster relief, stop reading this and do it now.

Then, mark on your calendar to do it again in a month and again six months from now. Go. Now.

OK, you're back. Think back about what you just did or, if you had already given before you opened this post, what you did when you gave. If you're like many people, you just decided, "I'll give to X Charity." Then, you went online, pulled out your credit card and donated. Good for you.

If you're like many others, (including my wife and I) you were unsure which relief agency to support. Which organization will provide the most needed help right now? So, you may well have gone online, looked at different relief groups' websites, even checked them out on Guidestar.

But when all was said and done, you went back online, pulled out your credit card and donated. Again, good for you.

My point? You gave online. You wanted to help, help now, and a check in the mail just didn't cut it.

The data so far support this feeling: as of Friday, according to National Public Radio, over 80% of funds donated to the top 10 international relief organizations had come online. To be sure, a lot of paper checks are still in the mail and haven't been counted, but that percentage is still impressive.

There are two lessons for nonprofits from all this:

First, make sure your organization can accept donations easily online.

Second, a week ago, many nonprofit staff were bemoaning their situation vis a vis the economy. The pictures and stories from Haiti put that in a bit of perspective for all of us.

Will businesslike charities become charitable businesses? Part 2

A couple of days back, in Part 1 of this post, I discussed the trendy idea that businesses and charities are inevitably going to merge, and took the position about the nonprofit side of the equation that I simply don't see this happening for a variety of reasons.

But what about businesses: are they becoming more charitable? Will business force out nonprofits by taking over our turf?

Again, no.

There is no question that more and more businesses have figured out that having social outcomes do a variety of good for the community and for the business. They build morale among staff, help develop a corporate culture that attracts people who care and are motivated, and provide a competitive edge to attract customers who also care.

This trend is largely evident in smaller companies who are more flexible, and most evident in smaller companies led by younger owners and managers. New entrepreneurs often try to marry up their entrepreneurial skills with a social or community problem, and are not shy about saying that they need to make money in order to do good. Look at Tom's Shoes, one example that's on television a lot. Great organization, great idea. But if the for-profit side doesn't sell shoes, the charitable side can't donate them.

The thing to remember is that this trend, while incredibly laudable, is still a distinct minority among business. It gets lots of press since it's newsworthy (read: unusual/weird) but it is nowhere near mainstream yet. And, given the behavior of so many for-profits (see yesterday's post) in the recent past, I don't suspect the idea of always doing social good will become the norm in practice for a long, long time.

So, to summarize both posts, more nonprofits are becoming businesslike in their pursuit of mission--but nowhere near all. More businesses are pursuing social good in addition to profits, but nowhere near a majority.

Both of these are good things that we should encourage, not angst over.

Venting a bit....

A story in today's New York Times got me going this morning. It reports that Goldman Sachs, the investment bank, is considering increasing the requirements for charitable contributions from it's top paid employees--you know, the ones who helped screw up the economy and are now getting million and multi-million dollar bonuses a year later.

The article noted that Goldman has long had a requirement that top earners give 4% of their income to charity--and then check their tax returns to assure that there is compliance. Thus, there is no real charity at Goldman, just an enforced policy, like a dress code or the expectation of cheery attendance at a hated boss's birthday celebration.

The key part of the article was whether this policy--of wringing donations out of otherwise unwilling employees from their obscene bonuses--would reduce public anger over the bonuses themselves.

Yet again, these people are clueless about how real people think and act. I must have heard two dozen interviews over the last year from Wall Street types who absolutely do not understand why the country is mad at them for taking crazy risks (on all our behalf) to make money (for themselves). While there were many, many people who contributed to the economic mess, the Wall Street bankers stand out above the rest for their endless and self-serving rationales of why they were not the ones that brought the nation (and much of the world) to its economic knees, then needed tax dollars to bail them out, and now can go back to business as usual (with no oversight, PLEASE--we know what we're doing).

All of which is a rant to get to this question. Is forced charity really charity? Don't get me wrong, I'm delighted that some nonprofits will get what, on my quick accounting, is a ton of money (Goldman has set aside $16.7 billion for compensation this year--calculate 5% of that and you see what I mean), but still, is it charity? Goldman has reported that the firm also put aside $200 million for it's Foundation. I wonder how much of that $ will be given to charity, and how much will be kept in the foundation, invested by Goldman--and who at Goldman will earn investment fees. Pardon my cynicism.

There's a related issue here that has been bugging me for a long time--the courts sentencing people to community service. This sets up a conversation I had with a high school student a few months back where he told me he was busy after school: "doing my community service alongside the felons and DUI guys". His school requires volunteering, but limits the places students can volunteer, the time, and the type of volunteering. The kids get it--this isn't charity, it's forced labor.

A few years back, I was in London giving a talk at a conference and the main topic of discussion at the breaks was the new Charity Act, which paid young people to volunteer as a solution for years of reduced volunteering, particularly by people under 30. All of the attendees from the UK thought this was a great idea. The three or four Americans there smugly noted that we don't pay our volunteers--they actually show up on their own.

Well, sort of.

Will businesslike charities become charitable businesses? Part 1

One of the more interesting debates in our sector at the moment is the discussion (panic/hue and cry/gnashing of teeth) about the merging of the nonprofit and for profit models of business. Critics and analysts have noted correctly that many nonprofits are acting in a more businesslike manner than 10 or 15 years ago. Then, these observers marry that "fact" with the growing desire of businesses to have a social outcome and become one definition of a social entrepreneur. These two trends are seen as inevitably ending the distinction between charitable groups, often accompanied by much verbal angst and pulling of hair.

My suggestion? Chill out. We are not approaching the nonprofit apocalypse by any means, so let's dissect this discussion a bit to see why in this post and my next one.

Are nonprofits in general more businesslike than 15 years ago? Absolutely. Are all nonprofits this way? No chance. There are hundreds of thousands of sloppily run nonprofits today, and there always will be, just as there are sloppily run for-profits, poorly managed government agencies, and badly managed personal finances.

What has happened is that the expectations of the quality of nonprofit management have climbed dramatically. Take outcome measurements for example, a term that was just gaining traction 15 years ago (with, I might add, much angst-filled commentary about how such measurement would be the "end of the sector" since it took valuable time away from mission). Or, look at the spread of best practice models, standards of excellence (such as the terrific ones from Maryland Nonprofits) and accreditation. And, of course, the online oversight of watchdogs like Guidestar and Charity Navigator. All of these forces have slowly raised the bar on nonprofit management, outcome and accountability.

To which I say, good, good, and good.

And, certainly we talk more about mission-based businesses (a term I've been pushing for 25 years) and using business skills such as marketing and finance. But have most nonprofits moved from being charities to becoming mission-based businesses to going all the way to being businesses with a mission on the side?

No, and it won't happen any time soon. Why? Because nonprofit staff and board have seen the light regarding the key rationale for managing their mission better: They get to do more and better mission as a result. All the business "stuff" that critics worry about is not based on becoming a business--it's about doing better mission. That's what people on the ground tell me and show me all the time. There are just too many people who are too committed to service and mission to let this morph out of control. Will some organizations go too far? Yep, and they already have. But the vast middle of the bell curve on this issue is just doing more and better mission, not turning into some sort of nonprofit Wal-Mart.

Now, how about the for-profit world and their social aspirations? That's also a real trend, and we'll look at that in my next post.

Are these really the big trends?

Being behind in a lot of things, I just picked up the December 10 issue of the Chronicle of Philanthropy, which lists their 10 Emerging Forces for the nonprofit sector in 2010. While most of the list, at least in my view, is rehashing of things that have been out there for a while, I was glad to see that they've highlighted the need for and increased use of volunteers (although I don't like their alliteration "Volunteers in vogue"...it sounds like it's just a trendy trend), and the fact that some boards may understandably stall their tech upgrades due to reduced revenues.

All of the trends make good reading and I'm sure at least 6 or 7 pertain to every single nonprofit out there.

In the same issue, the really bad news is the report on the sector from Bridgespan that notes that 97% of charities are feeling the effect of the recession and that more than 40% have laid off staff. These and all the other indicators (demand, funding, etc.) have all worsened since last year.

As we know, the nonprofit sector lags with recessions--and with rebounds. We go down later, go deeper, and come out last. So, what should nonprofits do? We'll talk about that a bit in the next post.

Some wishes and some apologies

Well, Happy 2010 to all.

Apologies for the loooooooonnnnngggggg break in posting, but stuff has been going on here, not the least of which was a bout of breast cancer for my wife, Chris. Thankfully, she's had successful surgery and her prognosis is very, very good. Thanks to all who sent (or thought) good wishes.

One of my 2010 goals is to post much much more, including on some cool stuff I'm involved with regarding nonprofit innovation, the 3rd edition of Mission-Based Management, which came out while I was gone from this spot, and the 3rd edition of Mission-Based Marketing, which is half revised as I write this.

So, you'll see more of me here from now on, and I hope you tune in regularly. I've always got lots to say, and I'm six months behind!

The interesting article from today is about one of my favorite nonprofits, Teach for America, from the New York Times. I'm not quite sure what to make of the headline, except to say it seems misleading. Need to read the entire piece of research.

Books: I just finished SuperFreakonomics and loved it as much as the original. Strongly recommend it.

Back soon....