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.