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Nonprofit Knowledge Matters | What’s up, what’s down in funding for nonprofits?

Posted: 
December 10, 2014

As we look at the funding landscape for charitable nonprofits heading into 2015, nonprofits are feeling as if we’re on a see-saw.

In some ways, we’re on top of the world: recent reports tell us that the tide may be turning – a little – when it comes to private philanthropy’s interest in providing funding for capacity building. And we’re chipping away at the donating public’s perception that “overhead is bad,” and hopeful that being transparent about the full costs of delivering services will demonstrate the need for contributions to cover administrative costs and also give donors, foundations, and the media data to show that it actually costs something to deliver services in communities (gasp!).

But, on the other hand, the bumps at the bottom of our see-saw ride are a reminder that the dollars flowing to charitable nonprofits are not enough to allow our sector to soar.

Here’s what’s up and what’s down.

UpGeneral operating support: A strong majority (81 percent) of grantmakers surveyed by Grantmakers for Effective Organizations, known as “GEO,” reported that their grants include general operating support grants. From this group of grantmakers, the median percentage of their total grant dollars that went towards general operating support was 25 percent - a big leap from just 3 years ago, when the median was only 20 percent. However, we’re also hearing from the field that many grantmakers are still stuck in the mindset that a “new” initiative is more exciting than an existing program or funding general operating support. “Funders continue to change their criteria and do not support general operational expenses. Everyone wants a new initiative, but if the old one is working and producing why not continue to fund what works?” (Quote from survey respondent in the The Fall 2014 State of Grantseeking ReportTM ). The 2012 data reported by The Foundation Center indicates that there were fewer dollars and grants directed for general operating support in 2012, than in 2011, so we’re still holding our collective breaths on this one.

UpMultiyear Support: This headline in the 2014 national study of philanthropic practice by GEO was music to our ears: “Multiyear support is making a comeback. Most funders now give multiyear grants.” Thank you, GEO for this insight: “Multiyear support shouldn’t be a fair weather practice. In tough times, nonprofits need this stabilty more than ever. Long-term support allows nonprofits to plan with confidence and reduces the amount of time they have to spend applying for and reporting on grants.”

Up Financial support for capacity building: The same study by GEO noted that more than 25 percent of the responding grantmakers reported they have increased the type of grant support most commonly associated with capacity building, which GEO also defines as “resiliency and capacity to navigate change.”

 

Down Government dollars: Almost half the nonprofits surveyed by the Nonprofit Finance Fund in its 2014 State of the Sector survey (NFF survey) with government contracts or grants reported a decline over the past 5 years in the amount earned from those contracts/grants. Plus, late payments from governments continue to be a problem: 26 percent of those taking out a loan reported that they used the loan to fill a funding gap created by delays in payments from governments.

Down Donor loyalty: If your nonprofit had a donor retention rate of only 42 percent, what would you do? That’s the national median retention rate for donors, according to the 2014 Fundraising Effectiveness Project, which underscores that many nonprofits are losing ground in their return-on-investment for new donor cultivation. The data are sobering: for every 100 donors gained in 2013, there were 102 lapsed donors; over the last nine years, donor and gift dollar retention rates have been consistently below 50 percent. New donors were the least likely to make a repeat gift.

Down Corporate support: Where’s the cash from corporate America? Yes, thank you for the in-kind gifts. Thank you, too, for the skilled volunteers. We don’t want to sound ungrateful, but it was surprising that 2013 marked the smallest increase in corporate giving since 2011, and that the majority of the increase was attributed to in-kind gifts. Surplus inventory doesn’t pay the bills.

Whether you are feeling up or down, we think you’ll agree that these are challenging times for fundraising. Good luck to your nonprofit with its year-end fundraising activities. And please don’t forget to thank your donors, and make sure your nonprofit is registered for charitable solicitation activity in every state where registration is required and where a nonprofit solicits contributions.

Filing W-2s for your nonprofit’s employees: Deadline February 15, 2015

The Affordable Care Act now requires all employers, including nonprofit employers, to report the cost of health insurance coverage for each employee covered under an employer-sponsored group health insurance plan on Form W-2, Wage and Tax Statement (in Box 12, use Code DD). As the instructions to employees on the back of the form explain, the fact that the ACA now requires that employers report the cost of health care coverage on the Form W-2 does NOT mean that the coverage is taxable. This reporting is for informational purposes only, and will provide employees useful and comparable consumer information on the cost of their health care coverage.

NOTE: Small employers filing fewer than 250 W2's are eligible for transition relief for tax-year 2012 and later, which means that compliance with this requirement is voluntary until the IRS issues final guidance. For more information, contact your nonprofit’s accountant, and/or see IRS guidance.

 


 

 

Featured Fundraising Resources

Corporate sponsorships

Ethical fundraising practices

Gift Acceptance policies

Internet and social media solicitation tips

Data on foundation giving (Foundation Center)

Nonprofit 911 free online fundraising webinars (Network for Good)

Looking for help with fundraising?
Contact your state association of nonprofits to find out how membership offers special access to the comprehensive educational resources available through Network for Good’s Fundraising Fundamentals. Bonus: Network for Good's Fundraising Fundamentals courses are eligible for continuing education points through CFRE International. 

This Month’s Poll

In the past year has your nonprofit received a grant that you would define as a “capacity building” grant? Yes/No 

Did you know?

The Association for Fundraising Professionals considers it unethical for a fundraising consultant or employee involved in fundraising to receive any compensation based on a percentage of funds raised. 

Worth Reading

Is Grantmaking Getting Smarter? (GEO) 

Hot off the press

IRS 990 instructions for 2014

Nonprofit Knowledge Matters | The Compensation, Benefits, and Employment Issue

Posted: 
November 12, 2014

The common sense of compen$ation

When questions about a nonprofit leader’s exceptionally high salary make the front page of the paper, we wince. A single nonprofit is being criticized for being an outlier, but it feels as if all charitable nonprofits and their values are being questioned.

At the National Council of Nonprofits, we are frequently asked, whether by the media, curious nonprofit staff members, or well-intentioned board members, how to determine what the appropriate compensation is for nonprofit staff.

The answer is, “it depends.” The legal process, promoted by the IRS, is to task the board or convene a group of board members (but not anyone employed by the nonprofit) to compare the salary and benefits of similar positions at similarly-sized organizations in your nonprofit’s geographic area, serving a similar mission. The process should be documented. A written description (such as in the minutes of a meeting) of what data was reviewed, and who was involved in the process, can protect the nonprofit and its board of directors from IRS penalties, in the unlikely situation that the IRS would find that the nonprofit approved compensation that was “excessive.” (Our website resources go into more detail about the process recommended by the IRS.) Of course, nothing can completely insulate a nonprofit from media scrutiny, but following the IRS “comparability” process, and taking pains to document all the research that went into approving compensation levels, offers protection against allegations of unreasonable conduct.

Comparing apples to apples, and proving that you did, is common sense, but it’s often hard to nail down data to use for the comparison. And the more practical question that comes up whenever a nonprofit is attempting to fill a position is: what salary level is attractive to candidates, but simultaneously won’t derail the nonprofit’s budget? Determining the appropriate salary and benefits for staff leaders is time consuming, but taking the time to “get it right” will make the hiring process more efficient and ensure that your nonprofit is attracting and retaining the talent it needs to advance its mission. Here are some ideas that may help:

  • Be very clear before you post an open position: What are the responsibilities of the position? How many years’ experience are truly needed? Also ask, what can your nonprofit afford to pay vs. what would it take to hire the talent your nonprofit needs? You may have to adjust your expectations.
  • What are other employers offering? Knowing this will give you an idea of what it will take to hire the talent you need. Search for the position you are seeking a candidate for, to gauge how the job market is pricing that job. Check the classifieds, and relevant online job boards. Some online job sites allow you to search only the postings that include salary data.
  • Consult a cost of living calculator (US Department of Labor). Or you can use this one (a humorous take on this topic from Blue Avocado).
  • Many state sssociations of nonprofits conduct periodic salary and benefits surveys and produce state-specific compensation reports that are frequently free for members.
  • The Bureau of Labor Statistics posts Occupational Compensation Surveys (OCS) for most geographical areas in the United States. The data are available by the type of occupation as well as by various levels within that occupation. While the exact job title you are looking for may not appear, there will be comparable responsibilities. The advantage of using these surveys is that they reflect data in your geographical area so you can get an idea of what employers in your area are paying for a specific job. Since your nonprofit is likely also competing with for-profit employers, don’t dismiss the BLS data as unhelpful.
  • Finally, don’t forget to make sure you know how your nonprofit will classify the worker (exempt or non-exempt), and to ensure that the proposed compensation meets updated minimum wage requirements in your state. 

More resources

How many people work for nonprofits in the United States?

Here’s a conundrum: As we often point out, the federal government can tell us how many heads of lettuce were grown in the US in a given year, but not how many heads of people were employed by charitable nonprofits! However, the charitable nonprofit community is a bit closer to having the data we need to show our clout and significance as an economic force in the workplace. According to recently released data from the U.S. Bureau of Labor Statistics (“BLS”) covering years from 2007-2012, there were at least 11.4 million people employed by nonprofits in 2012, which amounts to 10.3 percent of all private sector employment. (The actual number is higher since the data were based only on employer-units that participate in state unemployment programs, and many nonprofits opt-out of government programs, preferring to follow a private insurance route.) This BLS data revealed that of the nonprofit employees identified, their wages amounted to $532 billion, or 9.8 percent of total private sector wages! BLS made this data available in response to repeated requests from the nonprofit community. The BLS is now seeking input from nonprofits  on the methodology of the research, the usefulness of the data, suggestions for future data products, and – most importantly – whether it should continue to release this information, so that the public can benefit from it. The National Council of Nonprofits believes this information is vitally important to nonprofits (which is why we have long included this provision in our annual Public Policy Agenda: “… governments have a responsibility to collect and disseminate nonprofit employment and economic data that identify the impact of nonprofit organizations in their jurisdictions”).

  • Please join us by contacting BLS officials to thank the government workers who rolled up their sleeves to make this data available, and tell them how important it is to your nonprofit so they will continue to release this public information that the federal government already collects.
  • If you have questions about the data, or suggestions on how to improve the usefulness of the data, or the process of obtaining datasets, please also let BLS know.

What’s new in health insurance benefits?

 

Nonprofits that utilize the small-employer health credit to help pay for employee health insurance coverage will see a 7.3 percent reduction next year as the result of the automatic, across-the-board spending cuts known as “sequestration” that were enacted in 2011. The shrinking health credit is only one of thousands of arbitrary cuts that can adversely affect the work of charitable nonprofits. According to the IRS, these and other cuts will occur “unless and until a law is enacted that cancels or otherwise impacts the sequester.” In December 2013, House and Senate budget negotiators reached an agreement to avert another round of sequestration cuts, but that deal expires in 2015. White House officials revealed in October 2014 that President Obama will propose sequester relief in his fiscal 2016 budget due to be released in February 2015. That’s a long time to wait! Please help us help you by sharing your story about the small business health care tax credit with us. Thank you!

For information and special access to health and other types of insurance coverage tailored for nonprofits, such as Directors’ and Officers’ insurance, connect with your state association of nonprofits.

Before your nonprofit hires a professional fundraising firm – CAUTION!

$1 million+ in penalties was assessed against a Minnesota fundraising solicitation firm that contacted potential donors in South Carolina with “robo” calls, without registering with the state. Did you know that the majority of states require nonprofits to register BEFORE soliciting a single contribution? Your nonprofit is not off the hook for registration if it is not the one making calls to prospective donors directly or sending out direct mail pieces. Moreover, if your nonprofit is directing potential donors to an online portal (such as Paypal or others) that processes donations, your nonprofit may still be required to register in various states. We recommend that you know your state’s charitable solicitation law and are also aware of state laws in other states where your nonprofit is soliciting contributions. Here is a 50-state fundraising compliance guide. (This guide is not legal advice and was created by Harbor Compliance.)

The “lesson learned” is that nonprofits can be responsible for the actions of their employees, and also of independent contractors they hire. As a result, it’s a good idea to set the limits of authority and define responsibilities for independent contractors in a written agreement with them. See our resources about independent contractors.


 

Q: Where can I find comparability information about salaries and benefits for nonprofits in my area?

A: Many state associations of nonprofits offer salary and benefits reports that are state-specific. Related resources are available on our website.

Q: May interns receive a stipend?

A: If you are not careful, that stipend can turn a volunteer intern into an employee who is owed minimum wage. Read about compensation for interns.

Q: We need to downsize a program and thought that one solution would be to make one of our employees a consultant instead. Any risks?

A: It will be important to analyze whether the employee you are downsizing truly meets the definition of a consultant, otherwise your nonprofit could face penalties and back wages. Blue Avocado explains this issue. 

Top 10 Nonprofit Employment Mistakes (Siobhan Kelley, J.D, NonProfit Times)

5 Steps to help you decide what salary to pay your employees (Small Business Administration)

Who’s an employee and who’s an independent contractor – and why it matters (National Council of Nonprofits)

New Resources from the National Council of Nonprofits

What does it cost to deliver a nonprofit’s mission? #OwnYourOwnCosts

Worth Reading

Two words that change how people think of you: “Thank you”

With thanks – Gratitude can win you new friends. (UNSW Australia)

The Paradox of Generosity (Smith and Davidson, Oxford University Press 2014)

Overcoming the nonprofit starvation cycle – A conversation with Ann Goggins Gregory, interviewed by Nell Edgington (Social Velocity blog)

The Sustainability Mindset: Using the Matrix Map to Make Strategic Decisions
By Steve Zimmerman and Jeanne Bell (Jossey-Bass 2014) 

Nonprofit Knowledge Matters | Not-So-Spooky Stuff for Nonprofits

Posted: 
October 15, 2014

Wanted: Courageous Board Members

Stand for your MissionFor too long, a myth has hung over the nonprofit community like a scary fog:  that nonprofit advocacy is somehow spooky. Nothing could be further from the truth, because advocating for missions is a core part of our sector’s proud legacy. If you eat in smoke-free restaurants, drive safely on divided highways, have a Social Security card, enjoy civil rights, or are a voting female, then you are benefiting from the past advocacy work of nonprofits – and board members. That’s why we are excited to let you know about a new campaign, Stand For Your Mission, launched to raise awareness - specifically among nonprofit board members - that being an advocate for the nonprofit’s mission is an important role for every board member to play.

Don’t just sit on a board: Stand for your nonprofit’s mission.

The Stand for Your Mission campaign calls on all nonprofit board members to stand up as powerful champions for the missions they serve. The campaign is designed to unleash the full potential of nonprofit organizations to advance their missions in their local communities by engaging board members more directly as advocates on behalf of their organizations.

The goals of the Stand for Your Mission campaign are to:

  • Bring about a sustainable shift in the understanding and expectations around board engagement in advocacy;
  • Move advocacy from an ancillary to a key board leadership role;
  • Strengthen the nonprofit sector’s ability to advance the public good.

Importantly, this new campaign is not being advanced by ghosts, ghouls, or goblins, but by trusted, mainstream organizations in the nonprofit and grantmaking communities that recognize the need to change the culture around nonprofit advocacy so it is embraced as an effective tool for advancing nonprofit missions: The National Council of Nonprofits collaborated with BoardSource, the Alliance for Justice (with its Bolder Advocacy initiative), the Forum of Regional Associations of Grantmakers, the Campion Foundation and John S. and James L. Knight Foundation, to curate a set of core resources for board members, CEOs, and grantmakers. Please share the Stand for Your Mission discussion guide as a useful resource with your board.

Beyond advocacy, board members are called on as ambassadors of nonprofit missions to set audacious goals, be fearless, and be bold. There’s another quality that board members need: Courage. It takes courage to ask for money. It takes courage to speak up to ask questions around a board table. Courageous board members seek out new board members with diverse perspectives that enrich and improve their decision-making process. Just as the word “courage” comes from the Latin term for “heart,” courageous nonprofit board members care enough for their missions to not just sit there passively – they speak with their friends, community leaders, and even law makers, to advance their nonprofit’s mission!

Resources for courageous boards:

Talking about That Which Shall Not Be Named [what it really costs to be a charitable nonprofit]

While we wish we could just wave a wand, magical thinking won’t stop those who rate and rank nonprofits by focusing on the cost of a nonprofit’s operations. So what can nonprofits do to shake off this aversion to costs? Remember Harry’s invisibility cloak? Throw it off! Be bold and brave enough to have candid conversations with donors about what it really costs to deliver programs and services.  

Bring financial sustainability closer in 3 easy steps

First, let’s toss out the shape-shifting term “overhead” that means something different to everybody and instead just call all these costs what they are, whether “fundraising,” or rent, or “general administrative.” Second, let’s ignore any apparent incentives to be fuzzy about the full expenses needed to deliver a nonprofit’s services or programs. Instead, by fully embracing our own costs, nonprofits will help manage expectations about what is really needed to solve problems in communities. Third, let’s find the courage to talk about the costs, especially with donors and grantmakers – and document them, demonstrating accountability and candor consistent with a culture of transparency. We think this is the right approach – and we’re inviting you to join us by: “Owning your own costs.”

#OwnYourOwnCosts

Not only is transparency the right approach, but by owning your own costs your nonprofit is more likely to be financially sustainable. You’ll build more accurate budgets and, when, for example, your nonprofit submits a proposal for grant funding, the proposal will be based on actual costs and will contain a budget line for “administrative/general” or the equivalent. If the funder pushes back, this creates the opportunity to educate the funder, candidly, that outcomes (and evaluation of outcomes) have pricetags. Being transparent about expenses will serve to educate all funding sources about specific program expenses, but also about the administrative expenses that cut across all that your nonprofit does, such as insurance, or the internet connection. As your nonprofit, along with other nonprofits, educate donors and grantmakers – and governments – about all the expenses related to your nonprofit’s mission, the charitable nonprofit community will be more resilient and one day we hope will completely shake off the dreaded starvation cycle

While there are still a few who focus on costs when evaluating whether or not to donate to a nonprofit, more and more nonprofits, joined by enlightened grantmakers, such as members of  GEO (aptly named, Grantmakers for Effective Organizations), recognize that indirect/overhead costs are necessary in order for charitable nonprofits to be financially sustainable. Rather than calculating one ratio or conducting a single analysis, it’s important for charitable nonprofits to earn the donating public’s trust by being transparent about:

  • The nonprofit’s governance and finances, and
  • The outcomes of the nonprofit’s activities.

The solution is not solely to blame charity raters who misguidedly use overhead as their litmus test or private foundations who misguidedly limit or prohibit funding administrative costs needed to run an effective and efficient organization, but instead to be more candid about our own outcomes and costs to help funders and the public understand the true costs of delivering services.

As you can tell, we think it’s high time that everyone who invests in a charitable nonprofit’s mission accepts that administrative/overhead costs, such as turning on the lights, are not inherently bad. Quite simply, help us spread the word: it costs something to advance your mission!

Join us for a special Webinar to raise awareness about costs

At the National Council of Nonprofits, we and our State Association network are tackling misconceptions about costs one step at a time. Transparency about costs first requires knowing how much it actually costs to provide services and deliver programs. This means that someone at every nonprofit should be able to properly account for program related costs as well as those costs that cut across all the activities of the nonprofit. We know this can a challenge, so our network is hosting a special program designed to help your nonprofit #OwnYourOwnCosts.

Please join the National Council of Nonprofits and our State Association network for a free webinar about proper cost allocation, so we can all own our own costs and spread the message that overhead costs, whether for fundraising or administration, or anything else related to advancing our nonprofit’s mission are essential.

  • Join us for a free webinar on October 23rd for a discussion about this issue, what you can do about it, and learn how to allocate costs so that your nonprofit can more easily “own your own costs.”  REGISTER  Guest speaker: Jeff Russell, founder and CEO of Jitasa

 

Help your nonprofit understand and communicate its costs!

  • Use the hashtag:  #OwnYourOwnCosts on social media.
  • Share this article with your board: Overhead for board members (Blue Avocado)
  • Understand why governments and nonprofits need to revise how indirect costs are handled in contracts and grants: Investing for Impact: Indirect Costs are Essential for Success  (National Council of Nonprofits)
  • For the skeptics: Social Velocity’s Nell Edgington lays out in a post and video why we need to “get over overhead.” Overhead is “…meaningless because you can’t have exceptional programs and services if you don’t have solid staff behind them, if you don’t have …systems to figure out if you are making a difference, if you don’t have a fundraising function to bring the revenue in the door to make those programs and services operate, if you don’t have the infrastructure, the technology, all of the things that you need to make those programs and services run well.

 


 

 

Resources for Board Members

Good governance (National Council of Nonprofits)

Checklist for IRS Form 990 board governance policies (National Council of Nonprofits)

Board members’ voices count! Video: Your advocacy can make a difference

More resources about scary stuff

Creating Order From Chaos – Roles for philanthropy in disaster planning and response (Jessie Ball DuPont Fund)

Risk, risk, and more risk – and resources for managing it (National Council of Nonprofits)

Losing tax-exempt status (National Council of Nonprofits)

501h election: A simple way to protect your nonprofit from lobbying missteps (National Council of Nonprofits)

What information must a nonprofit make available to the public? (National Council of Nonprofit)

Worth Reading

Is your nonprofit scared of social media? Aespire explains the three myths of social media.

New! The Sustainability Mindset, by Jeanne Bell and Steve Zimmerman

Nonprofit Knowledge Matters | Facing the Future

Posted: 
September 17, 2014

Facing the future:  “It’s always wise to look ahead, but difficult to look further than you can see.” Winston Churchill

Notes from the Field, contributed by Jennifer Chandler, Vice President and Director of Network Support and Knowledge Sharing, National Council of Nonprofits

Here’s what we know: Leaders leave.” - I was tempted to use this as my opening salvo when speaking with nonprofit leaders in Indiana last week about continuing and emerging trends. As expected, when I asked those in the room to share what was keeping them up at night related to their nonprofits, about half in the room reported they were worried about their nonprofit’s financial sustainability. But an equal number confessed their concerns about finding new board members to replace those who were retiring, or their apprehension about what would happen if their executive director were to leave. One leader shared how devastating it was for her small nonprofit when a key employee (one of only 3) was out of work for months due to illness.

Transitions are times of great vulnerability for nonprofits. We’ve all seen nonprofits struggle with a funding dip, as donors wait to see how the new leadership will turn out. Transitions may cause collaborations to lose momentum, or strategic thinking to shrink, as the new leader cleans up a mess or simply needs time to get up to speed addressing day-to-day operations. Yet well before the inevitable transition there is a serious conundrum: whose job is it to bring up the fact that the nonprofit needs a leadership transition plan? Both the board and the staff leader may be reluctant to raise the issue, but planning for the future, including leadership transitions, is one of the most important fiduciary duties for any nonprofit board. Advance planning is a proven risk management strategy to minimize the stress of a transition.

While there are many good resources available encouraging nonprofit boards to focus on succession planning well in advance of leadership transitions, instead we are prone to ignoring the issue. Having to deal with transitions through crisis management instead is unfortunately one of the ‘dirty little secrets’ that even your nonprofit board may be hiding.

We understand. It’s hard to gaze into the future to the day when leaders say ‘goodbye.’ That’s why I was so pleased to find a little book filled with lots of wisdom titled, When Leaders Leave. It’s particularly well-suited for nonprofits still being led by their founders. We invited the authors to share an excerpt that we think underscores the vital importance of accepting that the future is uncertain. Once you take that initial psychological leap, you are already preparing your nonprofit to be resilient in the face of a transition of leadership.

Read on for concrete suggestions and inspiration from When Leaders Leave that can help your nonprofit face for the future with renewed resiliency.

 


 

 

Accepting leadership change as inevitable can be the engine that fuels the resiliency and agility an organization needs to thrive. Because change is the only constant we can count on, we all need to embrace it and figure out how to use it in our favor so that we can help our organizations grow and evolve. Here’s what we know.

Leaders leave.  Whether it’s a founder or leader with beginning thoughts about retirement, a new generation leader just starting her planned five-year run, or a transition in board leadership, organizations are always in flux somewhere on the continuum of leadership transition.

Leadership change is a challenge.  Leadership change is not simple. It impacts every employee, board member and stakeholder in the organization.  Anticipating that challenge in advance ultimately smoothes out the process and prepares the organization for a successful transition and integration of new leadership.

Leadership change is opportunity. Knowing that change is inevitable opens the doorway to new thinking about how an organization and its leaders can positively impact the mission. When the environment supports a mantra of continual growth, new directions will evolve. With change in mind, management always has an eye toward long-term growth and development for the individual and for the organization.

Change is constant. And a change in leadership is inevitable. That’s true even when that leader is the founder who passionately embraced a societal need, brought together bright and promising people to think about solutions, and created the organization.  At some time, at some point, that founder/leader will move on.

A change in leadership, which often strikes fear at the very heart of an organization, can throw the board, staff and leadership into turmoil. In fact, people go to great lengths to avoid disrupting the status quo.  Sometimes, they even stay in bad relationships because it seems like a more palatable option. If we are overwhelmed by the fear of new leadership and we try to hold onto the status quo, we expend a lot of energy grasping at something that is unachievable. Successful organizations have both the stability and the resiliency to respond to changes in their internal and external environments.

Change in leadership is, indeed, a painful thought.  But avoiding it or pretending that it won’t happen could put an organization in long-term jeopardy. What is most important is that the facts are faced and parameters put in place to ensure that the organization will continue to thrive and stand on its own without the current leadership.  It is critical because this will ensure that the organization’s leadership can continue to address its mission in positive ways.

Planning ahead and thinking through that potential change in leadership for the chief executive and, sometimes, for the board chair, is actually a series of three processes that support the organization’s overall strength and development: leadership legacy planning, succession planning and transition planning. 

Leadership legacy planning assures the organization’s ability to survive and thrive. This focus is actually part of an important, ongoing process in which the organization periodically assesses its vision based on the reality of current needs and refines its optimal path for growth. This process also provides a roadmap to ensure that all levels of leadership are aligned with the same focus. With advanced leadership legacy planning, the organization will survive a leadership transition and actually thrive because of the reflection inherent in the process and the diverse thinking and energy brought by a new CEO.

The opportunities abound. Every organization has the potential to go through a leadership change and emerge with strength. The transition provides a unique chance for the organization to manage change by establishing good leadership practices and creating an environment of resiliency.

Priscilla Rosenwald and Lesley Mallow Wendell are the authors of When Leaders Leave, a small but mighty book that is jam-packed with practical wisdom based on the authors’ many years of guidance to nonprofits during leadership transitions.

 


 

 

Why “overhead” is not a myth

It’s an undeniable fact: Spending on “overhead” is needed to accomplish your work. Nonprofits may have stuck their heads in the ground to avoid talking about this truth for years - often because so-called “watchdog groups” doled out demerits when a nonprofit was honest about actual costs. Unfortunately the donating public has become accustomed to claims

Fortunately, today an increasing number of nonprofits are talking about their overhead costs differently, and we encourage you to do the same. Why? Because you can’t wiggle your nose and solve the world’s problems. Instead it takes resources. Foir our nonprofits to be financially sustainable we all need to get in the habit of owning our own costs. Our communityies and  donors expect and deserve transparency, and need to know that providing important services in communities costs something. It’s up to us to demonstrate that administrative costs are essential to nonprofit operations. (Our report, Investing for Impact: Indirect Costs are Essential for Success, will give you lots of ideas and proven research to explain why such costs are essential to advancing your mission.) 

Just in time, the federal government is dangling a proverbial carrot in front of the charitable nonprofit community, to help us overcome the false notion that overhead-is-bad. New federal rules that go into effect late in 2014 offer an incentive for nonprofits to know exactly how much “indirect” costs go into their program and service delivery. Nonprofits with grants or contracts with the federal government, or that receive dollars from any down-stream government agency or nonprofit partner providing federal flow-through dollars, will be able to negotiate for recovery of the nonprofit’s indirect costs. (This is quite a change from the past and current system, when most frequently nonprofits are not reimbursed the full costs incurred when they provide services for governments.)

But first, your nonprofit will need to getin the habit of properly allocating administrative/overhead/indirect costs.

What’s the key to changing habits? It’s no surprise that positive and negative reinforcement play a huge role in both establishing and changing habits. So we invite you to identify something that motivates you and your colleagues at your nonprofit, and every time you have the opportunity to explain to a donor, or grantmaker, or to a government partner, how essential administrative costs are to your nonprofit’s ability to deliver services, pass around the chocolate!  And stay on the lookout for special programs offered by your State Association of nonprofits to help you learn about cost allocation, accounting for overhead, and how to prepare for the new OMB Uniform Guidance, that goes into effect at the end of 2014.

 


 

 

Featured Resources

When Leaders Leave by Priscilla Rosenwald and Lesley Mallow Wendell

Why and How to Hire an Interim Executive Director (North Carolina Center for Nonprofits)

Succession planning resources (National Council of Nonprofits)

Twelve ways to get a new executive director off on the right foot (Blue Avocado)

Nonprofit Executive Succession Planning Toolkit (Federal Reserve Bank of Kansas)

Overhead cost definition worksheet (Nonprofits Assistance Fund)

Worth Reading

Golf outings for charity: A “hole- in-one” or a sand trap that drains your resources? (Guidestar)

Raise Your Voice – A Cause Manifesto, by Brian Sooy

Whether you are already a fan of design thinking, or are looking for guidance on nonprofit communications, you will find that Raise Your Voice offers an indispensible reminder to link all your nonprofit’s communications to its cause more intentionally.

After Overhead: Investing in Nonprofit Financial Fitness (Nonprofit Finance Fund)

Nonprofit Knowledge Matters | Will America Give More?

Posted: 
August 20, 2014

Will You Help America Give More?

We don't often ask you to do more than read and reflect on the latest nonprofit trends, explore new resources, or respond to one of our polls in the sidebar. However, right now we could all make history together. We have the opportunity to ensure that nonprofits won't have  to ask Congress every year to extend charitable giving incentives that Congress has approved for the past decade. Just think - we could save all that time in the future, and use it to advance our missions!

The House of Representatives has already passed a bill that would unquestionably help nonprofits with more financial and in-kind resources; the Senate needs a push from all of us to take action. That is why we’re making one of those rare asks of you now – please help all nonprofits by writing your Senators (and talking to them while they are home for the August recess) and urging them to pass the America Gives More Act when they return to Washington in September. (Resources to help you reach out are included below.)

What the America Gives More Act does:

  • Allows donations made through April 15 to be eligible for deductions on the prior calendar year’s taxes – which can create an additional “giving season” for nonprofits around tax time, in addition to the holiday season;
  • Makes permanent the ability of individuals age 70½ and older to donate directly from individual retirement accounts (IRAs) to nonprofits;
  • Makes permanent and enhance incentives to donate nutritious food to food banks;
  • Makes permanent the incentive for donating conservation easements; and
  • Streamlines the excise tax for foundation investment income.

In other words, there's a lot to like about this law, which the House already passed in July, with strong bi-partisan support.

Senators are heading back to Washington soon from the annual summer recess. When they return there will be barely a dozen legislative days left in September before Congress adjourns again for the November elections. This means that the charitable nonprofit community needs to let Senators know right now that when they return to Washington the communities in their districts will be watching to see if they will act with compassion and pass the America Gives More Act

That's why we're making a rare ask of you now: Will you help America give more? Please join other nonprofit board members, staff members, and volunteers across America by delivering this simple message to your Senators: Don’t leave Washington in September until the Senate passes the America Gives More Act; our communities are counting on you.

  • Call your Senators’ local or Washington, DC offices (202-224-3121)
  • Text or Tweet your Senators
  • Write your Senators (see sample letter)

Learn more about the Act and what nonprofits can do to help.

FUNdraising – Perspectives on Corporate Sponsorships

What do wine and surfing have in common? It turns out that clean beaches are good for both picnics and surfing…and for raising money. As Bruce Burtch, author of Win-Win for the Greater Good, explains it, when you find the right alignment of missions and a messenger you trust you’ve got a greater chance of leveraging corporate support into a productive, and financially rewarding, relationship.

We’re pleased to share this article by Bruce Burtch on the importance of mission alignment in “cross-sector” (nonprofit/for-profit) partnerships.

The correct alignment between your organization and a potential corporate sponsor is of paramount importance. By ‘alignment’ I mean that when put side by side, your nonprofit’s mission and culture align with the potential sponsor’s brand, and your nonprofit’s values with their values, so that the partnership is compatible: intellectually, emotionally, and practically. The alignment must make sense to both partners, and especially to the public. This critical need for the proper partnership alignment is what I refer to as “brand fit.”

In what I feel was a stunningly poor example of “brand fit” between Kentucky Fried Chicken and Susan G. Komen in the “Buckets for the Cure” campaign, the wrong product or service alignment can be disastrous for a cross-sector partnership or cause marketing campaign, and more importantly, to a nonprofit organization's reputation.

In your assessment process, as you are selecting who to partner with, take a look at what your organization stands for, as well as the reputation of the for-profit partner. This is the starting point of your alignment process. Appropriate brand fit is fairly obvious. If your nonprofit is a food bank, for example, brand alignment would exist with a local grocery store. If your nonprofit is Habitat for Humanity, a construction business or hardware supply company would provide outstanding alignment because those businesses have expertise, employee talents, and knowledge of construction that are all needed in the building or remodeling of homes.

This alignment creates a natural flow when integrating the mission and cause of your partners into your own organization's culture. It just makes sense - to you, to your organization, to your partners, to the public - to all you wish to attract to the cause.
 
A perfect example of excellent alignment is the partnership between Barefoot Wine and the Surfrider Foundation, whose mission is the protection and enjoyment of oceans, waves and beaches. Together they created the “Barefoot Wine Beach Rescue Project” to help keep America’s beaches “barefoot friendly.” The partners hosted beach cleanups and restoration events coast-to-coast, utilizing volunteers to clean the shorelines, plant native greenery and collect litter along the beaches. At the end of each event, volunteers enjoyed Barefoot Wine and surf-inspired food. Aligning a brand like Barefoot Wine with the surfing-originated and water-focused Surfrider Foundation is an example of excellent alignment. Even the events themselves emphasized this barefoot-friendly fit.

The campaign won the Cause Marketing Forum’s 2012 “Halo Award” for Best Environmental or Animal Campaign. And while the campaign and both organizations are national in scope, this type of cause-related campaign could just as well have been orchestrated with any community park, beach or swimming pool partnering with local businesses related to water sports. It’s about finding the right idea and the right brand fit.

Bruce Burtch is the author of Win-Win for the Greater Good. Please visit www.bruceburtch.com for more information about cross-sector partnerships.

What is the impact of nonprofits in your state?

 Many state associations of nonprofits produce eye-opening reports that educate us all about the significant role charitable nonprofits play in our communities and in our states’ economies. A compelling example is Causes Count, a new report by CalNonprofits. Economic impact reports from around the country are posted on our website.

Get Ready for Giving Day!

To get the most out of giving days, like #GivingTuesday, you need a clear plan of action. Network for Good has offered our readers a special guide that outlines 11 action items to help you raise more money, rally support, and have more fun with your next giving day. Download the guide and start planning your organization’s campaign, whether for the biggest giving day of the year, Giving Tuesday, December 2, 2014, or any upcoming regional/state giving day.

 


 

Worth reading
New Nonprofit CEO Basics by Jatrice Martel Gaiter, executive vice president, external affairs, Volunteers of America 

The Nonprofit Fundraising Solution by Laurence Pagnoni
Free sample tools from the authors 

Have we got a deal for you…Bruce Burtch, author of Win-Win for the Greater Good, has generously shared a discount code with readers of Nonprofit Knowledge Matters to receive a 20% discount ($4) off the retail price ($19.95).
Purchase with the following code: JHHVKMHW.

Be “In the Know”
Do you know that reimbursing employees for medical expenses = reportable income? New regulations in 2014 require employers that reimburse employees through a medical reimbursement plan to report such reimbursement as “income” to their employees. This advice is provided courtesy of the North Carolina Center for Nonprofits and Dennis Walsh, CPA, who advises many charitable nonprofit clients.

Changes ahead for large employers under the Affordable Care Act
Starting in 2015, large employers (those with 50+ employees who work the equivalent of “full-time” as defined by the ACA) will have to report to the IRS whether or not they offer health coverage to their employees.

Nonprofit Knowledge Matters | Crowdfunding for Nonprofits and Fundraising for Overhead

Posted: 
July 9, 2014

What’s missing? #NPFullCosts

npfullcosts-barbecueNonprofits care. Nonprofits are staffed by hard working people. And for a long time, especially now, nonprofits have been doing more with less. So why the negative attitude about paying nonprofits what it really costs for them to operate? What’s missing is the understanding that nonprofits delivering services to individuals and providing programs in communities incur “overhead” expenses just like for-profit and government entities incur. Thank goodness the negative attitude towards essential expenses is changing – even if too slowly. We invite your help in spreading the word.

If you like the message in this cookout postcard, feel free to use it on social media to call attention to the limiting effect of the old thinking about overhead. Just click on the image to view the full-size image and feel free to save it and post it to social media with the hashtag #NPFullCosts. Also be sure to follow @NatlCouncilNPs and @buildnpcapacity on Twitter for updates and new resources. And we invite you to read an article published by NTEN authored by Rick Cohen, our colleague at the National Council of Nonprofits, who makes the case that without investments in technology, such as an up-to-date computers and database solutions (which would generally be accounted for as an “administrative” expense, lumped into the “overhead” category) most nonprofits will have difficulty delivering their missions. How does your nonprofit pay for technology expenses? Have you been successful communicating to grantmakers or governments, when negotiating a contract, the vital connection between investments in technology and advancing your nonprofit’s mission? The article offers ideas that may help critics of overhead understand that all nonprofits need to invest in infrastructure expenses in order to effectively deliver their programs and efficiently advance their missions. Read Changing the Conversation about Overhead.

What Nonprofits Need to Know About Crowdfunding

By Alexandra Woodruff, Summer Fellow

crowdCrowdfunding is any effort to raise money with donations from a large number of people. At its inception, crowdfunding was primarily used by young entrepreneurs as a way to capitalize new for-profit ventures. Now, crowdfunding is projected to become a 90-96 billion dollar industry by 2025, and is being touted as a valuable new tool for fundraising for charitable nonprofits. (No data exists yet that can tell us how many dollars are raised for charitable causes through crowdfunding.)

Crowdfunding happens through either (1) online websites tailored to showcase specific projects or causes, or (2) in-person, arranged around high-energy, community-building events. Here’s a primer:

- Online crowdfunding happens via websites (you may have heard of “Kickstarter” or “Indiegogo”) that allow sponsors of the event to post descriptions, videos, and pictures of their fundraising projects, along with a dollar amount goal. Online crowdfunding has the benefit of expanding far beyond a project’s typical audience, since anyone with internet access has the potential to learn about your project or fundraising cause. A crowdfunded project’s online presence can be shared easily via Facebook, Twitter, or any other social media platform. Additionally, most crowdfunding platforms allow the sponsor of the event fundraiser to reward donors for various levels of donations, which builds excitement that can motivate even more donors to support the cause.

- Live crowdfunding, on the other hand, features exciting live events hosted by those raising funds or by third-party organizations that specialize in creating crowdfunding events, such as The Funding Network (itself a nonprofit). The Funding Network (TFN), which recently founded a chapter in New York, is a London-based organization that is expanding its crowdfunding services globally. Nonprofits wishing to use crowdfunding to fundraise may apply for one of three spots at each live-crowdfunding event hosted by TFN. Nonprofits have the opportunity to give a six minute pitch and answer questions from the audience; audience members then pledge donations in an auction-like setting. “Live crowdfunding,” says Dana Williams, Program Director at TFN’s New York chapter, “brings people together who want to make a bigger impact.” Though TFN specializes in live event crowdfunding, Williams notes that all types of crowdfunding are “democratizing philanthropy.”

How Are Nonprofits Using Crowdfunding?

Nonprofits are using crowdfunding across the globe to expand their reach and raise funds as well as awareness for the causes that matter most to them. This past January, the Utah Nonprofits Association hosted crowdfunding specialist Devin Thorpe to speak about how nonprofits can benefit from online crowdfunding. Thorpe, author of Crowdfunding for Social Good (available as a free download), sums up the influence of crowdfunding: “While crowdfunding does not constitute a complete development plan, no development plan is complete without crowdfunding.”

Any nonprofit can take advantage of the benefits of either live or online crowdfunding. Both models allow donors to ask questions and offer feedback, facilitating discussion and building relationships between donors and organizations. Additionally, both can attract and inspire new donors who might not have contributed to your cause otherwise.

What Should Nonprofits Know About Online Crowdfunding?

There are important nuances in online platforms that nonprofits should be aware of. Some platforms are tailored for creative projects, while others cater specifically to nonprofits interested in using crowdfunding to fundraise. Additionally, different platforms charge different fees: some charge more if a project doesn’t reach its goal, while others don’t charge a fee at all, but also don’t allow the sponsoring nonprofit to collect donations unless they reach the target amount. In that case, donations are never actually collected/debited from the donor’s credit card, so donors’ contributions are not made, and neither the crowdfunding platform nor the nonprofit receive revenue. Something to be alert to: All crowdfunding platforms charge a baseline processing fee, and fees vary.

Pros and Cons of Crowdfunding for Nonprofit Fundraising

Some commentators suggest crowdfunding is pushing charitable nonprofits to be more transparent, since crowdfunding platforms encourage nonprofits to showcase specific projects and indicate how and where a donation of ten, twenty, or fifty dollars will be used. Others point out that online crowdfunding could open up new avenues for fraud, since donors often have not had person-to-person contact with the organization they contribute to. Still others warn that potential donors—who could be anyone from your neighbor to a sympathetic donor thousands of miles away – are less likely to be repeat donors, and that the time, energy, and effort required to host a successful crowdfunding event is draining, with very little promise for a long-term financial return.

Before Your Nonprofit Crowdfunds….Caution!

As with any fundraising activity, nonprofits need to know the laws that regulate fundraising. In the majority of states there are laws that require charitable nonprofits to register with the state BEFORE soliciting residents of that state. This means that an online crowdfunding event for a California charitable event, hosted through a platform based in New York, sending messages to potential donors known to be in Illinois, has to wonder, “Which combination of these three states should our nonprofit be registered in?” Good question; one that savvy board members and staff members of charitable nonprofits are increasingly realizing they have to answer in order to responsibly raise funds using the internet or mobile technology, including crowdfunding.

Charitable solicitation laws in most states remain murky when it comes to solicitations via the internet or mobile technology, and such laws don't address crowdfunding - yet. While the Attorney General of Michigan recently issued a statement specifically about crowdfunding, it focuses less on the obligations of charitable nonprofits, and more on the obligation of donors to keep their eyes open for fraud. The National Association of State Charity Officials published Social Media and Internet Solicitation Wise Giving Tips that offers guidance to nonprofits, donors, and web-based fundraising platforms, warning the latter about their need to be aware of legal requirements pertaining to fundraising, and instructing them to alert the nonprofits they work with about state-specific charitable registration requirements. But don’t rely on the fundraising platforms – know what your nonprofit’s legal responsibilities are.

Ready for more? Join your state association of nonprofits to connect with useful information and stay up-to-date with trends, like crowdfunding, and review our resources on fundraising, charitable registration, and crowdfunding

Nonprofit Knowledge Matters | Celebrating Better Budgets

Posted: 
June 11, 2014

Building a better budget (even if you are allergic to numbers)

During an interview with staff members at the New York Council of Nonprofits, Jenny Chandler, Vice President at the National Council of Nonprofits, learned how to build a better budget:

In an effort to get over my allergy to numbers, I spoke with the terrific team of Kelly Mathews (Chief Operating Officer), Michelle Jarvais (Chief Fiscal Officer), and Elizabeth Mathews (Senior Accountant), who shared with me their “6 P’s” approach to nonprofit budgets. See if you can find the “P’s” in their advice!

Jenny: When you work with nonprofits to build a “better” budget, what are your goals?

Michelle: We’re going for a strategic process that helps you plan – not just taking last year’s numbers and updating them. We encourage nonprofits to look a few years ahead and take a multi-year approach because that will result in a better budget.

Kelly: In my work with nonprofits I often see folks not thinking through the long-term effects of short-term decisions. An example would be a simple cost-of-living adjustment. It’s great in the year it’s given – it bumps up salaries and boosts morale. But has the nonprofit projected out the impact of that adjustment for the next few years? It’s going to change the revenue requirements for many years to come. That could be huge.

Michelle: We encourage nonprofits to think of their budget as a living, breathing, guiding document. Your budget is not something that’s approved by the Board of Directors and then locked in stone for the rest of the year. It’s never going to be static. It’s going to change month-to-month. It’s normal for the actual numbers to turn out differently than you projected when you drafted the budget, so a “better budget” is one that changes with the nonprofit’s experience. 

Jenny: It sounds as if you are suggesting that the board-approved budget should be formally amended throughout the year?

Michelle: Perhaps. Many organizations approve at least one budget revision annually. But sometimes adjustments are anticipated and reflected in the budget narrative so that a formal amendment isn’t necessary. If the narrative is thoughtfully drafted it will explain potential variances and alert the board to alternate scenarios.

Jenny: Wait a minute. You just said, “narrative” – You mean budgets aren’t just numbers on an Excel spreadsheet?

Michelle: No! A budget acts like a narrative when it tells the nonprofit’s story through the numbers. But it’s also useful to add short narrative explanations for various entries so that those reviewing the budget-: -- program staff, the finance committee, and board members – are aware of the underlying rationale for the numbers, or alerted to the reasons why a number in this year’s proposed budget is different from last year’s, for instance.

Jenny: You just mentioned some “P’s” – People who help build and approve the budget. Program staff? What’s their involvement?

Elizabeth: Program staff are the folks who will know the expenses of their programs and will have a wish-list of expenditures that they’d like to include in the budget planning process. It’s helpful to interview them during budget planning time and make them aware that some of the overhead costs for the entire operations (rent, insurance, utilities, internet etc.) will be allocated to their program budget. We need to help all staff understand the full costs of delivering services, which is more than just direct program expenses. In the budget we refer to those indirect and administrative costs as “shared costs,” which fosters the sense that we’re all in this together. We don’t want those shared costs to be covered up or overlooked when the fundraising staff are writing proposals for grants. We need to know our full costs and embrace them, and accurately reflect them in the budget for each program. That’s being transparent, and it’s also building a better budget.

Jenny: What are the biggest myths about budgets?

Kelly: That they are static, and that they are for one-year only. Better budgets are flexible as Michelle explained, and they are also forward looking and multi-year, so they can accurately reflect not only multi-year funding sources, but also projects that extend beyond one fiscal year. Also, if you start from scratch (we call this a “zero-based budget”), you can think about what you really need to make a program or activity successful. What would it cost if you built it from the ground up? Don’t be bound by last year’s budget.

Jenny: What’s an unexpected speed bump for budget builders?

Michelle: Politics. You can’t avoid it. Staff may try to out-hustle each other to secure a greater slice of the budget pie. Office politics play a role in budgets!

Jenny: What do you like best when building a budget?

Elizabeth: It’s a process that keeps everyone in the loop. An example is office supplies. The office manager puts in the supply order. If s/he is aware of how the budget is a guiding document for supplies throughout the year, s/he can monitor the expenditures and push back if someone is requesting supplies that won’t be approved. S/he can help out the rest of the team by being proactive.

Jenny: Is building a budget an art, or a science?

Michelle: Both. It’s a science because you need to rely on a process and policies that tell you who approved the budget and how it’s developed… But it’s an art because you are making projections about the future that are unknown. So you try to be creative in thinking of all the “what if’s” and plan for alternate scenarios for cash-flow or revenue sources. It all ties together – the planning, the process, the policies, the people, the politics, and in the end – the product. A better budget.

You too can learn to build a better budget guided by the finance folks at the New York Council of Nonprofits by attending a webinar on July 23 at 11 am Eastern. Discounted registration is available if you are a member of a State Association that is member of the National Council of Nonprofits.

Changing the Culture on Costs, One Community at a Time

Most nonprofits know the problems caused when governments, funders, and the public incorrectly assume that only program costs are well spent and that overhead costs are undesirable. Some nonprofit leaders in Napa Valley, California are doing something about those attitudes, and providing inspiration for the rest of the nonprofit community...

The Napa Valley Coalition of Nonprofit Agencies recently created an Advocacy Education Committee that is dedicated to two primary goals. First, the committee seeks to promote the sustainability and growth of the nonprofit sector by providing its membership with tools and education to effectively advocate for their mission and clients. Second, the group is educating the community at large about the value of nonprofits. Core to both goals is helping people understand what overhead is and why it is so important for maintaining a vital and effective nonprofit sector.

Sara Cakebread, Co-Chair of the Committee, put it succinctly: “What we’re trying to do is to create a whole program that educates the public: What is overhead, why it is important and why we need to support our nonprofits, if we want them to thrive.” Toward this end, Committee member Becky Peterson reframes how nonprofits should be viewed, “[They] do good work in our community, often filling the gap that government or the private sector doesn’t fill… we need to think about nonprofits as service providers, not as charities.”

This subtle, but important shift supports the growing understanding that to be effective and efficient nonprofits must invest in their infrastructures and a solid base from which to operate.

Cakebread said it well when she observed: “Donors say we want our money to go to programs, we don’t want to spend anything on overhead. As a donor you can’t do that — you can’t give somebody a lot of money and tell them they can’t pay for somebody to administer it. Or deposit the check. Or pay for an office or pay for utilities. All of those things people don’t think about.”

Jan Masaoka, CEO of CalNonprofits, calls The Napa Valley Coalition of Nonprofit Agencies “a great example of local nonprofits working together to get more funding to the communities they serve and represent, as well as working with county officials to streamline government processes."

Subscribe here to receive your free copies of Nonprofit Advocacy Matters (every other Monday), where this article was originally published.

And now for something fun: A summer celebration of charitable nonprofits!

Sit back in your chair, let yourself relax for two minutes to enjoy this short “Motion Graphic” about how nonprofits are essential to the quality of life in our communities. Brought to you by our member State Association, the Nonprofit Association of the Midlands.

 


 

Resources to help your nonprofit develop a budget

Budget Best Practice Tips (NYCON)

Financial management resources (National Council of Nonprofits)

NYCON’s Budget and Cash Flow Toolkits: Comprehensive, step-by-step guided & easy to use ● Take a tourInformation & Online Order Form ● Contact your state association of nonprofits to inquire about a discount.

Worth Reading

Is Strategic Philanthropy Yesterday’s News? (Nonprofit Quarterly)

Build a board culture that advances fund development (Cause Planet)

Preventing fraud in the cash disbursement process (Tate & Tryon)

Author Interview: A Board Member’s Easier Than You Think Guide To Nonprofit Finances (Andy Robinson and Nancy Wasserman)

Worth Noting

Beware of a current government grant scam.

Free program: Everything you always wanted to know about Grants.gov (June 25, 1 pm Eastern)

Nonprofit Knowledge Matters | Intern, Volunteer, or Employee?

Posted: 
June 15, 2011

Interns and Unintended Consequences

recruiting internsAbout this time of year, many nonprofits are bringing summer interns on board. Interns can be terrific additions to a nonprofit’s capacity building journey, but it’s important to clarify whether interns are unpaid volunteers or paid employees – or something in between. In particular, there could be unintended consequences if an intern receives a stipend that could transform a volunteer intern into what the Department of Labor would consider an employee, resulting in a risk that the nonprofit could owe back wages (to pay the intern at least minimum wage) and back taxes.

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