Being “leaderful” (as opposed to being “out front,” which is the traditional way to think of leadership) means serving alongside others as true partners, in service to the mission. In this issue we put a spotlight on ways nonprofits often exhibit leaderful practices, such as by developing the talents of their staff, by communicating candidly with their donors so that philanthropic investments can be most effective, and even by working with their regulators to help protect the public’s interest and trust in nonprofits.
What’s next? As the political campaign rhetoric sharpens, we all need to look to the other side of the November elections, when there will be a significant need for collaborating, healing, and trust-building. What leaderful roles will your nonprofit play?
Who regulates charitable nonprofits?
Many people assume that the IRS has primary jurisdiction over tax-exempt charitable nonprofits. Yet state governments play a much more active role in regulating nonprofits on almost everything, from their creation to dissolution and multiple life-cycle events in between. State laws govern a wide variety of activities, such as how a nonprofit changes its name, amends its bylaws, elects its board members, and pays its employees. Typically, it will be a state charity official who investigates simple items, such as how nonprofits fundraise (“solicit contributions“), to the more complex, such as alleged malfeasance involving charitable assets.
To help everyone understand the state-level regulation of nonprofits, Columbia Law School’s Charities Regulation and Oversight Project and the Urban Institute’s Center on Nonprofits and Philanthropy conducted a study and issued a report, State Regulation and Enforcement in the Charitable Sector. The report, based on a legal analysis of state laws relating to charitable nonprofits and a survey of state officials with regulatory authority of nonprofits, describes the structure of state charity offices, the scope of authority for these state government officials, and the types of enforcement actions they typically use when finding a charitable nonprofit to be out of compliance with state law. The report also identified the collaborative partners state charity officials partner with most often: state nonprofit associations!
We’ll be hearing more from state charity officials in the coming months in connection with their pilot single portal multi-state charitable registration project, designed to streamline the process of registering a nonprofit with multiple states for fundraising solicitation purposes. Stay connected with your state association of nonprofits so you can be among the first to learn how that project may affect your nonprofit’s charitable solicitation registration activities.
Core concepts in capacity building
Grantmakers for Effective Organizations (GEO) just handed the nonprofit community a delightful gift: its latest report, Strengthening Nonprofit Capacity: Core Concepts in Capacity Building. The paper is filled with insights about the powerful benefits – for grantmakers and nonprofits alike – of investing financial support in capacity building initiatives. This new body of work couldn’t land in our inboxes at a more appropriate time. While it may feel to many nonprofits that finding financial support for capacity building is like finding a needle in a haystack, GEO’s fresh paper has the potential to change many foundations’ minds about the utility of capacity building as a strategy to drive the success of the foundations’ own outcomes. As GEO points out, “Supporting capacity building is one of the most important things grantmakers can do to accelerate and broaden our impact on grantees and communities – and thus ultimately on our missions.”
While intended as a resource for grantmakers, GEO’s research findings offer gems of proven wisdom for all charitable nonprofits, especially those seeking financial support for much-needed capacity building initiatives. We encourage you to read the report for suggestions about how to take full advantage of capacity building support and to learn about the exemplary capacity building work of three of the National Council of Nonprofits’ members that are featured in the report: Forefront, in Illinois, the Massachusetts Nonprofit Network, and Washington Nonprofits.
The paper also sheds light on powerful shifts in grantmakers’ attitudes that can contribute significantly to the success of capacity building initiatives, as well as to positive relationships between grantmakers and grantees in general. We review these positive shifts in "What’s new in nonprofit capacity building?"
Trends: Is the annual employee performance evaluation dead, or just dying? (and why that might be just fine…)
The annual employee performance evaluation is a process all of us love to hate. Like the armadillo, we put on our armor and curl up in a ball to fend off the negative vibes from the annual ordeal. And we do so for good reason, according to recent articles in such publications as the Harvard Business Review (HBR), The New Yorker, and The Washington Post. The headlines of these articles tell the story: “The push against performance reviews;” “Why more and more companies are ditching performance ratings;” and “Study finds that basically every single person hates performance reviews.” There is even an article by Vu Le about annual appraisals in the nonprofit workplace: “Why the annual performance review has no place in the nonprofit sector.” (Spoiler alert: Vu’s post shares pointers that can make the process much more effective and palatable.)
Should nonprofits be throwing out the annual performance review process in favor of something more current? As reported by HBR, “By early 2015, around 30 large companies, representing over 1.5 million employees, were following a similar path. No longer defining performance by a single number, these companies were emphasizing ongoing, quality conversations between managers and their teams.” What do you think of the process used to evaluate workers’ performance at your nonprofit? On our blog we take a look at the arguments for and against annual performance reviews, and suggest that, rather than an “either/or” approach, this is a situation where “both/and” will provide the most effective development of the nonprofit leadership pipeline. What is the ideal employee performance evaluation process for your nonprofit?
Connect via the Nonprofit Career Center
Whether you are a nonprofit HR director searching for the right candidate for an open position or someone in the nonprofit sector seeking a new opportunity, the Nonprofit Career Center is a resource for you. See the sampling below for just a few of the thousands of open positions advertised, then search for the right job for you or list a job.
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