Like the mysterious Freemasons and their Grand Lodges, foundation affinity groups feel open and warm to insiders, but to outsiders they seem to be secretive, cloistered societies with their own coded languages, titles, and hierarchies. Rick Cohen first tells us about the lodges -- er, affinity groups -- then gives practical advice on how to make this knowledge work for your nonprofit:
You can't be a member of a foundation affinity group unless you are on the staff or board of a foundation. Their conferences are forums where grantmakers discuss what they should be funding . . . but you can seldom go unless you're a foundation person.
Why should you care? Because knowing how to work within their circles is an important way to get insider information about foundations and to get your organization a positive profile among grantmakers . . . in short, to help you and your cause raise money from foundations.
First we'll discuss the different types of affinity groups, then give some specific tips on how to make the most of them for your nonprofit, including ways . . .
There is an abundance of advice for nonprofit boards and EDs that speaks to the advantages of "partnership" and "open communications." But sometimes that advice just doesn't feel like enough.
Who's the boss? The board or the executive director/CEO?
The answer: it depends on whether the board is acting as a body, or whether board members are acting as individuals. The key is remembering that the board is different from board members.
It's not the board president who hires the executive director; only the board as a whole can do that. The treasurer doesn't approve the budget; the board as a whole does that. In other words, when the board is acting as a body, it is the boss. The executive is answerable to that body.
On the other hand, when board member act as individuals, they . . .
Dear Rita: I recently read an article that said it was a good idea to have insurance for volunteers. I thought volunteers had immunity in both federal and state laws. Should I be doing something to protect my nonprofit? Signed, Curious in California
Dear Curious: Volunteer immunity laws are common, but they almost always contain a provision that the volunteer's immunity only applies to claims that exceed the insurance policy limits carried by the nonprofit. That means both the nonprofit and/or its volunteers need to have coverage available . . .
So exactly how do you lead someone up to a $1 million ask? The director of major gifts at a large regional environmental organization agreed to tell us everything . . . as long as we didn't reveal her name or organization.
And best of all: post your questions to her in the Comments section and she'll answer them there at the end of the week!
Major gifts aren't the right strategy for every organization, but we can still appreciate how this fundraiser talks about her job:
Q: Can you walk us through a major gift ask?
A: Well, here's an example. We sent our board members a list of new members, and one of them knew one of the people on the list, although not very well at all. But he knew that this person had a large capacity to give. So he sent that person an email saying
Wouldn't it be great if there were an objective rating system so that donors could choose the best nonprofits to donate to just as investors use rating agencies to pick the best companies to invest in? Don't answer; it's a rhetorical question. Here's what you need to know about some of the best-known charity rating organizations:
In this Part I of a two-part article, we take a fast look at six charity raters -- Charity Navigator, Charity Watch, Better Business Bureau, GuideStar, Combined Federal Campaign (CFC) and Great Nonprofits -- and who they rate and the criteria they use to rate them. In Part II in our next issue, we'll cover what you should do to manage your nonprofit's ratings, and what we should do collectively as the nonprofit community.
1. Charity Navigatoris the heavyweight: the best known and the most often quoted. As a result, they are influential beyond just how they rate individual nonprofits.
Who they rate: About 6,000 of the largest U.S. 501(c)(3) nonprofits with revenue of more than $1 million including public support of more than $500,000
Cate Steane is the executive director of Family Emergency Shelter Coalition (FESCO), a nonprofit for families between homelessness and a home. With 60 people -- most of them children -- in its care every night, she went through a harrowing organizational crisis and lived to tell her First Person Nonprofit story about it:
Exactly a year ago, I told my board that we were on a path to end the fiscal year with a loss of $137,115, or 11% of the budget. Cuts in our government contracts for services had been brutal; foundations were retrenching in response to their investment losses, and individual donors were bowled over by the recession. Not good news, but we had some reserves and we would somehow muddle through.
Everybody has an opinion about whether nonprofit executives are paid too little or too much, but almost nobody has any real data outside their own experiences. At last! Economist Linda Lampkin (left) analyzed 100,000 nonprofit CEO salaries and has a definitive (if a little statistics-wonky) answer:
Sometimes it seems that the whole credibility of the charitable sector hinges on the issue of compensation. So what exactly is too much pay? And who is getting it? A colleague and I decided to analyze Form 990 compensation data to bring some real numbers to the discussion (database info at the end of this article).
The IRS says nonprofits must pay "reasonable compensation" but there are few specific guidelines other than that total compensation must be compared with "what ordinarily would be paid for like services by like enterprises under like circumstances." "Like enterprises" means organizations that provide similar types of services and have similarly sized budgets. Using the ERI Economic Research Institute database of compensation data from Form 990s in 2009 (the most recent full set available), we calculated the mean and median salaries for almost 100,000 CEOs of charities, by revenue size:
Analysis of 100,000 nonprofit CEO salaries
 Mean is the mathematical average, calculated by adding up the data points and then dividing by the number of data points. Median is the midpoint of the data, so the number of data points having values greater than or equal to the median is the same as the number less than or equal to it. Standard deviation, a measure of the variability of the data, is the average amount by which individual data points in a data set differ from the arithmetic mean of all the data in the set.
More than half of the nonprofits in the United States are estimated to be all-volunteer organizations. Here is a wonderful, succinct guide for the 600,000 + treasurers of such organizations:
My time as treasurer of a faith-based nonprofit was a labor of love. Starting out as an all-volunteer organization with a $20,000 budget, we developed financial systems, workable budgets, and demonstrated accountability. We served families affected by incarceration and there's no greater personal reward than seeing people realize they have real hope for a better life. In just three years the budget grew to over $330,000.
However, there was stress as well. As a CPA I found myself the recipient of unnerving deference at times. I frequently fell short in communicating financial information to board and staff. But the outcomes made it all worthwhile.
This experience helps me appreciate one of the many unsung heroes of our time: the treasurer of the all-volunteer organization (AVO). AVOs are among the most important and most invisible building blocks of our communities. Members of all-volunteer organizations read to children, care for the dying, get clean water legislation passed, serve as . . .
In our last Blue Avocadocolumn, we introduced the Matrix Map, which you can use to create a visual representation of your organization’s business model. Comprised of all your organization’s business lines (activities), the Matrix Map illustrates how your activities work together towards both programmatic impact and financial viability. For many board members, the Matrix Map provides sudden clarity on how the organization’s different activities inter-relate. But beyond helping them understand the business model, the Matrix Map can help nonprofit leaders strengthen it.
You’ll recall that putting together a Matrix Map calls for plotting your organization’s business lines according to their mission impact and financial profitability. Depending on where an activity is placed on the map, a strategic imperative emerges. These strategic imperatives are the actions . . .
"We [board members] do this huge amount of work, and we're volunteers, but the staff never seems to have any response but criticism for us not doing more!"
"I'm the executive director, and the board just seems to focus on what we haven't accomplished, instead of giving me credit for all the things I have accomplished!"
How many times have we heard (or thought) something similar? Despite admonishments to "give positive feedback," it often seems that efforts between board and staff of appreciation feel trivial at best, and even hypocritical or enraging at worst. What are some ways to express authentic appreciation that are meaningful to the recipient, and send the right message about values? Seven quick ideas:
Much of the confusion about board responsibilities is confusion between what the board does (as a body) and what individual board members should do. Most of the prescriptions for boards confuse the two, saying "The board should _____" without making the distinction. This straightforward model for boards has been embraced by thousands of boards across the United States:
There are two fundamentally different types of nonprofit board responsibility: governance and support. Depending on the responsibility, three types of switches occur:
Who's the boss
Whether the board is acting as a body or as individual board members
Who the board is representing
Let's look at both types of responsibility, and the three types of switches.
The governing role
On one hand, the board, acting as the representative of the public interest, governs the organization. In this role the board has several key responsibilities, including financial oversight, hiring/evaluating the executive director, and making the Big . . .
"Conflict of loyalty" is a useful concept and term that gives us another dimension to work with than simply conflict of interest:
In our legitimate desire to avoid conflicts of interest in nonprofits, we typically make two oddly opposite mistakes:
We narrow "conflict of interest" to a strict legal definition and focus only on matters that involve personal financial gain, and
At the same time we are too quick to label any kind of relationship at all as a conflict of interest.
But often, the "conflicts of interest" in nonprofits do not involve personal financial gain. Consider the board member whose commitment to rights for people with disabilities leads her to serve on the boards of two such organizations. At Board A she hears about a new grant opportunity that is opening up at a local foundation. Should she tell Board B about it, or is she obligated not to mention it?
Or what about the deputy director of a nonprofit theater who sits on the board of a battered women's shelter: two very different fields. He's just met someone he thinks would be a great board member for either organization. Should he suggest this person to both, or to which one?
What if you got a chance to chat over coffee with a deeply experienced, witty, and smart gay leader about the movement for marriage equality? He might say something you haven't seen elsewhere about the campaign. Listen in on a conversation with Matt Foreman(left, with Francisco De Leon to right):
Matt, isn't the Freedom to Marry movement a huge, unexpected, and unqualified success?
Well, yes. But frankly, I’m also a little conflicted about the issue. Fifteen years ago, when activists started pushing marriage equality in New York and I was lobbying for pro-gay legislation, I said "Folks, stay the hell out of Albany -- we can't even get a hate crimes bill passed because it would include the dreaded words 'sexual orientation' and you want us to put marriage on the table? No way, no how!"
I was convinced that marriage would have stalled and derailed . . .
There are more people with cell phones than people who use Twitter . . . so then, why is there so much more nonprofit talk about Twitter than about reaching constituents and donors through their cell phones?
We talked with a non-neutral Doug Plank of MobileCause to learn more about the benefits of using cell phones to reach people. MobileCause provides services that make it easier for nonprofits to use mobile phones.
Q: Why should nonprofits read this article about cell phones, anyway?
A: People are connecting with you through their mobile phone whether you know it or not: 40% of people will experience your website for the first time through their phone, and 30% of all American adults read their email on their phones.
But we don't have anyone's mobile phone numbers! And they'll be mad if we call them!
First, you are not going to phone them. You are going to communicate with them by text. You are going to poll them, give them information that they've asked for, and thank them by text. And sometimes you will ask them to volunteer and give by text.
Probably the most important thing you can be doing now is building . . .
Maybe in some mythic past it was possible to think first about strategic impact goals, and then about how to raise the money. But today we know better: you can't talk about what you're going to do without talking about how to get the money. And, you can't talk about how to get money without talking about what you're going to do.This piece is adapted from a chapter inNonprofit Sustainability: Making Strategic Decisions for Financial Viability, by Jeanne Bell, Jan Masaoka, and Steve Zimmerman.
What is sustainability?
Most of us in the nonprofit sector are familiar with setting programmatic goals. For instance, we might set a goal of reducing high school dropout rates by 10% in our community, or a goal of increasing the quality of the observations of one hundred amateur astronomy clubs. Nevertheless, we often aren't sure what our financial goals are, or even what they should be. If the financial goal in a for-profit company is to maximize profit, should our goal be to have $0 profit? Or should it be to grow an endowment of $10 million, or to have a surplus of 5%, or a deficit of no more than $50,000?
In classical economics, the answer to this question is . . .
Tracking volunteer time: sounds like another chore? Actually it can help you meet match requirements, improve your financial statement presentations, and reduce liability. In this article, CPA Dennis Walsh of North Carolina explains why and how to include volunteer time in your budgets and financials:
An all-volunteer suicide hotline was having a hard time raising funds. Its total budget was $45,000, which paid for a small office, telephone lines, and advertising. It asked for operating support, overhead and other funds in its fundraising proposals. Unfortunately, many foundations and donors are allergic to those terms. But when the hotline added up the time its volunteers spent answering phones, attending trainings and . . .
Executive directors are problem solvers. That's why we get paid the big bucks. But why keep it to just nonprofit problems? We would make great advice columnists!
Dear Nonprofit Director: After a year of dating the girl of my dreams, I introduced her to my family and announced we were getting married. The reaction was warm but not enthusiastic. Neither set of our parents has offered to help with the costs of the wedding next year. How do we bring this subject up to them? --Anxious in Anchorage
Dear Anxious: Potential funders like your parents are . . .
Jon Pratt of the Minnesota Council of Nonprofits uses a tongue-in-cheek version of the familiar Salary Calculator model to comment trenchantly on the indiscriminate -- and not so indiscriminate –differences in how nonprofit staff get paid:
How much should you be paid for your nonprofit job?
What . . . you want to get PAID? You mean an actual salary, not just a stipend, and for a nonprofit job that is not solely volunteer? Don’t forget to factor in all of the psychic income you get knowing you are making the world a better place! After all, you are doing the Lord’s work, so your reward may not be in this life but in the next. Plus, there is the prestige and halo effect – that has to be worth something!
Even after taking these not inconsiderable intrinsic rewards into account, you might still wonder whether you are getting paid the right amount of actual money (probably not) or whether one of your co-workers is getting paid the right amount (probably too much). The following fourteen data points provide a "scientific" formula (created by someone with two advanced degrees, neither of them in a scientific field) that you can use to check your salary against cruel reality:
1. Start by entering your organization's total budget here: ____________
Then enter the . . .
Executive director Vu Le writes with verve and humor about that peculiar, nerve-wracking nonprofit ritual known as the foundation site visit:
This week, Vietnamese Friendship Association (VFA) had a site visit: We're always telling people how cool our programs are, but to have funders actually come down and visit is affirming. And terrifying. It's a weird contradiction, like it’s your birthday -- yay! -- but you're also getting a colonoscopy.
Before a visit, we try to prep as much as we can. Making a good impression is important. This includes tidying up the place and putting away our fold-out cot, which staff use for naps during particularly long days -- and some weekends. I also gather up all the papers on my desk and shove them into the overhead bin.
The staff's personal appearance is also taken into consideration. The more funding is at stake, the better we dress:
< $10,000: we dress a little better than our usual shabby
$10,000 to $19,000: we wear button-down shirts and tuck them into our jeans
$20,000 to $49,000: we wear slacks and a nice shirt, maybe a tie
$50,000 or over: I might require some of the staff to get Botox