Philanthropy Front and Center - Washington, DC

What About BOB?

At the 30th anniversary celebration for the Center for Nonprofit Advancement on October 29th, Glen O'Gilvie, Chief Executive Officer, announced a new program that the Center will be offering: Back Office in a Box, or BOB. BOB is designed to help nonprofits share back office support at reasonable costs and in an important area:  financial management and accounting. In the volatile economic environment that we all now inhabit, it is even more important that money matters are handled wisely and correctly.

To learn more about BOB, tune in to our podcast with Glen, where he explains how to participate and other areas to be included in the program.

Are you sharing back office support in some creative way?  Let us know.

Back By Popular Demand: Webinars to Help Your Nonprofit Survive & Emerge Stronger

Now that we've lived through over a year of the economic downturn, you may be seeing the light at the end of tunnel in your nonprofit -- or maybe that light hasn't reached you yet and you're still in crisis mode. Regardless of your current position, you'll benefit from our new webinar training series, Turning Economic Crisis into Opportunity: How Nonprofits Can Survive and Emerge Stronger.

If this series sounds familiar, that's because we debuted it in October to a very positive response, so we've decided to repeat it. In the four sessions, you will learn to evaluate how well your organization uses resources to achieve its mission; apply the most effective short-term and medium-range strategies to ensure its survival; determine which revenue option is best; and implement the five essential characteristics of effective, sustainable nonprofits.

By understanding and strengthening your current financial health, you'll be prepared to make the most of economic recovery and secure your long-term sustainability. In addition, you'll develop skills that help you adapt to any economic climate.

Registration fee: $45 for each session.
Special offer: Register by November 30 for the complete four-part series for only $135...
YOU SAVE $45! Get four webinars for the price of three!

Click any title to get details and register.

• Special Offer: Complete Four-Part Series for $135
• Assessing Your Nonprofit's Financial Health, Tuesday, December 1
• Survival Strategies for Your Nonprofit, Thursday, December 3
• Strengthening Your Nonprofit's Income Portfolio, Tuesday, December 8
• Beyond the Recession: Building Sustainability, Thursday, December 10

Free Shipping in November on The 21st Century Nonprofit

This November, the Foundation Center is offering free shipping on our new edition of The 21st Century Nonprofit when you order online.

The second edition of this popular title explores the increasing emphasis on nonprofit governance, including accountability, transparency, and responsibility.

Revised chapters contain updated information on strategic and operational issues, such as long-term planning, marketing, and earned income. The new edition also provides a special discussion of the strategic issues facing nonprofits during times of recession and severe economic downturn.

Visit the Marketplace section of our web site for more information on this essential title or to view the table of contents for the publication. The 21st Century Nonprofit is available for just $39.95 with free shipping online this month. Order your copy today! >>

The second edition of this popular title explores the increasing emphasis on nonprofit governance, including accountability, transparency, and responsibility.

Revised chapters contain updated information on strategic and operational issues, such as long-term planning, marketing, and earned income. The new edition also provides a special discussion of the strategic issues facing nonprofits during times of recession and severe economic downturn.

Visit the Marketplace section of our web site for more information on this essential title or to view the table of contents for the publication. The 21st Century Nonprofit is available for just $39.95 with free shipping online this month. Order your copy today! >>

New Partnership for Two DC Health Funders Simplifies Application Process

The Meyer Foundation recently announced that it is beginning a new partnership with the Consumer Health Foundation (CHF), the leading health funder in the Greater Washington region. Beginning next year, CHF will manage the application process for Meyer's health and mental health grants.

These two foundations have worked closely together for nearly a decade and have overlapping interests in their funding priorities and grantees. This partnership will allow them to share knowledge and will help to streamline and simplify the application and reporting processes. CHF will accept proposals for Meyer's health related funding by invitation only starting in 2010. You can find more details about this collaboration on the Meyer Foundation web site.

This partnership serves as an excellent example of grantmakers working to improve the application process for grantseekers -- which is the main goal of Project Streamline. Project Streamline is a collaborative effort of organizations from both sides of the grantmaker/grantseeker divide who are studying grant application and reporting practices, their impact on grantseekers and grantmakers, and the implications for the field.

The Meyer Foundation and the Foundation Center, along with many  other organizations, are participating in this discussion to explore ways to simplify the application process and reduce costs on both sides. You can visit the Project Streamline web site to review recommendations issued by this group, download its report Drowning in Paperwork, Distracted from Purpose [pdf], or register for an online newsletter to keep up with new information.

Listen! David La Piana Discusses How Nonprofits Should Approach Strategic Restructuring

David La Piana, author of Strategic Restructuring: Mergers, Integrations and Alliances, recently sat down with Janet Camarena, Director, Foundation Center-San Francisco, to talk about best practices in how nonprofits should approach collaborations, mergers, and other types of partnerships. Listen>>

David La Piana, author of Strategic Restructuring: Mergers, Integrations and Alliances, recently sat down with Janet Camarena, Director, Foundation Center-San Francisco, to talk about best practices in how nonprofits should approach collaborations, mergers, and other types of partnerships. Listen>>

Getting Social at the White House

The Young Nonprofit Professional Network of Greater DC held its annual networking reception at the White House on October 22 in the South Court Auditorium, and I was glad to be able to attend. Guests were treated to talks by a number of Obama staffers including:  Buffy Wicks, Deputy Director, White House Office of Public Engagement; Trooper Sanders, Deputy Director of Policy, Office of the First Lady; and Sonal Shah, Director, Office of Social Innovation and Civic Participation.

Macon Phillips, Director of the White House Office of New Media, however, stole the show with his lively presentation on how the White House is using social media tools. He acknowledged that many administrators fear social media because it opens you up to "failing big in public."

In sharing tips for success with new media, Mr. Phillips stated that content is key -- a message we have heard from others during our TechSense programs. He counseled the audience not to go online just because everyone one else is. You need to have a clear message. His message is simple -- "Obama." He also underscored the need for a social media strategy. Theirs is to open up the White House so that is seen as belonging to the people, increasing engagement in government, and amplifying the administration's agenda. In fact, his post to the White House blog on Inauguration Day focused on their new media priorities.

So take a look at the White House web site to see how Mr. Phillips and his team are working to engage people. And if you missed our previous blog posts on our TechSense programs, including how nonprofits can use social media, you can find them here.

Legal Issues Every Nonprofit Manager & Trustee Should Know

Wouldn't you love the chance to get free legal information directly from an expert?  Register now for our program on November 9 -- Legal Issues Every Nonprofit Manager & Trustee Should Know.  Regina Hopkins of the D.C. Bar Pro Bono Program will discuss some of the most common legal issues nonprofits face.

In the meanwhile, the following post, originally featured on the Foundation Center-Atlanta blog, gives a great overview of what your organization can do to avoid some legal problems during the current financial crisis.

Staying Legal in Tough Economic Times By Rachel Epps Spears

Donations are down; requests for assistance are up.  Nonprofits that already operate on a lean budget are tightening the belt another notch or two.  Now is not the time to let down your guard when it comes to the legal health of your nonprofit.  Here are tips for keeping your organization out of legal trouble while you weather the economic downturn.

#1.  Don’t stop paying your taxes.

With decreased revenue, nonprofits sometimes fall into the trap of not paying employment taxes to the IRS .  Don’t do this!  The IRS won’t be moved by your charitable works; the Service wants its money.  Also, Board members should know that they can be held personally liable for a nonprofit’s failure to pay employment taxes.  As a related issue, make sure that any one you are treating as an independent contractor is correctly classified as such.  Follow the IRS guidelines or seek legal counsel to determine whether a worker is an independent contractor or an employee.  Make sure that you are properly withholding and paying employment taxes for anyone who should be treated as an employee.  See the IRS web site for more information.

#2.  Be careful when laying off employees.

When laying off employees, you must keep several things in mind to avoid future legal challenges to your decisions.  First, prepare a written layoff plan and carefully document layoff decisions.  This will help protect you from accusations that your decisions were made improperly.  Make sure that the business reason for the layoffs is clear and that the selection criteria for determining who is laid off is clearly defined so that you will have evidence if your decisions are later questioned.  Always remember that you cannot make termination decisions based on an employee’s race, national origin, sex, age, or any other characteristic protected law.  Also, before an employee is laid off, you must check if the employee has an employment agreement  and if there is an agreement, check for a certain period of service and for a severance payment.  Be aware that when you lay off an employee, he or she may be eligible for unemployment compensation.  It is important that you consult legal counsel to assist in creating a layoff plan that will be compliant with various applicable laws.

#3.  Make sure you pay minimum wage and overtime as required.

As an alternative to layoffs, you might consider retaining your employees but reducing their compensation.  Any such compensation reduction program must comply with federal and state wage and hour laws.  If you decide to lower salaries, make sure that you are still paying at or above minimum wage.  Also, don’t slack off on paying overtime to non-exempt employees.  If you don’t know the difference between exempt and non-exempt employees or haven’t carefully considered this classification, seek help.  See the Department of Labor for more information.

 #4.  Keep up to date your insurance premiums.

Insurance is costly but you need it more than ever when times are tough.  Be sure to pay all premiums due on general liability, workers’ compensation, director’s and officer’s liability and any other insurance that is vital to your organization.

#5.  Keep the Board informed and engaged.

Make sure the Board of Directors is well aware of the financial challenges facing the nonprofit and be sure to give them time to respond to those challenges.  Board members should meet more frequently, if necessary, and stay on top of any potential problems.

#6.  Check your contractual obligations.

If a lease or contract (including an independent contractor agreement) becomes too expensive or unnecessary to your business and you want to terminate, be sure to read the termination clause first and understand what risk you face by ending the contract. There may be cancellation fees or other requirements. 

Also, don’t use funds from one contract or grant to cover shortfalls in operations or other less-funded programs without properly considering your obligations under the contract and taking any necessary steps.

#7.  Renegotiate outstanding debt.

If you have a mortgage or other type of loan and are having trouble keeping up with the payments, don’t avoid your lender.  Most lenders would rather renegotiate the debt than foreclose. Contact your lender and see what can be arranged.

#8. Be sure subcontractors are being paid.

If you are in the process of building or renovating, don’t get caught between your general contractor and any unpaid subcontractors.  Make certain that your general contractor signs a release that he has received payment to pay subcontractors and make sure he pays them. 

A subcontractor that does not get paid by the contractor can put a mechanic’s lien on the property to obtain his payment.  Mechanic’s liens increase during difficult economic times.   Make sure that you have evidence that the owner paid the contractor in order to protect your organization.

#9. Be careful about additional fundraising efforts.

Nonprofits look for new and innovative ways to raise money in a bad economy but be aware that there are many laws and regulations for fundraising.  For example, Georgia has strict gaming laws governing raffles, door prizes and bingo games.  The IRS has many regulations that affect fundraising, including rules about unrelated business taxable income (UBTI). 

The UBTI regulations may require organizations to pay tax on any income (including fundraising income) that is not directly related to their charitable mission.   Finally, if you decide to try to raise additional funds by hiring a professional fundraiser, make certain the agreement will not affect your tax-exempt status.

#10. To Merge or Not to Merge?

Combining forces with another organization may be the only way to survive an economic downturn.  Although it is important that your organization’s mission, programs and culture are sustained, you must consider that merger with another organization may be the key to surviving during a period of fierce competition for scarce resources.  Combined organizations are more likely to attract funding than each organization alone and also experience more efficiency in operations.  Attorneys can help with the many legal issues that arise in a merger.

Rachel Epps Spears is the Executive Director of Pro Bono Partnership of Atlanta, a nonprofit organization whose mission is to provide free legal services to other nonprofits

Wouldn't you love the chance to get free legal information directly from an expert?  Register now for our program on November 9 -- Legal Issues Every Nonprofit Manager & Trustee Should Know.  Regina Hopkins of the D.C. Bar Pro Bono Program will discuss some of the most common legal issues nonprofits face.

In the meanwhile, the following post, originally featured on the Foundation Center-Atlanta blog, gives a great overview of what your organization can do to avoid some legal problems during the current financial crisis.

Staying Legal in Tough Economic Times By Rachel Epps Spears

Donations are down; requests for assistance are up.  Nonprofits that already operate on a lean budget are tightening the belt another notch or two.  Now is not the time to let down your guard when it comes to the legal health of your nonprofit.  Here are tips for keeping your organization out of legal trouble while you weather the economic downturn.

#1.  Don’t stop paying your taxes.

With decreased revenue, nonprofits sometimes fall into the trap of not paying employment taxes to the IRS .  Don’t do this!  The IRS won’t be moved by your charitable works; the Service wants its money.  Also, Board members should know that they can be held personally liable for a nonprofit’s failure to pay employment taxes.  As a related issue, make sure that any one you are treating as an independent contractor is correctly classified as such.  Follow the IRS guidelines or seek legal counsel to determine whether a worker is an independent contractor or an employee.  Make sure that you are properly withholding and paying employment taxes for anyone who should be treated as an employee.  See the IRS web site for more information.

#2.  Be careful when laying off employees.

When laying off employees, you must keep several things in mind to avoid future legal challenges to your decisions.  First, prepare a written layoff plan and carefully document layoff decisions.  This will help protect you from accusations that your decisions were made improperly.  Make sure that the business reason for the layoffs is clear and that the selection criteria for determining who is laid off is clearly defined so that you will have evidence if your decisions are later questioned.  Always remember that you cannot make termination decisions based on an employee’s race, national origin, sex, age, or any other characteristic protected law.  Also, before an employee is laid off, you must check if the employee has an employment agreement  and if there is an agreement, check for a certain period of service and for a severance payment.  Be aware that when you lay off an employee, he or she may be eligible for unemployment compensation.  It is important that you consult legal counsel to assist in creating a layoff plan that will be compliant with various applicable laws.

#3.  Make sure you pay minimum wage and overtime as required.

As an alternative to layoffs, you might consider retaining your employees but reducing their compensation.  Any such compensation reduction program must comply with federal and state wage and hour laws.  If you decide to lower salaries, make sure that you are still paying at or above minimum wage.  Also, don’t slack off on paying overtime to non-exempt employees.  If you don’t know the difference between exempt and non-exempt employees or haven’t carefully considered this classification, seek help.  See the Department of Labor for more information.

 #4.  Keep up to date your insurance premiums.

Insurance is costly but you need it more than ever when times are tough.  Be sure to pay all premiums due on general liability, workers’ compensation, director’s and officer’s liability and any other insurance that is vital to your organization.

#5.  Keep the Board informed and engaged.

Make sure the Board of Directors is well aware of the financial challenges facing the nonprofit and be sure to give them time to respond to those challenges.  Board members should meet more frequently, if necessary, and stay on top of any potential problems.

#6.  Check your contractual obligations.

If a lease or contract (including an independent contractor agreement) becomes too expensive or unnecessary to your business and you want to terminate, be sure to read the termination clause first and understand what risk you face by ending the contract. There may be cancellation fees or other requirements. 

Also, don’t use funds from one contract or grant to cover shortfalls in operations or other less-funded programs without properly considering your obligations under the contract and taking any necessary steps.

#7.  Renegotiate outstanding debt.

If you have a mortgage or other type of loan and are having trouble keeping up with the payments, don’t avoid your lender.  Most lenders would rather renegotiate the debt than foreclose. Contact your lender and see what can be arranged.

#8. Be sure subcontractors are being paid.

If you are in the process of building or renovating, don’t get caught between your general contractor and any unpaid subcontractors.  Make certain that your general contractor signs a release that he has received payment to pay subcontractors and make sure he pays them. 

A subcontractor that does not get paid by the contractor can put a mechanic’s lien on the property to obtain his payment.  Mechanic’s liens increase during difficult economic times.   Make sure that you have evidence that the owner paid the contractor in order to protect your organization.

#9. Be careful about additional fundraising efforts.

Nonprofits look for new and innovative ways to raise money in a bad economy but be aware that there are many laws and regulations for fundraising.  For example, Georgia has strict gaming laws governing raffles, door prizes and bingo games.  The IRS has many regulations that affect fundraising, including rules about unrelated business taxable income (UBTI). 

The UBTI regulations may require organizations to pay tax on any income (including fundraising income) that is not directly related to their charitable mission.   Finally, if you decide to try to raise additional funds by hiring a professional fundraiser, make certain the agreement will not affect your tax-exempt status.

#10. To Merge or Not to Merge?

Combining forces with another organization may be the only way to survive an economic downturn.  Although it is important that your organization’s mission, programs and culture are sustained, you must consider that merger with another organization may be the key to surviving during a period of fierce competition for scarce resources.  Combined organizations are more likely to attract funding than each organization alone and also experience more efficiency in operations.  Attorneys can help with the many legal issues that arise in a merger.

Rachel Epps Spears is the Executive Director of Pro Bono Partnership of Atlanta, a nonprofit organization whose mission is to provide free legal services to other nonprofits

Important! Date Change for Technology Day of Service

NPower Greater DC Region just announced that it has changed the date for its Technology Day of Service, which we featured in a post on our blog last month.

The Technology Day of Service will now be held on Friday, December 4, 2009.

On this day, NPower will arrange for volunteers from IT departments of several local corporations to meet with nonprofits to assess each organization’s current technology environment, including hardware, software, security, and on-going tech support. Organizations will receive a report with recommendations that address the areas of greatest need and assist with better business planning.

This date change gives you another chance to take part, so don't miss this great opportunity to get pro bono professional IT assistance! To participate, visit the NPower web site and download a brief online request form.

Pulse Check 3: How Are Nonprofits Doing?

As a follow-up to our earlier Pulse Check posts in March and July, here is another round-up of the latest surveys and studies indicating how the nonprofit sector is handling the effects of the recent economic downturn.

Glass Half Full or Half Empty? Results of GuideStar's Latest Nonprofit Economic Survey (August 2009)
GuideStar’s most recent nonprofit economic survey takes a look at the financial health of charitable organizations from March-May 2009. They found that since the last update, covering October 2008-February 2009, the percentage of nonprofits reporting decreased contributions has remained steady at 52%. Other findings showed that:

• 18% of responding nonprofits saw their contributions increase, while 29% reported that their contributions had stayed about the same from the previous survey period.
• Nonprofits reported that the decrease in giving was the result of the following:
  • Fewer individuals gave (69%)
  • Gifts from individuals were smaller (68%)
  • Corporate gifts were smaller (38%)
  • Private foundation grants were smaller (37%)
  • Read more>>

Volunteering in America: Research Highlights (August 2009) [PDF]
The Corporation for National and Community Service collects information on the American volunteer landscape in an effort to track changes and developments that may be useful for civic leaders and nonprofit organizations. Some of the key findings showed that:

• In 2008, 61.8 million Americans or 26.4 percent of the adult population contributed 8 billion hours of volunteer service worth $162 billion, using Independent Sector’s 2008 estimate of the dollar value of a volunteer hour ($20.25).
• As the economy slows and nonprofit organizations struggle to provide services on smaller budgets, volunteers become even more vital to the health of our nation’s communities. Between September 2008 and March 2009, more than a third (37%) of nonprofit organizations report increasing the number of volunteers they use, and almost half (48%) foresee increasing their usage of volunteers in the coming year. Almost no nonprofit organizations are showing a decrease in their volunteer usage.
• Volunteers were much more likely than non-volunteers to donate to a charitable cause in 2008, with 78.2 percent contributing $25 or more compared to 38.5 percent of non-volunteers.
• Read More [PDF]>>

Nearly 30% of Nonprofit Leaders Took a Pay Cut This Year; Pay in 2008 Grew Quickly (Sept. 2009)
The Chronicle of Philanthropy conducted a survey of 325 organizations that raised the highest amounts of donations from private sources in 2008, as well as grantmakers holding the highest assets that year. The results of the survey revealed that:

• 57 charities and foundations—29 percent of the 195 groups that responded—reported that their top executive had taken a pay cut this year due to the recession, declined raises or bonuses, or had his or her pay frozen. The median pay cut was 10 percent.
• The median compensation for chief executives at the organizations surveyed was $361,538, based on information from 253 groups that provided data for both 2007 and 2008. In 2007 the median compensation was $330,395.
• Read more>>

Nonprofit Finance Fund's and Business Volunteers Unlimited's Nonprofit Survey - Northeast Ohio (August 2009)
Locally, the Nonprofit Finance Fund and Business Volunteers Unlimited recently conducted a survey of Northeast Ohio nonprofits and found that nonprofits are struggling to balance falling revenues and an increase in demand as they plan for 2010. Read a summary of the survey for more information about the findings.

Have you read other enlightening reports and survey findings? Tell us about them.

Thanks to Cindy Bailie, Director, Foundation Center-Cleveland, for sharing this post.

Turnaround Advice for Struggling Arts Organizations

Arts organizations are facing difficult times in the present economy. They are losing donors as well as revenue from ticket sales. October is Funding for the Arts Month at the Foundation Center, so we thought we'd offer some resources for these struggling groups.

Michael Kaiser, president of the Kennedy Center for the Performing Arts and author of The Art of the Turnaround: Creating and Maintaining Healthy Arts Organizations (available in Foundation Center libraries), is an expert on successfully leading arts organizations out of crisis.

In his book, Mr. Kaiser outlines 10 tips for reviving financially distressed arts groups:

1. Someone must lead.
2. The leader must have a plan.
3. You cannot "save" your way to health.
4. Focus on today and tomorrow, not yesterday.
5. Extend your programming planning calendar.
6. Marketing is more than brochures and advertisements.
7. There must be only one spokesman and the message must be positive.
8. Fundraising must focus on the larger donor, but don't aim too high.
9. The board must allow itself to be restructured.
10. The organization must have the discipline to follow each of these rules.

Earlier this year, Mr. Kaiser started a special initiative through the Kennedy Center called Arts in Crisis. This program offers free counseling to arts-related nonprofits from the Kennedy Center executive staff on fundraising, building more effective boards of trustees, budgeting, marketing, technology, and other areas pertinent to maintaining a vital performing arts organization during a troubled economy. You can access the form to request services on the Kennedy Center web site.

You can find more useful information using our special web portal, Focus on Funding for the Arts. This portal will guide you to a wealth of resources, including a map listing arts funders by state, stories on the arts from Philanthropy News Digest, and current funding opportunities for arts organizations.

Arts organizations are facing difficult times in the present economy. They are losing donors as well as revenue from ticket sales. October is Funding for the Arts Month at the Foundation Center, so we thought we'd offer some resources for these struggling groups.

Michael Kaiser, president of the Kennedy Center for the Performing Arts and author of The Art of the Turnaround: Creating and Maintaining Healthy Arts Organizations (available in Foundation Center libraries), is an expert on successfully leading arts organizations out of crisis.

In his book, Mr. Kaiser outlines 10 tips for reviving financially distressed arts groups:

1. Someone must lead.
2. The leader must have a plan.
3. You cannot "save" your way to health.
4. Focus on today and tomorrow, not yesterday.
5. Extend your programming planning calendar.
6. Marketing is more than brochures and advertisements.
7. There must be only one spokesman and the message must be positive.
8. Fundraising must focus on the larger donor, but don't aim too high.
9. The board must allow itself to be restructured.
10. The organization must have the discipline to follow each of these rules.

Earlier this year, Mr. Kaiser started a special initiative through the Kennedy Center called Arts in Crisis. This program offers free counseling to arts-related nonprofits from the Kennedy Center executive staff on fundraising, building more effective boards of trustees, budgeting, marketing, technology, and other areas pertinent to maintaining a vital performing arts organization during a troubled economy. You can access the form to request services on the Kennedy Center web site.

You can find more useful information using our special web portal, Focus on Funding for the Arts. This portal will guide you to a wealth of resources, including a map listing arts funders by state, stories on the arts from Philanthropy News Digest, and current funding opportunities for arts organizations.