316 posts categorized "Nonprofit Management"

Less Hassle and Still Charitable: Why Projects Choose Fiscal Sponsorship

August 21, 2019

Fiscal_sponsorshipOne of the big trends we've noticed in both philanthropy and international development is increasing interest in funding different and new types of organizations. For many foundations, traditional public charities are not their first choice for investment. Instead, they are turning to international networks and partnerships that bring together diverse stakeholders, innovation platforms, funder collaboratives and re-granting funds, social enterprises, and short-term projects with a handful of staff.

As a result of this, we’re seeing many funders and project leaders consider the fiscal sponsorship model, which typically entails a project or small startup being "sponsored" by a larger tax-exempt organization with an aligned mission. The larger organization handles governance, financial management, and administration for the project it has agreed to sponsor, while the project (in many cases) pursues an independent strategy with semi-autonomous staff and its own advisors.

Since the Transparency and Accountability Initiative (TAI) transitioned to a U.S.-based fiscal sponsor in 2016, we have been repeatedly asked for advice by both project leaders and program officers. We’ve also watched as the fiscal sponsorship sector has grown. In the international development field, we’re even seeing the demand for fiscal sponsorship expand to other countries, most of which do not have legal frameworks in place to accommodate such a model.

Here in the U.S., the law currently supports a variety of models. In the model used by TAI, the sponsoring organization assumes responsibility for all tax filings, financial reporting, and legal compliance, including ensuring the charitable mission and activities of the project it is sponsoring. Typically the project is expected to contribute to the sponsoring organization’s overhead, abide by its policies, and report to its management and board. The exact terms of the arrangement usually are spelled out in a memorandum of understanding (MOU). The MOU often allows the project or startup to have its own steering committee to direct its strategy.

We are frequently asked about fiscal sponsorship and wanted to share some of the things you should consider before taking the plunge. (Nonprofit leaders may also want to consider how some of these factors are shaping organizational structures in their own fields.) Based on our own experience and what we’ve heard again and again from other projects that have gone this route, below are the top factors in deciding whether to pursue a fiscal sponsorship arrangement:

  • Time spent on administration. Many projects choose fiscal sponsorship out of a simple desire to focus on programming rather than governance issues or the nitty-gritty of administration (procurement, financial reporting, human resources, etc.).
  • A need to be nimble and/or drive short-term impact. Fiscal sponsorship is an option for activities like art exhibitions and disaster relief efforts, both of which require flexibility and are often short-term in nature.
  • Getting value from economies of scale. Overhead is always a consideration, and many projects worry that setting up their own formal organization will be too expensive and/or duplicative of other’s efforts.
  • Leveraging synergies. In best-case situations, hosted projects and their sponsors learn from each other’s activities and share networking opportunities, funding information, and strategic insight.
  • Balancing the interests of founders, funders, and stakeholders. Many networks and donor collaboratives choose fiscal sponsorship because member organizations are concerned about the hosting organization prioritizing its own issues and fundraising above the network’s needs.
  • Qualifying for tax-exempt donations sooner rather than later. When done properly, fiscal sponsorship enables a project or startup to receive tax-exempt donations (based on the public charity status of its sponsor) more quickly than if it had decided to set itself up as a 501(c)(3).

Fiscal sponsorship is not for everyone. The San Francisco Bar Association has a nice list of trade-offs, including loss of formal control,  branding issues, potential costs, and the difficulty of disentangling oneself from such an arrangement at a later date. Let us add here that a lawyer should be consulted on many of these issues.

We also don't want to see social sector leaders be daunted by the prospect of creating a new nonprofit entity. Nathaniel Heller is among those who have argued that too many projects and startups avoid the initial work of creating an independent nonprofit organization. There are also other options for structuring certain types of projects and networks (e.g., decentralizing work across members of a network).

Before diving into all the different models out there, project leads and their supporters will want to explore what it is they need and want. In TAI's case, we scoped out and prioritized the needs of the collaborative, including issues related to governance, administration, financial management, and human resources. We recommend others do the same: nailing down what it is you really want to accomplish and what you need to do it is invaluable information for key stakeholders as they consider the options available. It also will help if fiscal sponsorship is the model you decide on, as most sponsors will be eager to know more about your needs with respect to financial reporting, vendor management, hiring, and so on.

Funders are already embracing the fiscal sponsorship model. What are the implications for the nonprofit sector long term? If more projects are fiscally-sponsored, what might that mean for more traditional nongovernmental organizations (NGOs)? From where we sit, it seems that a growing number of NGOs are trying to capture the spirit of fiscal sponsorship with initiatives of their own, especially international NGOs, where the demand for fiscal sponsors who can hire international staff is great.

For their part, nonprofit leaders need to be aware of this trend and consider its relevance for their organizations. A growth industry often generates disruptive ripple effects. Pay attention to how new pilots, startups, networks, and collaborations in your issue area are being structured and how those changes might be shifting donor expectations. Are there ways to take advantage of these changes by offering sponsorship opportunities to others? Is there an opportunity to take advantage of the expertise and experience of another organization to incubate a new idea, spin out a project that has gained some traction but needs more support to generate impact, or create something with a fixed timeline? Maybe you’re just tired of the never-ending struggle to pay the rent and keep the lights on and are ready to let someone else worry about fundraising while you devote yourself to the cause or mission. If any those sound familiar, then fiscal sponsorship is a model you may want to consider.

Headshot_jenny_lah_michael_jarvisMichael Jarvis is executive director of the Transparency and Accountability Initiative, a global funders collaborative committed to building a more just, equitable, and inclusive society. Jenny Lah is an independent consultant who specializes in strategy, research, and organizational development, mainly in the international development sector. She has consulted with TAI as well as several other international networks on fiscal sponsorship and governance issues. Please note: the material above has not been reviewed by a lawyer. Organizations considering becoming or using a fiscal sponsor should get advice from an attorney with experience in nonprofit law.

Changing the Way Candid Serves You

July 23, 2019

ZBlog 2 Option 2Announcing Foundation Center and GuideStar had joined forces was just the beginning — now the real work of being Candid has started. We're busy combining operations on a number of fronts, and starting up new and exciting projects, too. I mentioned one of our most important initiatives in a previous post: the transition from our four regional library centers to our 400+ Funding Information Network (FIN) partner locations. We've received some thoughtful questions about what this evolution might mean for you.

What's happening to Candid's libraries?

We're not changing whom we serve, we're changing how we serve.

We've been around a long time, and over the years we've heard feedback from people who have struggled with our metro locations in terms of accessibility, hours, and parking fees and availability. Our current footprint of library locations in specific metro areas also locks our teams in to commitments behind the desk. Plus, now that we've become Candid, we have two offices in both the San Francisco Bay Area and Washington, D.C.

ZBlog 4 Option 1By the end of 2019, our Bay Area and Washington, D.C., offices will have been combined so that we have one office each in Oakland and D.C., while our Atlanta and Cleveland teams will be operating out of co-working or partner sites. We will no longer provide in-person library services at these locations, but you will still be able to get all of your questions answered through in-person trainings with our partner network and online services (more on this below).

Our largest office and library in New York will continue to operate in its full current form (still providing library services and trainings). We'll also begin experimenting with local programming close to Williamsburg, Virginia, where a large contingency of Candid team members are based.

How will these changes affect my local nonprofit community?

We're focused on continued and increased engagement in your community. Candid's mission continues to be to connect people who want to change the world to the resources they need to do it — research, collaboration, and training are the ways we accomplish that mission.

Our transition away from providing direct in-person library services at our own offices will free up our teams to interact directly with audiences beyond our own four walls. Taking our D.C. metro area location as an example: three of our FIN partners are within a ten-mile radius of our current location, and all three are Metro accessible. Our D.C. team plans to offer three to five classes per month at local partners and other locations, and they also plan on holding monthly training events at the University of the District of Columbia.

What does the Funding Information Network do?

Over more than sixty years, we've built up our Funding Information Network, which is made up of more than 400 partner locations across the U.S. and around the world. In 2018, 24 new partners joined the network, and visitors at our partner sites executed more than half a million searches on Candid databases.

Screen Shot 2019-07-08 at 2.59.29 PMThese public libraries, universities, and resource centers will continue to offer access to Candid databases on-site, free to the public. They also host our low- or no-cost fundraising trainings, including advanced courses such as our Proposal Writing Boot Camp.

In 2018, our partner locations led 166 trainings. In addition to these programs, our own Candid staff hosted 80 programs at partner locations that were attended by more than 1,500 people. And next year, thanks to the transition away from our own four library centers, Candid staff will be able to offer even more programs at these locations. You can find the current training schedule at our GrantSpace calendar.

How do network partners support local nonprofits?

The first way is through access to, and on-site assistance with, Candid databases like Foundation Directory Online. One of our partner locations in Michigan told us, "It is wonderful to have this resource and the teaching tools at our disposal. People come into our library looking for information on how to write or search for grants all the time. Being able to point them to GrantSpace or schedule an orientation to the database helps our community."

Network partners undergo Candid certification each year to become experts at navigating our databases and other resources. In addition, Candid offers a substantial amount of training to our partners, including a deep dive into what Candid is and what changes they can expect. More than 98 percent of our Funding Information Network partners meet, if not exceed, the partnership standards we've set out.

ZBlog 4 Option 2We track these standards each year, and we are constantly seeking new ways to ensure that our partners have access to and are provided training on Candid resources. Our regional staff works directly with our partners and hosts monthly and quarterly calls to continue building their capacity to serve your needs on the ground. In addition, we host annual conferences and training sessions with our FIN partners to keep them up to date and prepared to assist you.

The second way our partners support local nonprofits is through trainings. A partner from Ohio said, "The first class I ever taught resulted in an individual writing a letter of introduction to a foundation not accepting applications, getting asked to apply, and receiving a $50,000 grant. I just spoke to a frequent database user who has almost solidified a $500,000 grant for her nonprofit which works to bring military personnel back from overseas."

One of our partners in Arkansas shared, "Last year, a person was at our location quite frequently for most of the year. Now that person has succeeded in establishing a new enterprise locally that assists homeless LGBTQ young adults in Central Arkansas."

Another partner, from Georgia, said, "[Being a Funding Information Network partner] enables us to meet our strategic goals of building the community and partnering with other organizations to bring needed programs and resources to the community. The classes we offer have led to partnerships with nonprofits."

Check the local calendar on grantspace.org to see upcoming community events and use our map tool to find partners near you.

What if I can't get to a partner location?

You can connect with us online, anywhere, anytime. We have developed robust direct online reference services at grantspace.org, where you can get customized help from a real Candid staffer who has the expertise to help with any of your fundraising or nonprofit questions. In 2018, our Online Librarian service addressed more than 135,000 questions. Engaging with us via our online reference service is free, and even easier than a visit — you don't need to find parking to ask us your quick or in-depth questions.

ZBlog 5 Option 2Grantspace.org also continues to be a comprehensive online learning site, with access to thousands of knowledge resources/tools, blogs, videos, and, of course, a vast calendar of in-person, live-online, and on-demand training programs available at your fingertips. In 2018, we delivered 116 webinars and self-paced elearning courses to nearly 20,000 participants.

We also continue to build out our eBooks collection, ensuring anytime, anywhere access to our online collection of information resources. An average of one hundred users a month are taking advantage of this free service.

Whom can I contact if I have more questions?

Please don't hesitate to reach out to any of our team members with questions or ideas:

Western region: Michele Ragland Dilworth
Northeastern region: Kim Buckner Patton
Southern region: Maria Azuri
Midwestern region: Teleangé Thomas

We are thrilled for the opportunity this new operating model presents Candid and are very excited to meet with more of you across the U.S. As always, you can connect with me directly to talk about how we can serve you better.

Zohra Zori is vice president for social sector outreach at Candid.

________

Learn more about what Candid can offer you today
Learn more about GrantSpace's live and on-demand trainings
Learn more about the Funding Information Network
Learn more about our eBooks lending program

 

How to Find Your Most Engaged New Board Member

May 23, 2019

Board-meetingThere are nonprofits that enjoy a celebrated status in their communities. Powerful people clamor to be on their boards, and they earn those seats with significant contributions and meaningful introductions. And then there are most nonprofits. Their boards work to attract qualified board candidates but often end up wondering whether they should make do with less.

What are these nonprofits to do? The good news is that it is possible to recruit board members whose commitment to your cause more than balances out their lack of connections or personal wealth.

Now, it doesn't hurt to have a few well-connected (and deep-pocketed) people on your board. But having too many can be a problem. Increasingly, nonprofits are looking to solve the challenge of board member engagement. They struggle with board members who don't do much beyond showing up for meetings, or who write a big check to the organization once a year and then drop out of sight. But when it comes to that long-term project or software integration the organization desperately needs, the one that requires board members willing to do research and outreach until the goal is met? Fuggedaboudit.

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From 'Tribal' Knowledge to Technology: How Data Can Supercharge Your Nonprofit

April 24, 2019

Nonprofit_working_spaceTeam members at nonprofit organizations often feel a special kinship. Everyone strives to deliver on the organization's mission and is passionate about the same thing — having a positive impact on people's lives and within their communities. In effect, the nonprofit you work for is like a "tribe" — a group of people bound together by a shared interest, a shared vocabulary, and specialized knowledge.

Many nonprofits rely on their staff's collective experience and "tribal knowledge" — undocumented information that is unavailable to those outside the organization — to keep things running smoothly. While both are invaluable, operating in such a manner tends to create gaps in actionable information. And it leaves the organization vulnerable to losing critical institutional knowledge when long-serving staff members retire or move on professionally. 

What's a nonprofit to do? 

Simply put, nonprofits need to be more efficient when capturing organizational knowledge, leveraging the experience of staff, and translating staff insights into action. How? 

With software and historical data. 

Filling Critical Gaps With Data

Better support for participants. Historical data can provide nonprofits with valuable insights that intuition or gut instinct alone cannot. Let's say a fifth-grade student in an afterschool tutoring program is scoring at a seventh-grade reading level. Intuition tells you the student needs to be challenged. But data can show you:

  • which strategies have worked for similar students in the past
  • which K-12 accelerated reading programs best fit the needs of the student
  • how to quantitatively measure the success of your strategies 

Data gathered from digital tools can help the organization answer the above questions and create a program for the student that both stimulates and challenges her. And just as importantly, it will enable the organization to provide customized support for all participants in the program — all the time.

Putting hours back in the day. You probably work in the social sector because you have a keen desire to help others. Spending hours each day on administrative work (like data entry) can undermine that desire, while wasting valuable time on tasks that could (and should) be automated only adds to your stress. You may feel pressure to "make up" that time, but rushing through routine data-entry tasks can lead to mistakes that might have been avoided if you weren't so pressed for time. 

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New Tax on 'Excess' Executive Compensation Poses Challenge for Tax-Exempt Organizations

March 18, 2019

Tax_puzzleThe ability to attract and retain high-quality executives is an important component in the success of any tax-exempt organization and the fulfillment of its mission. A new provision of the Internal Revenue Code added by the Tax Cuts and Jobs Act of 2017 will have a "sea change" impact on the cost of compensating such individuals. Under the provision, "excessive compensation" paid to executives by a tax-exempt organization will subject the organization to a substantial excise tax liability. The penalty may be viewed as an attempt to level the playing field, inasmuch as the tax consequences associated with the payment of "excessive compensation" paid by for-profit employers, in particular by for-profit public companies, to their senior executives can result in the loss of a tax deduction for excessive compensation payments.

What Is the New Excise Tax?

Effective as of January 1, 2018, "applicable tax-exempt organizations" are subject to a 21 percent excise tax on the sum of (i) compensation paid by the tax-exempt organization (and certain entities related to the tax-exempt organization) for a taxable year to a "covered employee" that exceeds $1 million, and (ii) any "excess parachute payment" paid by the tax-exempt organization to a covered employee.

Which Tax-Exempt Organizations Are Subject to the Tax?

Any organization that is exempt from federal income tax under Internal Revenue Code section 501(a), such as public charities (e.g., United Way), exempt farmers' cooperative organizations, certain state or local governmental entities, and certain political organizations, are subject to the tax.

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5 Questions for...Rebecca Masisak, CEO, TechSoup

December 22, 2018

For more than thirty years, TechSoup has facilitated product donations and technical assistance to nonprofits and NGOs with the aim of helping them implement technology solutions that drive social impact.

With the goal of raising $11.5 million over the next three years to sustain and expand that work, the organization recently announced a direct public offering (DPO) through impact investing platform SVX.US. The DPO offers three tiers of debt security investments — risk capital notes, with a minimum investment of $50,000 and a 5 percent interest rate; patient capital notes, with a minimum investment of $2,500 and a 3.5 percent interest rate; and community capital notes, with a minimum investment of $50 and a 2 percent interest rate. TechSoup is the first nonprofit to be qualified by the Securities and Exchange Commission to raise funds through a Regulation A+ / Tier 2 offering.

PND asked TechSoup CEO Rebecca Masisak about the genesis of the DPO, as well as her views on the role of technology in building a more effective philanthropic sector and driving social change.

Headshot_rebecca_masisak_techsoupPhilanthropy News Digest: What was the thinking behind the decision to launch a direct public offering on an impact investing platform? Is there a broader goal beyond the immediate one of funding TechSoup's work and outreach?

Rebecca Masisak: Throughout our history, we've achieved scale and reach with the direct support of NGOs that wanted to use technology to achieve their missions. They have been investing in us — in the form of their administrative fees. The DPO takes that principle to the next level. It's important that those individual organizations from our community have a voice in what we do and have a way to vote — not just with a "like" on Facebook or a retweet — but with an expression of faith that comes with an investment in our DPO.

The direct public offering reflects our belief that TechSoup's stakeholders come from a range of economic backgrounds but share a common belief in the importance of a strong infrastructural backbone for civil society. The DPO enables us to offer a debt investment with interest as an impact investment, not just to institutional funders but also to U.S.-based individuals and smaller organizations in our community, with meaningful but relatively low investment minimums of $50. We want all these stakeholders to play a role in our future, not just those who have a larger budget to invest.

From the beginning, we knew we wanted to work with a platform provider in order to securely manage the investment transactions. We also needed a provider that could specifically support a Regulation A+, Tier 2 Offering in all U.S. states, so we looked at a few different options before making our choice. SVX has a strong track record as an impact investing marketplace in Canada and met all our technical platform requirements. Equally important, however, was that the SVX team shared our values and belief in democratizing access to impact investments. They have become a true partner to us, and I'm confident they will do an excellent job supporting the community engagement we seek.

PND: What has been the response to date from investors and other nonprofits?

RM: We get a lot of questions: Can nonprofits do this? What do you mean I get my money back? Why are you making the minimum investment so low?

This is a new way of doing investment in nonprofits — we are the first nonprofit qualified by the SEC to have this type of offering in all fifty U.S. states — and there are a lot of technical questions. We also know people are curious about how it turns out, not only because they want to see us succeed but also because they're thinking about doing it themselves. We're glad to be in a position to learn for the sector and to share our experience as the campaign progresses.

Since the launch in mid-November, the response has been incredibly positive. This includes those community-level "Main Street" investors who have had very limited opportunities to invest in this kind of security offering before. We see that the ability to invest this way feels empowering. Based on preliminary conversations to date, we also anticipate receiving significant support from larger entities at the Risk Capital note tier and look forward to making some announcements in the near future.

We're excited that other nonprofits have expressed interest in learning more about this approach, and we're committed to sharing what we are learning. We want others in the sector to benefit from our experience and have already started to publish updates on our blog and recently hosted a webinar along with the SVX team and our legal counsel from Cutting Edge Capital.

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Weekend Link Roundup (September 8-9, 2018)

September 09, 2018

6-500x500A weekly roundup of noteworthy items from and about the social sector. For more links to great content, follow us on Twitter at @pndblog....

Economy

It's coming — whether we like it or not. Automation is likely to force a third of American workers  to switch occupational categories by 2030, write James Manyika, Manisha Shetty Gulati, and Emma Dorn in the Stanford Social Innovation Review, with the largest disruption occurring among middle-income workers without a college degree. "[U]nhampered by quarterly earnings calls or the voting cycle," philanthropy can — and will need — to step up. Mantika, Gulati, and Dorn suggest four areas where it can do so.

Education

In The New York Times Magazine, Sarah Mosle reports at length about the many challenges public school administrators face in "finding effective teachers, retaining them and helping those who need to get better."

In a photo essay in the same issue of the magazine, Brian Ulrich looks at the kinds of second jobs that teachers across the country are taking to make ends meet.

Why are many teachers forced to work second jobs? Could it be their wages are lower than ever? Sarah Holder reports for CityLab.

Global Health

On the Bill & Melinda Gates Foundation's Impatient Optimists blog, Steven Buchsbaum, deputy director of discovery and translational sciences in the foundation's Global Health Program, reflects on the launch, nearly fifteen years ago, and subsequent progress of the foundation's Grand Challenges initiative. 

Nonprofits

With summer a fading memory, Beth Kanter has a timely reminder about the causes and costs of lost productivity in nonprofit workplaces.

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If You've Met One Foundation...You've Met One Foundation

June 08, 2018

Grant_application_for_PhilanTopicWriting grants is a lot like dating. Just because something worked in one relationship doesn't mean it's going to work in the next. Each relationship is unique, unpredictable, exciting, and...sometimes heartbreaking. And when we write a grant proposal, we have to be vulnerable but still present our best qualities. Ready for some foundation dating advice?

Because every foundation is unique, there are two critical components of success to grantwriting that have nothing to do with how well you craft your proposal — research and cultivation. Or in dating terms, getting to know you and courting.

First, you have to research the foundation. If you were dating, this would be like checking out someone's online profile. A grantwriter, instead, checks out the foundation's profile in Foundation Directory Online and spends some time with its 990-PFs. If the foundation issues publications, you'll want to flip through them and take note of the terminology the foundation uses and its stance with respect to your issue. If the foundation has a website, read through the program guidelines, application information, and any FAQs on the site.

As you do, keep an eye out for the foundation's preferences and restrictions. What has it funded in the past and at what level? A quick review of its tax returns (those 990-PFs) should give you a good sense of its giving patterns. One of my favorite things about Foundation  Directory Online is its mapping feature, which allows you to suss out whether a foundation has ever made a grant to a nonprofit in your city, county, or district, as well who the grant went to and the grant amount. Powerful information. It's like peeking into someone's dating history and learning how long the relationship lasted and how serious it was!

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Addressing Racial Equity With an Organizational Change Lens

May 21, 2018

Racial equity treeOrganizational change efforts can be daunting, even when the organization and its leaders know that such an effort will lead to a stronger, more sustainable organization in the long term. When it comes to racial equity, such efforts often carry an extra level of pressure. That's because change efforts seeking to enhance diversity, equity, and inclusion (DEI) can trigger both conscious and unconscious anxieties when staff and leadership are required to examine personal and organizational values, norms, behaviors, and perceptions. No matter what you do to create and communicate a compelling story and adjust policies and procedures, it all comes down to employee engagement, especially when it comes to "unfreezing" behavior and modeling change, both of which are key to ensuring employee buy-in and setting the stage for a successful change effort.

When tackling racial equity, the amount of individual energy and effort required to achieve a truly equitable and inclusive workplace can create stress at all levels of the organization — particularly for people of color. As with other change efforts, racial equity work requires staff members to personalize the process in order to find their own entry points into the work, and as each of us reflects on our own identity and what it means in both an individual and organizational context, frictions can arise. If not tactfully managed, issues of intersectionality, power dynamics, personal and work-related boundaries, and unconscious biases can become barriers that stand in the way of progress. But when implemented effectively, racial equity change initiatives can spark an examination of our lived experience, both at work and in our personal lives — as well as individual transformation. Not surprisingly then, if organizations can create a culture in which individuals are able to express and work through their own unconscious biases, uncertainty, and shame, they will experience a greater rate of change.

CRE's nearly four decades serving the nonprofit community has taught us that organizations ready to address and embrace racial equity must first examine how race interacts with all aspects of organizational culture, from board governance, to leadership and management, to staffing and talent management, to day-to-day work flow. While not an exhaustive list, below are four simple strategies for moving the needle on organizational change efforts intended to promote diversity, equity, and inclusion based on what we have learned from our experience promoting racial equity in our own organization and with our client partners.

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Embracing Leadership Transitions

April 13, 2018

Top_hands_inLeadership transitions happen all the time in philanthropy, but we rarely talk about the challenges and lessons they reveal. For the most part, our inclination is to try to keep the internal dynamics of our institutions private and (often) separate from our grantmaking. But because organizational change happens to all of us, we have come to see leadership transitions as offering lessons that can be illuminating not just to us but to our grantees and colleagues in other organizations as well.

Three and a half years ago, Lani Shaw, the longtime executive director of General Service Foundation (GSF), passed away suddenly. During her twenty years as GSF's first executive director, the foundation transitioned from being staffed by family members to having a full-time professional staff. Lani's passing put into motion a number of additional changes.

We know from experience that embracing change can be hard. But change can also propel an institution forward, because when it is embraced, it can be an opportunity to connect with our values and work in new ways. This is why, as we mark the two-year anniversary of a new executive director joining General Service Foundation, we wanted to share what we have learned on our journey.

1. Expectations: Transitioning to new leadership is just the beginning.

Robin Snidow (GSF Board Chair): It was a wake-up call when I realized that the hiring of a new executive director was only the beginning of the transition. I had my nose to the ground and was focused on the day-to-day business of keeping the foundation functioning. However unrealistic it may have been, I thought my work would be done once we hired the new ED.

That was not the case, and board chairs need to be aware. Transition means change, and change is dynamic. I wasn't trying to change anything while the executive director position remained vacant. But once Dimple [Abichandani] was hired, I knew we had to be open to changing if we wanted to take full advantage of the opportunities her hiring presented.

Lesson learned: Prepare the board for change. As board chair, don't assume your job is over or that it will get easier when you fill an executive position. That's when the fun starts! 

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9 Strategic (and Inexpensive!) Ways Funders Can Support Grantee Staff

March 16, 2018

Generic-supportNonprofits tend to sink or swim based not on mission and funding alone but on the talents of employees. Keeping good employees and equipping them for the work that needs to be done is one of the critical challenges frequently cited by nonprofit leaders, yet funders tend to invest much less in the "people" aspects of nonprofit organizations than they do in other areas. Indeed, businesses spend four times more per employee on leadership development than do nonprofits, while according to Foundation Center grant data from 1992-2011 less than 1 percent of foundation grant dollars are invested in nonprofit workforce development.

There are many reasons for this, from fear of getting tangled up in personnel issues to foundation charters that specify funding for programs rather than operations. However, as nonprofit organization Fund the People emphasizes, nonprofit people are nonprofit programs, and even modest investments in staff development can have significant impact.

At the Pierce Family Foundation in Chicago, our priority is capacity building and providing funding for the kind of "back office" support that keeps organizations strong and enables their programs to thrive. Given the particular experience of family members and founding staff in working for and running nonprofits prior to launching the foundation, a focus on supporting what it really takes to deliver mission was part of our vision from the beginning. It's only natural for us, therefore, to want to invest in the people whom nonprofits employ.

Below, I outline nine strategic and inexpensive ways we've invested in nonprofit staffing — and that we believe other funders interested in providing similar support can easily adapt for their own purposes.

1. Provide unrestricted general operating support. Capacity begins with staffing; do not underestimate the importance of supporting basic staffing costs by providing unrestricted general operating support. The more stable the general operating base, the more supported an organization will be in terms of staff retention, compensation, and morale. Staff also function better in non-chaotic environments that allow them to focus on how they can best put their skills to work. At the Pierce Foundation, 70 percent of our grantmaking takes the form of general op grants, and 30 percent is for specific capacity-building projects, from upgrades to CRMs and donor management software to consultant support for succession planning.

2. Offer an outside advisor for HR projects. Outside advisors can provide an objective review of a grantee's staff organizational chart, job descriptions, compensation levels, and personnel policies. We offer general workshops on topics such as "What Are You Paying and Why." We also offer private sessions with a consultant for organizations that are looking to revise their organizational chart or salary ranges, or (in a time of budget cuts) trying to combine two jobs into one. An outside advisor can make this process less painful and provide data and expertise that would not otherwise be available to an organization. We began experimenting with what made the most sense in this area because of the conversations our leading support specialist, Kris Torkelson, and Program Director Heather Parish found themselves having with grantees, many of whom did not know where to turn to for nonprofit-specific HR advice (much less a "reality check" with respect to job descriptions or comparables that can be shared with board members often reluctant to spend money on staff development).

3. Share salary data from national and regional surveys. We subscribe to the six or seven major nonprofit salary surveys because we know our grantees can't afford to and/or are unlikely to. One of our consultants combs and sorts through the surveys to identify "comparables" by position, type of organization, etc. and then shares that data with our grantees. This enables grantees to quickly see what organizations doing similar work pay their staff. Exposure to this kind of data often helps an organization understand why its staff turnover is high and can lead to needed adjustments to its salary ranges. We don't stipulate what our grantees should do with this data — that's not our role — but it typically feeds into the case for support made to their boards at budget time, as well as the longer-term planning done to ensure that an organization's ambitions align with its capacity.

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#TimesUp for the Nonprofit Gender Gap

March 09, 2018

Donor_perfect_workbook_for_womenFrom limited leadership roles to unequal pay to sexual harassment, the nonprofit community is coming to terms with its own #MeToo moment.

As a national conversation takes place around women’s issues, the surprising lack of gender diversity in nonprofit leadership along with the issues that surround it can no longer be overlooked.

For a sector that is largely funded and staffed by women, the numbers are troubling. While women make up about 73 percent of all nonprofit employees, they only hold 45 percent of nonprofit CEO roles. When it comes to pay, women nonprofit CEOs make just 66 percent of what their male counterparts make.

Fortunately, many nonprofits are having open discussions and taking action to promote gender equity in and beyond their organizations. 

In support of this crucial initiative, DonorPerfect partnered with five inspiring women who rose to the top of their organizations to create The Nonprofit Leadership Workbook for Women. This free downloadable guide commemorates Women's History Month in March, and every day, and offers a platform for these leaders to pass along what they believe it takes for more women in the nonprofit sector to ascend the ranks.

“This shift of power is so critically important. This shift in presence is so critically important,” says Marcia Coné, workbook contributor, author, and women’s advocate. “What follows is a shift in action, education, and understanding. It’s about balance and finding that there is space for both men and women to thrive, for both men and women to be safe.”

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What's in a Job Description?

February 02, 2018

It might not be obvious, but search firms like ours get lots of unexpected looks into what really goes on at the organizations we work with. And we're not just talking about hiring practices. We also gain insights into office culture, power dynamics, and reporting structures (those that work as well as those that don't). Where does all that information come from? Not from exit interviews or placement questionnaires. No, if you really want to get the inside scoop on an organization, all you have to do is look at the documents that every supervisor and employee loves to hate. 

Yes, I'm talking about your organization's job descriptions.

How do job descriptions reveal more than they were meant to? Let's look at six fairly common types and zero in on what they might be saying about your organization.

The All-Do Can-Do Job Description

Everyone can't (and shouldn't) do everything, but apparently your supervisor never got the memo. Under "responsibilities," this single-spaced three-page monstrosity not only includes "leap over tall buildings" and "argue cases before the Supreme Court," it also has the nerve to end with "other duties as assigned."

What this could mean: There's a good chance with a job description like this that no one knows exactly what the core functions of the position are, so the team responsible for creating it threw everything and the kitchen sink in just to be sure. Unfortunately, that often means that the person who ends up in the position is spread too thin and is likely to underperform. Can't say we're surprised; lack of clarity in a job description inevitably leads to confused priorities and overwhelmed staff. 

Pro Tip: Keep your job descriptions to one page. (Anything longer may be the reason the position is still open.) 

Unrelated Educational Requirements

You value education; we value education. But nonprofits too often are guilty of asking for educational credentials that not only don't match the requirements of the job in question — they don't make sense given the salary range. Why would a junior coordinator need a $75K master's degree? Or why is there an educational requirement for a fundraising position? In a sector where almost everyone is passionate about social justice, why do we insist on either excluding qualified candidates from disadvantaged backgrounds or saddling our junior staff with untenable debt?

What this could mean: Your organization isn't really serious about diversity and inclusion. By insisting on including expensive educational requirements in your job descriptions, you could be eliminating otherwise qualified candidates from diverse backgrounds before your candidate search even starts.

Pro Tip: "Or equivalent experience" in a job description gives you much more flexibility and will open up the candidate pool to a much broader variety of qualified people.

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5 Questions for...Laura Kalick, Tax Consulting Director, BDO

January 12, 2018

The GOP tax reform bill agreed to by the U.S. Senate and House in December and signed into law by the president on December 22 is over a thousand pages long. The bill is so long, in fact, that many members of Congress haven’t read — and are unlikely to ever read — it in its entirety. Its impact on nonprofits and the charitable sector could be significant, however, which is why earlier this month we spoke with Laura Kalick, national non-profit tax consulting director for the nonprofit and nonprofit healthcare industry at BDO in Washington, D.C., about provisions in the new law most likely to affect nonprofits in 2018, and beyond.

Headshot_laura_kalickPhilanthropy News Digest: There are lots of provisions in the tax reform bill that are going to affect nonprofits and charities. In your view, what is the one provision likely to have the greatest impact on the sector?

Laura Kalick: Well, the one that’s going to have the most impact is the doubling of the standard deduction and the limitation on deducting state and local taxes. These two provisions will likely result in a huge number of American taxpayers not itemizing their deductions and therefore not being able to deduct charitable gifts, which, as you know, is an important incentive for charitable giving. It's hard to know, of course, what people will do, but estimates from the likes of Independent Sector and the Council on Foundations suggest that charitable giving in the U.S. may take a hit of as much as a $20 billion, which is pretty substantial.

PND: The bill includes two provisions likely to be popular among individuals who do itemize their returns. One is an increase in the charitable contribution deduction limit, and the other is repeal of the so-called Pease limitation. How are those changes likely to affect charitable giving?

LK: The Pease limitation was more of a concern for high-income taxpayers, in that it reduced the value of a taxpayer's itemized deductions by 3 percent for every dollar of taxable income above a certain threshold — something like $250,00 for an individual and $300,000 for a married couple. With its repeal, people whose total income exceeds those levels will now get the full benefit of their contributions, so in that sense it could be an incentive for higher income taxpayers to give more.

The other provision is of little help to anyone, in my opinion. Previously, you could deduct charitable gifts totaling up to 50 percent of your contribution base — essentially, your adjusted gross income (AGI). That's a pretty large number, and although I don't have the stats for you, it's a lot more than most people actually allocate to charity. A provision in the new tax bill raises the maximum to 60 percent of one's contribution base, which is an even bigger number and not something that is likely to apply to too many people in any given year. I would also note that in addition to being able to deduct contributions up to 50 percent of one's contribution base, if there are contributions in excess of that amount, they could have, under the old code, and still can be carried forward under special rules. So I believe that increasing the limit to 60 percent is likely to have little impact.

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[Review] 'Engine of Impact: Essentials of Strategic Leadership in the Nonprofit Sector'

November 28, 2017

The nonprofit sector has never faced more difficult challenges — or had the potential to create greater impact — than it does today, argue William F. Meehan III, director emeritus of McKinsey & Company, and Kim Starkey Jonker, president and CEO of King Philanthropies, in their new book, Engine of Impact: Essentials of Strategic Leadership in the Nonprofit Sector. But for nonprofits — by 2025 projected to need up to $300 billion more annually beyond currently expected revenues in order to meet demand — to benefit from the largest intergenerational wealth transfer in U.S. history (an estimated $59 trillion expected to change hands between 2007 and 2061), they will have to "earn the right to expand [their] role and maximize [their] impact" in what Meehan and Jonker refer to as the coming "Impact Era."

Book_engine_of_impact_3dDrawing on a number of surveys, including the 2016 Stanford Survey on Leadership and Management in the Nonprofit Sector; a variety of Stanford Social Innovation Review articles, business and nonprofit management books, and Meehan's course on nonprofit leadership at the Stanford Graduate School of Business; and Jonker's experience overseeing the Henry R. Kravis Prize in Nonprofit LeadershipEngine of Impact outlines the challenges nonprofits currently face — lack of impact data, transparency, and sustainable operational support; donors' tendency to give impulsively to well-known organizations rather than high-impact ones; ineffective boards — and then explores a number of tools that nonprofits can use to address those challenges. They do not include venture philanthropy or impact investments, which Meehan and Jonker, somewhat "controversially," are skeptical of. Instead, they urge nonprofits to embrace the "essentials of strategic leadership" — mission, strategy, impact evaluation, insight and courage, funding, talent/organization, and board governance — which, when brought together thoughtfully and intentionally, create an engine of impact that drives organizational success.

Quoting liberally from business management expert Peter Drucker, Ashoka founder Bill Drayton (an early mentor of Meehan's), Good to Great author Jim Collins, and other luminaries, the authors illustrate each component of strategic leadership with concrete examples often drawn from the work of Kravis Prize winners such as the Afghan Institute of Learning (AIL), BRACLandesa, and Helen Keller International. And while they concede that some of them may be obvious, they are quick to note, based on survey results, that they are not all well understood or effectively implemented.

They emphasize, for example, the importance of a well-crafted mission statement, and caution organizations against mission creep, even if avoiding the latter means saying no to a new funding source. Indeed, saying "no" seems to be a critical part of strategic leadership, in that the urgent need to achieve maximum impact in a time of enormous challenges and limited resources is too important for nonprofit leaders to be distracted by non-mission-aligned activities — or by debates over semantics (e.g., "theory of change" vs. "logic model"): "if you ever find yourself caught in a debate about these terms' usage," Meehan and Jonkers write, "we suggest you leave the room immediately. We do."

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