Archive for the ‘Technology’ Category

Really bad advice about year-end giving, and some really obvious responses

December 31, 2012

The Nonprofiteer just received an e-mail entitled “Five Things You Need to Know About Year-end Giving” which was distinguished primarily by the utter wrongness of each and every one of the items identified.  Names have been omitted to protect the guilty, but commentary appears in bold.

1. Background Check….[B]efore you reach for your wallet, take the time to look into how charities spend their money. It is important know how much of your money actually reaches those in need. A rule of thumb is around 7% to 9% for administrative costs, though some online outlets with low overhead structures are able dip below that.  First clue that this is wrong: the imaginary precision of “7% to 9%.”  Second clue: use of the term “overhead” without definition.  “Overhead” includes such profligate expenditures as electricity and health care for employees.  The last thing we need is for donors to make it a condition of their gifts that nonprofit employees live in poverty. Rather than spend time trying to divine a charity’s wastefulness, donors should work on ascertaining its effectiveness.

2. Beware of dogs….Check the IRS database of more than a million charitable organizations to make sure the one you’re giving to is legit. The IRS database will not tell you which organizations are legitimate, only which organizations have filed appropriate paperwork.  Yes, of course, don’t give your credit-card number to any random jerk who calls; but more important, don’t give money to any agency about which you know nothing but a name and a 501(c)(3) designation.

3. Target the Need. If you see a specific need you want to affect, specify where your donation should go by adding a note, writing an email or by designating it on your check…. Money is fungible: whatever you give to a nonprofit inevitably supports its entire range of purposes and activities.  All that happens if you “designate” a spot for your money is that the recipient nonprofit shifts preexisting funds to another program.  If you don’t trust the charity to use your money wisely, don’t give it money; if you do, get out of its way and let professionals do their jobs.  The Red Cross responds to all sorts of disasters; if it gets more money than it needs for the victims of Hurricane Sandy, it will use that money for the victims of Hurricane Tom, or the house fire around the corner from you.  If you object to that, you’re more concerned with being trendy than with helping, so don’t bother to support the Red Cross.

4. Get More Than a Good Feeling….Be sure to get receipts for large donations above $250. Many non-profits are now accepting direct deposits and can accept funds with the click of a button.  Be aware of the tax deductibility of your contribution as not all non-profits can give you a tax-deductible receipt.  It’s true that donations to the NFL or the American Bar Association are not tax-deductible though  those agencies are nonprofit; but gifts to virtually anything you think of as a charity ARE tax-deductible.  Ask about it if you’re concerned but this is the least of your worries.

5. Simplify and Centralize Your Giving. Simplify your giving by using a one-stop-shop that makes finding and giving to charities easier. [Our company's] users can give to any 501(c)(3) recognized by the IRS. [Our company] keeps a record of donations so you don’t have to and provides a year-end receipt for tax purposes.  Again, don’t be trolling around looking for charities in somebody’s data-base; give money to agencies in your community whose work you know, or to organizations active in the field (social services, the environment, the arts) with which you’re concerned.  It’s no easier to find the names of random charities in some commercial Website’s data-base than directly from the IRS (or from the phone book, for that matter), and if you’re worried about having a receipt you could always just write a check, which is perfectly adequate documentation for the Revenue agents.  Don’t be dazzled by announcements of great on-line services which can direct you to charity: there’s nothing difficult about making your own gift, and “research” in this field means nothing more than familiarity with an agency’s work. What’s being ballyhooed here is the equivalent of an offer to chew your food for you: sure, you could hire someone to do it, but that would eliminate not only all the fun but all the nourishment.

Don’t feel desperate about giving away your money before December 31: there will be plenty of need (and plenty of tax-deductibility) in the new year.  Take the time you need to find out about the mission, services and effectiveness of the organizations you want to support.  There’s no charitable fiscal cliff, so don’t bother searching for a charitable bungee cord; your personal sense of balance will be more than sufficient to support you.

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Posted in Current Affairs, Fundraising, Mission, Nonprofit management, Nonprofits--General, Philanthropy and Taxation, Private Philanthropy, Social Service Agencies, Technology | 1 Comment »

Staying out of jail and up to technological speed while running a nonprofit

December 21, 2011

Some days the Nonprofiteer is happy to serve just as a pass-through for the good work other people are doing. This is one of those days.

On January 11, look out for the publication of Good Counsel: Meeting the Legal Needs of Nonprofits, Lesley Rosenthal’s guide to every possible legal issue in nonprofits. (The Nonprofiteer urged Lesley, who is Lincoln Center’s general counsel, to call the book “How to stay out of jail while running a nonprofit,” but for some reason she demurred!) Having had a chance to review the book in manuscript, the Nonprofiteer is happy to give Good Counsel her strongest possible endorsement, and not only—not even primarily—for big agencies with their own general counsels.  The lawyers on your Board who are forever being expected to know everything legal that might affect your agency (and who are secretly wetting their pants from anxiety because they don’t actually know all those things) will be particularly grateful for this brief, well-written and comprehensive guide to, well, staying out of jail. And—how moderne!–it’s also available for Kindle and I-Pad.  Publisher John Wiley & Sons/Lincoln Center.

And, in other useful news, elevationweb.org announces that it’s prepared once again to provide free Web development services to nonprofits which can match Elevation Web’s contribution.  Last year this “socially conscious Web design and media company” donated $400K in services to 95-plus nonprofits.  So if you (like most of the Nonprofiteer’s clients) think that upgrading your Website and making it easier to use (i.e. donate from) is of critical importance in the coming year, check out the group and complete the application at http://www.elevationweb.org/one_for_one.php.

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Posted in Arts Organizations, Boards of Directors, legal services, Nonprofit management, Nonprofits--General, Technology | 1 Comment »

No good deed goes unpunished

November 22, 2011

Now here’s something that breaks the Nonprofiteer’s heart: the MacArthur Foundation is making grants to a dozen libraries and museums nationwide to establish youth computer learning centers modeled on YOUMedia, the Chicago Public Library’s innovative youth learning project.

Why does such good news evoke such profound sorrow?  Because the Nonprofiteer can remember when the notion was that the philanthropic sector would serve as a laboratory, trying out new approaches to solving social problems and then passing along the ones that worked to be funded by the government.  What we have here, however, is a model already vetted in the public sector whose future sustenance apparently will have to come from private charity.

This role-reversal is particularly galling here in Chicago, where the reward for the library’s pioneering work has been a substantial chop in the city’s library budget.

It’s hard to read a computer screen, or learn anything, when the world is upside-down.

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Posted in Charity scandals, Current Affairs, Education, Finances, Government grants, Mission, Nonprofit management, Nonprofits--General, Poverty, Private Philanthropy, Public private partnerships, Technology | Leave a Comment »

Dear Nonprofiteer, It’s all very well to say “call your donors,” but . . .

October 31, 2011

Do you have any advice on getting phone numbers for donors not connected to board/staff/etc?

We’re finding it increasingly challenging, and people are understandably protective of personal info.

Signed, Waiting By The Phone

Dear Waiting:

I don’t, actually, though I’m a big user of WhitePages.com, where lots of people “protective of personal info” will find to their surprise that they’ve been listed.  It’s worth checking, at least, because it’s much more comprehensive than the old phone book.  You do risk having people say, “How did you get this number?” though relatively few will want to yell at you for saying thank you, and it doesn’t hurt to say, “Your number is published on WhitePages.com so we thought it was public information; if you’d rather it weren’t you might contact the site.”

Another thing: make sure your staff carefully examines the front of any check you receive (does anyone still send checks instead of credit card numbers?).  It’s pretty standard to have phone numbers there, and that’s your first, last and only chance to copy down information you’ll need later.

Finally, modify your donor contribution card to ask for a phone number.  Some people will refuse to complete the card, but many will fill it in just out of habit and then you’ve got them.

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Posted in Fundraising, Nonprofit management, Nonprofits--General, Private Philanthropy, Relations with funders, Technology | Leave a Comment »

Everything old is new again; and nonprofits should stay that way

April 21, 2011

So a couple of weeks ago the Nonprofiteer received a press release announcing “Redefining [of] the Nonprofit Model.”  Doubtless you’re all familiar with the genre: a group of business people get together and decide that the nonprofit sector hasn’t cured cancer or ended poverty because people in the nonprofit sector are stupid and lazy, and that an infusion of good old hard-headed American for-profit business practices will compensate for that.  Voila: instant Great Society!

This particular redefinition was truly revolutionary:

One hundred advisors, including many of Silicon Valley’s elite, are coming together to disrupt the nonprofit space. . . . [They] have committed to one full year of serving on the board of a nonprofit. . . . [and] attending monthly salons where they will discuss the specific pain points of their assigned nonprofits and attempt to find solutions as a team. . . . [This] is part of a larger movement . . . to make the non-profit world more efficient. . . .  “This is just the start of how [we] will disrupt the nonprofit sector and create new, innovative ways for business leaders to contribute . . . . Before [this], there was no easy path for nonprofits to find experienced leaders to help them at a board management level. A board role is not just about fundraising, but includes developing growth plans, operational efficiency, cause marketing, customer relationship management, event planning, and much more.”. . . . In order to maximize results, [the group] carefully matches advisors to nonprofits based on their skills, interests and a nonprofit’s needs.

So let’s review: a bunch of business people are going to sit on nonprofit Boards of Directors!  And then periodically those business people will get together and talk about how to be better Board members!   As Board members, they will not only fundraise but contribute their skills!  They’ll join Boards based on their interest in the nonprofit’s mission!  And they’ll seek ways to improve the whole sector!

The accumulation of these radical notions caused the Nonprofiteer to swoon;  but the one idea that really had her down for the count was that the entire purpose of the endeavor was to “disrupt the nonprofit space.”  Because really, what nonprofits trying to serve their clients need most of all is disruption of their management to supplement the disruption of funding they face constantly, disruption of their staff produced by those funding crises, and disruption of their ability to operate smoothly or secure resources when their message is being drowned out by a constant drumbeat of demands for “reinvention.”

The Nonprofiteer understands that in the tech world, “disrupt” is a positive word, suggesting the kind of change-the-world ethic that fueled Microsoft and Facebook.  But she urges everyone to notice that when those disruptive entrepreneurs Bill Gates and Mark Zuckerberg moved into the nonprofit sector, what they did was to find nonprofits doing good work and give them lots of money to do more of it.  If the disruptive “advisers” of the press release would just do the same thing, there would be less “news” but a healthier nonprofit sector.

As she fanned herself back to consciousness, the Nonprofiteer was struck once more.  In this case, the weapon was yet another article about hybrid corporate forms designed to enable nonprofits to earn their own revenue and stop “begging.”  Whether the discussion purports to be about L3Cs or public benefit corporations or Triple Bottom Lines, the argument is always the same: nonprofits should just get with the capitalist program, identify lucrative markets and earn their keep like every other good red-blooded American.

This approach ignores the fact that nonprofits’ markets usually consist of clients who are not profitable to serve—because if they were profitable to serve, the for-profit sector would be serving them.  The better a nonprofit is at finding and serving its market, the poorer it will be, because though for-profit clients are a profit center, nonprofit clients are a cost center.

Fine, say the hybrid-benefit-earn-your-own-revenue people: so start a profitable business and funnel its profits into the charity.  But this notion of a two-headed agency is, like most similar creatures, a monster.  If nonprofits expend their limited energy on creating market-based revenue streams, they’ll be diverted from their mission-based activities.  Either the marketing strategy succeeds, in which case the profit-generating people gain the power within the organization and mission falls to a sad second; or the marketing strategy fails, in which case it has consumed significant resources that should have gone to serving clients.

There are, of course, institutions for which running a business can be part and parcel of mission, for instance, job-training centers.  But for mental health agencies, arts organizations, group homes, rape crisis hotlines and most of the other charities which do the important work in our society, running a business is a dangerous distraction.

What if, instead of spending time telling nonprofits how they should operate differently, business people re-examined their own operating principles?  What if every business set aside 25% of its profits for investing not in the business itself but in the wider community?

In other words, instead of asking why a charity can’t be more like a business, let’s start asking why businesses don’t operate more like charities.  Businesses receive all sorts of public services and protections, from the enforcement of contracts in the law courts to well-maintained roads along which to distribute their products.  Why shouldn’t they be expected to contribute to the public good in return?

Most business people would say, “But our primary duty is to our shareholders, not to the public good” (and those over-influenced by Ayn Rand and the University of Chicago economics department would say “Our SOLE duty is to our shareholders, the public be damned”).  Right: and the primary (or SOLE) duty of charities is to their/our clients.  Anything that takes nonprofits away from that activity is perforce improper.

What’s the point of this thought experiment, in which charities chide businesses instead of the other way around?  Simply to demonstrate how much business advice to charities is sheer nonsense.  To presume that the voluntary sector doesn’t make a profit because it hasn’t thought about how to do so is to fundamentally misconceive its role in the wider economy.

Besides, what nonprofits need isn’t more advice: it’s more money. When business people are ready to provide that—when they’re ready to serve on Boards not as agents of disruption but as securers of resources; when they’re ready to advocate for a tax system which will underwrite the necessary work done by the voluntary sector—well, THAT will be the time for a press release.

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Posted in Private Philanthropy, Nonprofits--General, Coverage of nonprofits, Current Affairs, Boards of Directors, Philanthropy and Taxation, Marketing, Volunteers/Volunteerism, Poverty, Advocacy, Earned income, Mission, Nonprofit management, Finances, Technology, Social enterprise | 9 Comments »

Dear Nonprofiteer, Are voluntary Internet payments “contributions” for tax purposes?

July 28, 2010

Dear Nonprofiteer:

What rules govern the websites that provide a free useful service to people but also have a PayPal “donate” button on their page to keep the service free?

If that person’s PayPal is linked up to it, does that not mean that the donations (if any) cannot exceed the IRS annual exclusion amount of $13,000?  Or should that person try to register the Website as a non-profit?

Signed, Prepared to Pony Up But Puzzled

Dear Puzzled:

The Nonprofiteer was completely stymied by the legal and technical nature of your question.  Fortunately, she has a colleague in the Association of Consultants to Nonprofits whose knowledge of nonprofit law is encyclopedic.  Attorney Kathryn Vanden Berk kindly provided the following responses to your questions:

At first blush, I assumed that the Websites are 501(c)(3) entities, and that the advice is offered without charge — with the “ask” being a free-will tax-deductible donation.

However, I wonder if you’re talking about a for-profit entity that is asking for a free-will non-deductible “donation” in lieu of a charge.

In the first instance, there is no prohibition against an exempt organization (EO) giving advice or asking for donations.  It can even charge for the advice, as when Lumity requires payment for the book I wrote about how to start nonprofits in Illinois.  If it is asking for a free-will donation so that the service will remain free, then anyone can make up their own mind as to whether or not they want to click on the donate button. I used to use the Cornell University Law School LII (Legal Information Institute) to get into the IRS Code.  It would often put up a screen asking for donations for the site’s upkeep.  I just returned to their website and found that they still ask for donations.  You can see this at http://nimbus.law.cornell.edu/civicrm/civicrm/contribute/transact?id=6

In the second instance, a person may request a “donation” so long as they don’t hold themselves out to be a 501 (c)(3) charity, and/or claim that the “donation” is tax-deductible.  This might be a good way for some enterprising law firm to throw things out on the web to see if anyone finds it to be sufficiently useful that they are compelled by guilt (or appreciation or whatever) to pay for it.

If that person’s PayPal is linked up to it, does that not mean that the donations (if any) cannot exceed the IRS annual exclusion amount of $13,000?  Or should that person try to register the Website as a non-profit?

I’m not sure what you mean by this. The annual excludable amount for charitable contributions is related to one’s income, not to any arbitrary number.  Can you be more specific?  Are you talking about standard deductions?

The Nonprofiteer wonders whether the $13,000 cited by Puzzled refers to  the limit on tax-free gifts to individuals.  If so, then yes, gifts to a personal PayPal account must be counted toward that total.  If not, she urges Puzzled to clarify her question in the comments section below.

Whatever the circumstances, there’s no option simply to “register the Website as a nonprofit,” unless it actually IS a nonprofit, meaning an agency with a public purpose governed by a Board of Directors.  As in the case of “What about gifts to individuals?”, the Nonprofiteer stresses that nonprofit status is not camouflage for other economic arrangements; it’s an actual status requiring service to the community.

Many thanks to Ms. Vanden Berk for her expertise.  Input on these technical questions from other lawyers and IRS specialists gladly accepted!

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Posted in Earned income, Finances, Fundraising, Nonprofit management, Nonprofits--General, Philanthropy and Taxation, Private Philanthropy, Technology | 3 Comments »

Chase: What matters?

July 23, 2010

[An excerpt of this posting appears on the Huffington Post, in the Impact section.]

The Chicago Tribune’s Chris Jones notwithstanding, the problem with the Chase Community Giving program isn’t that it lets “civilians”–non-expert non-critics–decide which theater companies deserve a $20,000 one-time no-strings grant.  The problem is that it pretends to do that–Let the People Decide!–while actually turning theater companies into marketing satellites of Chase Bank.  Institutions poor and weak enough to be moved by a $20,000 carrot–to which the competition was explicitly restricted–recite the bank’s name relentlessly to their audiences.  That’s a lot of advertising for very little money.  Of course, all corporate giving is advertising–but this is of a special, insidious kind.

The Nonprofiteer doesn’t believe in “crowd-source philanthropy,” because it’s not philanthropy at all: it’s “crowd-manipulation marketing.”  Chase has gotten hundreds if not thousands of little charities to demand that their audiences provide contact information to the bank and subject themselves to commercial targeting for the good of the cause.

These crowd-manipulation marketing programs (pioneered by Pepsi and American Express, doubtless with many more corporate behemoths yet to come) also set up a system which rewards the nonprofits with the greatest Internet presence or savvy, which is not the same as giving the money to the neediest, or best, or most diverse, group of people doing important work in society.  Again, the issue isn’t who gets to define “best;” it’s whether the agencies competing for that designation have a fair and equal opportunity to receive it.  Upper-middle-class people may imagine that “everyone” has access to the Internet, but in fact if you reward clicks and responses to e-mail and Facebook postings, you reward organizations with wealthy white audiences and disadvantage those whose audiences are nonwhite and/or poor.  Way to magnify the digital divide.  Way to make sure that the rich get richer and the poor have babies.

This lazy and manipulative approach to corporate giving diverts nonprofit attention from real fundraising–which involves relationships over the long term–to point-and-click fundraising, which costs “donors” nothing and therefore gives them no stake in the institution.

The argument about who’s entitled to judge art is a side-show, doubtless one Chase would be happy to have theaters and critics debating from here to eternity.  Meanwhile, the bank laughs all the way to–the bank.

[Unable to resist, the Nonprofiteer dons her critic's hat and argues that, though she believes her opinions about theater are better-informed and therefore more useful than those of the guy standing next to you on the train, she's also open to the possibility that her prejudices and blind spots make this false in a significant number of cases.  In any case, if she didn't believe theater was the essential human art form--because it involves words, the very thing that separates us from all other species--and therefore belonged to everyone human, she wouldn't spend so much of her life seeing and reviewing plays.  So she refuses to concede that others' engagement with theater--in whatever form, and without any credentials whatsoever--is unwelcome or inappropriate.]

“Crowd-source philanthropy” doesn’t mean the people get to decide; it means they get the illusion of deciding while actually being used to serve someone else’s commercial purposes.  We know that’s a bad thing when the issue is what corporations give to, and get from, politicians.  Let’s not fail to notice when the issue is what they give to, and exact from, us.

See also Barbara Talisman’s posting on the subject, which links to an entire discussion of the pros and cons.

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Posted in Arts Organizations, Campaign finance, corporate giving, Coverage of nonprofits, Fundraising, Marketing, Nonprofit management, Nonprofits--General, Private Philanthropy, Relations with funders, Technology | 6 Comments »

All about venues

April 18, 2010

The Nonprofiteer was talking to a friend who had just scored an amazing venue for the fundraiser of which she is chair: a church close to all forms of public transportation and parking, with a youth group willing and able to provide valet and food service and an adult auxiliary willing to take responsibility for the building so her agency doesn’t have to pay for a security guard.  A wonderful welcoming space for free–isn’t that what every nonprofit wants?

Whereupon we realized how much time we and all the other nonprofit professionals we know spend trying to find exactly that: a free place to hold the meetings of our tiny all-volunteer association, or to hold the public forum sponsored by our small civic group, or to conduct the fundraiser for our grassroots coalition.  Wouldn’t it be great, my friend suggested, if all the nonprofits in our area (Chicago, but the same would be true for any metroplex) pooled our knowledge about who will share space for free under what circumstances?

If we had a venue registry, we could save endless time–and what is time in nonprofits but the only resource we have with which to secure money?  Anything which saves one saves the other, for as it is written “A rental fee saved is a grant earned.”

Surely someone with more social-networking capability than the Nonprofiteer could figure out how to set such a thing up (isn’t this the very definition of a wiki?).  Or is there one already in Chicago and the Nonprofiteer just isn’t in the (you should pardon the expression) loop?

Thoughts on how other people approach this chronic issue welcomed!

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Posted in Benefit events, Fundraising, Nonprofit management, Nonprofits--General, Real Estate, Technology | 6 Comments »

Making your nonprofit a star–or a pigeon

May 1, 2009

It’s not just Susan Boyle and “Britain’s Got Talent”–the nonprofit world, too, is full of ugly ducklings eager to turn into YouTube swans.  So it’s not surprising that two different groups have just announced plans to assist nonprofits in telling their/our stories on video. The first of these is genuine; the second is a concealed ad for fundraising software.

  • Animoto for a Cause (http://animoto.com/cause) is a new program “that will give non-profit organizations and humanitarians the ability to create dynamic, professional-quality online videos from their own photos and music – for free. . . .Animoto for a Cause will donate pro accounts to groups and individuals who are working to improve their community and the world at large, kicking off with more than 20 launch partners, like Help the Children and Susan G. Komen Foundation. . . . Animoto is encouraging all types of community activists to apply for an Animoto for a Cause account – everyone from college fundraisers to large non-profits will be considered . . . . Now organizations can use the service to promote their cause online in a multitude of ways, from posting and sharing videos on websites, YouTube and social networks, to downloading them to DVD for distribution at events.”
  • Meanwhile, an outfit called www.nonprofitnetworknews.com has created a “customizable video for nonprofits to make their wishes come true. The video then links to free nonprofit resources to help them get through these tough times.”  Well, if by “free nonprofit resources” one means “a commercial Website that doesn’t charge you for visiting,” that’s absolutely true.

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Posted in Advocacy groups, Arts Organizations, Coverage of nonprofits, Environmental, Health care, Higher education, Housing, International, Marketing, Nonprofit management, Nonprofits--General, Social Service Agencies, Technology | 1 Comment »

A retrospective on information technology from someone who should know

April 14, 2009
Here’s some talk about the use of technology in nonprofits straight from the horse’s mouth: an interview with Gavin Clabaugh, long-time IT guru at the Charles Stuart Mott Foundation.  In this valedictory interview on leaving Mott, he reflects on where nonprofits have been and where we’re going in terms of using technology (and preventing it from using us).  Particularly thought-provoking: his observation that many nonprofits’ understanding of technology is fundamentally flawed, because it’s based on consumer uses of technology, many of which “do not scale” to enterprises, for-profit or non-.

How refreshing to hear an IT geek point out the importance of not getting  carried away by the latest toy!

h/t Deborah Strauss, ex-ED  of Chicago’s IT Resource Center, now Lumity.

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Posted in Current Affairs, Fundraising, Marketing, Mission, Nonprofit management, Nonprofits--General, Technology | Leave a Comment »

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