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More on the Buffett challenge

February 3, 2012

When Warren Buffett challenged Mitch McConnell to help him pay down the deficit, McConnell paid him no never-mind—but a teenage girl in Northbrook, IL heard and responded, sending $300 to the Feds and asking Buffett to do the same.  This is an adorable story, and the video makes it more adorable still.

But let’s not let this young woman’s sense of civic duty and remarkable act of civic participation distract from the real point of the Buffett challenge, which is that without increased taxation of the wealthy, jerks like Mitch McConnell will free-ride on public-spirited souls like Katie Murphy.

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Posted in Current Affairs, Nonprofits--General, Philanthropy and Taxation, Private Philanthropy, Volunteers/Volunteerism | Leave a Comment »

Dear Nonprofiteer, Does an alumni association chapter have to file tax returns?

January 5, 2012

Dear Nonprofiteer,

I am the president of my local alumni chapter for a large university located in another state. The National Alumni Association is a 501(c)(3) organization with by-laws that state it can create various chapters around the country.   When our local chapter was created, the founding president filed the paperwork for an EIN so we could open a checking account. That is all he did; we are not incorporated as a 501-anything.   When he filled out the EIN paperwork, for “type of entity,” he clicked the “other” box and wrote “social club” in the blank. Our little chapter brings in less than $10,000 per year. We then funnel most of that back to the university’s scholarship fund.

My question is: are we supposed to be paying federal income taxes? State of Illinois income taxes?

My university is being remarkably unhelpful.   They did definitively say that they strongly advise their chapters against incorporating as their own 501(c)(3).

I have done some research and seen that other universities structure their alumni associations so that the national association is a 501(c)(3) and the local chapters are 501(c)(4)s. The local chapters then file what is called a “IRS-990 postcard.” This seems a reasonable solution, but it also requires that my chapter incorporate as a 501(c)(4), and I am hesitant to do that without official word from my university. I have a fellow board member who is breathing down my neck, convinced we are breaking all kinds of laws.  What should I do?

Signed, Clueless in Chicago

Dear Clueless:

The Nonprofiteer knows even less about tax law than you do, so she turned to her Association of Consultants to Nonprofits colleague Kathryn Vanden Berk, whose nonprofit law practice makes the Internal Revenue Code her constant companion.  Kathryn characterized your question as “easy but in multiple parts,” and her answer appears below.  Many thanks to her for her guidance, and for demonstrating that the author of Good Counsel isn’t the only nonprofit lawyer the Nonprofiteer knows!

There are four ways to handle this.  (1) ask the national association to take you on as a fiscal agent, (2) ask the national to file as a group exemption so that each chapter may get its exemption from the central organization of the group; (3) incorporate and go through the exemption application; and (4) do nothing.

Of these, the easiest is to be sponsored by the national (or any other already-existing) 501(c)(3).  The exempt entity confers the local chapter with its exempt status automatically and no paperwork needs to be filed.  However, the fiscal agent must report to the IRS on what happens within the local chapter.

The easiest for the locals, but harder for the national, is for the national to seek a group exemption.  It can then manage each of the local chapters as subsidiaries.  As above, the national is responsible for reporting to the IRS.

If the local decides to incorporate and seek its own exemption, it should identify its purpose as “educational and charitable”.  Generally, a scholarship organization must file a Schedule H with its exemption application, but it appears that this local forwards its funds to the national, and the national makes the selection.  In that case, it is not necessary for the local to go through the scholarship preparation.

An organization that identifies itself as a “social club” is exempt under 501(c)(6) of the Code.  However, I would not suggest that in this case.  The money collected is used for scholarships, and that is clearly a charitable purpose.  Since the national was able to get a 501(c)(3) ruling, it would be foolish for the locals to seek a different, less valuable exemption.  If the IRS balks at the (c)(3) classification, I would suggest that the national seek a group exemption.

Doing nothing is maybe not a crazy approach, but it risks exposure and the protections of the IRS Code and IL law are not available to the chapter leadership and members.  The reason I say it’s not crazy is the small amount of $$ that flows through the organization.  No one is going to come after them unless (and this is the big risk) something happens.  Then I can predict that there will be a great deal of embarrassment and perhaps even personal liability.

Bottom line: if you have not filed for a tax exemption, you must file as if you are a for-profit business, using Form 1120.  If you give your funds to the national at year’s end, then it is unlikely you will have to pay taxes.  However, your members cannot take deductions for the gifts they make to the local, even if they go to the national’s scholarship fund.  Same with Illinois: if the chapter is not tax exempt, then it is taxable and must file as such.

I should note that if you collect charitable funds in Illinois, you really need to be registered with the IL Attorney General, even if you are not exempt via the IRS.  The AG’s office is very strict about this.  You will have to pay a late filing penalty because you have been soliciting without being registered.  You might be exempt if you can convince the AG that $$ was raised only from members, but they are not as flexible on this as they once were.

I don’t know why the university advises against incorporation.  It’s a fairly inexpensive thing to do, and it gives liability protection to every member.  It’s a small price to pay for the protection it gives.  You need to have someone agree to be your Registered Agent, and to have his/her office or residence registered as the Registered Office.  You need to file annual reports (in Illinois and most states) to stay in good standing.  In Illinois, this costs $10.00 per year.

I don’t know why the (c)(3) and (c)(4) approach is used.  You would want every part of the organization to be classified as 501(c)(3) so that all gifts, grants and contributions are tax exempt and deductible to the donor.  I’d want to explore this further before acting.

So, Clueless, the answer is that no good deed goes unpunished.  Having investigated the question, you’ve now unearthed a series of obligations, decisions and tasks which I’m sure you’d rather not have known about.  You’re not about to go to jail but to protect yourselves it seems that getting your university to agree to serve as your fiscal agent, and then registering to raise funds in the state of Illinois, is the bare minimum you should do.

Posted in Finances, Fundraising, Higher education, legal services, Management Advice Day tip, Nonprofit management, Nonprofits--General, Philanthropy and Taxation, Volunteers/Volunteerism | Leave a Comment »

The power of thanks

October 28, 2011

So here’s something the Nonprofiteer heard yesterday: if an agency’s response to every initial donation is to have a Board member pick up the phone and call the donor to thank him/her, the likelihood of a second donation increases by something like 80%.

What’s terrific about that (other than the obvious, donor retention) is that picking up the phone is often the biggest hurdle Board members need to clear to become effective fundraisers.  So if they get used to picking up the phone in a completely non-threatening situation–when their only task is to say, “Hi, I’m a volunteer Board member of agency X and I just wanted to thank you for your gift–we really appreciate your support”–you’re halfway (well, maybe one-third-way) to getting them to pick up the phone and ask their friends to come to a benefit event or a fundraising lunch.

Sounds like the ultimate low-cost high-yield endeavor.  Has anyone tried it?  Is it as good as it sounds?

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Posted in Benefit events, Boards of Directors, Fundraising, Management Advice Day tip, Nonprofit management, Nonprofits--General, Personnel Issues, Private Philanthropy, Relations with funders, Volunteers/Volunteerism | 3 Comments »

Tom Sawyer was wrong

June 2, 2011

This branch of Habitat for Humanity has chosen to charge volunteers for the privilege of helping out.

When the Nonprofiteer pointed out that volunteers give more readily to the agencies they serve than non-volunteers, she wasn’t advocating admission fees.   Volunteers may have paid to paint Tom Sawyer’s fence, but Twain’s point was that they were stupid.  Your volunteers aren’t.

Even if mandatory “contributions” (oxymoron watch!) weren’t offensive in suggesting that volunteers’ time has less than no value, they’re practically the definition of penny-wise and pound-foolish: people will pay what you require (or not) and then regard their giving to the agency as being done for the year.

Or forever.  Please stop this idea before it kills again.

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Posted in Benefit events, Charity scandals, Coverage of nonprofits, Current Affairs, Earned income, Finances, Fundraising, Housing, Management Advice Day tip, Nonprofit management, Nonprofits--General, Personnel Issues, Private Philanthropy, Relations with funders, Social Service Agencies, Volunteers/Volunteerism | 4 Comments »

Dear Nonprofiteer, Victory on points?

April 22, 2011

Dear Nonprofiteer,

I recently saw an offer to serve on a non-profit board where there was a monetary donation requirement each year, but the amount could be substituted by service or other activities through the scale pasted below. Here’s the way they phrased it:

To ensure active participation, members earn points for financial contributions and volunteer service. We ask that a contribution of $250 be made in order to remain as an Associate Board member. You can, however, combine a cash donation of $100 with your fundraising and volunteer efforts by earning these points:

Sample Opportunities to Earn Points
Opportunity Points
Additional cash contribution of $50 50
Plan a Board Social or Fundraising Event 50
Serve in a leadership role 50
Secure $100 event sponsorship 15*
Represent [agency] at a public fair or presentation 15*
Sell a ticket to a fundraiser 10*

I was wondering, is this a common practice? I’m actually thinking about recommending it for another board where I’ve been asked to donate money.

Signed, Victor on Points or Technical Knock-Out?

Dear Knock-Out:

The Nonprofiteer knows that some larger organizations use this point system, but for smaller organizations she thinks the record-keeping and arguments about “what counts” are more trouble than they’re worth.  Obviously it depends on the size of the required contribution, but in general everyone on a Board should be expected to give AND participate, and in roughly equal measure.

This is expressed in a number of different formulations: Board members offer the three Ws (Work, Wealth and Wisdom) or are expected to provide the three Gs (Give, Get and Govern). Whichever initials you use, the point is the same: Board membership is not an either-or proposition but a yes-and one. The best way to assure fulfillment of these expectations is to adopt a clear statement of them for Board members, and go over that statement with every Board recruit. “Every Board member is expected to make a $500 contribution, and buy a ticket to the annual gala, and attend monthly Board meetings, and serve on a committee . . .”. That way, no one agrees to join the Board who isn’t prepared to do all those things.

People are fond of making exceptions to this in two cases: for Board members perceived to be significantly poorer than the rest of the group, and for those perceived to be significantly wealthier or better-connected than the rest.

In the first case, the Nonprofiteer’s advice is: don’t count the money in other people’s pockets. Poor people are more generous than rich people generally, and thus are often less upset by minimum Board gifts than their wealthier counterparts. If a rich Board member can just write a $500 check while a poorer one has to ask 10 friends for $50, well, that’s just another example of ways in which poor people have to work harder than rich people. And, as $500 per year is less than $10 per week, most working people—regardless of their assets—can afford it.

In the second case: if someone tells you s/he’s too busy to actually do anything but s/he’ll be glad to be on your Board, remember this motto: if they can’t do the time, they can’t do the crime. Someone willing only to lend his/her name and write a check should be placed on an Advisory Board (create one if you have to, or dub the person a “Special Advisor” and put him/her on the stationery), not on the Board of Directors. If you do put such a person on the Board proper, s/he will have all the legal responsibilities of Board members without being there to discharge them—a recipe for disaster and hard feelings, should the agency be socked with a bill for unpaid withholding taxes or a lawsuit from an injured client.

In short: the Board is a governance institution, and governance includes assuring that the agency has the resources it needs to fulfill its mission You shouldn’t have to negotiate with your governors about their tasks, which is what a point system suggests. Rather, they should be the ones setting their own goals and meeting them, and attracting others who will do the same.

And that’s the final reason not to use this point system: no one wants to serve on a Board of lazy people. Your group is more attractive to prospects if everyone’s revved up and ready to go on every possible front. You can find such people, provided you don’t declare defeat and stop looking.

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

A delicate balance

January 27, 2011

If fundraising is concentric circles, as consultants often say (you ask your friends and then their friends and then their friends’ friends), then it seems to make the most sense to start asking right in the bosom of the family: from your staff and volunteers.  Indeed, this is what most nonprofit executives think of when they hear the phrase “Charity begins at home”!

But staff and volunteers are in quite different positions with respect to your organization, and so they can’t be treated alike in terms of asking for money.

Often agencies are afraid to ask their volunteers for money on the grounds that they’re already getting the volunteers’ time, and it would be greedy to ask for more.  But in fact no one is in a better position to appreciate the value of the work you do, or the scarcity of resources under which you labor, than a volunteer.  Further, though not all volunteers are privileged, they are at least people who have leisure time to donate, which suggests they’re not grindingly poor.  If your volunteers show up at the office with a cup of Starbuck’s in hand, consider what that represents: 1 Venti/day@$2.50 x 5 days/week x 52 weeks/year = $650.  So they’re probably spending more on coffee than you’d think of mentioning in an initial ask.

Will any volunteers take umbrage at being asked to give money as well as time?  Sure; a certain percentage of the population finds discussion of money distasteful and crude, and such people may well be represented in your volunteer corps.  But you’re not any poorer for asking them, and there’s very little reason to think they’d stop volunteering at an activity they enjoy because you asked them a question to which the answer was “no.”

Don’t extend this blithe attitude, though, to asking your volunteers to ask for money.  Direct-service volunteers are apt to be offended if they’re asked to do other kinds of volunteer work, such as fundraising, because the request suggests that they’re not already working hard enough.  You understand the difference between time and money, and your need for both; your volunteers are equally sophisticated.  So ask them for money, not for more time.

Staff members are a different issue.  People who work in nonprofit agencies are already donating enormous sums to the agency, in the form of foregone income–-the money they could be making working in the for-profit sector.  In this sense they are almost certainly the top donors to the agencies at which they work.

The Nonprofiteer took a nonprofit executive job for half the salary she had been earning as a practicing lawyer—a not inconsiderable sacrifice, though one she was glad to make.  But when members of the Board suggested that she also write a check to the agency, her attitude was, “The very second the Board gives $25,000 a year to the agency–-collectively, let alone individually!—it will have the right to come back and ask for something more than the $25,000 worth of lost wages I’m already giving.”

To be fair, hers is a minority view.  Many agencies regard staff donations as some sort of measure of staff commitment to the agency.   But staff members indicate commitment every day through the work they do, the salaries they accept, the health insurance they lack.  At some agencies they even demonstrate their commitment by working overtime for which they don’t get paid—and by not ratting out their employers to the U.S. Department of Labor or the state agency charged with regulating wages, hours and working conditions.  The fact that our agencies do socially valuable work doesn’t entitle us to exploit our laborers, though of course for many years nonprofits have survived their lack of financial capital by consuming human capital instead.

So don’t ask your staff for money, and do ask your volunteers.  Maybe they’ll donate enough to make it possible for you to offer the staff health insurance, or paid sick leave, or even a raise.

Well, one can dream, anyway.

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Posted in Boards of Directors, Executive Directors, Fundraising, Management Advice Day tip, Nonprofit management, Nonprofits--General, Personnel Issues, Private Philanthropy, Relations with funders, Social Service Agencies, Volunteers/Volunteerism | 7 Comments »

Dear Nonprofiteer, There’s trouble in the pulpit: Can I get a witness?

December 20, 2010

Dear Nonprofiteer,

I’m dealing with a non-profit corporation, a church as a matter of fact, that is for all practical purposes a for-profit business masquerading as a non-profit.  The board is not independent—it is made up of the leader, her family and various of her hangers-on.

It would be easy to just walk away from this situation—it is so tempting!  However, taking the easy way out to let the organization fail on its own isn’t necessarily the way to minimize the harm the organization will likely do along the way while doing this masquerade.

Do you know of any tests that can be applied to non-profits, especially churches, that can expose cases where they are for-profits masquerading as non-profits?  If you have any other advice or guidance I would be glad to receive it.

Signed, Clean and Pure

Dear Clean and Pure,

There are all sorts of phony nonprofits.  There are “Astroturf” nonprofits, subsidiaries of for-profit corporations purporting to be grassroots efforts to educate the public on issues of financial import to the corporations.  There are what I’d call “lunch bucket” nonprofits, which exist to accept Congressional earmarks whose benefits actually flow primarily to for-profits.  And then there are flat-out scam nonprofits, which exist to provide tax-shielded income to their founders rather than the public benefit for which the tax shield is a quid pro quo.

The good news is, the IRS discourages out-and-out scams by requiring 501c3 groups to raise one-third of their income from public donations.  Though it seems peculiar on the face of it to identify charities by their income rather than their outflow, the theory seems to be that raising money is such hard work, no one would be willing to do it just for the purpose of stealing.  It’s easier to sell something, anything, and then steal from the earned revenue.  So that’s one of the many reasons that agencies which support themselves entirely by earned revenue are presumptively for-profits (and therefore taxpayers).

State Attorneys General also keep track of the scams, requiring agencies to specify a public or charitable purpose (which is sometimes broader than the IRS’s definition of a nonprofit, sometimes narrower) in order to qualify for tax-favored treatment.  (At the state level, this includes exemption from property and sales taxes, among others.)

There are hard and fast IRS rules about when a presumably public charity needs to be re-classified as a private foundation, but that represents a decision about which kind of nonprofit we’re dealing with, not the “phony nonprofit” scenario you’ve described.  Further details about those decisions and other IRS rules of thumb are available on the very clear and comprehensive IRS Website (no, really!) on the subject.  The decisions and guidelines often refer to  something soporific like “reclassification of exempt organizations,” but they are full of traps for the unwary nonprofit as well as disincentives for the dishonest one.

The bad news is, neither Federal nor state regulations are very often enforced against churches.  The First Amendment protects free exercise of religion and prohibits the government from becoming “excessively entangled” with religious organizations.  “Excessive entanglement,” according to the courts, includes most tax regulation, for if the government has the power to insist on an audit, what faith institution would be safe from government oppression?

This is all very well, except for situations like the one you’ve described.  Occasionally someone will petition the state Attorney General or the IRS to reclassify a “church” as a non-church to capture the kind of self-dealing you’re talking about.  But that would be very occasionally, which is why Jim and Tammy Faye Bakker and their ilk have managed to get so wealthy under cover of the cloth before crashing and burning for more venial (but juicier) sins.

The only thing you can do to keep yourself clean is to walk away.  If you’d like to notify your state’s Attorney General and/or Secretary of State that you believe this agency is not actually a church, you may do so.  But bear in mind that the burden of proof will be on you, and the mere fact that the pastor and her brood and buddies govern without membership input and  seem to be well-paid will not be enough.  Many churches are governed without membership input except in an advisory capacity (consider parishes of the Catholic Church, or affiliated congregations of the Lutheran Church, in which the diocese or the synod rules and the congregation obeys).  And many ministries are a family business: think Billy Graham and his son.

So though the Nonprofiteer wrinkles her nose in distaste at the situation you’re describing, she thinks you have no recourse but to walk away.  If you’re right, and the agency will crash and burn without your intervention, so much the better.  This would demonstrate the wisdom of the Bible saying, “All things come to him who wait.”

Sorry.

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Posted in Boards of Directors, Charitable Choice/Church-State Separation, Charity scandals, Earned income, Finances, Fundraising, Mission, Nonprofit management, Nonprofits--General, Religion, Volunteers/Volunteerism | Leave a Comment »

Fired up to volunteer

December 13, 2010

The Nonprofiteer first learned of the work of catchafire.org several months ago through our mutual colleagues at Mission Research.  She’s been getting around to writing about Catchafire’s work placing high-skill volunteers at New York nonprofits.  Now that founder Rachael Chong has been interviewed on NPR’s Marketplace, the Nonprofiteer realizes that time waits for no blogger.

Rachael describes her organization as “Match.com for volunteers and nonprofits.”  A nonprofit pays a low fee to have Catchafire figure out its needs (“scope its projects,” in site jargon) and find a volunteer with the right skills to accomplish the task.  (At the moment the group operates only in New York, which mysteriously has one of the lowest volunteering rates in the country, but it hopes to expand to other communities in fairly short order.)  Volunteer in, do project, volunteer out, bada-bing, bada-boom—the whole thing happens in a New York  minute.

The Nonprofiteer applauds Catchafire’s mission and part of its approach–the part about helping nonprofits figure out what they can actually do with high-skill volunteers other than asking them to stuff envelopes.  But for every volunteer who wants to root, shoot and leave she knows two who are looking for a long-term volunteer home, and though obviously a Catchafire volunteer isn’t precluded from becoming a permanent volunteer, s/he comes in branded as a person who will, and therefore probably only can, do one thing.

The Nonprofiteer is also concerned about sending a single volunteer to do a project, even if it seems apparent that a single pair of hands is all that’s required.  Many people volunteer to alleviate their loneliness (or, more positively, to connect with others) and a single-person project—even in the midst of an agency with lots of people—is likely to be isolated, and isolating.

The Taproot Foundation, which likewise uses a project-based model of providing assistance to nonprofits, addresses the isolation concern by assembling a team to complete each project.  The good news is, each volunteer gets to know and work with other high-skill volunteers.  The bad news is, teams of volunteers are to nonprofits as hairballs are to cats: tolerable on a temporary basis but unlikely to be integrated permanently into the system.  High-skill volunteers searching for a cause about which to stay passionate and a home in which to express that passion instead find the opportunity to be coughed up.

The Nonprofiteer’s theory is that both groups are treating the symptom [failure to use high-skill volunteers] rather than the cause [staff hostility to the use of volunteers].  It may be that only the symptom can be treated; but in her own practice, the Nonprofiteer works to help organizations identify and overcome the sources of staff resistance, so they can make use of high-skill volunteers on an extensive and long-term basis rather than a restricted and short-term one.  We all know that staff turnover is expensive because every new person has to be trained; the same must be true of volunteer turnover, and therefore solutions requiring constant orientation of new people create problems of their own.

But may the best model win!  And if nonprofits use some high-skill volunteers better as a result of any of these approaches, we’ll all win.

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Posted in Coverage of nonprofits, Current Affairs, Management Advice Day tip, Mission, Nonprofit management, Nonprofits--General, Personnel Issues, Volunteers/Volunteerism, Women's Issues | 4 Comments »

Dear Nonprofiteer, Who quit and made me president?

November 4, 2010

Dear Nonprofiteer:

Recently I started serving on a board of a small social service organization.  In the last six months our board president has slowly retreated from his leadership duties due to a variety of personal issues that he’s facing and I find that I’m essentially left driving the bus.  What resources are there that you would recommend for those seemingly newly anointed to oversee a nonprofit?

Signed,Nickeynewguy and Lost

Dear Nickey,

Of course the best resource is the Nonprofiteer it/herself–the site has no search function, I’m sorry to say, but if you just keep trolling backwards you’ll find numerous bits of advice for Board presidents.  But here’s the central thing to remember: even if you’re suddenly the Board PRESIDENT, you’re not suddenly the whole Board.

So the first thing to do is call a meeting of the Board (with the Executive Director in the room—s/he will be your most valuable partner) and say, “Well, I appear to have become president by default.  This wasn’t your choice and it certainly wasn’t mine; so let’s figure out what has to be done and divide up the tasks.”  In other words, make it clear from the word Go that you’re not going to be in this alone.

Second, if you’re the sort of person who ends up leading by default, that means you’re a natural leader in one way or another.  I’m going to proceed on the assumption that your leadership flows from quiet competence rather than noisy charisma (otherwise you’d have been Board president to begin with).  So use that quiet competence to help the Executive Director and your fellow Board members think through:

  • What do we have to do that’s urgent?
  • What do we have to do that’s important?
  • Are we letting the urgent get in the way of the important?
  • If so, is the urgent really so urgent?
  • If so, do we need more people to address things, urgent and important alike?
  • If so, who will lead a brainstorming session to identify and recruit prospective new Board members?

Note that I’m not suggesting you do the recruiting, though you may be the most motivated to do so, having suddenly awakened to a whole set of unasked-for responsibilities. Nor should the Executive Director do it—s/he’s got plenty to do already.   But the only way you can do your job is to make sure other Board members do theirs, and the best way to get them activated is to give them the fun job, namely, thinking about who else would just love the work you’re doing if only they knew about it, and then talking to those people with great enthusiasm about what you do.

Any Board member who can’t run, or at least participate whole-heartedly in, a recruitment campaign should be given some essential but boring task like reviewing budget vs. actual expenses or assuring compliance with the Federal and state filing requirements.  That person should have to report at the next Board meeting, as will the recruiters.  As soon as you’re having Board meetings where Board members talk to each other (instead of sulking, or reporting to the Executive Director or to you as though you were the only responsible parties in the room), you’ve got this presidency stuff down pat.

For more detailed guidance, the Nonprofiteer strongly suggests checking out any of the sites on the blogroll (in the right margin), as well as going to boardsource.org, which as its name suggests specializes in making Board service as straightforward and resource-rich as possible.  The Boardsource “Knowledge Center” is chock-a-block with guidelines, forms and checklists to help you make sure the essential bases are being covered—even in the center fielder’s absence.

And as further questions arise, please feel free to write again!

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Posted in Boards of Directors, Executive Directors, Management Advice Day tip, Nonprofit management, Nonprofits--General, Personnel Issues, Social Service Agencies, Strategic Planning (and the tactical kind, too), Volunteers/Volunteerism | 2 Comments »

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