Posts Tagged ‘nonprofits’

Emanuel and the foundations: What price access?

March 29, 2011

In fundraising there’s an old saw that if you want someone’s money, you ask for his advice.  Leave it to the ever-innovative Rahm Emanuel to turn this observation into an ultimatum, telling people equipped with useful advice that it won’t be heard unless it comes wrapped in money.

That, in effect, is the meaning of Mayor-elect Emanuel’s request to a group of Chicago foundations that they pay the costs of his transition, costs  traditionally covered by leftover campaign funds, of which Emanuel has plenty.   In a city whose political culture has long consisted of being punished for disagreeing with or disobeying the mayor, the foundations faced an unattractive choice: call the mayor-elect on his inappropriate pick-pocketing and look forward to 40 years in the desert, or pay the man the $2 (or $2 million, as the case may be) in order to be heard.

The Nonprofiteer doesn’t blame the foundations for ponying up, though she wishes they hadn’t: their job is to influence public policy and make change, and the mayor’s office is an important route (sometimes the only route) to doing so.  But the Emanuel administration-in-waiting should never have asked for this sort of tribute.  Whether intended or not, the request makes it appear that access to city government is restricted to those who tithe.  There’s nothing new about that—the title “City That Works” has always ended in a silent “For Pay”—but Chicagoans might be excused for having hoped for something new post-Daley.

Many in the nonprofit sector are dismayed at having to compete with city government for the foundations’ largesse, and that’s a legitimate concern, though a belated one: the Daley administration never hesitated to ask private and foundation donors to subsidize city expenses with money that would otherwise have gone to independent community groups.  (Can you say “Millennium Park”?  “Olympic bid”?)  But the Nonprofiteer is more concerned about a new mayor’s implying, and establishing a precedent for the idea, that even being heard on the 5th floor requires big bucks.

Some wag once said that New York was about culture and Washington about power, but Chicago was all about money.  Plus ca change . . .


“L3C” spells “caveat emptor”

March 17, 2011

Here’s something strange: a concept thrown around routinely and casually in conversations among nonprofits and philanthropies is simultaneously the subject of fierce debate and sometime disapproval by the Internal Revenue Service, a committee of the American Bar Association, and other experts. What is going on?

The notion of Low Profit Limited Liability Corporations (L3Cs, for short) is that they’re a vehicle for doing well by doing good and therefore an improvement over the typical nonprofit structure. L3Cs are permitted to earn profits but proponents claim that their praiseworthy intentions—to end hunger or provide clean water or whatever—make those who lend to them eligible for the special tax benefits attached to program-related investments. In other words, this is a legal structure presented as a technique for gaining access to capital (always a struggle for nonprofits) by providing a tax benefit to lenders.

Of course, foundations already get a tax benefit for program-related investments in regular nonprofits, so what, exactly, is the appeal? In theory, foundations might be more interested in program-related investments that generate a reliable flow of capital (in the form of profit) than in program-related investments that generate nothing but additional nonprofit programs and services. Likewise in theory, regular venture capitalists outside of foundations will be more interested in making investments in profit-making entities than in pure nonprofits. This—the notion goes—will increase the amount of capital available to support general good-guy behavior.

However, a number of scholars and lawyers (Daniel Kleinberger of William Mitchell College of Law prominent among them) see the L3C as, at best, redundant and, at worst, an invitation to fraud. They point out that regular limited liability corporations can be organized for any purpose, including public-spirited and low-profit ones. They point out that the IRS has not yet issued (and does not seemed inclined to create) a rule awarding automatic program-related investment status to any investment in an L3C. So anyone who invests in an L3C on the basis that it provides a higher return than a regular nonprofit with the same tax benefits will find out to his/her sorrow that this is not the case.

What strikes the Nonprofiteer as peculiar, though, is that in the many discussions she’s heard and read about L3Cs, only one mention (specifically, Professor Kleinberger’s Nonprofit Quarterly article) has ever surfaced of this opposition from the bar and Federal regulators.  Not until her tax lawyer Stuart Levine asked about the [successful] efforts in Illinois to create L3Cs did she realize there was anything controversial about the phenomenon.  After bringing her up to speed Levine wisely said,

L3C’s don’t work unless there is a change in federal tax law.  In other words, L3C’s are a little like Oreo-Tycin-Myacin—the wonder drug for which there is no known disease.

L3C’s raise difficult issues of fiduciary duty and the inherent conflict between “charitable” purposes and “business” purposes.  At the least, these conflicts cannot be dealt with via a quick-fix state statute.

Doubtless the Nonprofiteer spaces out on frequent occasions and misses aspects of what’s said or done in the sector.  But she suspects there’s also a disconnect between what nonprofit executives and L3C promoters expect and describe and what lawyers and regulators understand.

So if you’re considering investment in an L3C, be the aware buyer of whom you’ve heard.

Ownership and its Discontents

February 16, 2011

Many years ago the Nonprofiteer lived briefly in a cooperative apartment building, which looks like a condominium building but differs from it in a fundamental way. In a cooperative, owners don’t own their units: they just have long-term leases. What they own instead is stock in the landlord—a corporation whose sole asset is the building.

Being landlords, coop boards act like landlords: they determine who may move into the building, and what sort of alterations may be made to the units, and even how much heat any individual owner receives. As a result, coop owners are deeply involved, monitoring Board actions closely because those actions may intrude significantly on their lives. At the same time, they’re favorably disposed to any regulation promising to maintain or enhance the value of their units. They’re prepared to accept considerable restrictions on their own freedom of action for the privilege of restraining others’ freedom of action. The entire system is like living in the United Nations—for better and worse.

This came to the Nonprofiteer’s mind because in the past week she’s facilitated two Board meetings at which people have threatened to quit. (Perhaps this suggests she should alter her style of facilitation, but she prefers to think that she’s just making people face the hard questions.) At the first meeting, a Board member confronted for the first time with a clear statement that he was expected to make a personal financial contribution announced, “If I don’t get credit for using my corporate connections, I quit!” At the second, the Executive Director responded to a consensus that individual counseling was outside the agency’s mission by saying, “If you’re telling me I can’t listen to people’s problems and try to solve them, I quit!”

If people threaten to quit while talking about difficult issues like money and mission, what does that mean? It’s obviously necessary to press on the most sensitive spot, the issue that needs to be resolved before anything else can be accomplished; but is “I quit!” (whether acted upon or not) the only possible response?

People who serve on nonprofit Boards do so out of passion for the agency’s cause, and what they get in return for their commitment of time and energy and money and belief is a sense that they own the agency. When an “owner’s” understanding of the agency is challenged or contradicted, naturally it feels as if his/her property is being stolen. “I quit!” means “I’ll throw this in the trash before I let you take it from me.”

It’s good that Board members consider themselves owners of the agency, but bad that so many of them misunderstand the nature of that ownership. They don’t own their own little condominium understanding of the agency’s mission or its means of achieving it. Rather, they co-own the agency with the rest of the Board, and it’s the whole Board that owns the understanding of mission and means.

This often makes Board membership difficult for people who are natural leaders. They’re accustomed to acting without consultation, or with the kind of consultation that acknowledges their superior knowledge and/or power. But on a nonprofit Board, those who act without consultation risk either distorting the mission to match their private vision or provoking the adoption of significant restrictions on everyone’s freedom of action to prevent that distortion from taking place. Neither is a good outcome.

The ideal circumstance is for all the owners to realize that they’re members of a cooperative group whose sole asset is the institution, and that securing that asset’s well-being is the task they all face together. When that’s clear, disputes about what the institution is or does or deserves from its Board members can be negotiated among all the owners, and no one says “I quit!”

Now, how to get there?

Dear Nonprofiteer, For whose benefit, exactly?

February 9, 2011

Dear Nonprofiteer,

I have an ethical dilemma that I need help sorting out. I’m really bothered by this and I want to know 1. if I am seeing this from the wrong perspective and 2. what you would advise doing.

I am a wardrobe stylist and I make custom dress shirts & suits. Fairly often, when approached, I donate gift certificates for custom shirts to silent auctions, which raise a nice amount of money for fund-raising organizations.

Here is the issue: In the Fall of 2009, I donated a gift certificate to a well-known organization that runs after-school and extra-curricular programs for children. I was told that the gift certificate was for the silent auction that coincided with an annual fund-raising event. Obviously, I was told proceeds from this event & auction would go to support the local children’s organization.

Last week, I got a call from the former President of the Board of Directors of this organization. He was really excited to finally have his custom shirts made. The organization had given a gift certificate to him while he was on the board, as a thank you gift for his service.

I was a little fuzzy on the gift certificate details, had completely forgotten that I had donated a certificate to the auction, and couldn’t remember anyone buying a gift certificate as a gift…but went the next day to fit him and thought it would all be clear once I saw the certificate.

I only realized at the end of the 60 minute appointment that HIS gift certificate was the one I had DONATED to raise money for THE KIDS and the facility. It apparently was not auctioned off at all, but was given to a Board member as a gift! (Now, it might not have had any bidders in the auction, but this is sort of unlikely, has never happened yet.)

So now I am out-of-pocket, a lot, for a board member’s gift, as opposed to the organization buying something for him (which is tax-deductible for them!) This is a $700 retail value gift. I feel deceived—this money was for kids, not the board president.

Thoughts? Advice? I’ve heard both sides. Someone from non-profit told me I was stuck, that it was perfectly legal & someone else said that I am not accountable to fulfill this certificate.

I would really appreciate your experience/thoughts on this matter.

Signed, Tailor-Made

Dear Tailor:

1) You are not seeing this from the wrong perspective.
2) But it’s hard to know what to do.

There’s no question about it: if you donated a gift certificate to be auctioned off for the benefit of the agency, you wuz robbed if instead it was used instead as a personal gift to an agency Board member. Nonprofit Board members aren’t supposed to be compensated for their services, though they may be recognized: I would argue that a $700 gift starts to sound more like the former than the latter. (I’m presuming the agency knows the value of the certificate.)

You’re not actually stuck: no one can make you make these shirts, and neither agency nor Board member would be likely to sue you to secure them (or equivalent reimbursement). But you have a business reputation to protect, and so the question is which will cost the least to you: telling the Board member you can’t honor the certificate because it’s not being redeemed according to its terms, or telling the agency you want to be reimbursed for their misuse of your gift.

It’s a matter of strategy: if the Board member is likely to become a regular customer, you’d rather not piss him off by refusing to honor the certificate. (Obviously you can only guess about that, but you’re a savvy person: your guess is probably correct.) If you’re likely never to see him again, then say you CAN’T (not you won’t) honor the certificate because its terms called for it to be auctioned, not given away. If he protests that no such “terms” appear on the face of the certificate, explain that those were your arrangements with the agency, and advise him to return to the agency and explain that its gift is unredeemable. You can say or merely imply that what the agency did was exactly like passing counterfeit money: giving him something valueless while pretending it was valuable. Smile when you say all this, but say it and repeat it as often as necessary to get the guy out of your shop.

If, however, he’s a likely future customer, then your only choice is to go to the agency and tell them what you’ve told the Nonprofiteer: that you were told the certificate was to be auctioned off for the benefit of the agency and it wasn’t; that you were willing to donate to the agency but not to its individual Board members; and that you’d like to be reimbursed for the $700 value of your misused gift. If you want to sound lawyerly (which is all the Nonprofiteer got out of her three years in law school), say that you won’t take the $700 out of the hide of the Board member because he’s an innocent “holder in due course,” that is, someone who was given something worthless while believing in good faith that it had worth. Do all this in person with the Executive Director, and then (unless s/he hands you $700 on the spot) reiterate it in a letter to the entire Board.

Getting the $700 out of the agency won’t be easy: they know you’re as unlikely to sue them as they are to sue you. But if they fail to cooperate, do two things: include in the aforementioned letter a statement that you will never donate goods, services or money to the agency again; and include an express or implied intention to make the agency’s misdeed public. You can say, “and I intend to post this on my Facebook page,” or “and I intend to tell alll my business colleagues to do likewise [withhold support] or “I intend to mention this to my friend the New York Times reporter;” or you can simply say, “I know the agency’s reputation for uprightness and am sure you would not wish to have it stained by any accidental misuse of a donation,” and let them infer that the stain on its reputation will come from you.

If the agency offers you refund of half the price or more, take it and walk away. If not, make the shirts for the Board member and do them so brilliantly that he’ll be on your doorstep demanding more–for which you can overcharge him with a clear conscience.

What a shame you’ve had this experience–it seems to validate the old saying, “No good deed goes unpunished.” But plenty of other charities will use your gift correctly, so please try not to be embittered.

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.

Doings at the Nonprofit Finance Fund

January 26, 2011

The indispensable Nonprofit Finance Fund has just begun its annual survey of the sector for 2011. The Fund’s slicing and dicing of the data will produce a thoughtful report on the state of the sector, of the kind it has already provided for 2009 and 2010. Please help the Fund’s researchers help us: take 15 or 20 minutes and respond to their questions.

Speaking of indispensable, the Fund’s founding Executive Director Clara Miller has just announced that she’s moving on to a job with the FB Heron Foundation. No doubt she’ll continue to be a leader in her new position, but her tenacity and vision in creating financial systems for nonprofits (including the Community Development Finance Institution, of which the Fund itself became a leading example) and her no-nonsense discussions of what the sector needs and what it lacks will be sorely missed.

We all owe Clara Miller a debt of gratitude. Maybe the Nonprofit Finance Fund’s expertise can help us figure out how to repay it!

The rich get richer, once more

January 19, 2011

Take a look at this piece from the Chronicle of Higher Education documenting the important role of legacy preferences—admissions boosts to the children of alumni—in college acceptance rates.  It raises the question, as our colleague Rick Cohen puts it at the Nonprofit Quarterly, “why tax preferred institutions of higher education in many cases get to use their tax-exempt status to serve children of immense wealth and privilege.”

This is the real issue embedded in another question frequently asked: “Why do well-endowed universities get tax breaks?”   The answer to that can easily be “because education is a public good,” but if that good is available disproportionately to a tiny subset of the public then the entire edifice of tax protection for elite institutions starts to crumble.

Legacy preferences are regularly justified on the grounds that they’re necessary to assure alumni loyalty and therefore alumni financial support.  As the Chronicle article documents, the evidence for this is ambiguous at best.  But even if it were true, it’s not clear why the convenience of fundraising officers should trump society’s legitimate questions about how it’s allocating scarce benefits among competing groups of beneficiaries.  And as long as universities receive tax breaks, it is the broader society that’s doing the allocating and has the right to ask the question.

And here’s another question we have a right to ask: why is affirmative action a problem when it benefits poor people and minorities but not when it benefits wealthy white people?  “Legacy preferences” is, after all, a euphemism for making sure that thems that has, gits—and gits more.

Most colleges and universities these days would regard it as an ethical violation to accept tobacco money, or porn money.   Why should their ethical standards tolerate accepting privilege money—which means, essentially, accepting a bribe?  It makes little sense for the source of money to be evaluated for purity while its purpose goes unquestioned.

As an ex-admissions officer, the Nonprofiteer is more familiar with legacy preferences than she ever wanted to be, and she can assure her readers that merely being the child of an alumnus is not a bona fide occupational qualification.   Plenty of successful alumni have no-‘count kids—hence the old saw about “shirtsleeves to shirtsleeves in three generations.”  Nor does it matter that the practice is long-established.  Ivy League colleges had a long-established practice of coordinating their scholarship packages (to keep students from choosing among them on the basis of cost), until someone read and implemented the antitrust laws.  The sky didn’t fall as a result of that change, and it won’t as a result of this one.

Of all the ways in which universities violate the spirit if not the letter of the laws granting them tax advantages (from running semi-professional sports teams to serving as research arms of the military), legacy preferences are perhaps the most damaging.  Every legacy preference helps perpetuate a system of inequality.  Every legacy preference deprives someone better-qualified of an opportunity s/he’s earned.  What’s more, the howls of protest that go up when that accusation is leveled at some other system of preference are nowhere to be heard.

If institutions of higher learning want to maintain their tax-favored status, they should abolish legacy preferences.  If they don’t—if they go on practicing white people’s affirmative action—they deserve to be knocked off the comfortable perch on which they now sit.

Dear Nonprofiteer, How can we reduce the effort of acknowledging event-based donations?

January 6, 2011

Dear Nonprofiteer,

I have been a long time reader, and appreciate your blog tremendously!

I have a question, and if you choose to publish it, I would prefer to remain anonymous.

My organization is the fundraising agent for a couple of state funded organizations (the state only funds salaries & utilities—and the foundation I work for was founded a long time ago to raise funds for educational programs, content, etc.).  Recently, as a means to save ourselves ample amounts of time, energy, and overhead in administration, we began contracting with another local NPO that is first and foremost a performing arts space, but also the most comprehensive ticketing agent in our town.  This has become vastly beneficial because our own staff is so limited that we just don’t have the time and support staff to administer ticketing for ALL of the events for ALL of the organizations we support.  This saves us a great amount of time prior to these events, but we still have to process funds transferred to us from the ticketing agent post-event, and then send letters for any tax deductible value to the patrons.

So, here’s the question that has arisen in our office—can we just put something on the ticket itself that states the tax deductible value of the ticket to save ourselves from having to also send letters? Or, is it just best practice to send those letters post event to the event patrons?

Signed, Overwhelmed and Understaffed

Dear Overwhelmed:

Without being sure of the details, the Nonprofiteer recalls that actually tearing tickets is considered best practice in the management of for-profit events as a protection against employee theft of proceeds: the stubs are compared to the sales numbers and everything has to balance out at the event’s conclusion.  So it seems like a mistake to put the tax receipt or other acknowledgment on the ticket itself, when you’re going to want to physically retrieve at least part of it.

Of course, it’s possible to print a detachable ticket stub and leave that in the hands of the donor, and that stub could contain the necessary language for tax purposes.  (“Ticket price: X.  Tax-deductible value: X minus value of event’s benefit to patron.  Helping [nonprofit’s] clients: Priceless.”)  And if you’re using electronic tickets, which can be scanned and then returned in full to the patron, that same language can appear anywhere on the ticket’s face.

But the Nonprofiteer is a little puzzled about your role in the process.  Given that you’ve transferred ticket-processing to another nonprofit, why not transfer the entire fiscal agency to that nonprofit?  Does being the fiscal agent confer some other benefit on your foundation?  If not, it may be that a relationship that once made sense no longer does, now that the agencies you’re shepherding have become so active in their event-based fundraising.

Even if your foundation needs to remain fiscal agent for the purposes of state contracts, it should be possible to transfer fiscal agency for events to the ticketing nonprofit.  In that case, the task of sending tax-receipt acknowledgment to the patrons would fall to it.

In either case, of course, the task of actually thanking the patrons falls to the nonprofit whose event it is.  If the Nonprofiteer understands the situation correctly, donors have no particular interest in you: by their attendance at events, they intend to benefit the nonprofits for which you’re the agent.  Therefore, they don’t want to hear acknowledgment from you—they want to hear it from the benefited agency.  That’s what’s priceless!

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.”


Fired up to volunteer

December 13, 2010

The Nonprofiteer first learned of the work of 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 “ 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.