An instinctive reaction to fear is fight or flee.  An individual’s reasoning causing their reaction does not have to be based on truth but can be a perception.  Therefore, when groups use false information to create a perceived threat many individuals do not really know if the threat is real.  Their first reaction is based on their ability to cope with the situation.  Youth have not at this point in their life gained the coping skills to resolve conflict without striking out forcefully. The Matthew Shepard attack may have been such a reaction.

Causes of death between the ages of 15-24, according to the CDC, are:  first accidents, second murder, and third suicide.  Groups that teach hate only confuse youth more.  It is hard enough for them to understand that in their sphere of family, school and community, love and hate can be directed to and from the same person.  Teaching youth the tools to resolve conflict within themselves is critical to teaching them to resolve conflict with others.

Maybe the increase in violence among youth is due to the fact that society supports their exposure to violent content but not to sexual content.  Violence is okay but sex is not.  Hate is okay by adults but not kids.  Remember free speech does have its consequences and children and youth do hear.  Behavior is learned from adults and shared among peers.

The Boston Globe wrote in its 9/25/2007 edition about the pending Matthew Shepard Act in Congress.  It focuses on fabricated information by individuals throughout the USA who have stated that it is a bill to arrest clergy and storm churches.

It is about stopping hate crimes.  Stopping Violence!!!!!!  Supporting our youth helps us all.

One of the most frustrating exercises is spending a lot of thought and time on a proposal only to have it not funded.  Many people get very discouraged after repeating this exercise over and over again.  They begin to question themselves or their programs.  They wonder what they’re doing wrong or why funders don’t like their programs.  No matter how many times they receive “rejection” letters telling them that it wasn’t their program, they don’t believe it - they feel that there must be something more or different they can do.

What they need to do is not get discouraged!  It is important to reflect an enthusiastic attitude with funders - if you don’t show strong belief in your program, neither will they.

I recently read some stats that were both disheartening yet encouraging at the same time:

“On average, foundations reward grants to about 5% to 10% of those who apply, and in many cases less”    and       ”The rule of thumb for professional fundraisers is a 10 to 17 percent success rate.”  And that’s for professional fundraisers.

So while these stats make you realize that getting funded is not easy, they should also make you realize that it probably isn’t your program.  The important thing is to target those funders who are most likely to fund a program like yours rather than wasting time on those that “might”, and to have a well written proposal that reflects the funder’s priorities as well as your program’s strengths.  Have someone else edit it.  And if you doubt your writing skill, hire someone to write it for you. 

And while it’s easier said than done, try not to get discouraged!

By opening a Flexible Spending Account for Health Care Expenses, which every individual has, an employee can create a new pool of funds that otherwise go to the government in the form of taxes.

By opening a Flexible Spending Account for Childcare Expenses, which many individuals have, it will further increase an employee’s ability to create a new pool of funds that otherwise will go to the government in the form of taxes. For more information on Flexible Spending Accounts contact your local 125 plan representative or contact Matt Hedges, Great Harbor Benefits, 508-540-7940 x 11 or email him at ghbcapecod@aol.com.

Thousands of employees across the USA each year throw money away by continuing to spend their hard worked earnings for medical related items and childcare expenses with post tax dollars. The savings are not tied to an employee’s ability to earn a higher salary. If an employee has the expenses, then an employee should not think twice about using a flexible spending account.

Below I have presented two simple charts to show the dollar value of utilizing the benefit of Flexible Spending Accounts.

When it comes to measuring outcomes in the delivery of goals and objectives, what studies have been completed that demonstrate one group is better than the other?

Which group accomplishes better outcomes?

Does it take someone who has been through the same experiences to be better able to accomplish the outcomes?

Or

Does it take someone who is more educated to be better able to accomplish the outcomes?

It takes both types of people!!!!  I would challenge anyone who believes in one type over the other.  In the world of giving, it takes all of us to be able to accomplish the many needs of our society.  Whether it is the arts, human services, education, health, environment, science, etc, all of us are needed to make a difference. 

In reviewing many nonprofits and their documents, the use of paraprofessionals and volunteers is non-existent or very low.  The outcomes presented on the 990 are weak.  In interviewing a number of nonprofits over the years, the problem seems to be in the tracking of individuals, their time and work.    Question, what difference did your organization make? 

The solution for measuring their outcome and worth is treating the individuals at all times as if they were employees and expecting to achieve outcomes just like any other employee.   The training of all individuals is critical to the mission of your organization.  The training of all individuals is the first line of defense when something goes wrong.  The training of all individuals provides for the opportunity to grow the employment staffing needs of your organization.  Ask an individual why they return to one organization over another.  Most will respond in some manner that they felt their time was valued.

How does your organization show an individual that what they do is valuable?  What feedback loop has your organization built into itself to keep individuals wanting to work for your organization?

Volunteers; paraprofessionals; and credentialed staff should be part of your strategic plan and internal review.  These elements should be measured yearly at a minimum as to how your human resources goals and objectives for each of the levels of staffing are assisting your organization’s mission. 

If your organization does not do this, then try it and see how it adds to your organization’s success.

Correctly allocating costs among an organization’s programs can be one of the most challenging aspects of non-profit book keeping. It may seem simple enough: whatever you spend to pay a program’s staff and purchase the supplies that they use will equal the cost of the services they provide. Well, these may be the program’s direct costs, but they don’t represent its true cost. There are other expenses, too often overlooked and under funded, that contribute to every program’s bottom line.

Indirect costs (also referred to as “Administration and Support Costs”) are expenditures necessary to the overall management and operation of an organization. These include costs associated with general record keeping, business management, budgeting, board activities, legal expenses and other tasks that are not specific to any one program—including just keeping the lights on. Indirect costs also generally include the salaries and expenses of the organization’s chief officer and his or her staff.

Cost allocation is a way of accounting for each program’s share of these indirect costs. There are four generally accepted methods:

(1) Simplified Allocation Method
This method allocates indirect costs by use of a distribution percentage derived from a program’s direct costs, i.e. total employee compensation and other expenses. In other words, a more expensive program will account for a larger share of the indirect costs.

(2) Modified Direct Method
This method is similar to (1), but employs an additional allocation process for certain direct costs that are shared among two or more programs.

(3) Multiple Allocation Base Method
This method is used when a program, affiliate or subsidiary is different from an organization’s other activities and receives a disproportionate amount of administrative support. In these cases, the formula for figuring the allocation is not one-size-fits-all, but instead varies by program type.

(4) Approved Federal Indirect Cost Rate
Many non-profits that receive Federal assistance have approved Federal indirect cost rates. These rates are very useful in budgeting, particularly when developing a Federal grant proposal.

Whatever the size or complexity of your organization, you should choose your cost allocation method carefully. Indirect costs are an important piece of price setting that can make the difference between a successful organization and an unstable one. Understanding indirect costs can also help you increase efficiency and distribute your organization’s resources in a way that maximizes program outcomes.

As a follow-up to previous blogs on employee benefits, I wanted to focus on Life Insurance.

Most organizations provide life insurance to their employees. However, very few maximize the value of the employee benefit for their organization.

1. What is the purpose of offering the benefit?

2. How does offering the benefit create value for the employee?

3. How does offering the benefit create value for the organization?

4. What is the cost benefit analysis for your organization?

5. What measure has the organization taken to ensure that the benefit is accomplishing that for which it was intended?

A. To maximize the use of Life Insurance, use automatic enrollment procedures with an op out form. (Organization pays 100%)

B. Have a policy in which the employee’s estate and organization are both beneficiaries. (The incremental cost to increase the benefit from a basic $5,000 is minimual)

C. Remember when a death occurs, there needs to be time for a family to recover. Therefore it is better to have a value that provides three-six months of the employee’s net. Look into group life policies. For more information, contact your insurance broker or contact contact Matt Hedges, Great Harbor Benefits, 508-540-7940 x 11 or email him at ghbcapecod@aol.com.

Do you have a written personnel policy? When was the last time you reviewed it or updated it?

Do you have a written internal control policy? When was the last time you reviewed it or updated it?

Is there a relationship between your personnel policy and your internal control policy?

Important points:

1. Each organization should have personnel and internal control policies, regardless of size.

2. These policies should be reviewed annually to ensure that they continue to meet the needs of the organization and comply with all federal, state, and local laws.

3. All staff should have access to the policies and as part of their hiring orientation have an opportunity to read the policies and be shown where a copy is available at all times for review. Having a copy available electronically is the most efficient means for dissemination and updating.

4. Trouble begins when employees are treated differently. By using the organization’s written policies to address personnel issues, it should reduce the exposure of the organization to lawsuits. Personnel policies should be living documents that are able to be molded to fit the organization. If indeed there are different classes of individuals, such as a 24/7 program vs. a Monday-Friday 9-5 program, then the policy should address the differences. The policies provide program specific rules for the employee to follow and the benefits that the organization will provide for those eligible.

The internal control policy makes it clear to all parties the procedures to follow. It outlines business operations and guidelines to be used by all employees in the performance of their duties. It further supplies those tools and expectations of the organization management team for oversite.

A funny thing happens when you get nonprofits executives in a room and ask them how often they solicit businesses or individuals. Most will focus on a specific event or not at all.

Marketing is the number one issue that nonprofits fail to do for themselves as part of any development plan. That is if they have a development plan. The marketing starts with the single step of letting corporate and community individuals in the community that you serve know of your existence and what you do.

People Give to People

Businesses give to people in their market.

Your organization has to paint a picture in the mind of the giver that makes it personal. An organization has to be consistent and repetitive. It might take 8 times for an individual or corporate entity to give their support. When the donor does give, the most important follow up is to acknowledge the gift.

The difference between a one-time gift donor and an annual donor is that connection you are able to make.

The IRS expects that nonprofits will raise funds to offset a percentage of their costs, thereby lowering their cost to the public. Another aspect of measurement is what public good the organization offers. It is not the intent of the IRS to provide an opportunity for a nonprofit company to compete at lower costs than a for-profit.

Questions to ask:

Why is my organization worthy of financial support?

What portion of the dollars we raise will actually be put towards the services we provide?

What is the outcomes measure and how does it show that the organization is successful? How big is the issue the organization is trying to address?

How much of the issue is the organization trying to address itself?

What is the impact of the issue in the geographic area the organization services?

What would it take to address the issue in the geographic area the organization services?

What amount of money is being used to fund raise in comparison to the amount raised?

I have read too many 990’s and fiscal statements of nonprofits where no funds are raised, little is raised, or the proportion of money spent to raise funds of the amount actually raised is more than 25%, sometimes actually resulting in a loss.

Most nonprofits are doing a terrible job for one reason only - the lack of planning. So stop complaining and get your organization organized. The Executive Director and Board should be the leadership and base in this effort. It does not take hiring permanent staff to get the plan implemented. An organization can hire part-timers or consultants to assist in developing a plan or direct the implementation of the plan until there is adequate capacity in an organization. I have estimated that in any given week an Executive Director could contact 8-12 potential donors and only for up to 40 weeks.

So when was the last time you called a potential donor? When was the last time board members gave to your organization? When was the last time the board members helped to solicit money for the organization?

It is time to really make raising funds a priority for the Board and 25 % of the Executive Director’s time.

The use of state government procurement systems is the best way for nonprofits to utilize hundreds of hours of staff time, not pay for it, and end up with a great result.

Government must procure everything imaginable. Your organization should as a policy utilize the government procurement lists as the basis for pricing and qualifications. You then have a base for negotiating a better price with your current or local businesses. Please note that any government vendor must offer the lowest price to the government, so if they are to offer a lower price to you, they must offer the same to the government. However, there is the chance that the configuration of what you are buying is not the same as what is being offered to the government, thereby giving your organization some room to negotiate.

One example to check out is the Massachusetts procurement system at www.comm-pass.com. Further, for those organizations in Massachusetts on the nonprofit qualifying list under the Operational Service Division, you are allowed to purchase off these contracts as well. Other organizations should use the information in the contract as a base of information to work from and to be an educated consumer.

Focus on utilizing the government procurements to provide your organization with the expertise of government staff responsible for these activities. These individuals are usually more efficient and effective at coming up with the best options.

The other great aspect of using government procurements is their evaluation component for measuring satisfaction.

So what are you waiting for, Take Advantage of the government’s efforts.