pic from PBS HAWAII.ORG

The “Race to the Top” initiative for education has the opportunity to make a major impact for the long term by learning what states and local educational authorities did with their stimulus money.  The question should be asked:  Will there be more of a lasting effect on education by giving the money to a district school or to a charter school? 

Those that changed the rules by lowering standards to comply or by supplanting federal monies for what would have been state funding or by refusing to participate show what the commitment is to performance and the economic strength of the country. 

The pattern that has been common among charter schools throughout the country is that regardless of the fact that charter school obtain fewer funds than school districts, the charter schools are able to meet or exceed the school district’s academic performance in most cases.  The first and foremost difference is that charter schools are creating brand new school facilities without taxpayers bonds.  It is through fundraising and fiscal management that this has been accomplished.  The second type of school facility is through renting old (private or public) schools, renting office space, renting mall space, renting warehouses or college space.  Charter schools, while pubic entities, are managed by a small group and are able to make decisions fairly quickly to get a facility negotiated and created into a school. 

The other aspect of a charter school is that it is much more open to the community taking an active role in the school.  The board of the school and its leadership actively want parent and student participation.  The charter school has a larger number of volunteer, work-study and internship opportunities.

pic from Ken’s Aviation

Congress just might want to educate itself about its self dealing interests.

The Supreme Court recently overturned spending limits placed on corporations or unions for promoting their position on a candidate.  There has been a lot of complaining about the influence that the corporations and unions can now make in the outcome of elections.  While all of this complaining has been going on there has been little complaining about the many charities that congressional members have created to support their efforts.  There is no limit to what amount the corporations and unions can give to these nonprofits. 

These congressional nonprofit affiliates are a potential liability for the rest of the nonprofit industry.  There are too many examples of big spending by corporations with legislative bills before these same elected individuals. 

I found the example of corporations donating to the capital fund to pay off the Black Caucus Headquarters interesting since the brochure for the fundraiser is reported to have stated that the greater the donation, the greater the access, such as a private reception with members of congress.

These affiliated nonprofits seem to have one thing in common:  a means to be tied to the political process and not have limits on the amount that can be raised.

In most states elected officials would not be allowed to promote special access to anyone for their donation to a charity of their interest, especially if the corporation had pending legislation before an elected body.

It goes to the IRS’s question of whether the nonprofit has members, what benefit will members be provided and whether any board member or their immediate family will benefit.  I would not be surprised if the IRS or citizen groups take a look at these types of nonprofit organizations, causing a backlash for all nonprofits to have to deal with.

It might just be a good reason why elected officials choose not to serve or should not serve as board members.

pic from Hiking Artist

Finding that one idea for your nonprofit to build upon for sustainability is within the organization’s means of finding it.  Create your own solutions.

1. Print out by vendor the total dollar amount you spent in the last two years. 
2. Now check off whether any of these vendors promote recycling the products you purchased.  If the vendor will not recycle you should request that they do so or switch to someone who does.
3. Buy more that is locally made.
4. Come up with your own recycling program. 

Just a few ideas:

• Replace bottled water with a filtered watering system
• Return printer cartridges for a store credit
• Dedicate a location for returnable bottles for the office coffee supplies
• Have paper recycling
• Reuse the other side of the file folder or use a label

You will be surprised the amount of money that is saved each year and the impact the nonprofit has on lowering its carbon footprint.  So if you are not already doing something, what are you waiting for?

pic by Bearman, 2007

The selection of candidates for elected offices seems to have created a new type of citizen calling themselves the Tea Party Voter.  They represent those tired of hearing the same promises and inaction by those elected.  While the voters look to make change in the government many nonprofits are looking to turnover their leadership.

It looks like government should take a better look at nonprofits for examples of how to lead and make change.

The ability to know when to hand over the reins of a nonprofit organization one created is not supposed to be easy.  It is a lot harder when it is not done in a planned manner.  The heart and soul of a nonprofit usually starts with its leadership.  There are a few nonprofits that were started by a community, a group of dedicated individuals or a cause, but in reality they survive with the leadership that represents the passion of why the nonprofit was formed.  The board of the nonprofit has an equally important role to play in the planning of succession.

Nonprofits should not think of succession planning as being unique to their sector.  All corporations, regardless of their corporation type, have to deal with succession planning eventually.

One of the key decisions to this planning is to groom the successor to assure they have the passion and the ability to bring the organization into the next century.  Unless the successor is from within the organization, the first year will be about the individual learning and living the mission of the organization through the eyes of the board, founding leaders and the community they serve. 

Another key decision is the transition between the old and new leadership.  I would suggest that first the day-to-day operations get passed to the new leader of the nonprofit.  Have the previous leader concentrate on courting the nonprofit’s supporters and assuring a role for them as the nonprofit enters into its next stage. 

The use of a merger as the succession plan is an exit strategy to use when the nonprofit is at a loss to replace its founding leader and does not have the heart or the ability to agree to a replacement. 

pic from Bearman Cartoons

Some think the government’s response to the swine flu was an overreaction.  However, caution was better for preventing the worst, which might have meant death for many. 

While some think the climate change agenda is an overreaction, especially when Washington DC gets three feet of snow, it might just be that the unusual weather is due to the climate change’s effect on the jet stream. 

The federal government has begun making climate change initiatives a national focus and a number of foundations have begun to make it their local focus.  The interesting part about the term ”climate change” is that I find it to be more of a general description that a fair number of initiatives fall under.  It should be easy for every nonprofit to come up with a way to participate in making a DIFFERENCE toward climate change. 

You’re a nonprofit that can create a community program identifying uses of recycling materials and/or promoting participation in recycling. 

You’re a nonprofit that needs to weatherize your facility to reduce its energy costs.

You’re a nonprofit that can switch to a renewal energy source or less green gas energy sources.

You’re a nonprofit that has decided to locate your services near a central transportation hub.  This means you’re part of the smart growth initiative to be located within walking distance of a rail stop or bus stop.  When looking for such locations try to link individuals to your location by only having to take one ride to the stop.  If there are multiple connections they must be easy and convenient.

You’re a nonprofit that promotes urban farming that reduces green house gases by having more locally grown produce.  Hydroponics and greenhouses on roofs just might be the answer. 

Take time as a nonprofit to come up with your plan to participate.

Planning and implementing change is necessary for the nonprofit to evolve and adjust to the market place.  While it may be hard emotionally to implement, inaction can lead to failure.  A severe recession is what it took to show which nonprofits were prepared to make decisions and which ones were not.  It also showed nonprofits where their true strengths and commitments were.  The advice is to make strategic planning an annual event.  A nonprofit will never know when its importance will be paramount to its survival. 

Strategic planning is something that many nonprofits talk about doing but never do.  Part of the problem is too many people doing the talking and no one strong enough to take the leadership.  This results in many actions related to government filings to not be completed.  Recently the IRS has stated that “Exempt Organizations:  Status Revoked for Not Filing Annual Return or Notice.”
 
Most tax-exempt organizations, other than churches, must file a yearly return or notice with the IRS.  If an organization does not file as required for three consecutive years, the law provides that it automatically loses its tax-exempt status.  Loss of exempt status means an organization must file income tax returns and pay income tax, and its contributors will not be able to deduct their donations.

What must be filed this year depends on the organization’s financial activity:

Financial activity filing requirement
 
Gross receipts normally?  $25,000
Note:  Organizations eligible to file the e-Postcard may choose to file a full return.  990-N (e-Postcard)
Gross receipts < $ 500,000 and
Total assets < $1.25 million 990-EZ or 990
Gross receipts?  $500,000, or
Total assets?  $1.25 million 990
Private foundation (regardless of financial activity) 990-PF

Additional information

So at a minimum check to make sure your IRS filings are in order and compliance with your state is in order.

The lack of filings has created tax liabilities and penalities for many nonprofits.  

pic from hiking artist

Donors should request from the nonprofit the goals, objectives and outcomes expected of the funds from the donor.

Donors should request from the nonprofit the outcomes expected of the use of the funds.

Donors should require nonprofit outcomes of the funding to be measurable and clearly defined.

Donors should require a nonprofit to be able to report an accounting of the donated funds.

Nonprofits should be willing to publicly post outcomes and track the use of funds, especially if the donor has given thousands of dollars. 

However, nonprofits should by nature be more public in their detail to adequately promote their successes and needs.

pic from Hiking Artist

Donors and nonprofits each day are doing the heavy lifting to build the bridges to connect their mutual interests to resolve the problems of today. 

Would donors advocate sending their donation to nonprofits of less than 3.5 million dollars in revenues? 

Would donors advocate sending their donation to nonprofits with reserves or endowments of less than 5 million dollars?

Would donors advocate sending their donation to nonprofit educational institutions with the goal toward free education or a living wage debt?

Would donors advocate not sending their donation to nonprofits who forward the donations to another related organization? 

Would donors advocate not sending their donation to nonprofits who spend only just over 5% of their revenues and increase investment net worth?

Would donors advocate sending their donation to nonprofits of less than 3.5 million dollars in revenues? 

Would donors be willing to challenge the norm and mandate changes in the market place for nonprofits?

Would donors be willing to advocate for nonprofits and their funding needs in the financial markets and be willing to be guarantors of funding loans and lines of credit?

As a donor making nonprofits make the grade has not been standardized because giving is personal regardless of whether it is an individual or an organization giving the funds.  People have feelings, beliefs and objectives.  Nonprofits need to better understand human nature to better understand the donor.  The same can be said of nonprofits.  People run nonprofits and each has their own personality.  Matching the donor and nonprofit will continue to be a psychological endeavor for each of us.  

Pic from JC Colie

A donor should expect a nonprofit to maximize the return on their donated funds.  A donation should not be treated by a nonprofit as funds that are a commodity to be used once.  It is easy for any organization to spend funds and obtain no long term impact.  The action to make zero impact with donor funds takes no energy, no action.

It is not supposed to be easy to maximize the impact of donated funds.  A funding strategy plan is just as important to a nonprofit as a strategic plan and business plan.  The act of balancing a nonprofit’s priorities and control growth is the same for any business.

Impacting the level of success toward a nonprofit’s goals, objectives and outcomes lies with a donor’s choices.  A donor chooses among the 1.4 million nonprofits most times with little information.  A donor’s donation whether by an individual, a corporation or foundation is still made by people with preferences, likes and dislikes.

A donor can strategically choose to donate to a nonprofit that stands out in their community.  What makes the nonprofit chosen stand out?  What does the donor consider their community?  What natural ties does the donor have to a specific nonprofit?

Some aspects of nonprofits that donors have begun to look at is the true nature of what a nonprofit stands for.  Is the larger nonprofit management more or less likely to interact with programs?  This is less likely since most large nonprofits do not locate their administrative functions in the same location as a program.  Out of site out of mind is all too familiar and often the truth. 

The other aspect of larger nonprofits is the fallacy that they must pay large salaries to recruit the right talent to compete with the for-profit businesses.  This argument is false; it is just a way to justify management’s larger salaries than the general population. 

Nonprofit means giving and that includes employees.  Thousands of government workers manage and make decisions every day on hundreds of millions of dollars effecting thousands of people and thousands of nonprofits and they do not make near some of the salaries in the large nonprofits.  Voters mandate and expect checks and balances on the salaries of government workers.  The same oversight is expected to be extended by government on behalf of voters in allocating funds to nonprofits.