This article from Nonprofit About.com begins with the too often practice of not thanking donors, something that should be done immediately regardless of how the donation came.
From my perspective, if an organization does not thank donors immediately and well, they virtually negate their foundational mission, within which their organizational mission is embedded, of community service.
An excerpt from the article.
“A friend donated a considerable amount of money through payroll deduction to her local public radio station. For that amount, she was supposed to receive a thermos with the station's logo on it.
“When she didn't receive the gift nor any kind of thank you from the station, she called and asked about it. The woman on the phone said, "Oh, well we don't send thank you's for donations through payroll deduction." She didn't know anything about the gift.
“That was it...no apology...no "Let me put you through to someone who can help." Apparently, they didn't send the advertised gift for payroll deduction donations either because it never came. Why payroll deduction would have made any difference at all is perplexing. My friend was so infuriated that she never gave another cent and has plenty to say about the radio station whenever possible.
“I suspect that the woman my friend spoke to did not know what she was talking about, and that if the development department had known about the conversation they would be horrified.
“Overall there was a disconnect on several levels. What is their policy on thank you's? Is there a glitch in the fulfillment process that resulted in the gift not being sent? Why hadn't the woman on the phone been properly trained so that she knew the policies and what to do when her help was not enough? Why did she not appreciate the importance of a donor call such as that one?”
Showing posts with label Program Accountability. Show all posts
Showing posts with label Program Accountability. Show all posts
Tuesday, October 11, 2011
Friday, September 16, 2011
Nonprofit Overhead
It often causes troubles when nonprofit managers are trying to describe how their organization fulfills its mission to potential donors, but, as the excellent book, Uncharitable: How Restraints on Nonprofits Undermine Their Potential, explains:
“Overhead is a Fiction
“The very thing we are trying to measure is a phantom. We are taught to think of overhead as the enemy of all good causes. Its evil is supernatural. But there is no such thing as overhead—not as we have been taught to think about it, as something separate and distinct from the cause itself.
“The definition of a cynic has been said to be a person who knows the cost of everything and the value of nothing. The issue of nonprofit overhead ratios is a cynic’s paradise. When we ask, “What percentage of my donation goes to the cause?” we are asking about overhead, and we give rise to this illusion of something other than the cause—something that has little or no value to the cause. We create a sharp dividing line between one kind of expense and another kind of expense, both of which are going to help the cause but one of which we are told is not. The word “overhead” explicitly encourages us to create a distinction about expenses that has no basis in reality. Not only is what we call overhead not bad, it’s not not going to the cause. In fact, it is. The distinction is a distortion.
“One hundred percent of the money we donate to charity goes to charity, unless one kind of fraud is going on or some kind of ineptitude. And if there is fraud or ineptitude, asking what percentage of donations goes to the cause is hardly likely to reveal it. People who commit fraud don’t report it in line-item detail. People who are inept are as inept at reporting their overhead percentages as they are at performing good works. Absent these problems, we should assume that every cent out of every dollar we give to charity is going in good faith to serve some kind of charitable purpose, as the charity best sees fit to serve that purpose.” (pp. 162-163)
“Overhead is a Fiction
“The very thing we are trying to measure is a phantom. We are taught to think of overhead as the enemy of all good causes. Its evil is supernatural. But there is no such thing as overhead—not as we have been taught to think about it, as something separate and distinct from the cause itself.
“The definition of a cynic has been said to be a person who knows the cost of everything and the value of nothing. The issue of nonprofit overhead ratios is a cynic’s paradise. When we ask, “What percentage of my donation goes to the cause?” we are asking about overhead, and we give rise to this illusion of something other than the cause—something that has little or no value to the cause. We create a sharp dividing line between one kind of expense and another kind of expense, both of which are going to help the cause but one of which we are told is not. The word “overhead” explicitly encourages us to create a distinction about expenses that has no basis in reality. Not only is what we call overhead not bad, it’s not not going to the cause. In fact, it is. The distinction is a distortion.
“One hundred percent of the money we donate to charity goes to charity, unless one kind of fraud is going on or some kind of ineptitude. And if there is fraud or ineptitude, asking what percentage of donations goes to the cause is hardly likely to reveal it. People who commit fraud don’t report it in line-item detail. People who are inept are as inept at reporting their overhead percentages as they are at performing good works. Absent these problems, we should assume that every cent out of every dollar we give to charity is going in good faith to serve some kind of charitable purpose, as the charity best sees fit to serve that purpose.” (pp. 162-163)
Wednesday, September 14, 2011
Board Members & Courage
This article from Venture Philanthropy Partners is excellent, reminding board members that their job is to ask questions, get answers, and bring the level of passion, skill, and talent for which they were originally recruited as board members, to the proceedings of the board and fulfillment of the mission of the organization.
An excerpt.
“They check their brains at the door” is a complaint often heard about business leaders who serve on nonprofit boards. This complaint has merit. I regularly observe business leaders who are reluctant to apply the same rigor, objective questioning, performance expectations, and data-informed decision-making that serve them well in their day jobs.
“I’ve been guilty of this myself. I remember, with great chagrin and embarrassment, how much difficulty I had finding my sea legs when I first joined a nonprofit board. I was appalled by the lack of information available to us, and the little information we did have told me that the organization and its charismatic leader were struggling mightily. Instead of speaking up and constructively demanding the level of stewardship and governance that I took for granted in my corporate board roles, I just got frustrated and said little.
“I don’t think I checked my brains at the door. But I sure as hell checked my courage.
“As I reflect on why I didn’t speak up, I suppose I just didn’t know what my role “allowed” me to say or ask. I was the new guy from the business world without any real experience with the type of services the organization provided. I joined this board thinking it would be a “nice thing to do” and certainly not intending to ruffle feathers.
“I know others from the business world have felt this same hesitation, as well as a related one: Friendships and social ties with the executive director and other board members can blur objectivity and a sense of accountability.
“The net is that too many nonprofit boards are downright afraid to stir conflict, rock the boat with hard questions, challenge executive directors, and hold the organization accountable for its performance. We simply don’t want to “hurt somebody’s feelings” or, God forbid, introduce any aspect of conflict—even when it might spur constructive debate. Unfortunately, when we elevate “harmony” over mission and purpose, our clients/beneficiaries often pay a big price in terms of the quality of services they receive.
“Timid, polite, “collegial” boards may eventually start asking the right questions, but often it’s too late. The questioning finally comes when they’re faced with a problem so severe that they have no choice but to tackle the real issues. By that time, they’re in crisis mode, which, ironically, almost always results in broken glass and busted relationships as well as well as less-than-desired programmatic results.”
An excerpt.
“They check their brains at the door” is a complaint often heard about business leaders who serve on nonprofit boards. This complaint has merit. I regularly observe business leaders who are reluctant to apply the same rigor, objective questioning, performance expectations, and data-informed decision-making that serve them well in their day jobs.
“I’ve been guilty of this myself. I remember, with great chagrin and embarrassment, how much difficulty I had finding my sea legs when I first joined a nonprofit board. I was appalled by the lack of information available to us, and the little information we did have told me that the organization and its charismatic leader were struggling mightily. Instead of speaking up and constructively demanding the level of stewardship and governance that I took for granted in my corporate board roles, I just got frustrated and said little.
“I don’t think I checked my brains at the door. But I sure as hell checked my courage.
“As I reflect on why I didn’t speak up, I suppose I just didn’t know what my role “allowed” me to say or ask. I was the new guy from the business world without any real experience with the type of services the organization provided. I joined this board thinking it would be a “nice thing to do” and certainly not intending to ruffle feathers.
“I know others from the business world have felt this same hesitation, as well as a related one: Friendships and social ties with the executive director and other board members can blur objectivity and a sense of accountability.
“The net is that too many nonprofit boards are downright afraid to stir conflict, rock the boat with hard questions, challenge executive directors, and hold the organization accountable for its performance. We simply don’t want to “hurt somebody’s feelings” or, God forbid, introduce any aspect of conflict—even when it might spur constructive debate. Unfortunately, when we elevate “harmony” over mission and purpose, our clients/beneficiaries often pay a big price in terms of the quality of services they receive.
“Timid, polite, “collegial” boards may eventually start asking the right questions, but often it’s too late. The questioning finally comes when they’re faced with a problem so severe that they have no choice but to tackle the real issues. By that time, they’re in crisis mode, which, ironically, almost always results in broken glass and busted relationships as well as well as less-than-desired programmatic results.”
Thursday, August 25, 2011
Service Program Clients on Program Board
It is a sound principle, virtually a mandatory one for any program involving the transformation of individual behavior to actually have long-term credibility, and it is what this group of homeless are asking for, as reported by the Winston Salem Journal.
An excerpt.
“Decisions about the homeless have, for years in Forsyth County, been made mostly by well-meaning people who have never spent a night on the street.
“Today, a group of homeless and formerly homeless people will try to change that.
“The Homeless Caucus, a group formed by the community-organizing group CHANGE, called a public meeting tonight to ask for two voting seats on the executive board of the Homeless Council of Winston-Salem and Forsyth County.
“The council is a coalition of nonprofit and government representatives who do an annual count of homeless people in Forsyth and help distribute federal grant money to agencies that deal with the homeless.
“David Harold, executive director of the Homeless Council, could not be reached Monday.
“The caucus wants the homeless representatives to be paid, said Ryan Eller, lead organizer of CHANGE.
"Everyone else on the executive council is being paid by their respective employer to be at those meetings," Eller said. "The caucus, it was really humbling. They said, 'We don't care about the amount. We don't really care if it's five bucks. We just want to not be treated differently from everyone else.'"
“The caucus also will ask Mayor Allen Joines to commit to having homeless or formerly homeless people serve on boards and committees that deal with the issue.
“Joines said he will listen to what the caucus has to say. "I can certainly see the merits of having someone with those experiences on the council," Joines said Monday.
“Richard Cassidy, a Davidson County native who spent several years homeless in California, said those who have lived without a home have a perspective that others don't.”
An excerpt.
“Decisions about the homeless have, for years in Forsyth County, been made mostly by well-meaning people who have never spent a night on the street.
“Today, a group of homeless and formerly homeless people will try to change that.
“The Homeless Caucus, a group formed by the community-organizing group CHANGE, called a public meeting tonight to ask for two voting seats on the executive board of the Homeless Council of Winston-Salem and Forsyth County.
“The council is a coalition of nonprofit and government representatives who do an annual count of homeless people in Forsyth and help distribute federal grant money to agencies that deal with the homeless.
“David Harold, executive director of the Homeless Council, could not be reached Monday.
“The caucus wants the homeless representatives to be paid, said Ryan Eller, lead organizer of CHANGE.
"Everyone else on the executive council is being paid by their respective employer to be at those meetings," Eller said. "The caucus, it was really humbling. They said, 'We don't care about the amount. We don't really care if it's five bucks. We just want to not be treated differently from everyone else.'"
“The caucus also will ask Mayor Allen Joines to commit to having homeless or formerly homeless people serve on boards and committees that deal with the issue.
“Joines said he will listen to what the caucus has to say. "I can certainly see the merits of having someone with those experiences on the council," Joines said Monday.
“Richard Cassidy, a Davidson County native who spent several years homeless in California, said those who have lived without a home have a perspective that others don't.”
Wednesday, August 10, 2011
Program Evaluation
It is one of the most crucial items in a nonprofit’s toolkit for attracting donors and/or securing public contracts—especially those programs focused on transformative change—and this article from Nonprofit About.com is a good look at it.
An excerpt.
“Measuring the results of your nonprofit's programs is not easy, but it is crucial. Knowing how effective your programs are will guide your long-term planning, help you to correct course, and reassure your donors that your organization is worthy of support.
“New Philanthropy Capital, a consultant to philanthropists, is in the business of evaluating charities and making recommendations to their wealthy clients about where to invest their philanthropic gifts. Their advice to charities about measuring results include these tips:
• Stick with what you know. Don't make measurement any harder than it needs to be. Stick to what you are passionate about as an organization. Talk about impact that anyone can understand. You don't need to become abstract and theoretical.
• Think in terms of change. What does your organization seek to change in its community, people's lives, socio-economic conditions, health-care policy, the environment? Figure out the change you seek to bring, and then how to measure those changes. When you succeed in changing the status-quo, that is an outcome...the outcome you and your supporters want to see. Make sure you capture it.
• Keep it simple. Better to measure just one or two aspects of your program's results, that are at the center of what you do, than try to measure everything. You'll only spread your efforts too thinly and have less to show for it.
An excerpt.
“Measuring the results of your nonprofit's programs is not easy, but it is crucial. Knowing how effective your programs are will guide your long-term planning, help you to correct course, and reassure your donors that your organization is worthy of support.
“New Philanthropy Capital, a consultant to philanthropists, is in the business of evaluating charities and making recommendations to their wealthy clients about where to invest their philanthropic gifts. Their advice to charities about measuring results include these tips:
• Stick with what you know. Don't make measurement any harder than it needs to be. Stick to what you are passionate about as an organization. Talk about impact that anyone can understand. You don't need to become abstract and theoretical.
• Think in terms of change. What does your organization seek to change in its community, people's lives, socio-economic conditions, health-care policy, the environment? Figure out the change you seek to bring, and then how to measure those changes. When you succeed in changing the status-quo, that is an outcome...the outcome you and your supporters want to see. Make sure you capture it.
• Keep it simple. Better to measure just one or two aspects of your program's results, that are at the center of what you do, than try to measure everything. You'll only spread your efforts too thinly and have less to show for it.
Monday, August 1, 2011
Due Diligence
It is something far too few donors conduct on programs they encounter face to face, especially small grassroots efforts where they are often enamoured by the charismatic founder, which is what this article from Stanford Social Innovation Review is about.
An excerpt.
“Donors should always aim to put their philanthropic capital to the best possible use. However, in the current economic climate, where resources are diminished and society’s problems are all the more pressing, the need for strategic giving is greater than ever. Moreover, the emergence of scandals such as the one underlying Greg Mortensen’s Three Cups of Tea has put the onus on donors to do their homework. With that in mind, I suggest ten due diligence practices for would-be funders who are in the process of sizing up a philanthropic opportunity.
“Don’t let dazzling stardom cloud your vision. Though the leader of your potential grantee may be brimming with charisma, be sure to go through all the standard checks that you normally would.
“On a related note: Look closely at the leadership. Is the leader’s brilliance a mask for the structural weakness of the organization? As the management guru Peter Drucker once famously advised, “No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings.”
“Use multiple sources for your decision-making. Don’t rely on just one set of opinions when forming a view about a nonprofit; carefully consult the whole range of stakeholders with whom they work. Speak with other funders in the same issue area—and not just those who are supporting your potential grantee. Conduct a site visit, since often there is nothing like seeing it for yourself. If that’s not possible, interview staff working at various levels throughout the organization, including the executive director, the project managers, and the board.
“Don’t overlook governance. In our recent Think Philanthropy report, “The State of UK Charity Boards (2011),” we contend that an engaged board—with members who have diverse skills and networks, and who exercise full oversight over their organization—are essential to the success of a nonprofit.
“Use Web 2.0 and peer review tools. One of the Internet’s most useful features for budding donors is its interactivity—it’s easy to find and share donor experiences with charities and other organizations.
“Remember that growth does not mean effectiveness. The mere fact that a charity is growing in staff size and income does not indicate that it is more successfully pursuing its mission. It merely indicates that it is good at fundraising. More money can fuel more marketing prowess, but the key question is whether that extra money fuels more programmatic output.
“Consider funding through intermediaries. There are several organisations, such as Global Greengrants, Give2Asia, the African Women’s Development Fund, and innumerable community foundations worldwide, that provide excellent channels for funding projects; they combine a skill for grant-making with on-the-ground knowledge of the area or community to which they are giving.”
An excerpt.
“Donors should always aim to put their philanthropic capital to the best possible use. However, in the current economic climate, where resources are diminished and society’s problems are all the more pressing, the need for strategic giving is greater than ever. Moreover, the emergence of scandals such as the one underlying Greg Mortensen’s Three Cups of Tea has put the onus on donors to do their homework. With that in mind, I suggest ten due diligence practices for would-be funders who are in the process of sizing up a philanthropic opportunity.
“Don’t let dazzling stardom cloud your vision. Though the leader of your potential grantee may be brimming with charisma, be sure to go through all the standard checks that you normally would.
“On a related note: Look closely at the leadership. Is the leader’s brilliance a mask for the structural weakness of the organization? As the management guru Peter Drucker once famously advised, “No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings.”
“Use multiple sources for your decision-making. Don’t rely on just one set of opinions when forming a view about a nonprofit; carefully consult the whole range of stakeholders with whom they work. Speak with other funders in the same issue area—and not just those who are supporting your potential grantee. Conduct a site visit, since often there is nothing like seeing it for yourself. If that’s not possible, interview staff working at various levels throughout the organization, including the executive director, the project managers, and the board.
“Don’t overlook governance. In our recent Think Philanthropy report, “The State of UK Charity Boards (2011),” we contend that an engaged board—with members who have diverse skills and networks, and who exercise full oversight over their organization—are essential to the success of a nonprofit.
“Use Web 2.0 and peer review tools. One of the Internet’s most useful features for budding donors is its interactivity—it’s easy to find and share donor experiences with charities and other organizations.
“Remember that growth does not mean effectiveness. The mere fact that a charity is growing in staff size and income does not indicate that it is more successfully pursuing its mission. It merely indicates that it is good at fundraising. More money can fuel more marketing prowess, but the key question is whether that extra money fuels more programmatic output.
“Consider funding through intermediaries. There are several organisations, such as Global Greengrants, Give2Asia, the African Women’s Development Fund, and innumerable community foundations worldwide, that provide excellent channels for funding projects; they combine a skill for grant-making with on-the-ground knowledge of the area or community to which they are giving.”
Monday, July 25, 2011
Firing the Founder
One of the first pieces of advice I give to any founding executive director of an organization I am consulting with, is to be on the board of directors and the executive committee, and this story from Blue Avocado relates what can happen otherwise.
The firing of the founding visionary of any nonprofit organization is something that should only occur after extraordinary attempts have been undertaken, with the founder involved every step of the way, to resolve organizational issues; and in most cases, especially involving one or two dissatisfied board members, they should resign rather that forcing the founder out.
If legal or malfeasance issues are involved, then of course, that is another story.
An excerpt.
“Four weeks and five days ago from this moment -- at 4 pm on a May afternoon -- I was fired. That morning the board chair told me our afternoon meeting would not be a finance committee meeting after all, but, rather, "about your future with the organization." The meeting lasted, at the most, 6 minutes.
"We would like you to resign," the board chair said.
"I have already submitted my resignation," I replied. Three weeks ago I had told the board I would be leaving in November. We were about to embark on a strategic planning process, and our big conference -- the one I created 11 years ago -- would be in the fall. That seemed like a fitting exit point.
"It's not acceptable to wait until November," he said. "We are terminating you effective immediately. Please turn in your keys and key card right now."
“I was furious, white hot mad. I narrowed my eyes and "did a Harold" (my father's name was Harold).
“He went on to tell me that I was not to go to the office to pick up my personal items unless a member of the board was present, and he would let me know who on the board to contact for that purpose.
“And that was it.
“I'm still furious. I'm mad at all the board members. I'm pissed at the new board members that I recruited because they didn't stop it. I'm mad at the old guard for being so sanctimonious. They don't have a clue. I'm angry because I should have been treated better and there's nothing I can do about it. And that's NOT FAIR.
"Since the morning call had been pretty clear about the purpose of the meeting, I had had a few hours to prepare. I told each staff member that I might be fired that afternoon. We had a fantastic team of five at the organization, and I believed it was important for them to know what might be coming down the road.
“After my meeting with the board chair, I went back to the office to tell the staff what had happened. The door was locked, although everyone's cars were still in the lot. There was no answer to my knock. I was struck with a huge, hurt fear that they were sitting in there having been told not to let me in. I later learned that, at the same time I was meeting with the two officers who fired me, another group of board members had gone to the office and taken everyone across the street to a coffee shop to tell them what was happening.
“So I went home. I cried. I slept.
“The next day a friend forwarded an email to me that had been sent to everyone on our distribution list -- about 2,500 people. It started like this: "Effective immediately, ____ is no longer the Executive Director of ____. Our organization is in trouble and the most significant issues relate to our finances."
“Should have seen the signs
“I should have seen the signs. But I didn't. Looking back now, I can pinpoint when the shift in board personality began: about 6 years ago. There was an evolution of the board from a group of enthusiastic, flexible individuals to a collection of people who engage in inwardly-focused groupthink. They were unwilling to engage in any sort of healthy debate. They consistently ignored the financial warning signs I pointed out, and they flat-out saw only limited responsibility for themselves to be fundraisers.
“Nearly three years ago I missed another piece of evidence. A long time board member remarked that boards should have executive sessions at every meeting -- without the CEO. And so they did.”
The firing of the founding visionary of any nonprofit organization is something that should only occur after extraordinary attempts have been undertaken, with the founder involved every step of the way, to resolve organizational issues; and in most cases, especially involving one or two dissatisfied board members, they should resign rather that forcing the founder out.
If legal or malfeasance issues are involved, then of course, that is another story.
An excerpt.
“Four weeks and five days ago from this moment -- at 4 pm on a May afternoon -- I was fired. That morning the board chair told me our afternoon meeting would not be a finance committee meeting after all, but, rather, "about your future with the organization." The meeting lasted, at the most, 6 minutes.
"We would like you to resign," the board chair said.
"I have already submitted my resignation," I replied. Three weeks ago I had told the board I would be leaving in November. We were about to embark on a strategic planning process, and our big conference -- the one I created 11 years ago -- would be in the fall. That seemed like a fitting exit point.
"It's not acceptable to wait until November," he said. "We are terminating you effective immediately. Please turn in your keys and key card right now."
“I was furious, white hot mad. I narrowed my eyes and "did a Harold" (my father's name was Harold).
“He went on to tell me that I was not to go to the office to pick up my personal items unless a member of the board was present, and he would let me know who on the board to contact for that purpose.
“And that was it.
“I'm still furious. I'm mad at all the board members. I'm pissed at the new board members that I recruited because they didn't stop it. I'm mad at the old guard for being so sanctimonious. They don't have a clue. I'm angry because I should have been treated better and there's nothing I can do about it. And that's NOT FAIR.
"Since the morning call had been pretty clear about the purpose of the meeting, I had had a few hours to prepare. I told each staff member that I might be fired that afternoon. We had a fantastic team of five at the organization, and I believed it was important for them to know what might be coming down the road.
“After my meeting with the board chair, I went back to the office to tell the staff what had happened. The door was locked, although everyone's cars were still in the lot. There was no answer to my knock. I was struck with a huge, hurt fear that they were sitting in there having been told not to let me in. I later learned that, at the same time I was meeting with the two officers who fired me, another group of board members had gone to the office and taken everyone across the street to a coffee shop to tell them what was happening.
“So I went home. I cried. I slept.
“The next day a friend forwarded an email to me that had been sent to everyone on our distribution list -- about 2,500 people. It started like this: "Effective immediately, ____ is no longer the Executive Director of ____. Our organization is in trouble and the most significant issues relate to our finances."
“Should have seen the signs
“I should have seen the signs. But I didn't. Looking back now, I can pinpoint when the shift in board personality began: about 6 years ago. There was an evolution of the board from a group of enthusiastic, flexible individuals to a collection of people who engage in inwardly-focused groupthink. They were unwilling to engage in any sort of healthy debate. They consistently ignored the financial warning signs I pointed out, and they flat-out saw only limited responsibility for themselves to be fundraisers.
“Nearly three years ago I missed another piece of evidence. A long time board member remarked that boards should have executive sessions at every meeting -- without the CEO. And so they did.”
Monday, July 18, 2011
Poverty in America
It is not what most Americans think it is, based on what the vast social industry—of nonprofits and government—portrays, according to this report from The Heritage Foundation.
An excerpt, with links at the jump.
“Abstract: For decades, the U.S. Census Bureau has reported that over 30 million Americans were living in “poverty,” but the bureau’s definition of poverty differs widely from that held by most Americans. In fact, other government surveys show that most of the persons whom the government defines as “in poverty” are not poor in any ordinary sense of the term. The overwhelming majority of the poor have air conditioning, cable TV, and a host of other modern amenities. They are well housed, have an adequate and reasonably steady supply of food, and have met their other basic needs, including medical care. Some poor Americans do experience significant hardships, including temporary food shortages or inadequate housing, but these individuals are a minority within the overall poverty population. Poverty remains an issue of serious social concern, but accurate information about that problem is essential in crafting wise public policy. Exaggeration and misinformation about poverty obscure the nature, extent, and causes of real material deprivation, thereby hampering the development of well-targeted, effective programs to reduce the problem.
“Each year for the past two decades, the U.S. Census Bureau has reported that over 30 million Americans were living in “poverty.” In recent years, the Census has reported that one in seven Americans are poor. But what does it mean to be “poor” in America? How poor are America’s poor?
“For most Americans, the word “poverty” suggests destitution: an inability to provide a family with nutritious food, clothing, and reasonable shelter. For example, the Poverty Pulse poll taken by the Catholic Campaign for Human Development asked the general public: “How would you describe being poor in the U.S.?” The overwhelming majority of responses focused on homelessness, hunger or not being able to eat properly, and not being able to meet basic needs.[1] That perception is bolstered by news stories about poverty that routinely feature homelessness and hunger.
“Yet if poverty means lacking nutritious food, adequate warm housing, and clothing for a family, relatively few of the more than 30 million people identified as being “in poverty” by the Census Bureau could be characterized as poor.[2] While material hardship definitely exists in the United States, it is restricted in scope and severity. The average poor person, as defined by the government, has a living standard far higher than the public imagines.
“As scholar James Q. Wilson has stated, “The poorest Americans today live a better life than all but the richest persons a hundred years ago.”[3] In 2005, the typical household defined as poor by the government had a car and air conditioning. For entertainment, the household had two color televisions, cable or satellite TV, a DVD player, and a VCR. If there were children, especially boys, in the home, the family had a game system, such as an Xbox or a PlayStation.[4]“In the kitchen, the household had a refrigerator, an oven and stove, and a microwave. Other household conveniences included a clothes washer, clothes dryer, ceiling fans, a cordless phone, and a coffee maker.
“The home of the typical poor family was not overcrowded and was in good repair. In fact, the typical poor American had more living space than the average European. The typical poor American family was also able to obtain medical care when needed. By its own report, the typical family was not hungry and had sufficient funds during the past year to meet all essential needs.
“Poor families certainly struggle to make ends meet, but in most cases, they are struggling to pay for air conditioning and the cable TV bill as well as to put food on the table. Their living standards are far different from the images of dire deprivation promoted by activists and the mainstream media.
“Regrettably, annual Census reports not only exaggerate current poverty, but also suggest that the number of poor persons [5] and their living conditions have remained virtually unchanged for four decades or more. In reality, the living conditions of poor Americans have shown significant improvement over time.
“Consumer items that were luxuries or significant purchases for the middle class a few decades ago have become commonplace in poor households. In part, this is caused by a normal downward trend in price following the introduction of a new product. Initially, new products tend to be expensive and available only to the affluent. Over time, prices fall sharply, and the product saturates the entire population, including poor households.”
An excerpt, with links at the jump.
“Abstract: For decades, the U.S. Census Bureau has reported that over 30 million Americans were living in “poverty,” but the bureau’s definition of poverty differs widely from that held by most Americans. In fact, other government surveys show that most of the persons whom the government defines as “in poverty” are not poor in any ordinary sense of the term. The overwhelming majority of the poor have air conditioning, cable TV, and a host of other modern amenities. They are well housed, have an adequate and reasonably steady supply of food, and have met their other basic needs, including medical care. Some poor Americans do experience significant hardships, including temporary food shortages or inadequate housing, but these individuals are a minority within the overall poverty population. Poverty remains an issue of serious social concern, but accurate information about that problem is essential in crafting wise public policy. Exaggeration and misinformation about poverty obscure the nature, extent, and causes of real material deprivation, thereby hampering the development of well-targeted, effective programs to reduce the problem.
“Each year for the past two decades, the U.S. Census Bureau has reported that over 30 million Americans were living in “poverty.” In recent years, the Census has reported that one in seven Americans are poor. But what does it mean to be “poor” in America? How poor are America’s poor?
“For most Americans, the word “poverty” suggests destitution: an inability to provide a family with nutritious food, clothing, and reasonable shelter. For example, the Poverty Pulse poll taken by the Catholic Campaign for Human Development asked the general public: “How would you describe being poor in the U.S.?” The overwhelming majority of responses focused on homelessness, hunger or not being able to eat properly, and not being able to meet basic needs.[1] That perception is bolstered by news stories about poverty that routinely feature homelessness and hunger.
“Yet if poverty means lacking nutritious food, adequate warm housing, and clothing for a family, relatively few of the more than 30 million people identified as being “in poverty” by the Census Bureau could be characterized as poor.[2] While material hardship definitely exists in the United States, it is restricted in scope and severity. The average poor person, as defined by the government, has a living standard far higher than the public imagines.
“As scholar James Q. Wilson has stated, “The poorest Americans today live a better life than all but the richest persons a hundred years ago.”[3] In 2005, the typical household defined as poor by the government had a car and air conditioning. For entertainment, the household had two color televisions, cable or satellite TV, a DVD player, and a VCR. If there were children, especially boys, in the home, the family had a game system, such as an Xbox or a PlayStation.[4]“In the kitchen, the household had a refrigerator, an oven and stove, and a microwave. Other household conveniences included a clothes washer, clothes dryer, ceiling fans, a cordless phone, and a coffee maker.
“The home of the typical poor family was not overcrowded and was in good repair. In fact, the typical poor American had more living space than the average European. The typical poor American family was also able to obtain medical care when needed. By its own report, the typical family was not hungry and had sufficient funds during the past year to meet all essential needs.
“Poor families certainly struggle to make ends meet, but in most cases, they are struggling to pay for air conditioning and the cable TV bill as well as to put food on the table. Their living standards are far different from the images of dire deprivation promoted by activists and the mainstream media.
“Regrettably, annual Census reports not only exaggerate current poverty, but also suggest that the number of poor persons [5] and their living conditions have remained virtually unchanged for four decades or more. In reality, the living conditions of poor Americans have shown significant improvement over time.
“Consumer items that were luxuries or significant purchases for the middle class a few decades ago have become commonplace in poor households. In part, this is caused by a normal downward trend in price following the introduction of a new product. Initially, new products tend to be expensive and available only to the affluent. Over time, prices fall sharply, and the product saturates the entire population, including poor households.”
Thursday, July 14, 2011
Results Count
And the latest word describing results is outcomes, which this interview with an author of a new book on outcomes, tackles, from Nonprofit About.com.
An excerpt.
“Demand is growing for nonprofits to provide proof that what they are doing actually accomplishes something. That demand is coming particularly from donors and grantors, such as foundations. Unfortunately, many nonprofits do not have objective data showing that their outcomes are worth supporting.
“That fact is a bit shocking when you think about it. But, then, charities have been very busy providing programs, and sometimes just hoping that the band aids they apply to social needs actually work.
“But even the smallest nonprofit has heard the call for greater emphasis on outcomes measurement, reporting, and transparency. Until now, however, just how to do this has been obscure or scattered from here to there.
“That is where a new book comes in. It is The Nonprofit Outcomes Toolbox: A Complete Guide to Program Effectiveness, Performance Measurement, and Results, Robert M. Penna, PhD, John Wiley & Sons, Inc., 2011
“Impressed with the scope of the book, but also daunted a bit by its 350 pages, I wondered how to convince smaller nonprofits to invest in an obviously helpful resource that could serve as an all-in-one course in outcomes management.
“I turned to Dr. Penna with some questions. Here is a summary of our interview.
“Nonprofit Guide: How can a focus on outcomes benefit even a small nonprofit? What are the potential “outcomes” of outcomes management for nonprofits that are time and resource strapped?
“Penna: The greatest benefits of an outcomes approach for smaller nonprofits come from the knowledge of what, among their efforts, truly works…and knowing precisely how well those things are working. While any organization would benefit from this type of information, it is particularly crucial for smaller, less well-resourced organizations that must make every dollar, every hour of staff time, count.”
An excerpt.
“Demand is growing for nonprofits to provide proof that what they are doing actually accomplishes something. That demand is coming particularly from donors and grantors, such as foundations. Unfortunately, many nonprofits do not have objective data showing that their outcomes are worth supporting.
“That fact is a bit shocking when you think about it. But, then, charities have been very busy providing programs, and sometimes just hoping that the band aids they apply to social needs actually work.
“But even the smallest nonprofit has heard the call for greater emphasis on outcomes measurement, reporting, and transparency. Until now, however, just how to do this has been obscure or scattered from here to there.
“That is where a new book comes in. It is The Nonprofit Outcomes Toolbox: A Complete Guide to Program Effectiveness, Performance Measurement, and Results, Robert M. Penna, PhD, John Wiley & Sons, Inc., 2011
“Impressed with the scope of the book, but also daunted a bit by its 350 pages, I wondered how to convince smaller nonprofits to invest in an obviously helpful resource that could serve as an all-in-one course in outcomes management.
“I turned to Dr. Penna with some questions. Here is a summary of our interview.
“Nonprofit Guide: How can a focus on outcomes benefit even a small nonprofit? What are the potential “outcomes” of outcomes management for nonprofits that are time and resource strapped?
“Penna: The greatest benefits of an outcomes approach for smaller nonprofits come from the knowledge of what, among their efforts, truly works…and knowing precisely how well those things are working. While any organization would benefit from this type of information, it is particularly crucial for smaller, less well-resourced organizations that must make every dollar, every hour of staff time, count.”
Monday, July 11, 2011
Nonprofit Compensation
It is often a controversial subject and this Interview in the Nonprofit Quarterly examines it.
An excerpt.
“Jon Pratt: Recently, Charities Review Council of Minnesota conducted a public opinion poll that asked 800 people in Minnesota to pick a statement that best described their view of nonprofit pay. The choices were:
“Employees of charities should receive wages comparable to for-profit employees” (42 percent agreed);
“Employees of charities should receive wages comparable to for-profit employees” (42 percent agreed);
“Employees should be paid less than their for-profit counterparts but enough to earn a living” (34 percent agreed);
“Employees should be drawn to their work out of a commitment and paid no more than a stipend” (14 percent agreed); and
“Don’t know” (10 percent agreed).
"What do you think these responses say about the public’s understanding of nonprofit compensation?
“Paul Light: Well, it suggests that 42 percent, or a substantial minority of Minnesotans, believe that nonprofit employees deserve a fair wage, and that’s a positive. But when you get to the next group that says they should be paid less, and to the group that says no more than a stipend—which, combined, is the majority—it demonstrates a real problem. There may be an element of the “vow of poverty” theory among the ones who think this way. And I’ll bet if you had asked the whole group whether executive directors should be paid the same as corporate CEOs, the answer would have been emphatically no!
“But your survey pretty much reinforces the results of a survey I conducted in 2008 with a national sample, where we asked, “Do you think that the heads of charitable organizations are paid too much, too little, or just right?” The number who said “too little” was 4 or 5 percent; the number who said “too much” was in the high 40s. The 40 percent who say “too much” has been pretty steady over time, suggesting that many Americans believe that employees of charitable organizations should take a discount or pay cut because they’ve signed on to help others.
“JP: A frequent comparison group for reasonableness of nonprofit compensation is government pay scales, where civil service systems and public oversight bodies have developed very transparent structures of grades, ladders, and steps. Government compensation has been a major news item in 2011, with a wave of freezes, reductions, and public criticism of government salaries, pension benefits, and collective bargaining rights for public employees. The governors of Wisconsin, Ohio, Indiana, and New Jersey each made this a major issue. What do you see as the implications for nonprofit compensation?
“PL: Most of the public says that federal employees are just paid too much, and there’s a lot of false information out there about that, based on averages of what federal employees get versus what private employees get. The gross generalizations fuel the public’s notion that the federal government wastes a great deal of money, which is built on anger toward Washington and toward government in general.
“JP: Congress and the IRS have increased attention on nonprofit compensation. Nonprofit organizations with employees paid more than $150,000 are required to provide supplemental information about compensation on Schedule J.
“PL: It’s a frustrating paradox that Congress doesn’t care very much about how much private CEOs—corporate CEOs—make. Basically, if it’s in the private sector, we’re not going to worry too much about it. But if it’s in government or nonprofit-land, it is fair game.”
An excerpt.
“Jon Pratt: Recently, Charities Review Council of Minnesota conducted a public opinion poll that asked 800 people in Minnesota to pick a statement that best described their view of nonprofit pay. The choices were:
“Employees of charities should receive wages comparable to for-profit employees” (42 percent agreed);
“Employees of charities should receive wages comparable to for-profit employees” (42 percent agreed);
“Employees should be paid less than their for-profit counterparts but enough to earn a living” (34 percent agreed);
“Employees should be drawn to their work out of a commitment and paid no more than a stipend” (14 percent agreed); and
“Don’t know” (10 percent agreed).
"What do you think these responses say about the public’s understanding of nonprofit compensation?
“Paul Light: Well, it suggests that 42 percent, or a substantial minority of Minnesotans, believe that nonprofit employees deserve a fair wage, and that’s a positive. But when you get to the next group that says they should be paid less, and to the group that says no more than a stipend—which, combined, is the majority—it demonstrates a real problem. There may be an element of the “vow of poverty” theory among the ones who think this way. And I’ll bet if you had asked the whole group whether executive directors should be paid the same as corporate CEOs, the answer would have been emphatically no!
“But your survey pretty much reinforces the results of a survey I conducted in 2008 with a national sample, where we asked, “Do you think that the heads of charitable organizations are paid too much, too little, or just right?” The number who said “too little” was 4 or 5 percent; the number who said “too much” was in the high 40s. The 40 percent who say “too much” has been pretty steady over time, suggesting that many Americans believe that employees of charitable organizations should take a discount or pay cut because they’ve signed on to help others.
“JP: A frequent comparison group for reasonableness of nonprofit compensation is government pay scales, where civil service systems and public oversight bodies have developed very transparent structures of grades, ladders, and steps. Government compensation has been a major news item in 2011, with a wave of freezes, reductions, and public criticism of government salaries, pension benefits, and collective bargaining rights for public employees. The governors of Wisconsin, Ohio, Indiana, and New Jersey each made this a major issue. What do you see as the implications for nonprofit compensation?
“PL: Most of the public says that federal employees are just paid too much, and there’s a lot of false information out there about that, based on averages of what federal employees get versus what private employees get. The gross generalizations fuel the public’s notion that the federal government wastes a great deal of money, which is built on anger toward Washington and toward government in general.
“JP: Congress and the IRS have increased attention on nonprofit compensation. Nonprofit organizations with employees paid more than $150,000 are required to provide supplemental information about compensation on Schedule J.
“PL: It’s a frustrating paradox that Congress doesn’t care very much about how much private CEOs—corporate CEOs—make. Basically, if it’s in the private sector, we’re not going to worry too much about it. But if it’s in government or nonprofit-land, it is fair game.”
Wednesday, May 18, 2011
Nonprofit/Forprofit Boards
This is a book review of a new book (having greater value than a book soley about nonprofit boards in the congruence between the two) about boards and transitioning from one to the other, from Harvard Business Weekly.
An excerpt.
“Editor's note: For those of who have attended meetings of both nonprofit and for-profit boards, the differences between the two organizations couldn't be clearer. Nonprofit boards meetings tend to be longer, less tightly organized, and more sporadically attended by the board members themselves. Why this happens is one of the many subjects discussed in the new book Joining a Nonprofit Board: What You Need to Know, by authors Marc J. Epstein of Rice University and F. Warren McFarlan of Harvard Business School. In this excerpt from the introduction, Rice and McFarland highlight the major similarities and differences between the different types of boards and what newcomers to nonprofit governance can expect.
“Comparing Nonprofits and For-Profits
"There are a number of important similarities and differences between the operations and challenges of nonprofits and for-profits of which a new nonprofit board member must be cognizant. Some of the more important items are discussed in this section.
“Similarities
"There are a number of similarities between for-profits and non-profits which make people with for-profit experience particularly helpful as board members. The key similarities include:
1. Both organizations can grow, transform, merge, or die. Success is not guaranteed for either type of organization, but requires sustained work.
2. In both cases, cash is king. This for-profit focus is critical for a nonprofit board.
3. In both settings, good management and leadership really matter. Delivery of service, motivating and inspiring staff, and conceiving of new directions for growth are all vitally important.
4. Planning, budgeting, and measurement systems in are vital in both settings.
5. Both types of organizations face the challenges of integrating subject matter specialists into a generalist framework.
6. Both organizations add value to society. They just do it in different ways.
"In short, there is much overlap between the skills needed and perspectives provided by leaders in the two types of organizations. This is a key reason why social enterprise courses have taken root in business schools and why, appropriately socialized, those with for-profit backgrounds can contribute so much to the nonprofit world.”
An excerpt.
“Editor's note: For those of who have attended meetings of both nonprofit and for-profit boards, the differences between the two organizations couldn't be clearer. Nonprofit boards meetings tend to be longer, less tightly organized, and more sporadically attended by the board members themselves. Why this happens is one of the many subjects discussed in the new book Joining a Nonprofit Board: What You Need to Know, by authors Marc J. Epstein of Rice University and F. Warren McFarlan of Harvard Business School. In this excerpt from the introduction, Rice and McFarland highlight the major similarities and differences between the different types of boards and what newcomers to nonprofit governance can expect.
“Comparing Nonprofits and For-Profits
"There are a number of important similarities and differences between the operations and challenges of nonprofits and for-profits of which a new nonprofit board member must be cognizant. Some of the more important items are discussed in this section.
“Similarities
"There are a number of similarities between for-profits and non-profits which make people with for-profit experience particularly helpful as board members. The key similarities include:
1. Both organizations can grow, transform, merge, or die. Success is not guaranteed for either type of organization, but requires sustained work.
2. In both cases, cash is king. This for-profit focus is critical for a nonprofit board.
3. In both settings, good management and leadership really matter. Delivery of service, motivating and inspiring staff, and conceiving of new directions for growth are all vitally important.
4. Planning, budgeting, and measurement systems in are vital in both settings.
5. Both types of organizations face the challenges of integrating subject matter specialists into a generalist framework.
6. Both organizations add value to society. They just do it in different ways.
"In short, there is much overlap between the skills needed and perspectives provided by leaders in the two types of organizations. This is a key reason why social enterprise courses have taken root in business schools and why, appropriately socialized, those with for-profit backgrounds can contribute so much to the nonprofit world.”
Tuesday, May 3, 2011
Financial Advice for Nonprofits
As good for organizations as it is for families and businesses, keep a reserve, as this article from the Chronicle of Philanthropy advises.
An excerpt.
“My two most recent posts flagged operating reserves as an important issue that is often neglected by nonprofit boards and gave an explanation of what they are and why they matter.
“Since 2009, when the Meyer Foundation supported an Urban Institute study of the operating reserves of nonprofits in Washington, I’ve spoken about the topic of operating reserves at numerous conferences and other gatherings. I usually try to make most of the same points and arguments covered in the two earlier blog posts.
“Whenever I speak about this topic, the reactions from board members and executive directors in the audience are almost always the same. They look bewildered, as if I’d just suggested that they try to obtain a pound of enriched uranium or an albino giraffe. And then, hesitantly, someone will ask, “How do we get these ‘operating reserves’ you keep preaching about?”
“My answer almost always seems to disappoint, perhaps because of its simplicity. The most reliable way to build reserves is by operating at a modest surplus (bringing in more money than you spend) consistently over time.
“Consider this illustration: If an organization with an annual budget of $1-million runs a $50,000 surplus (5 percent of its budget) every year for five years, its accumulated surplus would be $250,000—or three months of operating expenses. If $50,000 seems too ambitious, even half as much would get the organization to $250,000in 10 years.”
An excerpt.
“My two most recent posts flagged operating reserves as an important issue that is often neglected by nonprofit boards and gave an explanation of what they are and why they matter.
“Since 2009, when the Meyer Foundation supported an Urban Institute study of the operating reserves of nonprofits in Washington, I’ve spoken about the topic of operating reserves at numerous conferences and other gatherings. I usually try to make most of the same points and arguments covered in the two earlier blog posts.
“Whenever I speak about this topic, the reactions from board members and executive directors in the audience are almost always the same. They look bewildered, as if I’d just suggested that they try to obtain a pound of enriched uranium or an albino giraffe. And then, hesitantly, someone will ask, “How do we get these ‘operating reserves’ you keep preaching about?”
“My answer almost always seems to disappoint, perhaps because of its simplicity. The most reliable way to build reserves is by operating at a modest surplus (bringing in more money than you spend) consistently over time.
“Consider this illustration: If an organization with an annual budget of $1-million runs a $50,000 surplus (5 percent of its budget) every year for five years, its accumulated surplus would be $250,000—or three months of operating expenses. If $50,000 seems too ambitious, even half as much would get the organization to $250,000in 10 years.”
Thursday, April 14, 2011
Mission Accomplished
And once it is so, nonprofits should transfer any assets to another nonprofit and close up shop, as this article from the New York Times reveals, is actually happening.
An excerpt.
“A few nonprofit groups have recently announced plans to wind down, not over financial problems but because their missions are nearly finished.
“Most notable, perhaps, is Malaria No More, a popular nonprofit that supplies bed nets in malaria zones. Its goal is to end deaths from malaria, a target it sees fast approaching.
“The charity has announced plans to close in 2015, but it is keeping its options open in the unlikely event that advances against malaria are reversed.
“We never planned to be around forever,” said Scott Case, a co-founder of Priceline and vice chairman of Malaria No More. “We have thought of this more as a project than as an institution-building exercise, and the project is nearing its completion.”
“So far, the number of organizations opting to go out of business for mission-related reasons is too small to call a trend. It is still far more common for a nonprofit to close its doors because of financial pressure, which is increasing as governments continue to pare their budgets and donors maintain tight grips on their giving.
“Still, the novelty of organizations going out of business once their work is done has attracted attention.
“I don’t think it’s going to be a widespread phenomenon because there are a lot of groups taking on problems like alcoholism and domestic violence that aren’t problems that go away,” said Jan Masaoka, editor in chief of Blue Avocado, a blog for nonprofits. “But I do see that in some cases there is an opportunity for organizations to wind down gracefully and with their job done.”
“Out2Play, an organization started by Andrea Wenner in 2005, plans to close its doors next year. The group has put up roughly 120 playgrounds used by about 80,000 children in public elementary schools around New York City and is fast running out of locations, in part because the Bloomberg administration liked the idea so much that it took on some schools itself.
“When I first wrote the business plan, I thought about expanding it to other cities or into other types of institutions, like housing projects or hospitals, and we talked about those ideas and others when the board began seeing the end in sight,” Ms. Wenner said.
“Ultimately, though, the board decided that the model worked best for the purpose it had served and that anything else would require more than a simple tweak.”
An excerpt.
“A few nonprofit groups have recently announced plans to wind down, not over financial problems but because their missions are nearly finished.
“Most notable, perhaps, is Malaria No More, a popular nonprofit that supplies bed nets in malaria zones. Its goal is to end deaths from malaria, a target it sees fast approaching.
“The charity has announced plans to close in 2015, but it is keeping its options open in the unlikely event that advances against malaria are reversed.
“We never planned to be around forever,” said Scott Case, a co-founder of Priceline and vice chairman of Malaria No More. “We have thought of this more as a project than as an institution-building exercise, and the project is nearing its completion.”
“So far, the number of organizations opting to go out of business for mission-related reasons is too small to call a trend. It is still far more common for a nonprofit to close its doors because of financial pressure, which is increasing as governments continue to pare their budgets and donors maintain tight grips on their giving.
“Still, the novelty of organizations going out of business once their work is done has attracted attention.
“I don’t think it’s going to be a widespread phenomenon because there are a lot of groups taking on problems like alcoholism and domestic violence that aren’t problems that go away,” said Jan Masaoka, editor in chief of Blue Avocado, a blog for nonprofits. “But I do see that in some cases there is an opportunity for organizations to wind down gracefully and with their job done.”
“Out2Play, an organization started by Andrea Wenner in 2005, plans to close its doors next year. The group has put up roughly 120 playgrounds used by about 80,000 children in public elementary schools around New York City and is fast running out of locations, in part because the Bloomberg administration liked the idea so much that it took on some schools itself.
“When I first wrote the business plan, I thought about expanding it to other cities or into other types of institutions, like housing projects or hospitals, and we talked about those ideas and others when the board began seeing the end in sight,” Ms. Wenner said.
“Ultimately, though, the board decided that the model worked best for the purpose it had served and that anything else would require more than a simple tweak.”
Wednesday, March 30, 2011
Speaking Truth
A good article from the Nonprofit Quarterly about the consequences of telling the truth versus lying, within organizations.
An excerpt.
“We have all experienced the public lie that goes unchallenged. It may be baldly untrue but somehow accepted as the basis for action with life and death consequences. Some of our experience of public lies may be based on differences in values or perceptions, but sometimes what is said just simply violates the facts—this is disheartening and drives people out of public participation.
“The same may be said of organizations. A nonprofit may, on the surface, be making every effort to promote teamwork and “the higher good,” but if its people continue to perceive a culture that supports a different and less reliable set of operating norms and assumptions than what is written or espoused, they will not bring themselves wholly to our efforts.
“Here are some typical reasons for telling lies:
• to avoid pain or unpleasant consequences;
• to promote self-interest and a particular point of view;
• to protect the leaders or the organization;
• to perpetuate myths that hold the organization or a point of view together;
“Regardless of why they are told, untruths and lies can cause people to disengage—and they can also diminish the spirit people bring into the workplace. This leads to a sometimes massive loss of applied human intellectual and physical capital assets. A disinvestment of human spirit results in what I refer to as a Gross National People Divestiture (GNPD). The GNPD index in any organization or society can be directly related to the prevalence and magnitude of untruths told and allowed to stand. GNPD occurs when your organization’s tolerance of untruth creates a climate of cynical disbelief engendering a lack of trust in information and relationships. This automatically creates management problems that are sometimes difficult to put your finger on but are often very powerfully present nonetheless.
“Our challenge is to buck the culture and engage people in building a climate of truth telling that will lead to a newly revived work ethic and heightened individual and collective energy. In order to do this effectively, we must understand the conditions that support the emergence of truth, and understand and eliminate those that routinely undermine its presence in our organizations.”
An excerpt.
“We have all experienced the public lie that goes unchallenged. It may be baldly untrue but somehow accepted as the basis for action with life and death consequences. Some of our experience of public lies may be based on differences in values or perceptions, but sometimes what is said just simply violates the facts—this is disheartening and drives people out of public participation.
“The same may be said of organizations. A nonprofit may, on the surface, be making every effort to promote teamwork and “the higher good,” but if its people continue to perceive a culture that supports a different and less reliable set of operating norms and assumptions than what is written or espoused, they will not bring themselves wholly to our efforts.
“Here are some typical reasons for telling lies:
• to avoid pain or unpleasant consequences;
• to promote self-interest and a particular point of view;
• to protect the leaders or the organization;
• to perpetuate myths that hold the organization or a point of view together;
“Regardless of why they are told, untruths and lies can cause people to disengage—and they can also diminish the spirit people bring into the workplace. This leads to a sometimes massive loss of applied human intellectual and physical capital assets. A disinvestment of human spirit results in what I refer to as a Gross National People Divestiture (GNPD). The GNPD index in any organization or society can be directly related to the prevalence and magnitude of untruths told and allowed to stand. GNPD occurs when your organization’s tolerance of untruth creates a climate of cynical disbelief engendering a lack of trust in information and relationships. This automatically creates management problems that are sometimes difficult to put your finger on but are often very powerfully present nonetheless.
“Our challenge is to buck the culture and engage people in building a climate of truth telling that will lead to a newly revived work ethic and heightened individual and collective energy. In order to do this effectively, we must understand the conditions that support the emergence of truth, and understand and eliminate those that routinely undermine its presence in our organizations.”
Thursday, March 24, 2011
Sage of Omaha Encourages Philanthropy
Warren Buffett makes an excellent case, as reported by the Omaha World-Herald.
An excerpt.
“Billionaire Warren Buffett said philanthropists must be prepared for some efforts to fail, and that major charitable initiatives are taking too little risk if they meet their goals every time.
“Intelligent charity, big-time charity should tackle things where it’ll fail,” Buffett, 80, said Tuesday at a press conference in Bangalore, India. “If you succeed in everything you’re doing in charity, you’re attempting things that are too easy.”
“Buffett, the world’s third-wealthiest person, started the Giving Pledge with Microsoft Corp. co-founder Bill Gates in June, aiming to persuade U.S. billionaires to commit more than half of their wealth to charity. The chairman and chief executive officer of Berkshire Hathaway Inc. is promoting philanthropy to billionaires around the world. He is in India for the first time after visiting South Korea earlier this week.
“Buffett has pledged the bulk of his wealth to the Bill & Melinda Gates Foundation, the world’s largest philanthropic organization, which combats poverty and disease and funds U.S. education initiatives.
“He has also made commitments to the Susan Thompson Buffett Foundation, named for his late wife, and charities run by his three children. His donations have funded access to abortion, subsistence farming in developing nations, and efforts to reduce violence against women and girls.
“If everything they do is successful, they’re a failure,” Buffett says of his children. “Because it means they’re taking on things that are too easy. They should be taking on things that are tougher.”
An excerpt.
“Billionaire Warren Buffett said philanthropists must be prepared for some efforts to fail, and that major charitable initiatives are taking too little risk if they meet their goals every time.
“Intelligent charity, big-time charity should tackle things where it’ll fail,” Buffett, 80, said Tuesday at a press conference in Bangalore, India. “If you succeed in everything you’re doing in charity, you’re attempting things that are too easy.”
“Buffett, the world’s third-wealthiest person, started the Giving Pledge with Microsoft Corp. co-founder Bill Gates in June, aiming to persuade U.S. billionaires to commit more than half of their wealth to charity. The chairman and chief executive officer of Berkshire Hathaway Inc. is promoting philanthropy to billionaires around the world. He is in India for the first time after visiting South Korea earlier this week.
“Buffett has pledged the bulk of his wealth to the Bill & Melinda Gates Foundation, the world’s largest philanthropic organization, which combats poverty and disease and funds U.S. education initiatives.
“He has also made commitments to the Susan Thompson Buffett Foundation, named for his late wife, and charities run by his three children. His donations have funded access to abortion, subsistence farming in developing nations, and efforts to reduce violence against women and girls.
“If everything they do is successful, they’re a failure,” Buffett says of his children. “Because it means they’re taking on things that are too easy. They should be taking on things that are tougher.”
Tuesday, March 15, 2011
Evaluation in Nonprofits
It is becoming even more important, and that is a very good thing, as funding shrinks and demands for program accountability increase.
This post from the Nonprofit Quarterly News Wire examines the problem of finding some common ground in evaluations.
An excerpt.
“Foundation and government funders are increasingly demanding that nonprofits produce rigorous evaluations designed to demonstrate the validity and sometimes replicability of their programs and projects. What they don't often do is help nonprofits – affordably –generate evaluations that are useful to practitioners and communities to improve the programs being evaluated.
“The nonprofit Public/Private Ventures has issued a new white paper with some useful thoughts to provoke a higher-level dialogue about nonprofit evaluation. Although clearly supportive of randomized evaluations using control groups that do not receive program services compared to those that do, P/PV is clear that there can't be a one-size-fits-all approach.
“As an alternative, P/PV suggests the following: providing an array of alternative evaluation approaches when a randomized control group approach isn't feasible; developing "common systems of evaluative information at a reasonable cost"; developing (more) rigorous standards for scaling and replication (a common objective of randomized evaluation models); and getting practitioners into the process of designing evaluations so that the processes won't be excessively burdensome to nonprofit staff and the products might be likely to yield program improvements.”
This post from the Nonprofit Quarterly News Wire examines the problem of finding some common ground in evaluations.
An excerpt.
“Foundation and government funders are increasingly demanding that nonprofits produce rigorous evaluations designed to demonstrate the validity and sometimes replicability of their programs and projects. What they don't often do is help nonprofits – affordably –generate evaluations that are useful to practitioners and communities to improve the programs being evaluated.
“The nonprofit Public/Private Ventures has issued a new white paper with some useful thoughts to provoke a higher-level dialogue about nonprofit evaluation. Although clearly supportive of randomized evaluations using control groups that do not receive program services compared to those that do, P/PV is clear that there can't be a one-size-fits-all approach.
“As an alternative, P/PV suggests the following: providing an array of alternative evaluation approaches when a randomized control group approach isn't feasible; developing "common systems of evaluative information at a reasonable cost"; developing (more) rigorous standards for scaling and replication (a common objective of randomized evaluation models); and getting practitioners into the process of designing evaluations so that the processes won't be excessively burdensome to nonprofit staff and the products might be likely to yield program improvements.”
Friday, February 25, 2011
Programs That Work
Many of the nonprofit organizations that are primarily funded by government are seeing their funds shrink or at worst, disappear, as government struggles with less revenue.
This article from Governing suggests ways to determine what programs work before reducing or removing funding, which is a very good idea.
An excerpt.
“Nearly all states have imposed some level of budget cuts -- some quite deep -- since the recession began in 2008. But very few have established systematic ways of sorting programs that are working from those that aren't.
“That's problematic. Without a serious evaluation of program effectiveness, politics tend to dictate important budget decisions, and arguments over stakeholder interests and political palatability drown out important questions of real-world impact.
“As a result, states and cities respond to record budget shortfalls with across-the-board cuts, and some vital public services end up on the chopping block unnecessarily.
“That's why we've developed the "Reviewing What Works" tools, a process for evaluating the effectiveness of government programs. They are part of a Center for American Progress report entitled The Secret to Programs that Work.
“The key to the Reviewing What Works approach is an interagency assessment of effectiveness with specific, concrete steps to compare various programs. The tools include a series of basic questions that should be asked of every existing program: What impact has it had on the problem it's trying to solve? How does it compare to other programs with similar goals? Is it well run?
“Given the grim budget picture, statehouses need to focus on cost effectiveness.
"Openly measuring the performance of our public institutions, and communicating that performance to citizens, has never been more important," Maryland Gov. Martin O'Malley said at Governing magazine's annual Outlook in the States and Localities conference. "The states that win will be the states that...manage for results."
This article from Governing suggests ways to determine what programs work before reducing or removing funding, which is a very good idea.
An excerpt.
“Nearly all states have imposed some level of budget cuts -- some quite deep -- since the recession began in 2008. But very few have established systematic ways of sorting programs that are working from those that aren't.
“That's problematic. Without a serious evaluation of program effectiveness, politics tend to dictate important budget decisions, and arguments over stakeholder interests and political palatability drown out important questions of real-world impact.
“As a result, states and cities respond to record budget shortfalls with across-the-board cuts, and some vital public services end up on the chopping block unnecessarily.
“That's why we've developed the "Reviewing What Works" tools, a process for evaluating the effectiveness of government programs. They are part of a Center for American Progress report entitled The Secret to Programs that Work.
“The key to the Reviewing What Works approach is an interagency assessment of effectiveness with specific, concrete steps to compare various programs. The tools include a series of basic questions that should be asked of every existing program: What impact has it had on the problem it's trying to solve? How does it compare to other programs with similar goals? Is it well run?
“Given the grim budget picture, statehouses need to focus on cost effectiveness.
"Openly measuring the performance of our public institutions, and communicating that performance to citizens, has never been more important," Maryland Gov. Martin O'Malley said at Governing magazine's annual Outlook in the States and Localities conference. "The states that win will be the states that...manage for results."
Wednesday, February 2, 2011
Donor’s Influence
In an ongoing discussion spanning generations, the ability of donors to influence the nonprofits they support, is examined in this article from the New York Times resulting from one major college donor wanting his money back after the school did not consult him on a recent personnel decision.
An excerpt.
“In the past week, Robert G. Burton has been portrayed as the flawed face of highly commercialized intercollegiate athletics.
“In a scathing letter to Jeff Hathaway, the University of Connecticut athletic director, Burton demanded the return of $3 million because he felt he had not been sufficiently consulted in the hiring of Paul Pasqualoni as the Huskies’ football coach. He demanded that his family’s name be removed from the team’s training complex.
“Now Burton, the chief executive of Burton Capital Management based in Greenwich, Conn., has been cast as a spoiled booster who feels that a $7 million contribution to the football program over the years gives him the right to be included in decision-making. Criticize him all you like, but Burton is the face of UConn’s new reality. The university embraced big-time football; now it must deal with the attendant big-time headaches.
“Philip E. Austin, UConn’s interim president, and Lawrence D. McHugh, the board chairman, have privately tried to mend fences with Burton, their largest sports donor.
“If the incoming president, Susan Herbst, who takes over in July, is wise, she will phone Burton now, assuring him that no disrespect was intended. If Burton insists that Hathaway be fired, Herbst should gently tell him that $7 million is not nearly enough to influence personnel decisions.
“The question raised by Burton is whether large donors have the right to call the shots.
“In almost any area of life, yes, but not in the university,” said James W. Earl, a professor of medieval literature at the University of Oregon. “A general rule is that your money does not win you influence. When word gets out that the donor is pulling this string, it’s a scandal.”
“Earl has been a voice of resistance at Oregon for years, protesting in particular that the presence of Phil Knight and Nike, the company Knight helped found, has injured the university even while elevating the football team into national title contention. During a telephone interview Thursday, Earl said he had raised the white flag.
“I’ve given up the fight,” he said. “We’re so deep in this that we can never go back. A professor can only do so much, and money talks. Phil Knight is a major donor. You really don’t want to get in his way or cross him. It does not take much to get him to walk away.”
An excerpt.
“In the past week, Robert G. Burton has been portrayed as the flawed face of highly commercialized intercollegiate athletics.
“In a scathing letter to Jeff Hathaway, the University of Connecticut athletic director, Burton demanded the return of $3 million because he felt he had not been sufficiently consulted in the hiring of Paul Pasqualoni as the Huskies’ football coach. He demanded that his family’s name be removed from the team’s training complex.
“Now Burton, the chief executive of Burton Capital Management based in Greenwich, Conn., has been cast as a spoiled booster who feels that a $7 million contribution to the football program over the years gives him the right to be included in decision-making. Criticize him all you like, but Burton is the face of UConn’s new reality. The university embraced big-time football; now it must deal with the attendant big-time headaches.
“Philip E. Austin, UConn’s interim president, and Lawrence D. McHugh, the board chairman, have privately tried to mend fences with Burton, their largest sports donor.
“If the incoming president, Susan Herbst, who takes over in July, is wise, she will phone Burton now, assuring him that no disrespect was intended. If Burton insists that Hathaway be fired, Herbst should gently tell him that $7 million is not nearly enough to influence personnel decisions.
“The question raised by Burton is whether large donors have the right to call the shots.
“In almost any area of life, yes, but not in the university,” said James W. Earl, a professor of medieval literature at the University of Oregon. “A general rule is that your money does not win you influence. When word gets out that the donor is pulling this string, it’s a scandal.”
“Earl has been a voice of resistance at Oregon for years, protesting in particular that the presence of Phil Knight and Nike, the company Knight helped found, has injured the university even while elevating the football team into national title contention. During a telephone interview Thursday, Earl said he had raised the white flag.
“I’ve given up the fight,” he said. “We’re so deep in this that we can never go back. A professor can only do so much, and money talks. Phil Knight is a major donor. You really don’t want to get in his way or cross him. It does not take much to get him to walk away.”
Wednesday, January 26, 2011
IRS Form 990-N Threshold Increased
This is very good news, reported by Guidestar.
An excerpt.
“The IRS reminds smaller nonprofits that a higher filing threshold has gone into effect for Form 990-N; invites smaller businesses, including nonprofits, to attend a free webinar on the Small Business Health Care Tax Credit; has published new fees for exempt organizations for 2011; and has released instructions and withholding tables related to the payroll tax cut.
“New Form 990-N Filing Threshold
“The filing threshold for Form 990-N, also known as the ePostcard, has been raised for returns covering the 2010 tax year that are filed in 2011. Most exempt organizations with gross annual receipts of $50,000 or less may now file Form 990-N instead of Form 990-EZ or 990. Private foundations, however, must continue file Form 990-PF, regardless of organization size.
More info here.
An excerpt.
“The IRS reminds smaller nonprofits that a higher filing threshold has gone into effect for Form 990-N; invites smaller businesses, including nonprofits, to attend a free webinar on the Small Business Health Care Tax Credit; has published new fees for exempt organizations for 2011; and has released instructions and withholding tables related to the payroll tax cut.
“New Form 990-N Filing Threshold
“The filing threshold for Form 990-N, also known as the ePostcard, has been raised for returns covering the 2010 tax year that are filed in 2011. Most exempt organizations with gross annual receipts of $50,000 or less may now file Form 990-N instead of Form 990-EZ or 990. Private foundations, however, must continue file Form 990-PF, regardless of organization size.
More info here.
Wednesday, January 19, 2011
Nonprofit Media-Based Ministries
Congress, as reported by the Senate Committee on Finance, is beginning to look more closely at the activities of these groups and what develops could also impact other nonprofit churches and nonprofits in general.
An excerpt.
“WASHINGTON -- Sen. Chuck Grassley, ranking member of the Committee on Finance, today released a staff review of the activities and practices of six media-based ministries and reports concerning other churches and religious organizations referred to the committee. He pursued this review as part of an ongoing effort to strengthen the tax-exempt sector. The review contains a summary of findings and identifies key issues for discussion by stakeholders.
“The tax-exempt sector is so big that from time to time, certain practices draw public concern,” Grassley said. “My goal is to help improve accountability and good governance so tax-exempt groups maintain public confidence in their operations.”
“Grassley said tax-exempt policy involving churches and religious organizations is an area Congress hasn’t looked at in decades. Then-Senator Mark Hatfield’s 1977 request to evangelical groups to be more transparent caused the formation of the Evangelical Council for Financial Accountability (ECFA). Joining this organization has become like a Good Housekeeping seal of approval for those in the evangelical community.
“According to the ECFA, Hatfield issued his request in response to legislation introduced by Rep. Charlie Wilson that would have required certain disclosures by organizations soliciting funds. Similarly, Grassley expects that the issues raised as part of the staff review will generate discussion about increasing accountability among all types of churches and religious organizations, not just evangelical groups. “The staff review sets the stage for a comprehensive discussion among churches and religious organizations. I look forward to helping facilitate this dialogue and fostering an environment for self-reform within the community,” Grassley said.
“Grassley wrote to six media-based ministries in November 2007, based on requests for review from members of the public who wrote to him because of his previous tax-exempt oversight work. In addition, these ministries had received media coverage and attention from watchdog groups. One of the six ministries, Joyce Meyer Ministries, responded fully to Grassley’s inquiry and joined the ECFA in March 2009
. Benny Hinn of World Healing Center Church also provided complete answers to all questions. Both ministries wrote to Grassley to explain they have undertaken significant internal governance reforms. “I appreciate these efforts,” Grassley said. “Self-correction can be more effective than government action. It’s something that’s worked with other entities I’ve looked at, such as the Nature Conservancy and the Smithsonian Institution and some top colleges that were amassing large endowments without increasing student aid.”
An excerpt.
“WASHINGTON -- Sen. Chuck Grassley, ranking member of the Committee on Finance, today released a staff review of the activities and practices of six media-based ministries and reports concerning other churches and religious organizations referred to the committee. He pursued this review as part of an ongoing effort to strengthen the tax-exempt sector. The review contains a summary of findings and identifies key issues for discussion by stakeholders.
“The tax-exempt sector is so big that from time to time, certain practices draw public concern,” Grassley said. “My goal is to help improve accountability and good governance so tax-exempt groups maintain public confidence in their operations.”
“Grassley said tax-exempt policy involving churches and religious organizations is an area Congress hasn’t looked at in decades. Then-Senator Mark Hatfield’s 1977 request to evangelical groups to be more transparent caused the formation of the Evangelical Council for Financial Accountability (ECFA). Joining this organization has become like a Good Housekeeping seal of approval for those in the evangelical community.
“According to the ECFA, Hatfield issued his request in response to legislation introduced by Rep. Charlie Wilson that would have required certain disclosures by organizations soliciting funds. Similarly, Grassley expects that the issues raised as part of the staff review will generate discussion about increasing accountability among all types of churches and religious organizations, not just evangelical groups. “The staff review sets the stage for a comprehensive discussion among churches and religious organizations. I look forward to helping facilitate this dialogue and fostering an environment for self-reform within the community,” Grassley said.
“Grassley wrote to six media-based ministries in November 2007, based on requests for review from members of the public who wrote to him because of his previous tax-exempt oversight work. In addition, these ministries had received media coverage and attention from watchdog groups. One of the six ministries, Joyce Meyer Ministries, responded fully to Grassley’s inquiry and joined the ECFA in March 2009
. Benny Hinn of World Healing Center Church also provided complete answers to all questions. Both ministries wrote to Grassley to explain they have undertaken significant internal governance reforms. “I appreciate these efforts,” Grassley said. “Self-correction can be more effective than government action. It’s something that’s worked with other entities I’ve looked at, such as the Nature Conservancy and the Smithsonian Institution and some top colleges that were amassing large endowments without increasing student aid.”
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