74% of Charities Not Making The Grade

In a recent article by ESPN’s “Outside the Lines” (“Athlete charities often lack standards”), the charities of high-profile, celebrity athletes came under fire for a variety of reasons. Some failed to show efficient and effective use of money donated and others flirted with highly deceptive and unethical behavior that could even be illegal. While a great deal of attention was given to the “bad” charities such as NBA forward and Kardashian husband Lamar Odom’s charity Cathy’s Kids (supposedly started to raise money for cancer research but has failed to give any money to cancer research in its eight-year history and has instead primarily existed to finance two elite youth basketball teams), one little fact within the article escaped wider scrutiny. The author of the article, Paula Lavigne, says according to Charity Navigator’s guidelines, 74% of the 115 athlete charities investigated fell short of one or more acceptable nonprofit operating standards. Moreover, according to Ken Berger, the president of Charity Navigator, who was cited in the article, this percentage is in line with what Charity Navigator sees among ALL charities. If 74% of all charities are failing to meet basic guidelines for running efficient and effective organizations, isn’t it time to demand change?

What exactly are these guidelines that 74% of ALL charities are failing to adequately meet? Charity Navigator, one of the highly acclaimed and trusted watchdogs in the nonprofit world evaluates organizations in two general areas: financial health, and accountability and transparency. For financial health they analyze seven key areas to assess the financial efficiency and capacity of an organization. They look at program expenses, administrative expenses, fundraising expenses, fundraising efficiency, primary revenue growth, program expenses growth, and working capital ratio. Financial ratings tables are used to compare an individual organization’s numbers against what is expected for other organizations of the same type. This means that the argument of “but we’re different” doesn’t apply as variation and differences among organizations is accounted for and controlled in the analysis. The basic idea is that organizations need to be responsible with their money. It’s not okay to spend more on administrative costs than programs. It’s not okay to consistently have fundraising expenses that exceed fundraising revenue. The goal is not to scrutinize the expense of every last penny but rather to just ensure money is being handled in a reasonable way that aligns with an organization’s mission. It’s alarming to think so many charities are failing to meet these basic standards.

The evaluation of accountability and transparency is equally basic. Accountability is defined by Charity Navigator as “an obligation or willingness by a charity to explain its actions to its stakeholders.” And transparency is defined as “an obligation or willingness by a charity to publish and make available critical data about the organization.” Not only are these simple concepts that every charity should have built into their core processes, they’re also in-line with the legal expectations of organizations benefiting from non-profit tax-exempt status.

The questioning of non-profits is likely to grow as stories such as the one featured by ESPN make their way into mainstream media. Non-profit hospitals in Illinois are currently under fire as communities and governments question whether they are truly charitable organizations. This just might be the tip of the iceberg. The larger community is not demanding more from charities and non-profits, they’re simply demanding that charities and non-profits meet their basic requirements to provide real value and hold themselves accountable to fundamental practices of good stewardship.

What Are You Doing For Others? A Call to Service for Businesses

In recognition of the annual national day of service it seems like a good opportunity to talk about volunteering. Every year millions of Americans volunteer in their communities as a way to honor the legacy of Rev. Dr. Martin Luther King Jr.. Legislation signed in 1983 created the federal MLK Day and in 1994 Congress designated the MLK Federal Holiday as a national day of service.

Dr. King said that “Life’s most persistent and urgent question is: ‘What are you doing for others?'”

The national day of service is an opportunity for individuals and families across the nation to answer that question. We are cooking. We are tutoring. We are painting, cleaning, giving and listening. We are serving those in need, building a stronger foundation for our communities and working together for a brighter future for everyone.

But individuals and families are not the only ones who must heed that call. Businesses are an invaluable part of our communities and in order to build that stronger foundation and reach a brighter future, they have to be vested partners in service as well. One way for businesses to engage in their communities and give back is by offering employee volunteer programs.

Studies show there are many benefits to offering employee volunteer programs including enhanced employee satisfaction, stronger employee retention and recruiting, increased productivity, professional development opportunities for employees, workforce preparedness, and a positive company image in the larger community. Businesses of all sizes can benefit from these findings and should seriously consider starting or expanding an employee volunteer program.

There are many resources available online for anyone interested in starting an employee volunteer program. Some of the best tips include the following:

Assess Employee Interests and Community Needs – What are your employees interested in? Are they already engaged in volunteer activities outside of work? What are the specific needs of your local community?

Get Leadership and Management Support and Find Internal Champions – Support from leadership and management is important because it sets the direction of a company’s culture. Leadership and management can help by dedicating funds for an employee volunteer program and leading by example. Internal champions are also important. These are the people with passion. They encourage others to volunteer and help create positive energy around the program.

Try Different Incentives – Individuals are all motivated by different things so trying different incentives is a good way to see what employees respond to. Different programs can include one or a mix of the following: matching financial donations to non-profits, offering flex time, paid volunteer days, volunteer events organized at work, dollars for doers and in-kind support services. Businesses vary in size and in their ability to offer certain programs. While you might not be able to afford to offer paid volunteer days if you’re running a small or medium sized business, there is something you can do and finding what works for you and your employees will ultimately benefit everyone involved.

The question of “What are you doing for others?” is one that must be answered by all and one that businesses should put at the top of their agenda for 2013.

A Resolution for Non-Profits in 2013

Here’s a resolution all non-profit organizations can and should make for the New Year: In 2013, resolve to update and strengthen your development plan. Development plans are the backbone of fundraising management. And whether it’s a formally written plan with detailed timelines and specific tasks or simply a bunch of ideas written on calendars and sticky notes lined around your desktop monitor, your development plan needs to be updated and improved every year to reflect the most recent goals and resources of your organization.

A strong development plans serves as a road map for your organization’s fundraising strategies, events, and tactics. The plan should be a formal, strategic document. That means if you’re the post-it notes around the computer type then this is the year to put your plan on paper. All key stakeholders should be involved in creating, updating, and strengthening development plans (fundraising/development staff and management, general management, board members, etc…); this helps set the precedent that EVERYONE has an important role to play in fundraising efforts.

Every development plan is different because every organization is different, but the work needed to create and update one is the same. You must take time to assess your organization and gather information. What are you currently doing? Is it working? What are your goals for the year? Are they realistic? And what steps do you need to take to get there? Updating and strengthening your development plan can seem daunting but it’s probably the single most important thing you can do to set your organization up for fundraising and development success in the coming year.

The 10 components we use for development plans here at Access Philanthropy can help serve as a guide as you work on your own plan for 2013:

1. Framing – Who are you? How does the world see you? What are your greatest strengths?
2. Audience – What are your current audiences and messages to each? Where can and should you expand?
3. Communications – Is your current message clear, concise, compelling, and true? How do your communications pieces measure up to similar organizations'?
4. Institutional Fundraising – What are you doing in the areas of foundation grants, corporate grants, corporate partnerships, and public charities? How successful are your efforts?
5. Individual Fundraising – What are you doing in the area of individual fundraising? How successful are your efforts?
6. Online Fundraising – What are you doing in the area of online fundraising? How successful are your efforts?
7. Infrastructure to Support Fundraising –What do you have in place to support fundraising efforts? What can you do to improve or add to this in the next year?
8. Integrated Timeline – Map everything out on a monthly timeline (prospecting, grant deadlines, events, etc…). Is it feasible? Are there holes in your calendar where you can or should do more?
9. Integrated Anticipated Fundraising Income – Project your fundraising income by quarter. Be realistic. This will give you a better idea of what to expect and give you something to measure at the end of the year.
10. Final Observations and Recommendations – What are the top 3-5 things you noticed about your development plan? What are the top 3-5 recommendations you can make to improve your plan?

Updating and strengthening your development plan is hard but essential work. Set yourself up for success in the New Year by not only having goals, but also having a plan to attain those goals.

Guide to Holiday Giving

Every day closer to the end of December brings another year-end appeal letter to mailboxes everywhere. Year-end appeals are exactly what they sound like. They are letters sent by non-profit organizations at the end of the year and are usually the single largest mailing for an organization and bring in the most money. The year-end appeal, also known as the holiday or Christmas appeal, is often successful because it taps into the giving spirit of the holidays and the practical spirit of donors wanting to make their charitable gifts by December 31st to qualify for tax deductions for the current year.

Whether you’re looking to make a first-time charitable gift in honor of a friend or family member for the holidays or are a seasoned philanthropist designating gifts before the year ends, you should make sure your money is being well-spent. Here are some tips from Charity Navigator to guide your giving:

* Do your homework – give to organizations that are on the up and up. Do your homework and make sure the charity is accountable and is getting results. Organizations should be efficient and sustainable in their finances. They should follow good governance practices and be transparent. Organizations should also get measurable results. Check the organization’s website and see if they list an annual report; if they do, read it! This will give you a good idea who they are, what they’re doing, where they receive money from and what they spend it on. You can also register for a free account on GuideStar and look at their 990 tax forms which will give you information on finances, governance and mission.

* Give freely – most donors like to give for specific projects and purposes because it feels better knowing your money is going directly to feed hungry people than it does knowing it’s going to pay someone to administer that transaction. But the truth is that organizations need money for capital, staff, electricity, phones, and post-it notes. There is a cost to doing business and while it’s not as exciting to fund that part of philanthropy, it’s essential. Unrestricted gifts in the hands of good charities will do more good than designated gifts that can’t be supported. If you give to a trusted organization you can feel confident that your gift will go to the area of greatest need and will ultimately support the cause that brought you to the organization in the first place.

* Find the perfect fit – spend as much time thinking about the organization you’re giving to as you would thinking about a special gift for a loved one. For every passion an individual has, there is a related charity or organization that needs help. Whether your passion is for animals, the environment, youth sports, families in need, hunger, or anything else, make sure the organization you are giving to is a good match for you or the person you are giving on behalf of.

Take care of those you love this holiday season. Help your community in any way that is meaningful to you and hopefully these simple tips will help ensure your kindness is well received and well spent.

Learning From Rejection

Let’s face it, rejection hurts. It doesn’t matter if you’re licking your wounds after a hard fought political race, were dumped by your significant other, or passed over at work for a promotion. Rejection is part of life and it’s part of philanthropy. The key to rejection is to learn from it. This is especially salient in grant writing.

Estimates for success rates in grant writing vary from 10%-50%. This variability reflects many things including the economy, financial markets, trends in giving, and the experience and preparation of grant seekers. Even assuming that you have done everything right on your end as a grant seeker – you selectively applied only to organizations that were a strong fit, you took the time to understand the funder’s mission, vision, values, and giving preferences, you wrote a memorable and honest narrative, you had a realistic and detailed budget, and you followed directions EXACTLY as stated – you still might get turned down. In this case it’s important to not give up.

It’s against our nature to stand tall and ask someone why they rejected us. It’s easier to vilify the rejecter or assume we simply weren’t good enough. But in the land of grants we have to fight that instinctual feeling of self-deprecation, put aside our bruised sensibilities and ask for feedback. Many funders are willing to provide feedback; you just have to ask them. Ask constructive questions to get constructive answers. Try to find out what the funder is looking for and what you can do to be more competitive in the next funding round. If the funder is too busy to provide feedback, ask someone outside of your organization to read your proposal. An objective eye will catch skips in logic or in narrative stories that you might overlook because you know the story so well your mind automatically populates that information. Don’t be afraid to ask for feedback. Don’t let rejection define you or your efforts. Use rejection to fuel a quest for something better. Give yourself time to dissolve the immediate pains of rejection and then pick up the phone and schedule a time to talk about your proposal. Actively seek out constructive criticism. As Henry Wadworth Longfellow said, ” The strength of criticism lies only in the weakness of the thing criticized.”

Politics, Philanthropy, & Big Bird

Do you remember last fall?

The Occupy Movement was born and spread across the United States, the world was still talking about the death of Osama bin Laden, and the Republican primary contest was in full swing. At that time we wrote a blog about comments Mitt Romney made related to what he would cut from the federal budget if elected President. One of those things was the Corporation for Public Broadcasting (PBS).

Fast forward to October 3, 2012… Governor Romney, the Republican candidate for President of the United States, is debating President Obama in the first of three Presidential debates and Romney tells moderator and longtime PBS news anchor Jim Lehrer, “I’m sorry, Jim, I’m going to stop the subsidy to PBS. I’m going to stop other things. I like PBS. I love Big Bird. Actually, I like you too. But I’m not going to keep on spending money on things to borrow money from China to pay for us.”

Social media sites such as Twitter and Facebook immediately lit up with people stunned and upset by Romney’s comment. The Twitter account @FireBigBird was created and gained over 13,000 followers in less than one hour. And the story continued to play in the national media days after the debate.

Romney’s comment didn’t come as a surprise to us. Living and working in the world of philanthropy, non-profits, and communities we’ve watched the 2012 Presidential Campaign since the beginning and his position on this while running for President has not changed. It has been pushed aside by other issues including the economy, undercover videos, “the 47%,” and myriad other things, but viewing himself as a fiscal conservative Mitt Romney has explicitly said he will cut funding for the arts. He will dramatically reduce funding for the National Endowment for the Arts and the National Endowment for the Humanities. In an op-ed piece published in USA Today in 2011, Romney described these programs as “not absolutely essential” and said they’re programs that “we don’t need or can’t afford.” These “unneeded” and “unaffordable” programs receive $155 million per year each and are among the smallest agency appropriations in the federal budget.

President Obama shouldn’t be held blameless in this conversation. Early in his term the Obama Administration tried to raise revenue for its spending programs by reducing the charitable deduction for the highest two income-tax brackets by as much as 30%. This plan would have raised the cost per dollar of giving from 65 cents to 72 cents which many economists estimated would have resulted in a 10% reduction in total giving by some of the largest donors in the nation.

Can you put a price on community? On culture? On valuing arts and history? On understanding where we came from and where we’re going? Culture and community are defining features of who we are as a society and we should all pay close attention in the next 30 days to what each candidate is saying and what that will really mean for our respective communities.

National Foundations Workshop

How has the national funding landscape changed since the recession?

Which national foundations and corporations are once again funding in Minnesota?

And what’s up with Walmart?

Find out on Tuesday, October 2, 2012 at the “National Foundations: Know Who and Know How” workshop presented by Steve Paprocki, President of Access Philanthropy.

If your organization doesn’t think it is a candidate for funding from national foundations, think again. Acquiring national funding requires an understanding of the national funding environment and how to create a funding persona that gets you recognized as a program or organization with national impact and appeal.

Find out what kind of research, branding, and communications you need to set your organization apart from the competition and attract national dollars.

At this workshop, you will:

  • Find out what’s happening in the national funding community and whether your organization has what it takes to create a national funding persona;
  • Get the inside scoop on the top 60+ national foundations that fund in Minnesota, but are based elsewhere;
  • Discover top funders in several categories – including corporate industries, faith-based communities, specialty funders, “nooks & crannies” funders, and constituency-specific funders; and
  • Understand the quirks of national funders and how to address their specific needs and idiosyncrasies.

This workshop goes beyond the usual suspects (Gates, Ford, etc.) and includes foundations whose presence in Minnesota may not be well known.

Register now before this workshop meets capacity! Registration is available through the Minnesota Council of Nonprofits website at: http://www.minnesotanonprofits.org/events/2012/10/02/national-foundations-know-who-and-how

The 80/20 Rule

The 80/20 rule, or the Medical Loss Ratio (MLR) rule states that insurance companies can spend no less that 80% of premiums on medical care and quality, and no more than 20% on administration costs. Since passing the Affordable Care Act, insurance companies are required to inform their consumers of how their premium dollars are being spent. Should they not meet the 80/20 rule, they must rebate premium dollars that exceed the limit.

123, 171 consumers in Minnesota will be receiving a total rebate of $8,956,885, an average of $160 per family.

Rebates must be paid by August 1st of each year by way of rebate check, credit or debit lump-sum reimbursement, direct reduction on future premiums, or the employer participating in these listed actions, or actions that will benefit their employees.

Under the Affordable Care Act, insurance companies are also required to send a letter to each of their enrollees explaining the 80/20 rule. They must inform their enrollees if their company failed to meet the 80/20 rule and provide breakdown of how they exceeded the standard.

For more information visit:
http://www.healthcare.gov/law/resources/reports/mlr-rebates06212012a.html

Buy Local, Eat Local, Give Local

So you have started to buy produce from the farmers market, and you choose the coffee shop on your corner versus the Starbucks ten minutes away for your daily caffeine dose, and you have finally worked it into your budget to buy farm fresh, organic, locally raised eggs. Congratulations! You are gracefully making the transition into becoming a true localvore. Now wouldn’t it be great if you could start directing your financial support to some neighborhood initiatives that promote green local living? Well you’re in luck; there just happens to be an ioby coming to a town near you! What is an ioby you ask? “Ioby connects people and money to site-based projects. All of these projects are conceived, designed, and run by neighbors—which ensures community buy-in, long-term caretakers and daily reminders of what’s been achieved”. – Ioby. 2012. MarketSmiths. 05 May. 2012. www.ioby.org Founded in 2008 by three graduate students, ioby is a way of bringing environmental and green habits to the streets. The founders, all environmental enthusiasts, recognized that popular “green” initiatives were not necessarily accessible to most people and generally involved promotion of products and buying things to make lifestyles more green. The idea behind ioby was to create an affordable way, through locally based funding, for neighbors to latch on to green living, by working together on improving their community green spaces. So how does it work? There are a few ways to get involved. You can either pick a project that is in your neighborhood and donate directly, or you can pick a project and donate but then also get involved, get your hands dirty and meet your neighbors. Alternatively, if you have a project that you want to start it is easy to get going by setting up an ioby. By signing up and starting a project you will have access to a network of funding resources including the ability to collect tax-deductable donations, get fiscal sponsorship free of charge and find new volunteers and donors. It is about bringing people together who support shared values and causes and raising local money for local projects. So find an ioby near you and continue your localvore lifestyle!

Soul of Money

Have you ever thought about what your donating and spending habits say about the inner workings of your soul? What about the connection that your donations have to your personal values? How can you examine your relationship with money and the way you spend it? These questions may or may not be ones that you ask yourself when it comes to your personal philanthropy, however searching for these answers deep in your psyche can result in surprising realizations. What do your hopes, dreams and expectations surrounding your relationship with money really mean? A forerunner in this exploration is Lynne Twist, the founder of The Soul of Money Institute. The mission of the institute, created in 2003, is to encourage conversations about money and provide educational programs to inspire people to become more aware of where they spend their money. The workshops, books, consulting and fundraising philosophy aim to foster a change from consumer driven lifestyles to sustainable lifestyles, all the while transforming relationships with money to benefit individuals and the greater good. With a long history of fundraising for large foundations and small community organizations all over the world Lynne wrote the book The Soul of Money in 2003 and has since focused on promoting this idea of connecting the way you spend your money to your spiritual core. Check it out! http://www.soulofmoney.org/services/