No one likes a bully, whether it’s the schoolyard variety shaking down little kids for lunch money or the diva boss screaming curses over the handling of her morning latte. But when the harassment is less obvious, more corporate than individual–or when it benefits us in some way–our righteous indignation tends to fade.

“Economic bullying” is a good example: paying some people inequitable salaries and relying on free labor. Why are we willing to let those practices go unchallenged?

In a recent scholarly paper, John Tropman and Emily Nicklett, both professors of social work at the University of Michigan, attempt to reckon with our collective reluctance to confront economic bullying. The authors pull no punches in addressing social exploitation: the structures that force some people to contribute low- or no-cost labor so that others can get richer.

Social exploitation isn�…

Read More

Collaborations and mergers among nonprofits certainly aren’t new, but much of what nonprofit leaders know about them comes from our for-profit counterparts.

Nonprofit collaborations are no better and no worse than those done by for-profits. They’re simply different. As I wrote in a previous post, for-profit collaborations and mergers are driven by financial motivations including cost savings, but charities are unlikely to reap any savings for years, if at all. For nonprofits, the primary driver to merge or collaborate should be to help them achieve their missions. Mergers and collaborations are strategic tools. They do not have to be a last resort.

The Great Recession and the protracted recovery have sparked renewed interest in nonprofit collaborations. But resources dedicated to helping them carry out their plans are scarce, so many groups don’t know where to begin.

For…

Read More

Three-quarters of American nonprofits have annual budgets under $1 million, and most are even smaller. What these organizations lack in size, however, they make up for in impact. They respond to local needs, are absolutely critical to community building, and are staffed by people who understand and care about their communities–communities that have been abandoned by countless others.

Yet, we know from our work with small nonprofits (most recently through the Capital and Capacity for Economic Recovery Initiative) that they often struggle with financial challenges that are unique to their size and structure.

Executive directors of small groups often assume leadership through a deep knowledge and understanding of programs and generally have less experience in finance than those of larger ones. On top of that, it can be hard for groups with limited budgets to bring financial expertise…

Read More

Those of us immersed in the fight against domestic violence know how critical political decisions are in protecting women. When the Violence Against Women Act (VAWA) was passed in 1994, on the heels of the O.J. Simpson trial, women across this country won a major victory that shifted the tide toward prevention and signaled that domestic violence was everyone’s fight, not just one for victims, survivors, and the organizations struggling to help them.

But VAWA, arguably one of the most important pieces of legislation on women’s rights in decades, is now under attack. The House of Representatives has proposed massive cuts to VAWA, continuing a downward trend of support for domestic-violence programs. Previously set at $795.8-million a year, the proposed bill calls for  $136.5-million in cuts. Among the proposed changes are those eroding protections for immigrant women and men, gay a…

Read More

In the current economic climate, many nonprofits are facing a dilemma: increasing demand for their services at a time when financial support for growth is scarce. For those groups that decide to expand to meet the greater need, careful financial planning is essential.

But since normal expenses often increase faster than revenue during times of growth, charities must also have a plan for plugging the budget gaps and a good sense of how long it will take the revenue and expenses to balance out again.

One organization that decided to undertake growth is Legal Outreach, a New York City nonprofit that works to prepare students for college.

NFF worked with Legal Outreach to project its direct and indirect costs over several years, and Legal Outreach estimated how much of the growth it could cover each year through a combination of fundraising and drawing down its reserves.

Once the…

Read More

Though it may not always feel like it, the Great Recession officially ended in June 2009–three years ago. Nonprofits have been hit hard with increased demand for services and a shifting funding landscape in the years since the economic crisis began, and predictably there has been much talk of a resulting spike in collaborations and mergers. But the notion that collaborations are somehow linked with recessions leads to the false assumption that nonprofits should collaborate because of financial motivations.

Organizing strategic collaborations solely to reduce costs does not set up collaborating partners for success, and it ignores a fundamental function: to do a better job of accomplishing  the mission.

So why do we associate tough economic times with collaborations and mergers? Because of money. When resources are scarce, competition for those resources increases, and the…

Read More

Nonprofits and their donors often see endowments as the route to financial stability, but they aren’t the right solution for every organization. Here we debunk some of the longstanding myths about endowments.

Myth #1: A strong, sustainable nonprofit needs an endowment.

The one thing that sustainable nonprofits need is enough income to run their programs and pay for salaries, facilities, etc.  An endowment is one of many ways nonprofits can generate income. But for some groups, it is unnecessary or even a bad idea.

So before deciding to establish an endowment, nonprofits should decide if doing so addresses how income will be used to achieve the mission, when it will be needed, and how much will be needed. Organizations that are in financial crisis, that have limited capacity to attract more donors, or that have short-term missions should avoid establishing endowments.

Myth …

Read More

In an annual ritual marking the change of seasons, pitchers and catchers just reported to Florida for spring training.  Professional baseball sends a powerful lesson to those of us who work to solve social problems: Despite nearly 150 years of entrenched traditions, the sport has shown itself to be open to change.  And that change is transforming how the game is played.

How does baseball point a path forward for those of us struggling to support a just and vibrant society in our troubled times?

The answer lies in the story of Billy Beane, general manager of the Oakland Athletics, who demonstrated how radical innovation can allow anyone to achieve positive transformation even against seemingly impossible constraints.

Mr. Beane, immortalized in print and film by Moneyball, watched his baseball team lose the 2001 playoffs to the much wealthier New York Yankees. He approached the…

Read More

Imagine if critical documents you needed every day just to do your job were stored in another building, one you had to walk to and from, no matter the weather. Imagine hallways so narrow that you had to turn sideways to slide past your co-workers on your way to a meeting.  And imagine that that meeting—with a client or a colleague—took place in a room smaller than a closet in many American homes. If you work in or have visited a community health center, you may not have to imagine it. And yet, even under these conditions, a center I visited recently managed to squeeze 29,550 patient visits into its 13 tiny exam rooms in a single year.

Like most nonprofits, they’ve grown used to doing more with less. Their mission commands it. But there’s a growing constellation of organizations committed to furnishing them with enough capital to do more with more.

Owing to its sheer size, …

Read More

Nonprofit leaders are all too familiar with Murphy’s Law: If anything can go wrong, it probably will.

That’s why nonprofits need liability and property insurance, which are critical tools for protecting assets and preserving financial health when the unexpected happens.

However, the insurance trade is a complicated, regulated industry. So I’ve enlisted the help of two seasoned insurance professionals to explain how it works: Pamela Davis, chief executive of Nonprofits Insurance Alliance Group, which insures 10,000 nonprofits across the country, and Valissa Naganashe, an agent at Brownrigg, which insures nonprofits and businesses..

Q: What is general-liability insurance?

Ms. Naganashe: General liability is the most basic form of business insurance. This is the protection you have whenever you or your business will be held responsible for causing damage to a property or…

Read More