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Nonprofits and Those Who Support Them Should Talk Openly About Finances

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About 6,000 nonprofits responded to the Nonprofit Finance Fund’s survey asking how comfortable they are discussing their financial health.

When nonprofit leaders and funders get together to discuss grant opportunities, they discuss the programs and services that support the grantee organization’s mission, but they seldom talk about financial health.

In Nonprofit Finance Fund’s annual State of the Sector Survey, we asked nonprofit leaders which aspects of finance they are comfortable discussing w…

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Navigating Tough Trade-Offs in the Era of Scarcity

tugofwarDemand for social services is outpacing the ability of our traditional financing sources to keep up. So how should we balance the need to pay for services now versus the need to invest in adaptation for sustainability?

This question has no easy answers. Well-meaning and thoughtful people will disagree, weighing philosophical, analytical, and emotional arguments differently. But the premise is well documented: We are entering a new “Era of Scarcity,” as aptly coined by Mario Morino in the sub…

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Inequitable Salaries at Nonprofits Are a Kind of Bullying

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 sc…

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What It Takes to Succeed in a Nonprofit Collaboration

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 …

How Small Nonprofits Can Improve Their Fiscal Health

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 Rec…

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What Drastic Cuts Would Mean for Domestic-Violence Groups

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 p…

Planning for Growth on Sound Financial Footing

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 aga…

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Collaborating in Good and Bad Times for the Right Reasons

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…

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The Truth About Endowments

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…

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Baseball’s Lessons on Promoting Social Change

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?