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�…

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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 …

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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…

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The job market is full of visionary people hoping to find a job at a nonprofit.

They are idealistic young people who envision jobs that are the perfect nexus of “helping people” and using what they have learned in their academic studies. They are nurses who hope to run free clinics and fine-arts majors who want to start community theaters.

And they are sometimes for-profit employees looking to make a career switch or nonprofit professionals looking to start or move up in an organization.

These budding nonprofit leaders bring with them the passion for service, creative rigor, and intellectual curiosity required to inspire people and communities. Why is it, then, that so many new managers find themselves burned out, off-mission, and out of cash in short order? In a word, finance.

Many experienced nonprofit executives avoid telling young people how much of a leadership job…

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The executive directors of children’s museums are some of the most creative people on the planet.

Introducing kids to learning, play, and problem-solving is their life’s work. Yet as I found out when I recently gave a talk to a group of museum leaders, these proven innovators face limits in their ability to experiment, to test fascinating concepts that could substantially improve their organizations’ enterprises or the nonprofit world at large.

For most of them, two things stand in the way of carrying out good ideas: They lack the money to carry out ambitious changes—what the Nonprofit Finance Fund calls change capital–and they are surrounded by boards, donors, and others who fear failure.

Change capital is to the nonprofit world what venture capital is to the for-profit world. It is money that can be used for excellent growth opportunities and to incubate…

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“May I interest you in a susu account or would you like to hear about Sharia-compliant lending?”

Those kinds of solicitations are not something many of us in the nonprofit world hear very often—or would understand.

But if we are in the business of investing, lending, or giving in diverse
communities, we must do better at increasing our understanding of how
culture matters in the handling of money.

After all, many of the inequities that philanthropy seeks to eliminate are rooted in cultural bias—and many of the opportunities for change are rooted in cultural awareness.

For example, those who work with African or Caribbean communities should
know that susu collectors are popular in these cultures, and they made the
idea of giving small loans popular long before microfinance became trendy.
And if we work with Muslim communities, we must understand that Islamic law,…

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As my husband and I stood surveying what seemed like 100 feet of snow that fell on our roof throughout the winter and taking bets on the likelihood of its collapse, he uttered these dangerous, divorce-inducing words, “You didn’t forget to put a new roof in our budget?”

Did I budget? Of course I budgeted, for all these kinds of possibilities. But I had also nagged about the need for us to consistently save for the work in spite our list of less practical but more enjoyable expenses.  The undeniable truth is that real estate, be it a family residence, a theater, or a school, requires constant care and feeding.

Many nonprofits, like weary homeowners, defer routine building repairs or dealing with other deteriorating systems often to the point of jeopardizing the soundness of the both the facility and the program. Take, for example, a child-care center whose boiler regularly…

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I’ve spent much of my adult life studying and practicing the art and occasional science of finance. As a result, I felt smugly smart about my understanding of how money works—until I landed on what a colleague refers to as “planet nonprofit.”

In the nonprofit world, everything seems upside-down. Capital is sparse, cash reserves are difficult to accrue, and, most curious, debt is feared and reviled. Debt, the life force of my previous existence in the business world, is largely inaccessible and ineffective in my new parallel universe. And this troubled me greatly when I started working with nonprofits.

Don’t get me wrong: I don’t worship at the altar of the leveraged loan. In fact, the best financial advice I ever received was from a poster on the wall of a convenience store. It said: “In God we trust, all others pay cash.”

The ability to generate, save, and…

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