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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?

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Why Community Health Centers Matter

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 y…

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Simple Lessons in Nonprofit Insurance

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,…

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Tips on Coping With the Slow Recovery

The economy’s slow recovery has prompted many nonprofit leaders to wonder how to prepare for what could be an even tougher and longer road out of the recession than anybody expected. While concerns about the possibility of a double-dip recession come and go, it is probably wise to follow the old adage to prepare for the worst and hope for the best.

Here’s what it means to prepare:

Shore up the revenue and find your weak spots

Don’t assume that because you have always received a grant from a pa…

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10 Traits Nonprofits Need to Make Successful Financial Changes

Today’s economic realities have prompted many nonprofits to consider new business models so they can better serve their constituents while ensuring their own financial solvency.

These adjustments are taking many forms. Some organizations are investing in new ways to deliver programs and services, while others are making their current activities more effective and efficient. Change can mean restructuring operations, collaborating more formally with similar nonprofits or, as now happens with gr…

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Learning About Finance: Advice for Nonprofit Leaders

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 b…

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Why Financial Reserves Are No Longer Optional

As the economy continues its slow recovery, nonprofits and donors are more frequently trying to understand the role of financial reserves—a tool that may have been an option in the past but is now a must-have for organizations that hope to maintain stability in turbulent times.

In particular, people want to know how reserves compare with endowments, because both are ways for nonprofits to help secure the organization’s future.

Reserves are a lot more flexible than endowments—and often more app…

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Fear of Failure: An Obstacle to Change

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 …

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Bankruptcy Isn’t a Solution to Nonprofit World’s Woes

The grim economic news of the past week underscores why life in the nonprofit world isn’t going to get better anytime soon. Economists agree that this will be another “jobless recovery” where the gross domestic product will continue to improve but employment figures will stagnate.

At the same time, we seem to be ready as a society to tighten our belts and go down the path of “all cuts, no new taxes” to balance state budgets as well as to trim the burgeoning federal budget deficit. It sounds good…