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The Chronicle of Philanthropy
Managing
From the issue dated October 16, 2008

Hotline

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   Discuss any Chronicle article in our forums

Tips for seeking an economic-development job

Advice for giving money to needy students

Navigating the rules about splitting an administrative position


The Chronicle's Philanthropy Careers section asks its readers to submit questions about job hunting, recruiting, and management challenges in the nonprofit world. In our advice column, we respond to some of those inquiries with tips about resources and suggestions from experts.

Previous editions of Hotline are also available on the Philanthropy Careers Web site. Send your questions about job hunting, recruiting, or managing in the nonprofit world to hotline@philanthropy.com.

Q. I'm looking to re-enter the nonprofit work force after a long period off that I spent tending to family obligations. I worked for Fannie Mae, but I am not looking for a job that is solely housing-related. I care passionately about helping low-income, minority neighborhoods — and about how they continue to grow and develop once the do-gooders have left. Where should I start looking for my new job?

A. Marcia Peterson, director of New Orleans Ministry at Desire Street Ministries, a Decatur, Ga., charity that works to rebuild neighborhoods such as New Orleans's Ninth Ward, suggests you take a step back. Before you start looking for a job, she says, you need to make sure you understand the challenges of helping people in the sort of neighborhoods you describe.

"It's not like getting an economic-development job in an affluent suburb or Manhattan," she says. Working in areas hampered by intense poverty, few resources, and long histories of racism, she says, can be frustrating and difficult, involve long hours and emotional strain, and result in few short-term rewards.

"A lot of people come in well-intentioned, thinking they can solve the problems in 12 months," she says. "If you come in with that feeling, you're going to burn out."

At Desire Street Ministries, Ms. Peterson has seen quite a few employees and volunteers suffer that very fate. One young woman quit her job as a summer camp counselor in the Ninth Ward after only one day. "She didn't realize it still looked like this three years after [Hurricane] Katrina," Ms. Peterson says.

To avoid getting yourself into that sort of situation, she says, familiarize yourself with the neighborhood in which you want to work and with the people who live there. Go to neighborhood-association meetings and religious services. Volunteer with organizations that serve the neighborhood. Have dinner with families and learn what their lives are really like. "Go with them to the corner store where they buy a gallon of milk for $6 because they can't afford transportation to a bigger grocery store where milk is $4," Ms. Peterson says.

Then, when you're interviewing with potential employers, she says, you'll be able to convey passion for the cause and to prove that you understand the sacrifices you'll be making.

Anne Wunderli, director of facilities and social enterprise at Pine Street Inn, a social-service charity in Boston, says you might start your job search by looking for grass-roots organizations that were created to work in a specific neighborhood. If you're worried about do-gooders leaving the scene, she says, "these guys aren't going anywhere. They are neighborhood-born. There's no place for them to go."

Ms. Wunderli also recommends you visit the Social Enterprise Alliance Web site for more information, as well as the online Directory of Social Enterprises, a joint project of the alliance and Community Wealth Ventures, a Washington consulting firm that works with charities.

And consider reconnecting with the people and organizations you worked with during your time at Fannie Mae, suggest Barbara Beck, director of financial services and underwriting in the Chicago office of the Local Initiatives Support Corporation, an economic-development group with headquarters in New York. Ms. Beck got her current position after working for a charity that borrowed money from the organization.

Q. I would like to start giving away $1,000 a year to one college student, for books. How do I get started?

A. The first step in setting up a scholarship is to decide, broadly, who you intend to help, say nonprofit experts. Do you want to lend a hand to a needy student? Or do you want your scholarship to reward merit, such as academic achievement or community involvement? Do you want to support a student from a particular high school? A student who is attending a particular college or studying a specific major?

Mike Guyer-Wood, national director of marketing and sales at Scholarship America, an organization in Minneapolis that helps distribute donations earmarked for students, recommends deciding if the scholarship will be awarded to each student only once, or to the same student for four years.

"It depends on the donor's philosophy," he says. "Do they want to touch a number of students, or do they want to make a lasting impact to touch one student's life for four years?"

Next, determine whether you will give away $1,000 each year, as long as you are able, or whether you would like to make a larger one-time gift to create an endowment that would allow the scholarship to exist "in perpetuity."

According to Kevin Murphy, president of the Berks County Community Foundation, in Reading, Pa., "It would take about $20,000 to endow this fund to give away $1,000 a year." That initial investment is based on a distribution of 5 percent a year, he says.

The simplest way to give money to a needy student is simply to give it to a college and earmark it for a specific purpose. However, if the amount is modest, you might want to approach a public institution rather than a private college, says Jan Kurtz, director of development at Reed College, a private liberal-arts college in Portland, Ore.

"A gift of that size isn't something that we would take on," she says. Because of the high cost of attending Reed — around $40,000 annually for undergraduates — the college accepts only endowed scholarships and requires them to grant at least $10,000 a year.

By contrast, a public community college, such as those supported by the Maricopa Community Colleges Foundation, in Tempe, Ariz., would gladly accept a gift of $1,000 a year earmarked for scholarships, or a scholarship endowment of $20,000 (the foundation's minimum endowment is $10,000), says Steve Schenk, the foundation's executive vice president.

But if you want to set up an endowed scholarship fund, and have a significant amount to set aside for such a gift, here are some options:

A community foundation would cost you nothing to set up an endowed fund, though you would pay annual administrative fees to the foundation. For example, says Mr. Murphy, his group charges 2 percent of a fund's fair market value each year.

Or you could choose to make your gift through an organization like Scholarship America, which accepts annual gifts, Mr. Guyer-Wood says. (Such groups may require a minimum gift; for instance, says Mr. Guyer-Wood, his charity's endowment minimum is $100,000.) However, Scholarship America would charge at least $700 a year to cover administrative costs. A better bet for you, he says, would be to make your gift to your local chapter of Dollars for Scholars, a program of Scholarship America through which volunteers raise money for students in their area. By going that route, the administration of your scholarship would cost you nothing.

One thing you should not do, Mr. Murphy says, is create a private foundation to give out your scholarship. "To set up a private foundation," he says, "you'd have to incorporate an entity and seek a tax exemption, and for $20,000, that would be insane."

Q. I am associated with a for-profit company that is branching out and creating a nonprofit arm. Can the two parts of our organization share a human-resources director? And can you recommend any books or Web sites that would help us set up our humanresources department?

A. The short answer to your first question is yes, says Brian Murphy, a Burlington, Vt., lawyer who advises charities. But, assuming the "nonprofit arm" is a private foundation whose money comes solely from the parent corporation, the best situation is for the for-profit company to offer the services of the human-resources director to its nonprofit division at no charge.

Doing so will keep you from getting in trouble by accidentally violating the U.S. Treasury Department's "self-dealing" rules, which prevent people with fiduciary responsibilities at private foundations from taking advantage of their positions, he says. Such a misstep could result in excise taxes for the foundation and its managers.

If you plan to charge the nonprofit arm for its use of the human-resources manager's services to the nonprofit group, he says, "consult with a tax adviser and do it very carefully."

You could also have each entity hire the employee separately under distinct contracts; in essence, the human-resources director would have two jobs, Mr. Murphy says. But he counsels you to exercise caution if you use that kind of arrangement.

If the nonprofit arm is not a private foundation, but rather meets the definition of a public charity, you do not have to worry about self-dealing at all, he adds. For information about self-dealing and other legal issues that foundations may face, visit the Council on Foundations Web site.

To help you set up your human-resources department, Jennifer Hughes, a spokeswoman at the Society for Human Resource Management, in Alexandria, Va, recommends several books. You might start with The 2008 U.S. Master Human Resources Guide, by Donald W. Myers, The Complete Do-It-Yourself HR Department, by Mary F. Cook, The Comprehensive, All-in-One HR Operating Guide, by R.J. Landry, and Essentials of Human Resource Management, by Shaun Tyson.


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