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Independent Sector
November 05, 2009
Independent Sector
Nonprofit Leaders Urged to Rethink Their Role in Society
Expanding on a key theme of this year’s Independent Sector conference, Diana Aviv, the group’s president, called on nonprofit leaders at all organizations – regardless of size or mission – to take a broad view of their work and their responsibility to help make society better.
“We do not and cannot work in a vacuum,” she told participants at the gathering of charities and grant makers, which drew some about 1,100 attendees in all.
“If our employees and their families can’t afford medical care, it limits their productivity,” she said. “If our transportation infrastructure makes it hard to get to work, it affects people’s performance. If we don’t collectively attend to the harm inflicted on our environment, polluted air and climate change will ultimately damage everyone’s work. And if we don’t demand greater civility in Congress and in the public square, we diminish our ability to achieve our aims.”
Ms. Aviv urged nonprofit leaders “to attend to these larger issues long before they threaten our work.”
As an example of the consequences of not doing so, she cited the experiences of health and human-services groups that now must take on loans as state and local governments increasingly delay payments for services already provided.
“Except for a sliver of public-interest organizations, at no time did we step up and try to fix a system that we have known to be problematic for years,” she said. “Why was this the case? Because we have long believed that these larger issues were not our responsibility.”
She called on participants to go back to their organizations and have at least one board meeting within the next year to define a role for their groups beyond their specific issue or cause.
“My point is that excelling at your particular mission is key – but so too is attending to the wider societal issues of the world you inhabit,” she said. “Active engagement with these issues is part of the price we pay for this special place we, as a community, have been afforded by society.”
Independent Sector
How to Minimize Risk While Staying Open to Opportunity: Shared Strategies
Several speakers at Independent Sector’s annual meeting offered their insights about how to make wise financial decisions in these trying economic times.
Above all, they said, nonprofit leaders need to develop a sound plan that fits their organizations. Relying on hope or mounting debt to try to ride out this time of shrinking revenue simply won’t work, they said.
“Fundamentally, vulnerable organizations cannot serve vulnerable people,” Dione Alexander, vice president of the Midwest region for the Nonprofit Finance Fund, told conference participants.
“You can only do so much,” she added. “Figure out what it is.”
‘Crash-Test Dummy’
Rick Sperling, founder and chief executive officer of Mosaic Youth Theatre of Detroit, said he feels something like “a crash-test dummy” as he tries different approaches but has yet to hit on the ultimate answers.
He says his group has shifted its thinking from one that was all about risks at its start 17 years ago to one that is focused on sustainability.
After realizing that the typical life span of a youth arts organization in the city was 10 to 15 years, Mr. Sperling said he made it his personal mission “to create an organization that would be around for the grandchildren of the kids that are in the program now.”
That has involved making tough choices, he said. The group has decided not to take on any debt, it has a line of credit available to it, and it has not yet dipped into its reserves. “That’s the good news,” he said.
The bad news is that there’s a cost associated with those decisions. “We are serving less young people, we are doing less programs, and we had to cut a significant number of our staff to get there,” he said, all painful decisions.
Open Finances
Mr. Sperling said one lesson he learned the hard way has been the need to be open with staff members about financial concerns right from the start and not “try to control the message.”
“Everything I was afraid of, that people would jump ship, that people would be upset, it all happened later when people found out how bad things were, and then I had lost their trust by that point,” he said.
The challenge now is figuring out how to still be bold while exercising financial restraint, Mr. Sperling said. He said his group recently and unexpectedly found a building that seems an ideal home for the organization. It leaders must now figure out if there’s a way to take advantage of the opportunity while justifying the added risk that would go with it.
“If we do this wrong, this could kill us,” he said. “If we do it right, it could make us sustainable and a destination in Detroit, it could help us do our mission exponentially better, serve more people in a better way. So we’re at a crossroad.”
Independent Sector
A Year Into the Job, Gates CEO Shares His Measures for Success
Reflecting on his first year as head of the Bill & Melinda Gates Foundation, Jeff Raikes told participants Thursday at Independent Sector’s annual meeting in Detroit: “I love my second career.”
He added: “One day I’m learning about malaria and the next day I’m learning about U.S. high school education and the next I’m learning about rural sanitation in Tanzania.”
The former Microsoft executive said he has identified three broad goals for his foundation work as he looks five, 10, 15 years out.
“What I hope is that I can look back on the Gates Foundation and see that we, with our partners, contributed to significant impact on the problems that we were focused in on,” he said.
In addition, Mr. Raikes said he is constantly pushing to improve the internal workings at the foundation and to create “a great environment for people to do their best work.”
He said his experience at Microsoft taught him to hire people who are “high energy,” have “high horsepower,” and who know how to get the job done.
As head of the foundation, he said he urges his employees to “use their good judgment to set the right priorities and make the right tradeoffs,” rather than trying to do it all. That requires giving them “the license” to make those decisions, he said.
Mr. Raikes said he frequently shares stories from his days working on his family’s farm in Nebraska as a way to convey his vision for the organization and set the tone, as well as encourage employees “to reflect on their own values.”
What’s more, Mr. Raikes said, he wants the Gates Foundation to play a role in improving philanthropy overall by passing along lessons learned and being “a good contributor to this sector.”
“If we can have accomplished those three things,” he said, “I’ll be quite satisfied with this next phase of my career.”
November 04, 2009
Independent Sector
Independent Sector Gathering Opens With Sense of Urgency
Detroit
With a mix of urgency, excitement — and at times, frustration — speakers here at the opening session of Independent Sector’s annual meeting called on nonprofit leaders to find new ways to work together in response to the nation’s problems.
This is an “all-hands-on-deck, walk-and-chew-gum kind of moment,” Melody Barnes, President Obama’s domestic policy adviser, told the audience.
She said the administration is committed to finding innovative ways for the federal government to support and promote nonprofit groups.
For example, through the Office of Social Innovation, officials hope to identify successful programs and help them expand to serve more people, she said. “We believe somewhere out there is the next Teach for America or Harlem Children’s Zone, and we want to find it,” Ms. Barnes said.
The work of nonprofit groups, she added, figures heavily in the discussions at the White House; it’s “part of the bloodstream” of the administration.
‘Six-Turkey’ Scenario
Other speakers at the two-and-a-half hour opening session talked about the need for organizations within the nonprofit realm to work together far more than ever before, uniting around precise goals and then clearly dividing up tasks.
Gail McGovern, head of the American Red Cross, told a story of families at a military base that almost received six turkeys apiece for Thanksgiving because of a lack of coordination between charities. “In these economic times, we have to be very careful that we don’t waste a dime,” she said.
Jim Wallis, president of Sojourners, a religious and human-rights network, put the issue even more bluntly, likening nonprofit organizations to competing gangs protecting their turfs. “We’ve got to drop our gang colors,” he urged.
Nonprofit groups need to move beyond thinking about their own organizational success, which holds little meaning if bigger societal needs are still going unmet, Brian Gallagher, head of United Way Worldwide, told participants.
While many nonprofit leaders talk about collaboration today, he said, few embrace it at the level required. “True integration is when you let someone else spend your money,” he said.
Mr. Gallagher pointed to United Way’s work with foundations and charities to cut the high-school dropout rate in half by 2018 as an example of the kind of goal nonprofit leaders should commit to and then be willing to be judged on the results.
‘Collaboration Silos’
Several speakers talked about the need to form new alliances, often with unlikely partners. Mr. Gallagher warned against getting stuck in “collaboration silos,” in which similar groups never venture beyond talking to organizations that share their particular causes.
Janet Murguia, head of the National Council of La Raza, and Benjamin Todd Jealous, who leads the NAACP, described their recent collaboration to urge Congress to make changes in health-insurance options.
Speakers also criticized the nonprofit world for being too slow to embrace the need for changes. “Where’s the passion of the ’60’s,” asked Margaret McKenna, president of the Walmart Foundation. She questioned how nonprofit leaders could think a goal of ending childhood poverty in the United States by 2015, for example, was an acceptable timeframe when the problem is so fundamental and potentially fixable.
Added Mr. Jealous: “You need to allow yourself to be outraged.” The emotion, he said, “points out to you who those other friends are out there” that you might not otherwise think of who could become potential partners.
November 11, 2008
Independent Sector
Independent Sector Considers Stand on Raising Taxes
Members of the nonprofit world are weighing how to ask for more federal money from the Democrat-controlled Congress and White House in 2009.
Specifically, Independent Sector has drafted a set of priorities for the next president and Congress that includes asking for higher taxes to maintain spending for nonprofit organizations and for social services, such as food stamps and health care for low-wage earners.
The extra money is necessary as the economic crisis increases demand for charitable services while at the same time current tax revenues are drying up, the group argues.
But the choice to ask for higher taxes remains controversial among nonprofit service providers and the individual donors and foundations that give them money.
“As essential as government revenues are to the work of so many in this community, taxation and fiscal policy are not something on which the nonprofit sector has had a collective, vocal position,” said Diana Aviv, president of Independent Sector, which wrapped up its annual meeting today in Philadelphia.
While Ms. Aviv and others at the conference urged members to speak up in favor of higher taxes, some attendees were reluctant.
William C. Daroff, vice president for public policy at United Jewish Communities, said his donors support the organization for the work it does, not “because of specific policy positions they feel are outside or beyond the scope of our mission.”
“There are many ways to increase revenue, and many of our key stakeholders would prefer that we not take out the Tax Code and decide who the winners and losers are,” he said.
— Eric Kelderman
November 10, 2008
Independent Sector
Using Games to Solve Gritty Social Problems
Ruby Wood has just died, leaving a very special bequest: $6-million for the six people who helped take care of her in her old age to give away to other people who care for others as well as other people in need of care.
That’s the basic story at the center of a new online game to be unveiled by United Cerebral Palsy later this month, the organization’s chief executive, Stephen Bennett, told participants at the Independent Sector meeting here today.
The game, tentatively called “Ruby’s Bequest,” is the latest example of how nonprofit groups are using online games and simulations to get people involved in, and thinking about, social issues.
“We thought, what if we could get people from multiple points of view to investigate the future of health care and of care giving, and look at the problems together, they could come up with some solutions,” Mr. Bennett said.
Players will register for the game, and then be able to carry it to their own blogs, video-sharing sites, or other social networks and game sites. Already a few players who were invited to sign up early have posted videos of themselves talking about their ideas.
In one video on YouTube, a woman tells viewers that it’s 2014 and she is pressed with the hardships of caring for her two young children and her elderly father, who is losing some government aid for his medications. She suggests that people link to her Web page and respond to her idea, inspired by the success of car-share programs, to create a cooperative care-giving program.
Mr. Bennett said the key to the success of the game is to be able to bring the ideas it generates into the real world, particularly at a time that his organization and others are preoccupied with dealing with the effects of the economic downturn.
“We have to bring it down to earth,” Mr. Bennett said, “because there’s plenty of people out there, including our offices around the country that are struggling to make payroll, and they are going to ask, Why are you playing virtual games?”
Chinwe Onyekere, a program officer at the Robert Wood Johnson Foundation, said a research project sponsored by her organization could soon provide answers to those concerns.
Robert Wood Johnson is spending $8.25-million this year and next to support research assessing whether interactive games make a difference in changing behavior, such as whether they can promote exercise.
— Debra E. Blum
Independent Sector
IRS Officials Say Nonprofit World Must be 'Squeaky Clean'
Two key Internal Revenue Service officials today pledged that the agency will continue efforts to ensure that tax-exempt organizations are following federal laws.
“We are going to continue to insist that the sector is squeaky clean,” Douglas Shulman, the commissioner of Internal Revenue, told attendees at Independent Sector’s annual meeting, in Philadelphia.
Mr. Shulman said it was not the IRS’s job to determine how charities fulfill their individual roles, but explained his concern that the poor economic conditions could tempt tax-exempt organizations to bend the rules by, for instance, using money for capital expenses on operating needs.
At the same time, the agency is trying to use less onerous ways to encourage better compliance with the federal tax rules, Mr. Shulman said.
For example, the IRS is “checking up” on young nonprofit groups, instead of conducting a full-blown audit, to make sure they’re following rules, he said. That kind of action mirrors “soft” notices from the agency asking individual taxpayers to amend their tax returns if there is a problem with their original filings.
As new disclosure requirements go into effect after this year, with the revised Form 990, the IRS is considering beefing up disclosure rules for private foundations, said Steven T. Miller, head of the tax-exempt division at the tax agency.
That may not mean an overhaul of the current Form 990-PF for private foundations, though, because of staff and budget constraints, Mr. Miller said.
— Eric Kelderman
Independent Sector
For Nonprofit Groups, Time to Speak is Now
Independent Sector President Diana Aviv said today that the recent economic meltdown and the election of Barack Obama as President have challenged recent assumptions and have thrust nonprofit organizations and foundations into an unfamiliar role.
No longer are nonprofit organizations mere stewards of government grants and private-sector donations. Instead, they must become true advocates for change in the way government and the free market operate.
“If we stand, as I believe we do, at a moment of profound rethinking about the American social compact, then the values of mutual concern and shared responsibility that unite us must be central to that discussion,” Ms. Aviv said in a speech at Independent Sector’s annual meeting today in Philadelphia.
“We must use our voice — the organized expression of what we collectively call the independent sector, a voice founded on the values and aspirations that are embedded in the work we do.
“The great national re-imagining that is poised to take place must draw a good part of its moral and intellectual inspiration from the nonprofit community. From us — individually and collectively. From our ideas and actions.
“Government and business have recognized that our commitment to the greater good over individual gain is our enduring virtue; this puts us in a unique position to speak up now — when the good needs to be so much greater.”
Independent Sector
Fund Raisers 'Don't Whine' in a Tough Economy
“Great fund raisers don’t whine about the economy,” Reynold Levy, president of the Lincoln Center for the Performing Arts, told participants at the annual Independent Sector meeting here. “They believe in Noah’s principle: No more credit for predicting rain. Credit only for building arks.”
Among the types of arks Mr. Levy suggested charities build: a larger, more engaged governing board. Trustees, he said, want to do more than just see their name on a letterhead, and charity leaders ought to raise expectations for how much trustees should give and how much they ought to raise.
He also said that charities ought not be shy about how often they make solicitations – “fund raising is like baseball,” he said, where one hit for every two outs makes for a superstar — and should choose carefully who does the asking.
“Donors give to people they admire, not just to causes and organizations they respect,” Mr. Levy said.
And plenty of people, he said, still do have money to give, mostly from gains over the past couple decades, even though they have seen their assets drop recently.
“It’s like taking a 20 percent haircut after 300 percent gains,” Mr. Levy said of the downturn.
He also offered an optimistic take on the hit many professional-services firms are experiencing in this tough economy. As more clients cut back on using their services, Mr. Levy said, more lawyers, accountants, and consultants may be available for pro-bono work.
Charities, he said, should take advantage.
At the meeting here, as in his new book, Yours for the Asking: An Indispensable Guide to Fundraising and Management, Mr. Levy compared being a fund raiser to being a salesman. And, he told participants here who wondered if any of the advice in his book needed updating to fit the new financial realities that, in general, the same rules apply.
“There‚s never a bad season, or year, or day, or economic climate for soliciting donations for a worthy cause,” he said.
— Debra E. Blum
November 09, 2008
Independent Sector
Nonprofit Groups Discuss How Elections Affect Their Organizations
Nonprofit groups on Sunday got an optimistic view of how the historic 2008 presidential elections and the administration of Presdent-elect Barack Obama, a Democrat, will effect their organizations.
Independent Sector, a nationwide association of foundations, and corporate giving programs, kicked off its annual meeting in Philadelphia with speakers who analyzed election results.
The stature of the nonprofit world cannot help but improve under an Obama administration, said James Capehart, an editorial writer at The Washington Post. He added that that the best and brightest leaders of tax-exempt organizations may be tapped to work for the new president.
Judy Woodruff, political editor of PBS’s News Hour with Jim Lehrer, explained that Mr. Obama’s campaign broke new ground by operating as a 50-state grass-roots group and that he understands the power that kind of organization can wield. In addition, Mr. Obama, as a candidate, talked about establishing an office to reach out and harness the grass-roots power of the nation’s nonprofit groups, she said.
The optimism, however, was tempered by a sharp reminder that the international economic crisis is likely to both decrease the resources of charitable organizations at the time that demands for their services are increasing.
“We need your help more than ever,” said Mayor Michael Nutter, of Philadelphia, whose city faces a $108-million budget shortfall for the current fiscal year and a gap of nearly $1-billion over five years.
Mayor Nutter recently announced major cuts in city services, including the elimination of some 800 jobs as well as the closing of city pools and libraries.
One concern of nonprofit groups is that foundations will see a Democratic White House and majority as an excuse to not give money to social service organizations, said Brigitte Savage, development director of Accesso Hispano, a project of the Self Reliance Foundation that seeks to educate the Hispanics about education, health care, the environment and reducing violence.
Rebecca W. Rimel, executive director of the Pew Charitable Trusts, said that while many foundations have lost 20 percent to 30 percent of their holdings in the declining stock market, they must maintain the focus on their missions and work in a bipartisan fashion with the new Congress and administration.
— Eric Kelderman
Copyright © 2009 The Chronicle of Philanthropy