Small Nonprofits - You Are Called October 31, 2007 By RussBurke

Reports have surfaced that the IRS has begun sending out notifications informing small nonprofits (those with less than $25,000 in annual gross receipts) of their obligation to file the new Annual Electronic Notice for 2008. As the legislation rulemaking is still not fully finalized, organizations are directed to start filing for tax periods beginning after December 31, 2006. You can see a specimen copy of the IRS notice here.

At present, the filing notice as described on the specimen really doesn't require much in the way of information crunching. There are, however, penalties for failure to file. And this will not go away; rules are still being debated.

I think we can expect to see that an increasing amount of information will be required of nonprofits at all levels, including the very small. It will benefit small nonprofits to begin to manage information as if they need to do more detailed reporting. Hopefully, your fundraising software and accounting software is up to the task.

Seems to me, that task is just around the corner.

The Dilemma of Big Dollars October 25, 2007 By RussBurke

I like listening to NPR on my way to work...and always pay careful attention to Robert Reich's commentaries. Early in October, he argued that big education and big culture had distorted the real intention of charity. He claimed that only about 10% of charitable deductions serve the poor. [You can read this commentary on his website in a 10/3/07 post titled: Why Charity Doesn't Begin at Home.]

His assertion rests on the notion that big education and big culture are the "charities of choice" for the wealthy to perpetuate their lifestyles. So, in reaction, he asserts there should be a scale such that donations to nonprofits that serve the poor are fully deductible while donations to education and culture should be only 50% deductible. Of course, among the 41 responses (today's count) to Mr. Reich's post, some point out the practical challenges facing implementation of such a plan...who decides and what happens when the national musuem lets in 2,000 poor kids a year or some prestigious university subsizes the tuitions of 50% of their student body?

Last Saturday, the University of Pennsylvania announced their $3.5 Billion campaign, joining Stanford University, currently in the midst of a $4.3 Billion capital campaign. Stanford's campaign ranks as the largest education effort to date according to The Chronicle of Philanthropy. Still, Penn will have to work hard to catch up to Harvard University, now sitting on an endowment in excess of $30 Billion! That Chronicle article also presents a link to a list of all educational institutions with current campaigns at or above $3.0 Billion.

These are only the higher education players...think of the Guggenheim, the Smithsonian or the Met. Suddenly it seems so clear why programs that feed and clothe the poor and tend the lame and sick struggle so hard to make ends meet...while our national and state governments continue to abdicate a commitment to the basic social and economic rights and dignity of our citizens.

Why am I writing this? Simply this: Nonprofits are under more scrutiny that ever. And recent IRS changes will focus exclusively on the little guys, representing a new reporting burden. Seems we are moving in the wrong direction. I don't have a solution (possibly fundraising software), trite or otherwise. But, going forward, I'll be a bit more circumspect about where my own donations go.

 

AFP's Standard is Our Standard October 18, 2007 By RussBurke

Hey, maybe actually, it is below our standard!

I'm referring to the article titled "New Ethics Code Governs Businesses that Serve Fund Raisers" published today on the News Updates website of The Chronicle of Philianthropy.  Authored by Holly Hall, this article cites the action of the Association of Fundraising Professionals (AFP) to create these "new" ethical standards and invite businesses to pay to attest they meet those standards. They do this by now offering to allow these businesses (including us for GiftWorks fundraising software) to become AFP members so we can display their "Executive Circle" logo.

I'm still trying to understand the logic of being charged to be labeled ethical but I certainly appreciate the need in the marketplace. Fundraisers, often so pressed for time and dollars, can give due diligence short-shrift. Lamentable but true. Then, of course, no field is free of shysters either.

In any case, I'll hold our Mission Research standards of ethics and demonstrated behavior, up to anyone. Everyone here "gets it". And we didn't need AFP to get there. Now about that AFP membership fee....

Humanity over Profits. October 13, 2007 By Steve Fafel

It's been a while since I've posted. Russ has largely taken over blogging for the company, focusing a lot more on fundraising approaches and GiftWorks tips; I tend to focus on broader issues, which I talk about on my personal blog. But today I wanted to share a few things from this weekend's Social Venture Network conference (www.svn.org).

First, SVN was founded by Josh Mailman of the Mailman Foundation and Wayne Silby, the founder of Calvert, the leading socially responsible investment fund and foundation. Both helped fund Grameen and Grameen Phone; the winner of the Nobel Peace Prize last year was the founder of Grameen.

SVN is made up of a group of business owners, innovators, and nonprofit leaders working to change the world through their work, business practices, and economic models. Some of our members: Ben Cohen from Ben & Jerry's, fundraising author and speaker Mal Warwick, Judy Wicks of the White Dog Cafe and founder of BALLE (www.livingeconomies.org), and the late Anita Roddick of The Body Shop, who passed away last week. It's an impressive group of people committed to social change and the triple bottom line of people, planet, and profit.

The panel last night talked about corporate social responsibility and sustainability, and the moderator, whose father was or is a purchaser at WalMart, works for Business for Social Responsibility (bsr.org). Panelists were from Nike, Method, and Worldwise, all of whom are seriously committed to social responsibility and sustainability.

The panelists, that is, and at least two of the companies. Nike is doing a lot of work to improve its sustainability and impact on the world, with a legitimate effort to change anything from supply chain policies to manufacturing practices. Hannah (Nike) knows her stuff. But as she spoke about Nike and Walmart, I began to feel troubled by the entire dialog. So I spoke up during the Q&A.

I don't shop at Walmart. I don't shop at most national chains because I'm committed to buying from local businesses, as the economic impact is 3 to 4 times greater when you buy from local vs national businesses. But that's not why I don't buy from Walmart; on occasion I'll buy from Target, Costco, and rarely, Lowe's.

I stopped buying at Walmart in 2001 when I learned that if they took 25% of their profits, they could provide full health coverage and living wages to all of their employees. Walmart has the largest percentage of workers receiving public, taxpayer-funded assistance--TANF, Food Stamps, Medicaid, etc. Instead of paying their workers enough to live on and adequate health insurance, Walmart pays its shareholders billions in profits. 25% of that would solve the problem, and shift the responsibility from the taxpaying public to the company.

So we're subsidizing those profits, and I have a problem with that. At Mission Research, we always pay a living wage, and we provide great health benefits. Nobody in our company will face bankruptcy because of a healthcare crisis in the family.

So yes, it troubled me that Hannah from Nike (I wear Earth Shoes now, great running shoes!) was promoting certain aspects of sustainability, but Nike itself stops at about where WalMart stops: at profit. So my question to Hannah was this: in the choice between human rights and profit, what does her board choose? In the choice between human misery and profit, what does Walmart's board choose? She answered honestly. It's profit.

At SVN, we believe in a different kind of business. Social Responsibility isn't a coat you put on everyday. You breathe it, you drink it. None of us is perfect, but the answer to the question in our board meetings will always be "humanity over profits". In the choice between greater profits and humanity, humanity wins.

We're not perfect. Ben & Jerry's was never perfect, and with the Unilever acquisition a few years ago, it will never be. None of the companies here is perfect. But we choose humanity over profits. We compete, we innovate, we fight hard to be the best, increase revenues, and build profits, but not at the expense of our neighbors, communities, and values. That's the difference between a socially responsible company and a company with an office on social responsibility. It's not an afterthought, it's part of the framework of principles that inform our vision, planning, decision-making, and execution.

My co-founders and I donated a combined 20% of our personal stock in Mission Research to the Underdog Foundation and the Mailman Foundation as part of our commitment to social responsibility. The company is over 27% foundation owned. We like making money. We enjoy serving customers with affordable, easy to use fundraising software, and we invest in customer service and education (more coming!). But this company will never choose profits over humanity. 

INERTIA - Let Physics Work for You October 12, 2007 By RussBurke

Not too many years ago, I tried to start a monthly giving program for a local nonprofit. It was a hard road because, frankly, I had no direct experience with them and hadn't yet read Harvey McKinnon's "Hidden Gold: How Monthly Giving will Build Donor Loyalty, Boost Your Organization's Income and Increase Financial Stability". I sure wish I had!

One very important concept McKinnon makes patently clear is inertia. This is one I know from experience. Inertia...donor inertia...is one that truly works in your favor. The concept is simple: Once a donor commits him or herself to an automated monthly donation (EFT, credit card, bank draft, etc.), the donation tends, against all odds to continue. Automation makes it so painless.

People are reluctant to cancel their monthly commitments. Over time, they may even "forget" that they made them. McKinnon cites that a significant percentage who do cancel often rejoin when their circumstances change.

Why? I believe it is because the pysche of the monthly giver is squarely focused on your mission. They believe their's is a deeper connection to the organization and what it does. And that, fellow fundraisers, is what we need to cultivate. This is a great pathway to continuing cultivation.

Students of physics know that for a body to stay in motion, you have to set it in motion. To get started, consider doing some segmenting research in GiftWorks fundraising software to identify long-term donors, multiple gifts per year donors and other characteristics that might indicate they are good candidates to be solicited for your new Monthly Giving Program. And it wouldn't hurt to pick up McKinnon's book. That will considerably shorten your learning curve.

Good Luck!

I do believe McKinnon is right...monthly giving is a critical key to building sustainability. 

Effective Fundraising with GiftWorks October 8, 2007 By RussBurke

That's the title of a new five session online course we'll be offering beginning Oct 15.

The course is designed to inform new GiftWorks users, especially those relatively new to fundraising, about all the ways GiftWorks can support you in doing the right things. Our operating mantra explores best fundraising practices and shows you how to adapt GiftWorks fundraising software to support your programs. You can see the course description and registration information here.

Along the way, of course, you'll learn alot about how GiftWorks really functions. But more important, I think you'll begin to see the truly accessible flexibility and power that GiftWorks puts right into your hands. Upon completion of the five sessions, we'll designate you a Certified GiftWorks Professional...clearly a person in command of their tools.

Lest you be saddled with trite phrases, just let me say that we want to help you get the most out of GiftWorks! Please plan to join us.