News, comments, resources, and more for nonprofits.
Nonprofits often seek grants from foundations for new projects or ongoing financial support. During an informative webinar, presented today by John Hicks, CFRE, for the Association of Fundraising Professionals (AFP), he discussed ways to build positive relationships with foundations.
His ‘elements of a good relationship’ include: trust, communication, shared values, honesty, and respect…as he noted, the elements of any good relationship. Learning about a foundation’s mission, values, culture, philanthropic philosophies, and practices, is critical to assessing a good match and possible funding opportunity. If mission and values clearly aren’t in alignment, he urges grant seekers to not waste their own or the foundation’s time in pursuing a relationship.
His ‘six rules of engagement’ build on those elements. Nonprofits need to know:
- The landscape--the type of foundation: mega, competitive or community, family
- The people you are dealing with--program officer/staff, board members, or family foundation donor; learn through direct conversations and through your networks
- Their considerations—what they are dealing with that has nothing to do with you, or ‘their environment’
- What they value—outcomes that relate to their vision, working with people who have authority and responsibility for funding and outcomes, and people who follow their protocol
- How to give them what they want, how they want it—by learning their culture, personalities, and information processing practices, without shortcuts. Never to under estimate the importance of the gatekeeper—the person who opens and is the first to review your correspondence, requests, and reports for process (rules) and information
- Minimize risk—their risk through failed projects or misuse of funds; grantee risk through unrealistic expectations or mission drift
Stating that, like other types of fundraising, people give to people the trust, he encourages nonprofits to keep foundations informed about their work and outcomes before and while seeking funding from them. The relationship is a professional one, not a personal one, that needs to be treated much like working with an attorney to prepare a case: the grant-seeker preparing a case to the foundation and the foundation professional preparing a case to his/her board, grants panel, or the donor, directly.
These and many other grant-seeker/grant-maker resources are available at ONEplace and through the AFP website. If you have tips for developing positive relationships with foundations, please comment on this blog.
Association of Fundraising Professionals
The big buzz in the social media world right now is Google+. But what is it and why should nonprofits care? Google+ is a new social media venture created by Google to, “bring the nuance and richness of real-life sharing to software” according to Vic Gundotra, Senior Vice President, Engineering at Google. It offers many of the same communication features social media users of Facebook and Twitter are familiar with such as messaging, pictures, and games, along with some valuable extras.
The big difference between Google+ and other established social media sites is Google+ organizes contacts into different “circles” or groups. This allows the user to communicate specifically with targeted groups. For example, a user can send out a targeted post to their planned giving circle, and a different post to their professional circle. Other features include Instant Upload, Hangouts, Sparks, and Huddle.
To learn more about Google+, visit:
Keep in mind that Google+ has not been rolled out to the general public, it is by invitation only.
What is your opinion of Google+? Are you one of the lucky few to receive the Google+ golden ticket? Please share your comments by posting to this blog.
Do you know if there is? Do you know how much it affects your organization’s ability to do your mission-driven work now or in the future?
During our First Wednesday Risk Management Series webinar, presenter Carlye Christianson of the Nonprofit Risk Management Center pointed out several critical outcomes from having ‘unhappy stakeholders’ (staff, volunteer, board members) in your midst. Common to all stakeholder groups: discontent diminishes commitment to mission; and, costs of replacing people are high. She recommends studying retention in departments and stakeholder groups at least annually so problems can be addressed quickly. Below are some key points she made about why people leave organizations and how to proactively address discontent-causing practices:
- Only 12% leave an organization for reasons related to compensation
- 88% leave for other reasons, including: organizational culture; management style or a specific supervisor; lack of opportunities for advancement or professional development; or, the organization’s lack of commitment to quality or mission
- One in three employees is thinking of leaving at any one time; for discontented staff that rises to 50%
- Discontented workers often increase: tardiness, mistakes, detachment, poor attitude
- To proactively address potential discontent: listen to employees; conduct a ‘stay interview’ (what will keep you here/what will send you away); offer opportunities for new assignments, training, and leadership development; provide options for work/life balance, encourage ‘a voice’ in how the organization runs and how the mission is served
- Leave organizations for the same reasons staff do plus lack of: orientation, interpersonal relationships, good skill/assignment match, commitment to mission
- To get and keep volunteers: develop a volunteer management program with a policy and procedure manual; review and update recruiting practices (only recruit people and skills you really need); develop job descriptions; provide orientation, ongoing training, and recognition; assure meaningful integration into the organization; and, conduct stay/exit interviews
- Leave organizations because of: low productivity in the board room (low expectations; poor attendance, preparation, or engagement; lack of meeting management); crisis mentality; factions and impasses; poor ED-CEO / board relationships;
- To get and keep board members: recruit and orient purposefully and appropriately; create an intentional culture of candor, inclusiveness, foresight, and reflection; evaluate and change board structure, operations, and ‘work’ (clearly define board / ED roles; move from hands-on to policy focus, etc); engage in strategic discussions and issues; and, conduct stay/exit interviews
Continually assessing all areas (ED, board, staff, volunteers), individually and collectively, and implementing a culture of continuous engagement and improvement will go a long way to stemming and/or reversing discontent in all stakeholder groups. The costs for your organization and, especially the constituents you serve, are too high to do otherwise.
For more information on this and many other risk management topics, visit the Nonprofit Center for Risk Management. ONEplace presents their First Wednesday Webinar Series and Third Thursday HR Webinar Series. Check our website calendar for more information and registration.
Nonprofit Center for Risk Management (symbol: Chinese for angry, annoyed, unhappy)
The IRS changed the filing requirements so that every tax-exempt organization has to file an annual 990, no matter how small their budget. They promised to drop organizations that didn’t file for three consecutive years. They notified nonprofits and the public over and over, again. They extended the deadline to get 990 filings up-to-date.
Now, the list of nonprofits that have lost tax-exempt status for failing to file has been published—and, it numbers 275,000 (about 14% of all nonprofits in this country)! In Michigan, almost 9,000 charities are on the list.
What does this mean to your organization or you, as a donor? An article in The Chronicle of Philanthropy (6/8/11) summarizes the ramifications of a nonprofit being dropped, affects on tax-deductibility of donations to dropped groups, and how to seek reinstatement. It also provides a link to the list.
Additional information is available on the IRS website for exempt organizations.
Do you know the current status of the organizations you are involved with as a staff or board member, volunteer, or donor?
IRS: 275,000 Groups Lose Tax-Exempt Status
Summer is around the corner and teens and college students, or recent graduates, are seeking summer internships to gain knowledge and job experience in an area of interest or study.
At the same time, many nonprofits are hoping to engage interns to accomplish projects, often in areas staff don’t have skills in, while offering the intern a chance to experience the nonprofit’s day-to-day operations and mission-driven activities.
So, it’s a win-win, right? It certainly can be as long as employment laws are followed. When deciding the scope of intern engagement, whether and/or how to pay them, and whether or not they are added to your employee ranks, consider the Department of Labor (DOL) guidelines for interns, or as they call them, ‘trainees.’
The intern or ‘trainee’ must meet these six criteria (all of them) to be an intern and not an employee:
- The training the intern receives ‘is similar to what would be offered in a vocational school’
- The ‘primary benefit of the training/internship is to the intern’
- The ‘trainees don’t displace regular employees but work under close supervision’
- The ‘nonprofit employer derives no immediate advantage from the activities of the interns, and on occasion, its operations may actually be impeded’
- The ‘intern is not guaranteed a permanent job at the end of the program’
- The ‘nonprofit employer and intern understand that the intern isn’t entitled to wages for the time spent in the internship’
All criteria are important, but number 4 is a key area the DOL looks at in determining if the ‘intern’ is, indeed, an employee. Employees must be paid at least minimum wage, on the regular payroll schedule, with all required employee taxes withheld and deposited.
To qualify as interns, their engagement needs to: be primarily related to their own benefit through mentoring and/or training; include credit for a course or major with required reports to the sponsoring educational institution; not include work done by regular employees; not guarantee future employment.
To learn more about this important topic, read the entire article from which this information was taken. Classifying interns mistakenly can lead to penalties as well as having to pay back wages and employment taxes. Classifying them correctly benefits everyone.
The Nonprofit Risk Management Center offers a range of resources for nonprofits, including webinars on general risks and human resources risks. ONEplace offers them regularly throughout the year. Check our calendar for upcoming topics and dates.
Department of Labor guidelines for interns
The Association of Fundraising Professionals (AFP) and the Center on Nonprofits and Philanthropy sponsor the Fundraising Effectiveness Project (FEP), which provides nonprofits with tools for tracking and evaluating their annual growth or decline in giving. The FEP focuses on “effectiveness” (maximizing growth in giving) rather than “efficiency” (minimizing costs). It conducts an annual survey and publishes gain (loss) statistics in a yearly report.
The 2010 Report(pdf) is enlightening. The Project looks at “donor lifetime value: the total net contribution that a donor generates during his/her lifetime on a [nonprofit’s].” It also looks at donor defection rates, or the rate of declining donations following a first gift. For cash gifts, it’s 50% in the first year and 30% each year after that! In addition, 30% of ‘regular or sustainer givers’ are lost from year to year.
With these ongoing trends, and the time and money needed to attract new donors--over and over again--learning how to attract and keep donors with the greatest potential lifetime value is critical for nonprofit sustainability.
During a recent AFP webinar, several ‘drivers of lifetime value’ were discussed, starting with reasons donors defect. Simply: lack of customer satisfaction with their donating experience, led by the lack of responsiveness by the nonprofit staff. Donors who were surveyed said they were ignored, lied to, meetings were delayed, staff were ‘uncivil,’ and the nonprofit/staff ‘failed to deliver on promises.’
On the other hand, a high level of donor satisfaction with the customer service they receive from a charity’s staff drives donation levels and repeat gifts. The higher the satisfaction, the more likely the donor is to give again and again.
- To know what makes the nonprofit qualified and competent to utilize their money to best advantage
- To know what is done with their money; who is served and to what outcomes
- To build a relationship with the organization beyond giving money
- To express their own identify through their gifts
Regular, sustained giving is based on trust, commitment, satisfaction, and identification. Basing your donor-relations activities on excellent customer service, getting to know what is important to your donors, and learning how they want to engage with your organization will reduce defections and build greater lifetime value for your organization.
A win-win for all!!
Effective Fundraising for Nonprofits
WealthEngine, the Association of Fundraising Professionals, and APRA (a fundraising research organization) presented a webinar recently called ‘Fundraising Intelligence.’ They discussed the legal and ethical practices we, as nonprofits, must comply with and honor as we work with donors’ personal information. Each organization has privacy standards, ethical standards, and a Donor Bill of Rights.
With all of the public information about donors and potential donors, what makes their profile at your organization confidential is that it IS a ‘profile’...a custom, formatted profile IS highly confidential.
The rise of the internet has made it more important than ever to verify information and have policies and procedures covering who, why, when, and what is shared internally (staff and board) and with volunteer fundraisers. Here are ‘best practices’ cited in the webinar:
- Recognize everyone in fund development is responsible for collecting and securing donor/prospect information;
- Set parameters for collecting and using data and information
- Make sure sources are reliable; confirm data/information from multiple sources
- Set policies that define what information is confidential or ‘privileged’ in donor/prospect profiles; review policies often, especially as any new person is permitted access
- Define who has access to donor/prospect profiles; have everyone with access sign a confidentiality statement; do not disclose confidential information to unauthorized parties
- Be sure donor/prospect profiles and confidential information are under lock and key; electronic files are password protected; and, old/unused documents are shredded
- Be sure privileged information isn’t shared in casual conversations or where unauthorized individuals can overhear it
- Don’t transmit any documents as Word files (use PDFs), or by fax or email
- Recognize all donor/prospect information is the property of the organization creating the profile and not to be shared with any other outside person or organization
- Include information in profiles that the donor/prospect will enhance your relationship; donors/prospects have the right to access to their file upon request so don’t include information they wouldn’t want to see there
It’s all about relationships with our donors and prospects. “Respect the privacy of prospects/donors: use information gathered through cultivation in a way that only enhances the relationship with the prospect/donor and your organization.”
In this day of open access to all types of information on the Internet, wikileaks, etc, the subject of copyright protection is often misunderstood, ignored, or forgotten. However, copyright laws are ‘alive and well’ and actively protecting published and unpublished original works of many kinds.
This issue came to the forefront recently when we learned that ONEplace workshop participants re-created a copyright protected document received as an educational handout. Even though not required, the document was clearly marked with © notations which were overlooked when it was re-designed to improve its appearance. They were asked to immediately destroy the illegal documents.
There are legal, ‘fair use’ provisions in the law that allow certain specific, non-commercial uses of copyrighted materials: “the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.”
In seeking the best, most current, resources for ONEplace workshops, copyright-protected materials are often used as part of the curriculum for “teaching, scholarship, or research” purposes. We are now reminding participants when materials are © protected and how they may legally be used, along with advising appropriate use of all copyright-protected materials.
Read the Complete version of the U.S. Copyright Law(copyright.gov)
Download the Copyright Basics guidePDF
U.S. Copyright Law
Have you created a communication plan for the coming year? If not, now is a good time. According to a report done by the Nonprofit Marketing Guide on 2011 Nonprofit Communication Trends, only 34% of nonprofits have a written and board approved 2011 communication plan in place. Creating a communication plan opens up opportunities and creates synergies between your organizational marketing, fundraising, and promotional efforts. Creating a clear purpose and direction for communicating with stakeholders will allow your organization to speak with one voice and strengthen your image to the public and to your constituents.
Tackling a communication plan is a process similar to strategic planning, it is done in phases. Here are four online resources specifically designed to walk nonprofits through the communication planning process.
Books written about communication plans are rich resources offering more details and breadth on the subject. Recommended books include:
If your nonprofit doesn’t have internal skill to write a plan, hiring a consultant is an option. The ONEplace Consultant & Trainer Directory includes consultants who specialize in communication, marketing, and branding.
If you have experience writing your own communication plan, or working with a consultant, please share your experience along with any helpful tips and/or advice.
Consultants and Trainers Directory
Michigan's Charitable Solicitations Act (COSA) was substantially amended in December, 2010. The amendments take effect on March 31, 2011.
The changes effect nonprofits of all sizes. Please learn integrate them into your operation by the effective date. Penalties for violations are steep.
Some of the significant changes made by the amendments are:
1. A charitable organization will be exempt from registering under the Act if all of its fundraising will be conducted by volunteers and it expects to receive less than $25,000 per year in contributions through their efforts. This is an increase from the current level of $8,000 per year. An organization will still have to register if it will use paid staff or a professional fundraiser to raise any amount of donations.
2. Nonprofits will now "register" with the Michigan Attorney General to solicit donations, instead of being licensed by the Attorney General to solicit donations. The registration will be good for a period of 19 months, instead of the current 12 months.
3. The law lists a number of activities that are prohibited. Many of these are targeted against misrepresentations. However, one prohibits a person from soliciting a contribution on behalf of a charitable organization that is not registered. A violation of any of these prohibitions could result in a civil fine of up to $10,000 for each violation.
4. The amendments also list certain actions that are punishable as crimes as either a misdemeanor or a felony. Misdemeanors are subject to up to 6 months in prison or a fine of up to $5,000, while felonies are punishable by imprisonment of up to 5 years and a fine of not more than $20,000. It is a misdemeanor if a person knowingly solicits or operates as a charitable organization in Michigan and the charitable organization is not registered with the Attorney General.
5. The amendments allow local County prosecutors to prosecute persons who have committed acts that are misdemeanors or felonies. This takes the burden off the Attorney General to prosecute these cases. This might result in greater enforcement of the Act and criminal prosecution of smaller infractions.
A few sections of the Act were not amended and these do not appear in the bill that was passed in December. To understand the entire Act, you will need to look at both the current law(pdf) and the amendments and insert the amendments into the current law, where applicable.
Our thanks to Leo Goddeyne, attorney with Miller Canfield, for this summary of important changes effecting nonprofit fundraising in Michigan.
CHARITABLE ORGANIZATIONS AND SOLICITATIONS ACT Act 169 of 1975