Nonprofit Pro Media

Nonprofits: When is Organizational Transparency a Detriment?

How necessary is transparency?

The National Council for Nonprofits states that “charitable nonprofits embrace the values of accountability and transparency as a matter of ethical leadership, as well as legal compliance.”

But what happens when transparency endangers the lives of those who fund and staff a nonprofit? What if the founder uses a different name other than her/his legal name? Are they violating the trust of donors who contribute to their organization?

These questions are emerging as more nonprofits are formed to help refugees, immigrants and historically marginalized demographics. Should the founder of a nonprofit that builds homes for refugees in Iraq risk his life by using his legal name? It is a perfectly reasonable question – the socio-political contexts in Iraq and Syria are complex, with different factions holding ethnical standards across the spectrum. Think about the nihilistic violence of ISIS and its targeting of foreign aid workers. What may be a moral necessity in Pennsylvania could be a mortal mistake in Aleppo.

Do donors really care about transparency if it risks the lives of those who are working to serve a greater purpose?

Recently, two peacekeepers went missing, presumed to be kidnapped in the Democratic Republic of Congo. Nonprofit work is not always risk-free. The price for transparency in their case may very well have cost them their lives.

How Nonprofits Can Leverage Virtual Reality

Virtual reality presents incredible opportunities for nonprofits. Schools, museums, and performing arts organizations are leveraging its use everyday to teach empathy and cultural understanding, empower people to experience faraway places, and provide the public deeper immersion into the arts. Through virtual reality, mixed reality, and augmented reality, nonprofits can extend their reach beyond their website, social media presence, and physical location. They can be anywhere and share their mission with anyone.

Here are several trailblazing organizations leveraging this experiential technology.

Global Nomads Group. This organization is making an impact by connecting middle- and high-school students with their peers around the world, breaking down barriers separating youth from the global community.

Classical Music Reimagined. Faced with aging audiences and declining interest in classical music, the industry may have just found a way to leverage new engagement strategies through Classical Music Reimagined, demonstrating value to brand new audiences.

Guggenheim. Last year the Guggenheim took a leap and collaborated with Google to enhance the museum experience with virtual reality.  They speak of an enhanced experience not as a replacement but as something different, “a virtual experience of a museum will, necessarily, be fundamentally different from a visit to the physical building, and we trust that those differences can be strengths when in the hands of an engaged public and teachers.”

Think outside of the box – or put the box over your eyes – and ask, “could this technology take my organization to the next level?”

Humane Society Fights Another Battle for Wildlife

When we hear The Humane Society, we think of cute, sad puppies and kittens that need adoption. We also think of slaughtered horses, abused pets, and mutilated lab animals.

The Humane Society of the United States fights everyday for the rights of pets and wildlife, a battle they’ve fought in conjunction with the wildlife scientists of the U.S. Fish and Wildlife Service for years.

In a hasty move last month, the U.S. House of Representatives overturned a rule designed by wildlife management professionals that prohibits and sanctions the killing of hibernating bears and young wolf pups in dens.

Following the vote, President and CEO of The Humane Society of the United States Wayne Pacelle stated:

What the House did today should shock the conscience of every animal lover in America. If the Senate and President concur, we’ll see wolf families killed in their dens, bears chased down by planes or suffering for hours in barbaric steel-jawed traps or snares.

Backers of the measure claim it is a states’ rights issue.

Fighting legislation takes significant resources and The Humane Society for the United States will be in full-on fundraising mode to ensure that the organization serves its mission to protect animals.

The new political era has introduced a host of threats that directly impact nonprofits. Organizations will continue to run up against unexpected issues that require quick action and a reserve fund to tap. We in the nonprofit sector are going to see more call-to-action funds over the next few years. How will this shape the fundraising climate? Will donors heed the call?

In short: get ready for a shake-up in fundraising strategy compared to the past eight years.

Mar-a-Lago Red Cross Gala Raises Questions

(The gates of luxury: outside of Mar-a-Lago)

Does it matter where you host your charity gala?

The days following Trump’s January 27 executive order were chaos. Customs and Border Protection agents were abruptly tasked with barring Syrian refugees’ entry to the United States indefinitely, blocking all other refugees for 120 days, and preventing the entry of all citizens of seven mostly Muslim countries for 90 days. The plan was ill-defined and generated immense consternation among those enforcing it. It also created tremendous backlash, bringing protesters out to airports in support of refugees and in opposition to the targeting of a single religion, Islam.

A familiar charity – the Red Cross – was at JFK Airport in New York, providing basic provisions to those impacted by the order, just as they have done since 1881 for others dislocated by major events.

According to the American Red Cross’s 2015 990, the group received over $46 million in government grants. Not a significant amount when factoring in annual gross receipts over $3 billion. But is it a conflict of interest to accept funding from a government that creates duress for those the nonprofit is supposed to serve?

Consider this: The American Red Cross recently hosted its annual charity gala at Mar-a-Lago, a Trump property, which has become known as the Winter White House. The Trumps attended the gala and offered praise to the organization.

Optics matter. Nonprofits should be mindful of the potential repercussions of their actions. Fixing with one hand what the other breaks isn’t going to make any real progress.

Top 5 Most and Least Charitable States

Utah wins! Ranking number one as the state with the highest percentage of donated income. A recent study by WalletHub shows that the United States is full of generous people. According to the National Philanthropic Trust, U.S. donors gave more than $373 billion to charity with 71% coming from individuals.

Which states received top marks for highest percentage of donated income?

1. Utah

2. Minnesota

3. North Dakota

4. Maryland

5. Oklahoma

Which states received poor marks for highest percentage of donated income?

1. Massachusetts

2. Rhode Island

3. Maine

4. New Jersey

5. New Hampshire

Although the U.S. is a country filled with generous citizens, giving back is not easy to do. We are witness to a changing tide – the birth of a culture of giving instead of a culture of consumerism. This fad has become a trend that is entrenching itself in all that people do.

Five Steps to Securing a Millennial Nonprofit Board Member

On the topic of millennial nonprofit board members, organizations are all talk no action.

Boards toss around questions: How do we engage millennials? At what price point will our event seem attractive enough for millennials to come? Where are all the young people?

The millennial generation is innovative, creative, saddled with debt, and has experienced social and political turmoil since birth. 80 million strong in the United States, millennials have changed the way business is done and life is lived. They tend not to have children until their thirties (if at all) and marriage is secondary to financial security.

After watching their parents lose retirement funds and their homes during the recession, millennials exercise caution in their approach to commitment. They are less trusting of older generations but seek their guidance. Millennials lead the market place with innovative approaches to products and services, disrupting traditional industries.

The “rule book” does not apply to this generation. Millennials are loyal once a company has earned their trust, sensitive to advertising, and can detect marketing smack from a mile away. They’re techno-savvy social creatures who care about the environment, the rights of all, equality, justice, and wish for a world that is “good.”

How does this apply to nonprofit boards looking to engage them? First piece of advice, do not take the “check the box” approach. They will sense that immediately and deem you and your organization untrustworthy.

Look at their behavior and values. Sitting is the new smoking; standing desks are gaining popularity. Think BPA-free. Recycling is part of daily life. Planned Parenthood’s mission is meaningful to both women and men. They give donations to the ACLU knowing that the organization plays an important role ensuring justice for all. Millennials want to help create a better world.

They also understand fundraising. And it so happens that the number one issue with nonprofit boards is their inability to fundraise. 

In short, they are primed to be nonprofit board members.

Five steps to securing a millennial board member.

1. Identify: Identifying potential candidates is a simple process. Leverage your network, leverage your organization’s current donor and/or membership base. A board position is essentially a job, so approach it as you would if you were filling any other position.

2. Qualify: The identification process will yield candidates who might be a potential fit. Research them, look at their social media posts, discover who they are related to, where they work, what interests they have, organizations they belong to and donate to. Determine if they are able to contribute a financial gift. If not, move on to the next candidate. The board is a group of people that acts as the cornerstone of an organization and it is their fiduciary responsibility to ensure the vitality of the organization.

3. Engage: Determine the best person to make the connection and schedule a meeting. At this point, the person making the connection should be clear about the meeting’s intent. For example, “Jason, as you know I serve on the Board of XYZ nonprofit. They are making a significant impact in {insert geolocation} helping low-income folks get access to free health care services. The organization is looking for new board members willing to serve and support our community. You came to mind as someone who has demonstrated his love of community. Would you be interested in meeting with {insert nominating committee chair} to discuss this opportunity?”

4. Solicit: During this step, the board chair should be looped in to provide feedback. Following that step, board members should be notified by the nominating committee chair that a potential candidate is in the pipeline. A short description of the individual, how they were identified, and a LinkedIn profile should be circulated. A meeting with the potential candidate and the nominating committee chair should commence. Topics to be discussed include an organization overview, strategic goals, strengths and challenges, the minimum expected board gift, and a candidate’s interest level.

5. Secure: Lastly, if the candidate’s interest and financial standing are aligned with the organization then they should be formally asked to join the board – their position pending a vote by the board.

Donor-Advised Contributions Increase Dramatically

Nothing motivates major donors faster that potential tax law changes. According to the National Philanthropic Trust, there has been a 72 percent hike in donor-advised contributions. Favorable market conditions and concern over changes to tax laws may be responsible for this dramatic shift.

Donor-advised funds are most likely to be held by high-net worth and ultra-high-net worth individuals. Fears of giving caps influenced major donors in 2016. What will happen in 2017? What type of tax policies will the new administration devise? Questions with answers waiting to be revealed.

It should be noted that the surge in donor-advised contributions did not translate to increased contributions from those funds to nonprofit organizations in 2016. Nonprofits actually saw a decrease in gifts from donor-advised funds. Organizations should find solace in the fact the money is there but the check has not been mailed. As tax-policies become law, 2017 will be an experimental year for giving practices.

Jackson, Mississippi is the New Poster City for Civil Rights

Enlightened thinking is happening in Mississippi, a state that has a reputation for leading with hate instead of love.

Last April, Mississippi governor signed an anti-gay law that allowed individuals and institutions with religious objections to deny services to gay couples. A few months later, a federal judge blocked the controversial law, describing it as “state-sanctioned discrimination.”

Today, through a ground-breaking museum underway in Jackson, the state of Mississippi may be turning over a new leaf.

The Civil Rights Museum “will be the first state-constructed and state-operated civil rights museum in the nation,” stated Haley Fisackerly, President and CEO of Entergy Mississippi.

A collaborative effort between the state and private sector has led to the Civil Rights Museum, which will share the history of the struggle for equal rights between 1945 and 1976. Perhaps, in the future, they will expand the exhibits and collections to feature other groups that have fought (and are still fighting) for greater equality, such as the LGBTQ community. Who knows, perhaps other civil rights movement organizations will join the growing list of culturally enlightening places to visit in Jackson, Mississippi.

The project received significant funding from Toyota, a company that has become a major employer in the state over the last decade with Toyota car manufacturing located in the state as well as the firm’s R&D headquarters. Evidently, corporate giving is very much alive and well. Look for the rise of corporations as they continue to take on a larger role in communities that are looking to make an impact.

Cannabis Gives Back

Or at least its trying to.

A recent article in the Denver Post raised the issue of charitable giving from cannabis businesses. Many nonprofits refused the accept donations from the Colorado Harvest Company – a chain of shops and a shareholder with O.penVape – for fear of the ramifications. Organizations walk a fine line when soliciting corporate donations from politically charged companies, such as those selling cannabis.

Philanthropy is an important part of our culture and corporate giving is a responsible way for businesses to give back to their communities. Corporations of all kinds have programs that provide literacy support, funding for community beautification projects, or resources for volunteer cleanup events. Why should cannabis companies – if they want to use their profits for the social good – be treated any differently?

There are a couple of considerations that nonprofits have regarding this issue: fear of losing their nonprofit status or federal funding and the misalignment of organizational goals.

Fears relating to the federal government may be somewhat justified. There is merit to the argument that many nonprofits may lose federal funding under the Trump Administration’s proposed budget, so there is a perceived heightened risk of accepting corporate donations from cannabis companies.

Losing a 501c3 status status would be devastating for any nonprofit, and there is a lack of clarity in our legal system stemming from the novelty of state-level marijuana legalization. Can a nonprofit registered and doing business in a state that legalizes cannabis lose their 501c3 tax status for accepting donations from companies selling marijuana? Inevitably, this question will emerge in the courts.

As more states work to legalize cannabis, nonprofits should be able to entertain contributions form this dynamic and growing industry. Diversifying contributed revenue streams is a best practice solution for all nonprofits and corporate giving is part of the equation. Corporations that deal in legal commerce shouldn’t be treated any differently from the rest, especially considering that the medical use of cannabis is a legitimatizer that other substances – such as alcohol – lack.

Michigan Foundations Short-Change Underserved Communities

(Clean water protesters. Residents of Flint Michigan were let down when public water was horribly contaminated due to institutional neglect).

From 2003 to 2013, Michigan’s 66 foundations – including some of the largest in the nation, such as The W.K. Kellogg Foundation, McGregor Fund, and The Kresge Foundation – gave $10.3 billion to programs based in the United States. During that period, the U.S. was at war and was in the midst of the worst economic recession since the great depression. In a word, It was a period of great uncertainty for many.

Yet only 31% of that $10.3 went toward programs that benefited lower-income people and other disadvantaged communities and vulnerable populations, including people of color, children, domestic workers, immigrants and refugees, the incarcerated and formerly incarcerated, the LGBTQ community, people with disabilities, people with HIV/AIDS, sex workers, and women and girls who have been victims of abuse.

Support for advocacy, citizen engagement, community organizing, and long-term solutions to inequality faired even worse. Finding solutions to global income inequality can’t even begin when, here at home, we put forth limited resources for finding solutions to inequalities in our own neighborhoods.

So far, the year 2017 has brought rapid change and nonprofits will undoubtedly look to foundations for support and direction over the next decade. The election 2016 fallout has led many funders to change course.

Groups of people previously passed over for by funders have become top priorities, and programs previously considered ineffective because of their grand social visions are receiving renewed attention. Upcoming grant cycles will most likely see an influx of funding for nonprofits dedicated to underserved populations and social justice issues.

Discover more information on funders and nonprofit organizations by reviewing their information available online through the Foundation Center.

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