Tuesday, November 11, 2014

Targeting millennials

By Lynn Sygiel, editor, Charitable Advisors

Ronan Johnson was 7 years old when he did his first volunteer work. As an Indian Guide in Southern California, his troop collected cans of food and worked at a homeless shelter. Although he was giving his time, he didn’t make the connection that this was philanthropy or volunteering.

“That was just part of being a Cub Scout. We probably got a badge. It was something you were supposed to do at that age,” said Johnson, the now 35-year-old associate in the Indianapolis office of the law firm Taft Stettinius & Hollister.

Since moving here after law school, Johnson now gives his time to multiple organizations in the city.

“There are more opportunities here in Indy than in other cities I’ve been in,” Johnson said. “Individuals are willing to give up so much of their time, especially to organizations that they care about and in many cases, they may not have a direct connection.”

Although at the upper end of the millennial generation, which in the U.S. is approximately 80 million people, Johnson shares many of its characteristics. The 2013 Millennial Impact Research Report, financed by the Washington, D.C.-based Case Foundation, indicated that 72 percent of his generation are eager to volunteer for a nonprofit organization, and a little over 50 percent would like to give monthly to a charitable organization.

Despite a willing talent pool, nonprofits have struggled to engage millennials in meaningful ways. Johnson, however, is the exception. Currently, he serves on the Meals on Wheels board, and is chair of the executive board of the Young Lawyers Division of the Indianapolis Bar Association. He is also active in the Penrod Society, the Association for Corporate Growth and completed the United Way's Emerging Leaders program.

According to studies by Indianapolis-based Achieve, millennials want to engage with causes to help people, not institutions. They prefer to get to know an organization before committing to its cause and consider all their assets -- time and money -- as having equal value.
Johnson’s Meals on Wheels volunteer activity reflects this.

“What got me involved initially was someone asking me. But what’s kept me involved is the mission and everything else. It was a cause that I strongly believed in and that I could get behind. It’s something, regardless of board involvement or not, I would have been involved with as a volunteer because we’re providing meals, nutritious meals to the homebound,” he said.

Before joining Meals on Wheels, Johnson invested time in United Way’s yearlong leadership program.

“What I actually got to understand was the role that I was supposed to serve,” he said. “I was not just there to be the executive director’s buddy and rubber stamp whatever the executive director was doing.”

If nonprofits are going to attract and keep volunteers from Johnson’s generation, which will be 50 percent of the workforce by 2020, they must find new recruiting approaches.

In “The New Breed: Understanding and Equipping the 21st Century Volunteer,” recruiters are encouraged to start with a process similar to dating and introduce individuals to an organization without a commitment. The authors suggest an invitation to help assess a specific problem or fix a software issue can be better starting places than asking for an ongoing volunteer commitment.

Given what Johnson understands about his generation, he uses some of these skills to attract other volunteers. One of those is the annual Get on Board event. For the past several years, he’s volunteered at the event and has been surprised that the audience is intergenerational, and sees it as an introduction to nonprofits. This year more than 650 people attended the annual event.

“A lot of them are there because they’ve been told that they need to get involved in the community. Personally I don’t think that’s the strongest reason to want to be involved. If it ends up causing them to do great things, all the better. Get on Board is a great way to see what kind of options are out there,” said Johnson.

“It gets back to something I mentioned earlier where I think that people don’t really know how it is they want to get involved and what they want to do. And I think putting people in front of the organization and giving them an experience with them first hand is kind of like putting training wheels on it where it makes that first step easier,” said Johnson.

To promote the event, his committee reached out to law firms to distribute information, not only to associates but to partners as well.

Connecting millennials to organizations is exactly what he has tackled this year as chair of the Young Lawyers Division of the Indianapolis Bar Association. During his tenure, the group will offer four events designed to introduce nonprofits to millennials.

Johnson often hears people talk about the idea of volunteering, but when he asks what they are doing, their response is, “I’m looking for the right opportunity.”

“It’s a really daunting first step. It can be a little bit intimating for a lot of people. Because there are so many options out there. They’re not really sure what they want to do and they are paralyzed by it,” he said.

What advice would he give his generation?

“I think it’s really amazing how much I grew and accomplished whenever I have been behind a shared mission. Even when you don’t have a ton of money, moving forward to accomplish those goals or whatever the goal is that you set forth, I think it’s pretty amazing.”

Tuesday, November 4, 2014

Moving boards towards effectiveness

By Bryan Orander, president, Charitable Advisors
We received a good response to our article last week about positive trends that local leaders are seeing in nonprofit boards – clearer expectations, higher engagement, and more selectivity in recruiting board members.
In 2010, some area executive directors and board chairs participated in a study focused on nonprofit organizations with boards that succeeded in moving “to the next level. “  The study, by Mary Hiland of Hiland Associates, yielded some helpful guidance for organizational leaders, executive directors and board chairs who desired to increase the performance of their boards.
Participants identified five finding themes for boards’ work:
1.     Alignment: Right people doing the right things with the right skills.
2.     Individual growth:  Assistance for each board member to be the best he or she can be.
3.     Team building: Fine tuning how the group works as a team.
4.     Maturity:  The board’s ability to understand the needs of the organization and its role as a collective group.
5.     Asset creation: The collaborative process by which boards reach full potential to lead and add value to the organization in achievement of the mission.

The results reflected a continuum of board development, seemingly independent of the operational life cycle:
1.     Getting the basics right.
2.     Improving overall board functioning; building board infrastructure.
3.     Becoming more strategic.
4.     Attracting investment, social capital (people and influence) and engaging with the community in powerful ways.

Survey participants identified three critical success factors:
1.     Outside governance expertise or training. Essentially a “nudge” – from a facilitator or a board member attending an external training both contributed to a new vision of the board.
2.     The board chair’s role is critical in creating or inhibiting movement and building momentum for change, in partnership with the executive director. The board chair usually engaged a few other board members, building a small group of champions for change.
3.     Study participants described a specific, articulated intention to develop the board: ”We were obsessed with board development.” “Status quo was not OK.”

Tangible improvements occurred when there were changes in:
1.     Identifying more people as leaders, and leaders doing a better job in their roles.
2.     Stronger relationships among the board and executive resulted with better interpersonal dynamics.
3.     Engagement resulted in increased attendance and participation, better quality discussion and better preparation. Additionally, there was more energy and momentum.
4.     Board functioning resulted in better meetings, more ownership of the board’s work, more effective committee work, and recognition that the board needs to work on itself – not just the organization.
5.     When boards moved to a more thoughtful, long view versus day-to-day supervision resulted in boards fulfilling their roles.
6.     Composition resulted in more diverse and better “quality” of board members.
7.     Community engagement resulted in board members increased engagement with the external community, “got it” regarding fundraising, increased identification and use of board members networks and/or strengthened advocacy.
1. Personal: Check your calendar and get to the Board Chair Summit this Friday morning, presented annually by Leadership Indianapolis. Whether you are a current or future board leader, you will take away great insights and new relationships. http://www.leadershipindianapolis.com/boardchairsummit.html
2. Organization: Start the year with a board self-assessment. You can use many checklist tools available on the Internet or Charitable Advisors has developed an on-line assessment tool that allows for anonymous feedback and provides a PowerPoint report for your board to review and discuss. It also includes a few opening questions that can be used to review the past year and help prioritize your efforts for the new year. http://www.charitableadvisors.com/boardassessment.html

Bryan Orander is president of Charitable Advisors and publisher of the Not-for-profit News. Charitable Advisors is a consulting practice based in Indianapolis that focuses on expanding the capacity of area nonprofits. He started Charitable Advisors in 2000 after more than 20 years of experience in leadership, management and consulting.

Tuesday, October 28, 2014

Addressing health and disparities in communities

By Shannon McMorrow, interim director of Master of Public Health, UIndy

Good health. Unlike the majority of developed countries in the world, it’s not considered an inalienable right guaranteed in the United States.  However, at the very least, every American should at least have a fighting chance to achieve it.

The reality is that there are disparities in the U.S. on many levels: income, education and certainly health.

Many who work in the nonprofit world, especially in social services, come face-to-face with these disparities on a daily basis. Eliminating them is not an easy task as one disparity tends to feed upon another.

Those who live in poverty -- some 48 million Americans -- may have fewer opportunities for education. Those with little education may have fewer opportunities to climb out of poverty. And both groups may be at a disadvantage when it comes to accessing healthcare, healthy environments and making healthy choices.

It’s the latter problem that a new master’s program at the University of Indianapolis is trying to remedy. UIndy is the only university in the Midwest to offer a Master of Public Health degree in health disparities.

The need to understand and address health disparities is great – and growing.

One example: Indiana ranks 41st out of 50 states for overall health and 44th  for the number of adults who smoke. According to the United Health Foundation, 37.2 percent of Hoosiers who make less than $25,000 are smokers. As income levels rise, the percentage of smokers falls. Only 14.5 percent of Hoosiers with incomes greater than $75,000 smoke.

What might be the root causes of these facts? How can we change these realities and root causes? This is part of the mission of UIndy’s program, to analyze these questions, looking at the intersection of factors – physical and social environments, social inequities based on gender and race, genetics -- and implement programs and policies to improve health disparities.

Centered on the core public health values of community collaboration and social justice, the program combines intensive professional practice experiences with academic coursework preparation that includes current public health knowledge in conjunction with community-based projects. The applied public health curricula at UIndy will provide students with the ability to understand and use evidence to positively have an impact on the community’s health.

UIndy's MPH classes are predominantly online, with only three of the core courses requiring an on-campus weekend. The program also requires one week spent at the university during the first summer of the student’s program. This hybrid format makes working and going to school a reasonable option and prepare students for a multitude of positions and careers in public health.
New MPH cohorts begin each fall. If you are interested in learning more about the Master of Public Health at UIndy, please visit uindy.edu/health-sciences/mph or call (317) 788-4909.

Shannon McMorrow, Ph.D., is the interim director of UIndy’s Master of Public Health program. She has more than 10 years of experience as a community health educator in diverse and multidisciplinary settings across the U.S., Belize and Uganda. Her doctoral studies centered on understanding the implications of media coverage of HIV/AIDS in Kenya for community health education practices.

What makes an effective nonprofit board?

By Lynn Sygiel, editor, Charitable Advisors

There has been a dramatic shift in how nonprofits answered that question in the past decade. A board’s impact has often been measured by tangible participation – financial contributions and attending meetings. Although these two factors are still important, it’s no longer enough.

Today board members must have a full understanding of a nonprofit’s mission and be committed to it. They must be willing to share their individual expertise to further advance that mission. They must be willing to roll up their sleeves and move an organization forward.

“Particularly after the recession, if a nonprofit is going to survive, its board has to be strong,” said Kim Donahue, director of agency services at United Way of Central Indiana. From her vantage point, working with United Way agencies and their partners, Donahue sees more boards operating at this higher level.

“There’s been a steady march toward being more efficient and effective. It’s more than a glimmer of hope, it is a real trend,” said Donahue. “It’s kind of odd to say, but sometimes crisis motivates the board like nothing else.”

Lena Hackett has also witnessed this shift. She is founder and president of Indianapolis-based Community Solutions Inc. and her consulting firm has been working with organizations, locally, regionally and nationally for 14 years.  Locally, she attributes it to more training and recruiting the right people. In fact, she has seen people turn down board positions after they thoughtfully considered the commitment.

“I think for probably a decade, we were stuck on what a board should be -- how many people should be on your board, and what kinds of people should be on your board,” Hackett said. She tells boards to look for members who can help move an organization’s agenda ahead, not just recruit prominent people.

One of the outcomes of these changes Hackett has seen is more nimble and involved boards.

“I think organizations are less tolerate of board members who are not active. You know they come to a board meeting, and hear reports and leave, and don’t think about the organization again until the next time they come to a board meeting,” she said.

Both Hackett’s and Donahue’s work with nonprofit boards is designed to strengthen their effectiveness.

Donahue often begins her work by asking each board member to complete a simple assessment that evaluates their personal performance. After reviewing their responses, she facilitates a discussion to help board members understand how their performance affects their roles. Over the past 8 years, she has completed the process with 17 boards.

“I find that board members are very honest in assessment, partially because it’s anonymous and partially because they know it’s a tool for them,” said Donahue. Another tactic she thinks is important is for individual members to annually sign an expectation contract, reviewing what it means to be a board member.

Hackett starts her process with the results the board wants to achieve.

“We do individual board interviews and have people identify where they feel they have spheres of influence -- where they have ability to have impact, influence or leverage. We work with a board on action accountability,” she said.

After the board decides on an action or goal, each member is asked to put their commitment in writing and give it to the board chair or executive director. The next meeting starts with a progress report sharing personal actions. In Hackett’s results’ model, board members hold each other accountable.

As part of her firm’s process, after working with a nonprofit, they stay connected in a coaching role for up to 90 days.

“Our experience is that change is easier for people to do on paper, but once they start to implement it, it gets very hard. So to have a coach there at a board meeting, and in between, coaching them on issues that come up, is just key to what we do,” said Hackett.

Another significant change that Donahue has seen is the elimination of nominating committees. Boards opt instead for a governance committee, which has broader responsibilities and includes board education and recruiting community members for committees. Often, they find the latter develops a pipeline of future board members. By involving non-board members on committees, community members get a chance to learn about the nonprofit, and in turn the board gets a chance to see who’s really engaged and a worker bee.

“Being able to recruit from committees is a great thing. It happens more often in larger nonprofits than it does in smaller nonprofits, but even the smaller are starting to adopt it,” said Donahue.

Boards are also encouraged to scout for future talent outside their immediate circles.

“How many times have you heard a nonprofit say, ‘It’s a well kept secret.’ If you keep recruiting from the same circle, you will remain a well-kept secret,” said Donahue. She recommends events like Get on Board because it widens the pool and immediate sphere.  Some nonprofits have had informal meet-and-greets for people who are interested in board membership.

Hackett sees the relationship between board and an organization unique and recommends potential board members go to a meeting and see the personal interactions.

“I consider a board relationship with an organization a fairly intimate relationship. If you’re just looking to get on a board, be discerning a little bit because it’s a lot of work. See how the chemistry feels,” she said.

Donahue believes in real work for the board, and has additional recommendations for on-going engagement.

“At every board meeting, some part of strategic plan should be discussed. It doesn’t have to be the whole plan. Review one of the goals on the plan and ask: How are we doing on this? Do we need to adjust the deadlines.” Additionally talking about future directions or the organization’s vision is also empowering.

“We trap them in the here and now, always bantering them to raise money, badger them for this and that,” Donahue said. “Give them an opportunity to look at the future: What do we see happening in the next three to five years? What could this become? What do we need to do to get there?”

Donahue said one phrase that sticks in her head. “Boards are the keepers of quality.”


TIPS for improving board members’ experience

  • Provide new members with a packet that clearly outlines roles and responsibilities.
  • Remember that often a new board member feels like they walked into the middle of a conversation. Provide them with a year’s of board minutes.
  • Give them information early and often.
  • Help them understand the differences in the for-profit and nonprofit sectors. One good tool is Jim Collins’ “Good to Great in Social Sectors,” a small monograph.
  • Remember that a terrific board cannot make up for a weak CEO. It’s the board’s responsibility to hire the best possible CEO and evaluate him or her regularly.

Tuesday, October 21, 2014

Repair regulations considerations

Editor’s note: Last October, the IRS issued its final regulations regarding the rules for deduction versus capitalization of tangible property. These final regulations clarify the previous regulations under IRC Sections 162 (a) and 263 (a) and affect all taxpayers who acquire, produce or improve tangible property. The following is a reprint of an article that appeared on BKD’s website in March.
By Robert Conner, national tax assistant director, BKD
The IRS recently issued final “repair” regulations clarifying when tangible property expenditures may be deducted instead of capitalized for tax purposes. For tax years beginning on or after January 1, 2014, exempt organizations with unrelated business income (UBI) or taxable subsidiaries should look to these new rules to determine the proper tax treatment of expenditures related to tangible property acquisitions, improvements, repair and maintenance activities. 
One of the provisions most favorable to taxpayers in the repair regulations is the new de minimis safe harbor, which allows companies to deduct tangible property expenditures falling below their financial statement capitalization policy threshold. To qualify for the safe harbor election, an organization must have an accounting policy in place on the first day of the applicable tax year that calls for expensing amounts paid for property less than a specified amount. If such requirements are satisfied, the otherwise capital acquisition cost of tangible property subject to the policy may be currently expensed for tax purposes.
For taxpayers with applicable financial statements—generally an audited financial statement—the policy can be as high as $5,000 per invoice or item and must be in writing as of the beginning of the tax year. For all other taxpayers, the amount is $500 or less per invoice or item, and the policy is not required to be in writing.
Exempt organizations with UBI or taxable subsidiaries should review applicable expensing policies in light of the new de minimis safe harbor to determine if the expensing thresholds are appropriate. If your organization does not currently have a written capitalization policy, consider adopting a policy prior to the start of your next fiscal year. The regulations do not require board-level approval to adopt or change a written capitalization policy. However, organizations considering a change should consult their tax advisor and external auditor (if applicable) to reconcile any competing tax and nontax considerations.
To learn more about how the repair regulations may apply to your organization, or for help formalizing a capitalization policy that makes sense for your organization, contact your BKD advisor.

Robert Conner serves as a national tax assistant director BKD’s national office in Springfield, MO.  He performs tax consultations and quality control reviews with the firm’s offices. He has worked as a tax advisor since 2005, graduating from Illinois State University 

Tuesday, October 14, 2014

So you want a lawyer on your board …

By Zac S. Kester, executive director, Charitable Allies
Good nonprofit organizations seek out community leaders from diverse backgrounds to serve on their boards of directors. As they recruit directors, they know that having the right people with the right skills helps the organization achieve its strategic goals.
Nonprofits are tapping lawyers not only for their legal expertise, but also for their personal networks and reputation. With increased regulatory focus and challenges in nonprofit governance, business transactions and donations have taken on a new complexity that can benefit from a legal perspective.
Having a lawyer on board can be good for both sides: nonprofits receive the benefit of legal counsel, while lawyers get to support a cause they are likely passionate about, and connects them to other community leaders outside the legal circle. This opportunity is not lost on new lawyers who are encouraged by their firms to invest time volunteering in the community.
One nonprofit recently avoided a massive wage claim liability when it laid off several employees. The lawyer on board was able to help ensure banked vacation days were paid. Otherwise, the nonprofit and its board and officers could have faced triple damages and attorney fees awards for the nonpayment of wages.
Three primary benefits of bringing a lawyer on a nonprofit board:
·       Receive general legal knowledge. By virtue of their training, lawyers are analytical thinkers. They are steeped in the basics of law, including contracts, lawsuits, liability and liability insurance, as well as issues concerning employment, immigration, health care and government regulations. Lawyers on board draw from this knowledge while serving and can help make business and programming decisions.

·       Have help making the tough decision(s). Because of their training and experience, many lawyers can identify problems early. They can also help problem solve and mediate myriad interests among the board and stakeholders of the nonprofit.

§  Make connections. Most successful lawyers have many community connections. These may include grant-making organizations, community activists, politicians, business leaders, school leaders, accountants and other lawyers. Connecting the organization and its staff with some of these contacts is par for the course of serving on a board. Nonprofits can leverage the lawyer’s relationships to build a bigger network and increase their donor base. 

Despite these advantages, there are three cautions to consider:
·       Ensure subject-matter knowledge. Lawyers are required to be “competent” in a field or subject of law before providing legal services in that field. Out of a desire to help, many lawyers may attempt to answer questions outside of their competency or knowledge. Today’s nonprofits require professional advice specific to the nonprofit sector and the board members should be prepared to acknowledge this and seek outside and independent legal counsel where appropriate.

§  Properly manage conflicts. In addition to the typical conflicts that arise in the nonprofit sector (i.e. private benefit), Rules of Professional Conduct control many situations that happen when a lawyer’s representation of one client adversely affects his representation of another or his personal interests. For example, the lawyer may be asked to formulate an opinion on the appropriateness of a board decision in which the lawyer participated, making the lawyer a defendant or key witness and therefore ineligible to make such an opinion.

§  Protect the attorney-client privilege. It can be difficult to delineate exactly when the attorney-client relationship begins, especially when dealing with a lawyer on board. Additionally, if the lawyer does not make it clear that he or she is wearing only the “lawyer” hat when giving legal advice in the boardroom, then conversations with that lawyer-board member may not be privileged.

Having a lawyer on board can come with great benefits, both to the lawyer and the organization, and also comes with some risks to both. But when the risks are properly managed, the lawyer’s service can be positive and fruitful.

Attorney Zac Kester provides generalist and strategic nonprofit legal and consulting services. He holds a Master of Law, a post-law school advanced degree, in which he studied the unique needs of tax-exempt nonprofit organizations. His legal and consulting career has focused on nonprofit organizations. Contact Zac Kester, executive director, at 317-429-1649 or zkester@charitableallies.org with any questions.