The Annual Misperception of Charitable Priorities

About the only issue that bothers me more than the occasional abuse of a few highly paid charitable leaders to condemn the whole sector is the regular reporting by the so-called “watchdog” charity rating agencies that use tax forms to determine the effectiveness of nonprofits. These are the types of ratings that perpetuate the “How much do they spend on overhead?” question instead of “What impact have they made on their community?” I wonder what they could determine from my tax forms?

Charity Navigator has released its annual ranking of charitable efficiency based on the Form 990 tax filings of some of the larger nonprofits they have reviewed in each of 30 communities – they poorly label the lists as “the largest” nonprofits in each city. I suppose I am more frustrated than usual because Indianapolis was near the bottom of the list and Cincinnati didn’t do much better, but my major concern is that the issues with this type of rating system are obvious and well-covered while the general public only sees the negative headlines. It is a classic case of making important what they can measure because they are not able to measure what is important. To their credit, Charity Navigator indicates on their website that they will be looking at additional aspects in their ratings – I’m anxious to see how they do it and wish them success with a very difficult task.

In case you are new to this discussion, here are the three points that stand out for me:

1) Demonizing infrastructure and Inaccurate completion of the Form 990 – a 2007 study by the Center on Philanthropy at Indiana University and the Urban Institute at http://nccsdataweb.urban.org/FAQ/index.php?category=51 emphasized the importance of adequate infrastructure for organizations to be able to effectively deliver quality programs. They also discovered that a significant percentage of Form 990s were incorrectly completed to show few or no funds spent on fund raising or administration. These misstatements can be attributed to a lack of knowledge or an organization’s decision to stretch the truth to look better to donors and rating agencies.

2) Organization Life Stage, Gift Size, or Aggressiveness in Fund Raising – A young organization with little public visibility is required to spend much more time and money to raise each new dollar, in small amounts from mainly new donors, often more than $1 for every $1 dollar it raises. In contrast, a well—established organization, with thousands of repeat donors making larger gifts, may spend less than 10 cents for each $1 raised.

3) Lack of comparative information on program impact – Measures of success are notoriously difficult in the nonprofit sector. Using tax form information is grasping at what little information is available and generalizing it to all the operations of that organization. An organization could have great financials and a low quality program or produce great results but not look very good on its Form 990.

Nonprofits are measured by a different yardstick than private businesses and that is appropriate, but it creates some tough questions for nonprofit staff and boards to deal with. When is it better to provide fewer services than to use more expensive options to raise more money? If a business puts a product on sale and narrows its margins in order to increase cash, they are being business-like. If a nonprofit spends 70 cents on the dollar to raise extra money to accomplish an important mission that would not otherwise be accomplished, they might be labeled as wasteful or inefficient.

When donors are making serious investments in organizations, they need to understand where that organization’s funding comes from and how it is used. Donors need to reward those organizations who are spending money to hire good people and enough people, reaching out aggressively to the public, and following a path of building personal relationships with the individuals and organizations who can make them financially sustainable in the long-run.

"Nothing Stops a Bullet Like a Job"

This is a terrific tagline! You have never heard of Homeboy, but I bet you have a pretty good idea of what they do and why.


13 Nonprofits were honored last fall for Outstanding Taglines. A nonprofit's tagline is hands down the briefest, easiest and most effective way to communicate its identity and impact. But this high-impact, low-cost marketing tactic is often overlooked or under-emphasized by nonprofits. GettingAttention.org's 2008 survey of nonprofits showed that 7 in 10 nonprofits rated their tagline as poor or didn't use one at all.


The annual Getting Attention Nonprofit Tagline Awards program was designed to address this missed opportunity, and guide nonprofits to craft an effective tagline. This year's winners were selected from 60 finalists drawn from 1,702 nonprofit taglines submitted to the 2009 Getting Attention Nonprofit Tagline Awards competition.


The winning taglines are featured in the free 2009 Getting Attention Nonprofit Tagline Report available for download.

This is a long report but it is skim-able and I promise you will find it thought provoking.


Bryan

Take a Walk, Support a Cause, Support Me!

Walking for Dreams is a very exciting concept, a multi-organization fund raising walk created by the Sycamore Foundation about 5 years ago. By combining the efforts of 20+ nonprofits who each bring a dozen or two walkers, it creates the energy and raises the dollars of a 300-500 person walk that these organizations couldn't create on their own.

Over the past 5 years, our family has walked for a couple organizations and always have a great time. The Sunday, May 23 event begins and ends outside the restored Buggs Temple at the north end of the canal downtown. The walk route winds along the canal down to White River State Park and back again. It is over before you know it.

Subtle CALL TO ACTION:
Option 1) Go to https://www.walkingfordreams.org/register.aspx and register to walk for an organization you know about or want to know about and recruit your friends, family, and co-workers to donate to support you.
Option 2) Go to https://www.walkingfordreams.org/Donate.aspx and make a contribution to a walker/organization you know of or want to learn about.

Option 3) Go to https://www.walkingfordreams.org/Donate.aspx and make a donation to support ME (Bryan Orander) walking for Southeast Community Services - SECS is the community center and basic needs safety net agency on the near SE side. If you got your job through the NFP News or you appreciate the information you receive through our free publication, here is a way to return the favor.

Option 4) Feel guilty for not participating - feel better by writing a special check to a nonprofit you respect and let us know about it.

On May 23, show up at Buggs Temple between 1-2pm to check in and browse the information tables for all participating non-profits.

Bryan Orander, President
Charitable Advisors and Not-for-Profit News
http://www.CharitableAdvisors.com
http://www.NotforProfitNews.com
317-752-7153

Need a Boost of Encouragement, Insight, and Energy?

A few seats are left for Friday, May 7’s Leadercast presented by Chick-fil-A and hosted by our friends at Choices, Inc., an Indiana nonprofit focused on systems of care for youth (www.choicesteam.org).

You can watch from Choices offices on North Keystone with meals provided and wi-fi access or save $15 and watch at a convenient southside location.

The Chick-fil-A Leadercast is a one-day leadership event featuring the world's best leaders speaking about the leadership principles that matter most. Broadcast LIVE by GiANT Impact from Atlanta to hundreds of locations around the world, the Chick-fil-A Leadercast is a catalyst for new ideas and better leadership practices. The focus for this year's event is to help you make a lasting impact in the lives of those you lead by living out the leadership principles that guide your decisions and your life.

See the full agenda at the registration link.

Here is a list of speakers. 

Jim Collins - Author of Good to Great, How the Mighty Fall, and co-author of Built to Last

Tony Dungy (Pre-Recorded) - Retired head coach for the Indianapolis Colts

John C Maxwell - Leadership expert and best-selling author of The 21 Irrefutable Laws of Leadership

Steve Uzzell - Award-winning corporate photographer and former staff member of National Geographic

Mark Sanborn - Best-selling author of The Fred Factor

Connie Podesta - Expert in the psychology of human behavior and leadership development

Jim Goodnight - CEO of SAS Institute, Inc.

Ed Bastian - President of Delta Air Lines

Ben Carson - Neurosurgeon and Professor of Pediatric Neurosurgery at the Johns Hopkins School of Medicine, recipient of the Presidential Medal of Freedom

Chip Heath - Author of Made to Stick, Columnist for Fast Company, and Stanford Professor


FMI or to register visit . Registration ends Wednesday.

I will look forward to seeing you at the Choices site on Friday,

Bryan

How Many Board Treasurer’s Do You Need?

I really appreciated a presentation by Aaron Hurst at last November’s BoardSource Conference. Aaron Hurst is the founder and CEO of an organization called Taproot Foundation. Taproot Foundation has re-invented pro bono services by creating ways for teams of selected professionals to volunteer together to complete high value projects for nonprofit client organizations.

I resonated with Aaron’s premise that the Board Treasurer and Finance Committee tend to be the most consistently functioning board members on many nonprofit boards. Aaron suggests the Treasurer role is best performed because it is the best understood, reporting requirements are clear-cut, and the position is very specifically recruited – we know we need a person with particular skill and expertise. The Treasurer is the steward of the organization’s Financial Capital or Assets. They can take hold of the role of ‘owning’, protecting, and maximizing those assets.

What if you applied this stewardship concept to the other key assets of the organization and recruited people who were highly qualified to leverage them?

Treasurer of Human Capital – How do we recruit, hire, and train the best people? How do we attract and retain the best volunteers? How do we best leverage the skills of our staff and volunteers? What are the metrics that define progress and performance in this area?

Treasurer of Social Capital – “The Boss of Buzz” – Establishing and protecting our ‘brand’. Identifying and building key relationships. Coordinating and integrating fund raising, marketing, PR, and communications. What are the metrics that define progress and performance in this area?

Treasurer of Information Capital or Treasurer of Impact – How do we get information and how do we use it? How do we manage and access the knowledge we have developed? How do we show we are making a difference? What are the metrics that define progress and performance in this area?

BEST APPLICATION
Aaron suggests this model is best applied in mid-sized nonprofits that have staff infrastructure in each functional area but are not large enough to have highly experienced senior executives in areas like HR, marketing, and finance.

Pro Bono versus Traditional Volunteer - With a Pro Bono volunteer, you respect their professional skills and engage with them almost like a client and consultant relationship. With a traditional volunteer, you treat all the same and assign to low skill roles where volunteers are essentially interchangeable. Mr. Hurst also asserts that these Treasurer roles are very high leverage - many of us may have experienced this through the financial downturn as we had board members step up to show us how we should be forecasting and managing cash or restructuring debt. An “A”-level, high-expertise and high-performing board member can have 10x the impact of a board member who brings less energy or expertise. Who will be your second treasurer and what will they be stewarding?

Why is Board Self-Assessment So Important?

The past two years have been far from the norm and have required nonprofit boards to step up and take their roles even more seriously than they have in the past. As you begin this new year, it is the perfect opportunity to provide your board members with the opportunity to reflect on key roles, provide candid feedback on what is working, and offer ideas to further strengthen your work. Regular Board Self-Assessment is considered a “best practice” for increasing the engagement and effectiveness of your board.

Here are four good reasons to integrate an assessment debrief into an upcoming board meeting, working session, or retreat:

Education – It is critical for boards to regularly review and discuss their roles and responsibilities. An assessment creates an opportunity to move from textbook theory to application. It is easy to get caught up in one or two roles and lose perspective on the bigger picture.

Engagement – An assessment requests input from all board members and then engages the full board in discussing the results and defining actions to be taken.

Reflection, Evaluation, and Perception – Ah… the unexamined life. Do we all view our work the same way? How are we doing? Step back from the routine reports and activities to explore how we can work smarter and leverage our efforts in support of our mission.

Prioritization – What should we be focusing on? Beware of assessment tools that merely ask you to rate everything and then produce a long list of problem areas. You need to know where you are already strong, what areas are most important in the next few years, and which areas are worth investing your scarce time and resources.


CALL BRYAN TO LEARN MORE OR TO GET STARTED 
(317-752-7153) 

The Charitable Advisors on-line assessment is adapted from a framework developed and placed in the public domain by the international consulting firm McKinsey & Company that identifies nine critical roles of the board. It helps prioritize efforts and solicits input on committee work and board member commitment. The cost is only $325 for the on-line assessment and summary report in PowerPoint. In Central Indiana, Bryan can also provide a 1 ½ - 2 hour on-site board training and debrief, including the cost of the On-line Self-Assessment, for $750.

>>Learn More

What are the most recognizable Nonprofit Brands?

I often meet new people and share that I work with the leadership of nonprofits. I am amazed at how often people ask “What is a nonprofit, can you give me an example?”. Now I have a great list. Each year, Harris Interactive releases the 2010 results of EquiTrend®, its renowned annual brand equity study that measures over 1,000 brands across 42 categories. Harris Interactive has been tracking consumers' awareness and perception of brands for over 20 years. A portion of this study focuses on an array of charitable non-profit brands, defined as charitable, member-based organizations with tax-exempt status. Harris Interactive's 2010 EquiTrend® report includes an overall Brand Equity score which takes into account several different dimensions of each non-profit organization. These include elements such as familiarity, quality, and likelihood to donate. While all of the top-rated organizations are household names, they are not necessarily just the largest non-profit organizations.

The top most trusted nonprofits this year include:

>>Read Entire Article