Nonprofit Board Crisis

Nonprofit Board Closes Its Doors: Values Come First

According to the Christian Science Monitor, "Britain now has one fewer adoption agency, since Catholic Care won't allow homosexual couples to adopt, and the national Charity Commission won't allow them to discriminate."

No matter what I personally think of its values, I must applaud an organization's board that puts its values above all else.  The Charity Commission (UK) drew its line in the sand and Catholic Care drew its line.  I have to believe that those nonprofits with a different set of values will be able to fill the void left by Catholic Care.  I can even trust that the Catholic Care board considered whether there were others that could fill the void it leaves but this was obviously not its first consideration.

My kudos to both the Charity Commission for holding its nonprofits to a public benefit standard and to the Catholic Care board for holding itself to its standards.

Nonprofit Parent Shuts Down Affiliate

In an era when results and accountability and, equally if not more so, financial management all matter, the parent/national Planned Parenthood has stripped away the status of its San Francisco affiliate.  Officially, at the end of the next week, Planned Parenthood Golden Gate will lose its affiliate status.  And, as affiliate relationships tend to go, this will likely mean the loss of financial and other resources.

According to the Bay Citizen (one of those new fangled and, I believe, on-line only, nonprofit investigative and local papers hoping to create sustainable financial model, PPGG says its clinics will stay in business, change its name, and find the resources the national office provided. 

The world of nonprofit national parent and affiliate organizations is often very interesting to me.  National parents are very reluctant to do what is perceived as "meddling" in affiliate business while at the same time tend to be held responsible for how their affiliates conduct business.  This generally means that national parents develop lots of operating standards and offer lots of constructive criticism and capacity building and, the real carrot to keep affiliates at a higher level of performance, get national sources of funding that would otherwise not be available to the local.  And, sometimes, as another way to help maintain standards, nationals get affiliates involved in national projects which the national funds.

Disassociating with an affiliate if not easy and can have a negative impact on the national.  So it is a brave thing when the National parent says "you are out-of here".  Of course, the evidence with PPGG suggests that maybe the National should have acted much sooner (see the article).  The warning signs that all was not right were pretty clear.  But, as I note, disaffiliation is not easy and if I were to guess created a much-heated conversation at the Parent board level to think about what alternatives were available.

But, assuming that the facts are correct and the the National did its homework, let's all congratulate the National Board and staff for taking action.  Good job national Planned Parenthood!

As for what was PPGG, I wish you well and hope you can see this as a learning opportunity.  Even though it's likely you've had the best advice on how to improve, perhaps this action will move you to now try and get it right.

Nonprofit Revenue Generative Venture: Thrift Store

Because my spouse has been heavily involved in the development of a thrift store for a state-wide immigration and refugee services organization, I have had a lot of time to think about and explore the dimensions of thrift stores in all their glory.

One big conclusion: like all nonprofit revenue generating ventures, it's not simple to organize.  There are many details and a good business plan that maps out these details: who does what when and particularly, where is the best location, how are customers recruited, and how many sales are really needed to at least cover costs?  Having a key person seeing to all these details is also critical.  And, having some cash to make it all happen, even with volunteer organizers, is essential.

Thrift stores are an age-old revenue-generator for nonprofits.  The pioneers like Goodwill and the Salvation Army have illustrated how it can be done.  And the big new kid on the block, Savers, has really offered another model that particularly benefits nonprofits that couldn't really manage a store on their own (the majority of nonprofits I might add).

All that said, there is another side to thrift stores and particularly, the donated inventory which is really the most essential ingredient.  I thought this Slate Magazine article and some of the linked articles pretty thoughtful for those donating to, shopping at, and, or, operating or thinking of operating a store.

Nonprofit versus Public Keepers of Historical Artifacts

Two significant historical artifacts were turned over to the Smithsonian Museum today.  One of these items was the paperwork signed by Adolf Hitler which "laid the legal groundwork for the execution of 6 million Jews". The second was some of Jim Hensen's Muppets noting that there are also plans to give some other puppets to an Atlanta, Georgia musuem.

The Hitler Papers were transferred to the Smithsonian from a California museum that had itself gotten the papers from General Patton (who happened to live next door) according to the LA Times.  The Hensen Muppets came from Mrs. Hensen who will also be giving some of the collection to another museum according to a story also in the LA Times.

My question: what is the criteria for when the public sector is a more preferable keeper of history than the private nonprofit sector?  Is it when said artifact will reach more of the public (lots of evidence where the public gets pretty good access)?  Is it when the public can better afford to care for such items than what the private sector would have in resources (lots of examples where this is proven otherwise).

I actually don't have the answer to these questions but for me, this exchange of artifacts certainly moves me to wonder about the three legged society we have built where the nonprofit sector fills the void when there is no incentive for the for-profit and no demand of the public sectors.

Nonprofit Stories

Perhaps it's just the end-of-summer doldrums where there's little "real news" but from what I'm reading, stories about nothing are rising up.  For instance, The Philadelphia Inquirer has been exploring a story about a nonprofit subsidiary of the Philadelphia Housing Authority.  Here's a blurb:

This week, Asia Coney, who makes six figures, will wake up in her Philadelphia Housing Authority-owned home, pile into her PHA-owned 2000 Ford Expedition, and head to the swank Sheraton at 17th and Race, to run an empowerment conference to help poor families get off the public dime.

Coney makes at least $101,170 as head of Tenant Support Services, Inc. (TSSI), a nonprofit subsidiary under contract with PHA to provide tenant services.

Other than the possibly "offensive" reality that Ms. Coney makes six figures and has significantly subsidized rent and this consequently makes some people grumpy, I'm not really getting the "so what" of the story.  This story is like this past Sunday's story from the New York Times about a possible lack of transparency at the Social Innovation Fund and "questionable" awards.  Both stories are just that: stories trying to make something of not that much rather than focusing on nonprofit successes and results.   Not of course that there isn't really some story here nor that the issues shouldn't be explored nor that the reporters covering these items aren't generally very good at exposing some real issues when they exist.

In my opinion, these types of stories really don't do much for anyone, and particularly the nonprofit sector.  More importantly, nonprofits must not be doing that great of a job giving these same reporters an opportunity to focus on outcomes - not quirky travails. We can do better.

Against Corporate Social Responsibility

In a Wall Street Journal article yesterday an Aneel Karani (a business school professor) argued how it doesn't make sense for corporations to pursue Corporate Social Responsibility strategies.  Dr. Karani argues that such strategies may do more harm than good, particularly for the corporation.  The basic argument (my interpretation): corporations should do what they do best, make money, and if they do, they will likely have some positive social impact.  Dr. Karani creatively uses the demand for nutritional food as an example.

Harrumph is all I can say!  Evidence suggests otherwise.  As one example: Wal*Mart.  Another -- all the manufacturing that has been moved off-shore because, essentially, it was just too expensive to reinvest in infrastructure.  We can see the results of these actions.  Harrumph! 

Nonprofit Rock Stars Tussle

It's a sobering thought but sometimes, maybe everyday but it's not always so news worthy, the folks that do the work of nonprofits; the folks that do the work and have a really high profile and are maybe even considered the "rock stars" in the nonprofit sector; have issues.  And sometimes, these issues get aired to the correct ear at just the right time and poof: there's a big New York Times story.  And for a moment we forget that nonprofits have governing bodies who are the sometimes big and sometimes little engines moving the nonprofit forward.  And we also forget that what nonprofits are about is results.  And, we forget that even when the rock stars aren't perfect, they too are about results and using their respective skills to achieve these results.

Such is the case in Sunday's New York Times story about the newly awarded mega-bucks from the Social Innovation Fund and how maybe there's not enough transparency by the Fund itself and how maybe "some" people got money and weren't stellar in their proposals and, well, you get the picture.

One thing for sure: this is not the time to be bashing anyone in the sector unless of course they are doing what they are doing for personal gain and/or are not achieving results.  The Times story isn't about results.  And, really, funders, rock stars, board members: results has got to be the story we discuss.  Stories like this do nothing for the cause of making a world in which everyone has a chance to succeed.

Nonprofit Boards Meeting Electronically Could Fail Status Test

According the Wall Street Journal, a "digital" or "virtual" church was denied church status on the grounds that it's congregation did not, well, congregate.  Because there is no physical meeting space and in essence, no way to document congregants meeting for worship, the church-applicant failed the "association" test which essentially says that one of the core elements of church is people meeting face-to-face to do their religious thing.

As one nonprofit lawyer points out, there is a possible so-what to nonprofits from this ruling.

"....if the IRS doesn’t clarify its classifications, non-profits conducting board meetings electronically could run afoul of the agency.  If my clients’ boards of directors can meet that way, is it much different than allowing a church congregation to congregate that way and hold a worship service?” he asked. “The IRS is going to have to address that sooner or later.”

I have to admit that I believe that nonprofit boards that meet in-person tend to pay better attention to their decisions in addition to having the opportunity to forge relationships which also contribute to better decision-making.  At the same time, in-person meetings are not a guarantee that all in the room are fully participating.

Nonprofit After String of Failed For-Profits

It's not surprising to see folks who want to be in the restaraunt business move into a failed restaraunt and try to make a go at it.  It's equally not surprising to see one more failure.  It might be the location, the pricing, the costs--any number of factors but for sure, those that have tried have failed.

Down in the Philie area there's a movie theater that has been purchased and made a nonprofit after a "string of private owners" failed to succeed.  The theater's business model: attract audience through "classy" (my term) movies, some old, some new and have memberships and donations, and, I presume, fees make the place sustainable.

I assume that one element that the theater has going for it is that it is not paying taxes: property or state/federal income.  I'm guessing that the location, once good when it began, may be ok but...times have changed and the mega-theaters do draw audience.  I would have guessed from its nonprofit status that it was only screening oldies or the like but this next couple of months it will also be playing what is in the mainstream theaters: Julia Roberts’ film “Eat, Pray, Love” will play throughout August and into September.

I have a bunch of questions: What exactly justifies this theater being nonprofit?  Is it really filling a void in which the for-profit sector has no incentive and the public sector has no demand (for public dollars to be used)?  And with all the competitors -- the big cinemas as well as cable -- is there really an audience noting that the previous owners would say the answer is "no".  And what exactly is the incentive for memberships or donations?

Unfortunately, the answers I would hypothesize don't leave me to think this is a viable idea.  I'd love to check back in a year to hear the progress but like the effort to make for-profit news media nonprofits, I'm just not understanding the viability of these conversions.

To learn more about this theater, check the story at the Philadelphia Inquirer.

Nonprofit Standards Reflects Leaders Standards

Can a nonprofit have standards that are different than its leaders?  My guess: probably not.  Big decisions like mission and particularly values and/or policies will likely come from the "top" and for most nonprofits "top" refers to the board or, if that board is selected by the Chair or Founder, then, the Founder. 

Ok, this is a hypothesis with some evidence I've observed over the years.  So why the question?  Well, Wycleff Jean is one of the latest candidates for President of Haiti.  You may recall that not-so-long ago, Mr. Jean's foundation, an entity raising money to benefit Haitians, was under some serious challenges for not-so-proper use of its monies, including some very questionable payments to Mr. Jean and those who work with or for him.  My simple analysis: Mr. Jean has street-cred in Haiti and there are cultural nuances we straight-laced westerners just might not understand.

For his part, Mr. Jean says no one except the Haitian people really understand or have all the facts straight.  But the bigger question: let's say the press and all the judging westerners are correct, Mr. Jean just hasn't been that honest or just hasn't been the kind of grantmaker we think is preferred.  Does that mean he really can't be a good president of a country really needing someone to believe in?