Nonprofit Board Crisis

Nonprofits and Garbage

I missed this over the weekend but like all garbage, it doesn't go away that easily.

Mayor Bloomburg (New York City) wants to figure out how to assess religious institutions and nonprofits a fee for garbage pick-up.  His office estimates that some $17 plus million could be generated through this enterprise.

I must admit that the idea is not as offputting as an overal arbitrary tax where the taxpayer pays and can't say what they want the tax used for (e.g. war).  Oops --just a tad political! 

Anyway, maybe there are some services for which a charge should be assessed and if not garbage, what?  To top it off, if I were the religious institutions and nonprofits, this might be one of those great opportunities to band together and create a garbage company which then launches a recycling company and jobs, and revenues to be shared and maybe lower costs, oh my!

This could be one of those opportunities to turn something bad into something great!

For more on this, see the Wall Street Journal.

Nonprofit Without Prudent Governance?

How risk tolerant a nonprofit is should be determined by its board.  Risk tolerance is a policy issue that is particularly important for community housing organizations because there is often a lot of money at stake, not to mention a lot of lives, and for the community, the question as to whether they are better off as a result of that organization's intervention.

A case in point is the investigative story published in today's Washington Post.  A D.C. nonprofit housing developer Exec got involved with some high-risk investors and in the end, no one was better off. 

Would better results have been achieved with more prudent governance?

Nonprofits Focus of Taxation

Huh? Nonprofits focus of taxation.  Is this some sort of paradox you might ask?  You can't tax a tax-exempt organization!

Ah, but if you are a municipality like the City of Boston or Providence or Chicago, just maybe you can and do so at the tune of 25% of what you might owe if your institution was not tax-exempt. To these cities and more the PILOT (payment in lieu of, voluntarily paid by larger nonprofits) is just not enough to cover the deficits all are facing. 

In my opinion, nonprofits are just not telling the stories of their value well enough.  These stories, I believe would illustrate the cash and non-cash value large nonprofit institutions bring to a community.  These stories, if told correctly and were targeted, would generate the public support needed to get the politicians to back-off. 

Come-on nonprofit boards and execs -- get out there; make the numerical and results case of your worth to the community.  Understand that if you don't, you will continue to be the target for giving more -- as though you had it.

For more on the story, check-out the New York Times.

Nonprofit Becomes Political Statement

Yesterday as reported by media everywhere, Indiana Gov. Mitch Daniels signed a measure imposing some of the nation's tightest restrictions on abortions and making Indiana the first state to cut off taxpayer funding to Planned Parenthood, which immediately went to court in an effort to stop the law. Daniels is considering a run for president in 2012. Adding his signature to the abortion bill will likely help his image among social conservatives who were upset over his previous calls for a Republican "truce" on social issues.  

Should the Indiana and National Boards of Planned Parenthood be proud that bashing and defunding them has become the new "it" political statement?  Is there nothing more than going to court that Planned Parenthood can do? 

One answer is to remind ourselves about the paradigm that defines the role of the nonprofit sector: to fill the void where public does not have a mandate (lowest common denominator of needs) and for-profits have no incentive.  So, I could argue that such bashing and pulling of money from Planned Parenthood would suggest that the public no longer places Planned Parenthood services on the list of lowest common denominator of needs. 

But is this true?  Has the public really come to the place that the Governor of Indianna represents?  And what are the alternatives?  Well, many nonprofits that are not government-funded do survive through individual gifts.  Take Amnesty International or some of the big environmental groups. 

Maybe this defunding trend is really an opportunity for Planned Parenthood to recreate itself as the "People's Choice" demonstrated by a legion of donors.  Afterall, while the money from the public sector is appealing, perhaps the strings and the negative messaging coming from those who question such allocations just isn't worth it.  A good board conversation, don't you think?

Nonprofit Inclusion: Price Matters

One of the components of a marketing strategy is price (along with product/service; place (distribution); promotion (communications); and, position.

Price reflects a combination of ingredients including the cost of providing a service, cometitor's pricing, and an income goal.  But beyond how price benefits an organization, price also establishes value, real (tanigble) and perceptual (what a prospect buyer believes something is worth including their real and perceived cost of going and getting that service).  As such, price attracts and detracts consumers.  

Some would argue then that a high price set on an event could mean that the costs to create and deliver services are high.  Others could argue though that the organization only wants a consumer that has means to participate.

For example when a nonprofit wants to attract a wide audience to an event or wants to ensure lots of folks have access to a particular publication it may "price" the event as "free".  But, for some, free means "of little or no value".  The target customer would not then be the folks who hold such a position about the meaning of "free".  On the other hand, that same nonprofit could set a high price i.e. value while finding donors to subsidize lots of folks to ensure a broader range of participants.

The Independent Sector has for many years claimed to be the voice and representative of the nonprofit sector or of those who care about the secotor.  But what does the price of their 2.5 day conference say about their desire for broad representation?  Currently, the "early-bird non-member" discount rate for the 2011 October Chicago conference is $1,050.  The non-member regular Conference Rate is $1,800.

So, based on pricing alone, who do you think the Independent Sector wants at its table?

Nonprofit Hospitals Face Dinosaur's Fate

Nonprofit Hospitals are going the way of the dinosaur.  The reasons are likely not unknown to any of you.  The Washington Post does a great job of drawing the picture.

So, let's say you are a board member faced with the question of whether you should stay or go.  You want to pursue mission.  But you also want to be prudent. Really, what would you do?

Nonprofit Governance Matters

Is it right to say that when celebrity's are directly involved with a nonprofit, good governance may be set aside?

While the details remain fuzzy for the moment there are some facts that lead me to think that this organization's board has been kind-of out-to-lunch in the oversight department.  The celebrity: Madonna (as well as others)  The organization: Spirituality for Kids (actually chaired by Madonna)  Spirituality for Kids, according to the Associated Press, is an organization related to the Kaballah Center, the mystical Jewish folks.  Raising Malawi, another Madonna organization formerly related to the Kaballah Center is also facing some legal challenges as well.

Here's however where the details get really fuzzy.  What is known is that the two organizations are being reviewed by the federal and New York tax authorities.  We also know that there is some kind of "phony tax scheme".  And finally, we know that some programming that was supposed to have been conducted may not have been.

So much for the facts.  But the more important question is where are these boards?  Is this one of those "star-struck" situations that when folks get involved with a nonprofit celebrity they leave their brains and prudence (good common sense) at the door?  And if the answer is yes, then, and I hate to say this, but should we have a whole different set of criteria for the composition of boards that are either created or singulalry supported by celebrities?

Gotta make you wonder....

Nonprofit Governance Just Not Evident

When there's no oversight, particularly oversight to ensure that donors' monies are distributed and spent as intended, it's just plain bad governance.  Witness the Kanye West Foundation.

The Rolling Stone Magazine noted that the Kanye West Foundation has "shuttered" its charity. According to the Magazine, the Foundation "started by the rapper and his late mother, has shut down after giving away only a fraction of the money it raised.  According to reports, in each year between 2007 and 2009, the foundation received donations averaging $492,000 but spent an average of only $18,080".

Now, where is that board?  And, where is that money?

 

Nonprofit Under Attack

What should the board of a national nonprofit, with affiliates in every state, do when it is under attack?

Well, that was the question facing ACORN and now its the question facing Planned Parenthood.  ACORN, with thousands of individuals who at one time or another were supported by or worked with ACORN, didn't fare so well.  It remains to be seen on the Planned Parenthood story.

But what about a board in these situations which don't only occur nationally but locally and statewide as well?  I propose that one board job is to have the conversation about what is perceived to be the problem by those who attack.  I'm confident that both national and local Planned Parenthood boards have spent a lot of time, many years, engaging in this conversation.

So what is left?  I propose that if a nonprofit board believes its duty of care involves not only making prudent decisions on fiduciary matters but also ensuring that mission is pursued and accomplished, then that board would want to step up and be active voices in making its case to those who are raising the questions.  Being active voices could involve: editorials (in what remaining papers exist); television and radio appearances; and, buttonholing representatives.  I think it could also involve personally reaching out to friends and constituents and those who have been favorably affected by the work.

The bottom line, for me, is that situations like that being faced by the Planned Parenthood board, provide an opportunity to learn more about what duty of care may really mean.  Hope as a board member you don't have to face this kind of fight but be mindful that care extends well beyond just making prudent financial decisions.

 

Nonprofit Pulls Out: What Was Board Thinking?

Perhaps it's the best laid plans story or perhaps the poorly laid plans story but when a nonprofit decides to leave a community and release itself from its assets, I wonder what the nonprofit's board was thinking when they made the commitment in the first place.  Case in point.

According to the Columbus Telegram:

Boys and Girls Home of Nebraska will be ending its Columbus operations, leaving tenants of Columbus Family Resource Center without leases after August of this year.

The tenants, including Columbus Area United Way, Nebraska Workforce Development, Boy Scouts of America, Connect Columbus, Catholic Charities, a Central Community College-Columbus satellite office and others, were informed by letter that their leases would be terminated Aug. 31 as Boys and Girls Home looks to pull out of the city.

Boys and Girls Home lists high maintenance and utility costs as a factor for the closure. It also states that the agency would be willing to negotiate a sale of the building to any interested tenants.

In the past year, social service agencies in the building had faced rent increases as the Boys and Girls Home made an effort to remain viable.

Among the services offered by Boys and Girls Home is a residential program for troubled youths.

I might offer that this is a good opportunity for the building's current tenants to ban together and buy the building and share the costs, creating another nonprofit they mutually own for this purpose.