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Jan 14

Big App: Big Brothers Big Sisters tech solution

By Feature

Editor’s note: January is National Mentoring Month celebrating mentoring and the positive effect it can have on young lives.

By Lynn Sygiel, editor, Charitable Advisors

In 2010, Darcey Palmer-Shultz and Amy Pomeranz Essley had a significant problem to tackle. During their combined nearly 30 years of working for Big Brothers Big Sisters of Central Indiana (BBBSCI), they had taken on many issues, but this particular challenge gave them pause.

Big Brothers Big Sisters, which pairs adult mentors with kids in need of role models, had a match-retention rate they wanted to improve.  Palmer-Shultz and Pomeranz Essley knew that could be higher. But how to go about it?

Simultaneously, and perhaps serendipitously, Cummins, the Columbus-based engine company, entered the picture and made the nonprofit a unique offer.

BBBSCI could apply to train side by side with Cummins employees in the Six Sigma methodology, a series of techniques and tools for process improvement developed by Motorola in the 1980s.  Many manufacturing companies now use the method.

“It’s a lot more uncommon for nonprofits to use it, but Cummins had an opportunity where they would allow nonprofit partners to have somebody go through training and work with their team,” said Palmer-Shultz, the CEO of Big Brothers Big Sisters  who enrolled in the 2010 training.

For the Six Sigma study, Palmer-Shultz focused on how to improve the organization’s 12-month match retention rate. She was the only nonprofit leader in the room and found the process invigorating. She said the study resulted in defining 24 improvements that helped keep more of its matches together.

But this study led to other innovations, said Pomeranz Essley, who serves as chief program officer.

“While we were doing that research, we heard from Bigs (the organization’s nickname for its mentors) that they really wanted ideas of additional things to do with their Littles. So that’s kind of how we came up with the second study,” said Pomeranz Essley. At the time, Big Brothers Big Sisters was providing advance tickets for events and discounts, and the Bigs wanted more of this type of help. She enrolled in Cummins training in 2013 to learn the process and begin planning how to tackle the request.

Like the first training, this was another in-kind contribution from Cummins.

The result of the second study was a useful, but a somewhat unwieldy list of 200 different activity ideas outlined on an Excel spreadsheet.

“And we were like ‘Now, what do we do?’ We had to have some way to communicate this list out to Big volunteers,” said Pomeranz Essley. 

Palmer-Shultz said they assumed they would simply post a list of activities on BBBSCI’s website – – pages and pages of them — but they quickly came to the conclusion there had to be a better way.                              

That realization was sparked by the fact that nearly 50 percent of the organization’s volunteers are under the age of 30.

“Again, we were thinking fairly small in the beginning, and then we got to the point, ‘If people are going to use this, it’s going to have to be what people are using now. It cannot be a piece of paper or whatever we might be able to come up with,’” said Palmer-Shultz.

So they reached out to a BBBSCI board member who had helped develop a web application for a one-day Giving Tuesday fundraiser to see if he might have ideas or questions for them.

That board member, Drew Linn, is the chief strategy office of Counterpart. Counterpart, formerly WDD Software, first used a web-based fundraising application platform in 2014 for Big Brothers Big Sisters’ inaugural #GivingTuesday campaign, called AppToGive.

According to Linn, the Cummins studies established the “whys” but together they determined that an app was the best solution.

Counterpart was able to develop the software for the administrative side for BBBSCI’s match-support specialists and others who manage the portal, but brought in another company, Crafted, as a partner because mobile is its expertise.

Development took place between August and December of 2015, with the launch in early 2016. The app cost about $60,000 to build with funding coming from Cummins, The Glick Fund, Opus Community Foundation, Midland Atlantic Properties and Lilly Endowment.

“We had some unique funding that paid for this, so we weren’t pulling from anything and definitely that made it possible. We had in-kind from our partners, which made a huge difference as well, significantly reducing the expense,” said Palmer-Shultz. Without partners who were invested in it, she said, they probably would have had to scale back what they were able to implement.

Called the Big App, it provides adult volunteers with a constant reminder of their training. Today, there are over 123 intentional-match activities and events that align with the 12 Indicators of Thriving. The tool helps Bigs find different opportunities and keep track on a pie chart of what they’ve done with their Littles.

“Each activity is linked to an Indicator of Thriving, which includes developing things like emotional competence. Scrolling over the indicator provides a definition, which is a helpful reminder. So as Bigs are using it and tracking activities, it shows them over time areas they are addressing,” said Pomeranz Essley. The hope is that having exposure to activities in the 12 areas will help staff see increased youth outcomes and growth.

“Basically, it allows a Big to more deliberately engage with his or her Little. As a tool, it organizes information about things to do,” said Linn, who’s also a Big. “It used to be email hell. Literally, it was an avalanche.”

The tool has streamlined communications between staff and volunteers, reduced internal printing costs and it allows the nonprofit to do ‘push notifications.’ For example, when BBBSCI has ticket opportunities that are relevant only for high school kids, they can target a segmented audience.

Since launching over two years ago, 98 percent of BBBSCI’s matches use the app.

“It was a change for them, but they really started to see the benefits of it,” said Pomeranz Essley. When the nonprofit implemented the first project, its goal was to get to 75 percent retention. Retention now exceeds and is sustained at over 80 percent.

In hindsight, there are other reasons why is the app is helpful, said Palmer-Shultz. The organization knows that what they ask of volunteers is a high threshold – overall length of commitment, frequency and responsibility to do it independently.

“Even though we support, coach and offer quite a bit, trying to make it as doable, rewarding and as simple as possible to be effective is really important,” she said.

While Counterpart provides two spreadsheets monthly, it collects and stores all the data. Linn said together they are now figuring out what is valuable and prioritizing the metrics. Ultimately, his company envisions providing an administrative dashboard to look at specific match engagements. The BBBSCI’s match specialist would already know what activities a Big and Little did, and be able to spend more time on the relationship and even helping to plan for the next one.

“So I feel like those are the things that are going to come next which not only saves the Big time, it saves the match support specialist’s time and now you’re focused on outcomes instead,” said Linn.

During the building stage, there was conversation about whether it was exclusive or if it should be built to have the capability to add agencies. Early on, the decision was the latter.

In the summer of 2016, the team presented at Big Brothers Big Sisters national conference, and since then, nine Big Brothers Big Sisters agencies have signed on: Lexington, Ky., Omaha, Neb./Council Bluffs, Iowa; Louisville, Ky.; Madison, Wis.; Appleton, Wis.; Minneapolis/St.Paul; Salt Lake City; Orange County, Calif., and Columbus, Ohio.

Agencies pay an annual fee, which helps cover maintenance costs and keeps the app fresh and up-to-date, including updating the organization’s new brand. Several agencies have paid to add features. Each, however, must receive Central Indiana’s approval first. BBBSCI owns the app code. 

“Technology changes fast. This last year, we used (the fees) to upgrade just the behind-the-scenes engine because it was running slower and not as efficient. And it’s only three years old. And so, that didn’t get them any of the other ‘I-cannot-wait-for-this-upgrade stuff,’” said Linn. 

Currently BBBSCI and the agency partners are in discussions about what this will look like in three to five years.

“It’s figuring out what we want this to do and how we want to keep using it in the future.”

Essentially Central Indiana designed the first round based on what it needed.

“But we have all these partners who have really good ideas and we are starting figure out together what the next step is,” said Palmer-Shultz.

 Centric Innovation Award

This past fall, the Big App won a Centric award. 

The Indianapolis-based network of resources brings together hundreds of leaders and practioners for a full-day event.

At the gathering, the Indiana Innovation Awards are given to individuals and organizations that are leading innovation in the state. This year, the Big App and its partners — Big Brothers Big Sisters of Central Indiana, Counterpart, Crafted — were recognized for this tech application.

Advice to other nonprofits

Counterpart’s Linn provided some advice to nonprofits.

It is important to remember that sometimes the nonprofit and the tech company speak two different languages.

“It’s an education process for both sides,” he said. It was often that when the nonprofit asked a question, the tech company thought there was a problem. :In a sense you’re not even prepared for the question.

Pomeranz Essley said she didn’t even know the questions to ask.

It’s important to keep it simple.

“Our firm is nearly 25 years old, and we’ve learned over those years that you need to focus on the most minimal scope that provides value so it will engage the users.

“You can build a Cadillac but do you actually need power windows if you’re in Alaska. You and I can sit here all day, and we could dream and some of the stuff won’t be used. Remember for most nonprofits, you’re talking about a limited budget and no body wants to waste money. It needed to be very intentional.”

Dec 17

CEO succession planning is no longer just for retirement

By Uncategorized

By Bryan Orander, president, Charitable Advisors

Earlier this year, I interviewed a 30-something arts organization’s CEO about leadership and staff development and the discussion turned to CEO turnover and succession planning. I explained that more than half of the leadership transitions that Charitable Advisors’ supports are for retiring nonprofit executives.

The arts organization CEO surprised me by taking the conversation in a different direction, sharing that she feels most successful leaders her age see their roles as 3-5 years and then they want to move to a different challenge to continue to grow as leaders.

This may be an emerging trend to watch. Looking at the last 50 leadership transitions we have supported, only two have had tenures less than two years, but two clients from 2013 have recently called us as their young, successful leaders move to new opportunities.

That means that board and staff leaders need to be extra vigilant in defining what succession planning looks like to sustain their organizations:

Succession planning for retirement: Traditionally, serious succession planning is done when an older leader is willing to share that they see retirement on the horizon. From past experience, the board, hoping it is an idea that will pass, sometimes ignores this. More appropriately, it triggers conversations about reviewing/grooming potential internal successors and taking the leader’s retirement into account in organizational planning.

Do it without the pending retirement: Every organization has the opportunity to approach succession planning to prepare for an unexpected leadership departure plus the chance to attract and develop more staff and board leaders.These discussions also have the positive side effect of making those key roles more “do-able” by actively sharing leadership with others.

For its direct and concise explanations, one of my favorite resources on this topic is a white paper written by my friend and Noblesville native Tim Wolford for the Annie E. Casey Foundation called “Building Leaderful Organizations” http://www.aecf.org/resources/building-leaderful-organizations/

Your funders and donors care: For years, United Way has mandated that organizations have written succession plans. Foundation leaders are very aware of how important leaders are to their grantee organizations, and also that every capable leader eventually leaves.


Are you prepared? What’s your plan if your senior leader gives a year’s notice or becomes ill, or your younger leader gives you a few weeks’ notice?  Call Bryan Orander at 317-752-7153 or Bryan@CharitableAdvisors.comto learn more or talk about applying these insights to your organization.

Dec 17

‘Blocker’ corporation: Avoiding UBIT for nonprofit ‘business’ activities

By Uncategorized

This article originally was published on Aug. 2, 2016. 

By Zachary S. Kester, JD, LLM, CFRM and Kylie Schreiber, at Charitable Allies

As charitable organizations seek to increase streams of revenue — to provide more services, support more staff or help ensure long-term sustainability — many dabble in sources of business revenue to supplement the financial bottom line. For example, an organization with a pool may wish to rent the pool and locker room access to local schools to use for their interscholastic or intramural swimming teams.

Business activities are fairly common among charitable organizations, in fact according to the National Center for Charitable Statistics, nearly 70 percent of the $1.4 trillion of nonprofit income was earned. The activities themselves are not inherently wrong or impermissible for charities. They only become an issue if they are unrelated to the charitable purposes of the organization and represent a substantial percentage of the total revenue and activities of the organization. Unrelated business income tax (UBIT) can apply to income from those types of unrelated business activities.

In fact, ‘business’ activities are often related to the charitable nature of the nonprofit (i.e., sales of counseling or therapeutic services, or selling donated goods). Yet, many regularly carried-on-business activities do not qualify as related (i.e., receiving debt-financed rental income or selling advertisements in a newsletter) even if the income produced is used to further the tax-exempt purposes.

When nonprofit business activities start to grow, regardless of whether they are ‘related’ to the charitable purposes of the organization, best practices often involve driving those activities through a subsidiary legal entity such as an LLC, a supporting organization, or a traditional business corporation.

Called a ‘blocker’ corporation, it is a traditional business c-corporation that is wholly owned by a charity but whose activities are not attributed to the charity. This is true even if the charity exercises substantial influence or control over the blocker corporation’s activities. Through a blocker corporation, not only is the charity protected from liability related to the business activity, but also the charity may engage in substantial revenue-generating activities that would otherwise be considered UBIT.

Understanding UBIT

In deciding whether or not to conduct business activities through a blocker corporation, it is important to first understand UBIT and its purpose. UBIT was created to ensure that tax-exempt organizations did not start competing with for-profit entities by providing goods and services beyond the scope of their tax-exemption and not pay taxes.

What can trigger the UBIT is complicated and, as usual, comes with a host of exceptions.

Unrelated business taxable income (UBTI) is defined by the IRS as “the gross income derived by any organization from any unrelated trade or business regularly carried on by it.” An “unrelated business” is “any trade or business the conduct of which is not substantially related to the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption.”

In order for income to be classified as UBTI, the business activity must (1) be derived from the operation of a trade or a business, (2) be regularly carried on, and (3) not be substantially related to the tax-exempt purpose of the organization. If a business activity meets those criteria, then that income must be reported on the Form 990-T, if it is over $1,000. At that point, the income will be subject to standard corporate tax rates, and if such income is more than insubstantial, it can threaten a charity’s tax-exempt status.

The UBTI and UBIT determinations vary on a case-by-case basis because of many exceptions, exclusion and modifications to the law, many of which do not make much sense.

Examples of business activities not subject to UBIT include:

  • Passive income, such as dividend and interest income, royalties and rents from real estate property
  • Any activity in which 85 percent or more of the work is performed by unpaid volunteers is exempt from UBIT, such as a thrift store
  • Sales of donated items

Examples of common sources of taxable income include:

  • Sales from advertisements in a newsletter or on a website
  • Rental income from debt-financed property (i.e. renting out property acquired from a loan for big events like weddings or fundraising concerts for a discounted fee)
  • Investments like hedge funds and private equity funds that function as partnerships (unless a blocker corporation is used)
  • Fees earned for providing administrative or clerical services to another organization

Use of a blocker corporation

All these are the types of business activities that might be better off and more successful if spun into a blocker corporation. And the blocker corporation transfers income to the charity in the form of passive, non-taxable income.

Recall that through a blocker corporation, not only is the charity protected from liability related to the business activity, but the charity may engage in substantial revenue-generating activities that would otherwise be considered UBIT.

Suppose there is a charity that promotes health and wellness in a community and operates an animal shelter also has an associated vet clinic that charges for veterinarian services. Vet services, being unrelated to human health and wellness, may trigger UBIT. However, having the vet services provided by a blocker corporation allows those services to continue being offered and the income used to support other health and wellness and animal shelter programs without triggering UBIT.

By using blocker corporations, charitable organizations maintain their tax-exempt status and can still increase revenue without paying UBIT. If a nonprofit is already conducting business but is not expanding due to unease about paying UBIT and the risk of losing its tax-exempt status, a blocker corporation may be the answer.

However, it is important that the nonprofit organization does not “control” the blocker corporation. “Control” means the nonprofit organization owns more than 50 percent of the stock, capital, or beneficial interests in the blocker entity. There is some indication that “control” by the nonprofit organization might mean owning at least 80 percent of the stock, capital, or beneficial interests in the blocker entity, but there is a conflict of the law and would require obtaining counsel exceptionally qualified in the creation of blocker corporations to determine. Therefore, to be safe nonprofit organizations should own no more than 50 percent of the blocker organization in whatever form that ownership interest may be. In the end, remaining under these ownership limits allows what would otherwise be UBTI to pass to the nonprofit organization without being taxed.

The primary activities of charities are, and should remain, pursuing charitable ends. If a business opportunity develops to help add to the bottom line, it may be worth exploring how that income can be converted into passive income for the charity, especially if the charity has already developed an expertise in a given area through which the larger community would benefit.

Pursuing or continuing business activities does not necessarily run the grave risks that it is often believed to have. Besides blocker corporations, there are other ways of avoiding UBIT, including having volunteers (not paid by the organization) do the work or even restructuring the activity so that it more closely relates to the charitable purpose.

Blocker corporations offer just one way for organizations to get where they want to go with a larger budget to do so. Performing business activities does not have to be intimidating and can be done in compliance with all regulations.

Attorney Zac Kester provides generalist and strategic nonprofit legal and consulting services. He holds a Master of Laws, 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.

With highly experienced legal and training personnel, Charitable Allies provides all manner of legal and educational services for boards, officers, management and staff of myriad charities throughout the sector. From basic one-time questions about a single matter to training for boards and officers to complex reorganization or merger of activities, Charitable Allies is your go-to cost-effective provider of legal services to nonprofit organizations.

Contact Zac Kester, executive director, at 317-333-6065 or zkester@charitableallies.org with any questions.

    Substantiation

    • AccountingWeb. UBIT: When a Nonprofit Is Profitable. Meredith Pratt, CPA. Jan 7th 2013. Tax-Exempt Entities: UBIT and Debt-Financed Income, Rack & Olansen, A Professional Law Corporation
    • Hinckley Allen – Nonprofit Update. Katie A. Ahern. Five Things Nonprofits Should Know About: Unrelated Business Taxable Income (“UBTI”). February 13, 2014.
    • Mosher & Wagenmaker, LLC. A Basic Study of Unrelated Business Income Under IRC §512.
    • IRC section 512(a)(1).
    • IRC section 513.
    • IRC section 513(a)(1).
    • IRC section 513(a)(2).
    • IRC section 513(a)(3).
    • IRC section 512(b)(4).
    • IRC section 512(b)(13).
    • IRC section 514(b)(1)(A).
    • 26 C.F.R. § 1.512(b)–1(L).
    • Jacobson Jarvis & CO, PLLC. What Not-for-Profits Need to Know About Tax Compliance.
    • Mosher & Wagenmaker, LLC. A Basic Study of Unrelated Business Income Under IRC §512.
    • The Nonprofit Times. Tax Strategies for Hedge Funds, Private Equity Funds. Karen Andersen, CPA.
      McGuire Woods. IRS Advisory Committee Releases Recommendations on UBTI Compliance. August 21, 2014
    • Rack & Olansen. A Professional Law Corporation. Tax-Exempt Entities: UBIT and Debt-Financed Income
    • Emily Chan, Profitabe Side of Nonprofits – Part I: Earned Income, http://www.nonprofitlawblog.com/the-profitable-side-of-nonprofits-part-i-earned-income/
    Dec 03

    Why you need to know about donor-advised funds

    By Feature, Fundraising

    By Lynn Sygiel, editor, Charitable Advisors

    Michele Thomas Dole has spent her career helping others realize their philanthropic dreams.

    During the day, she is a senior trust officer at Fifth Third Private Bank. She advises clients about trust administration and estate planning, and builds client relationships to help accomplish their financial goals. For the past 15 years, outside of work, she has been an adjunct faculty member at the Lilly School of Philanthropy and has helped design curriculum for both the school and the Women’s Philanthropy Institute.

    She admits much has changed in the field of philanthropy, and her daily work experience keeps her teaching relevant. Among the most striking change during her tenure is the ubiquity of donor-advised funds (DAF).

    Last year, the number of donor-advised funds in the U.S. rose to nearly a half million. Some predict that in the next five years, donor-advised funds will be among the top five U.S. charities. Given this growth, she believes nonprofit staffs and boards should be well versed in the nuances of this tool.

    “It is astonishing to me how pervasive donor-advised funds are. It feels like they are touching every aspect of charities. They’re just so much more commonplace than they were 10 years ago,” said Dole. And her students have kept pace. She finds that they are wholly aware of donor-advised funds and many have stewarded donations made with these grants.

    Established and managed mainly through community foundations and Jewish Federations in the mid-1930s, for decades they were typically known as community trusts. It wasn’t until some 60 years later that national sponsors emerged. Fidelity Charitable was the first, according to Tony Oommen, a planning consultant for the company. He is one of 12 professional advisers for the company and is based in Chicago.

    With the advent of national charity sponsors, donors everywhere had access to this tool, however, it wasn’t until 2006 that it burgeoned.

    “Prior to the last 10 years, donor-advised funds weren’t really on the radar of most people. This was in part because there was no actual definition of a donor-advised fund in the IRS code until 2006 with the enactment of the Pension Protection Act.

    “Before that it was really just a program within a public charity, where a donor contributed and then recommended where those grants were going,” said Oommen, who has been a financial adviser for over two decades.

    “I think that’s where it really picked up. People became more aware that this could be something that could simplify charitable giving. In Fidelity’s case, it was based on the idea of democratizing charitable giving. And Fidelity, as a private company, could take company capital and sink it into a nonprofit to provide resources to develop a program.”

    Nationally, contributions to donor-advised funds have increased as a share of total giving over the past decade. For 2017, donors contributed $29.23 billion, or the equivalent of 10.2 percent of individual giving.

    The 2006 IRS definition is a legal statute, specifically defining an account or program. The Treasury Department followed with a study to determine if there were abuses or potential abuses in order to craft future legislation and regulations. The study results released in 2011 found no major infractions, Oommen said.

    Since then, what donor-advised fund sponsors have been waiting for are potential regulations. The most meaningful IRS guidance, according to Oommen, came last December when the IRS released a notice, known as 2017-73. The notice sought public comments on excise taxes in certain situations. Actual regulations, however, have not yet been released.

    Interestingly, Indiana the 17th largest state by population, ranks fourth in the U.S. for donor-advised fund charitable sponsors, according to the National Philanthropic Trust report. There are 58 in the state.

    In Indiana, the Lilly Endowment began its GIFT Initiative in 1990 to launch and develop community foundations across Indiana, which contributed heavily to the number. Community foundation program officers can be eyes and ears on the ground.

    Dole cited a recent family that was in process of establishing a donor-advised fund. They hadn’t determined their primary areas of interest nor the charities they wanted to support. She recommended the community foundation establish the fund because as a local foundation it would know the family’s  ‘backyard.’ A program officer would know whom to call at the local charities if the family wanted to tour to learn more. She also recommended that the family prepare questions before the tour.

    “For people who want an opportunity to teach and impart their family’s values on the next generation, donor-advised funds are another tool that can bring families together to do the kind of thoughtful philanthropy they want to.”

    According to Oommen, the main reason this vehicle has become more popular is that it cuts down on the red tape and makes charitable giving simpler. It provides one receipt for all annual gifts and reduces the barriers for people who want to make a difference and execute their good intentions. But he sees it as more than that.

    “It’s easy and tax efficient,” Oommen said. “The vast majority of people that give money to charity give cash. But cash is the most expensive asset to give to charity because in almost all cases, the donor has had to realize taxable income or just ordinary income or capital gains tax to free up cash to give.”

    With a donor-advised fund, contributors can choose appreciated long-term capital asset instead. The charity sponsor can sell it and then liquid assets are available for grant making.

    “A lot of people don’t get good advice, and they never really run through the math of what a difference that makes,” he said.

    The second reason, according to Oommen, is that an individual can give more in years when it’s tax advantageous to do so and set aside money for future giving. Some people, too, can set aside a retirement distribution by giving income that is being taxed higher while they are still working and set aside for future distributions.

    “So the implication of that is that you can give more in a year when it’s advantageous to you to do so from a tax perspective and set aside money for future distributions to charities,” he said. “The whole idea is simplicity.”

    In that vein, Fidelity banded together with three other donor-advised fund sponsors – Schwab Charitable, Kansas City Community Foundation and BNY Mellon Charitable — to create a widget. A nonprofit can add it to its website. Called DAF direct http://dafdirect.org/, when hyperlinked, it preloads the charity’s information for the donor and all the donor has to do is key stroke the dollar amount.

    Oommen believes this trend of donor-advised funds is going to continue and will increase overall giving. During an economic recession, he said, charitable giving dips. So when times are good, donors can set aside money that can be distributed and help to offset that dip.

    But even as popular as these funds are, donors don’t necessarily understand the potential.

    “I would say that it is the charity’s duty to understand how to raise funds from people who have these DAFs or will be setting them up. Get educated about it and how the process works. Talk to your donors about why they are using them. Understand the language of those professional advisers.

    “Track donors who are making grants from donor-advised funds separately. Somebody who has set up a donor-advised fund account has put some thought in and probably is getting some advice and setting aside money strategically and intentionally for a future distribution.”

    It is important, he said, to talk about testamentary transfers using a will or trust. Often he said that gift officers and estate planning attorneys miss donor-advised funds because they aren’t included in the intake questionnaire for a new client.

    “It’s just not part of the taxable estate that’s governed.”

    But the bottom line is it’s good all around. Oommen emphasizes that Fidelity’s goal is to help increase overall the amount that’s given in the U.S. The percent of GDP – 2.1 percent — has been roughly the same for the past 20 years.

    “If that could just move from 2.1 to 2.5 percent of GDP that would be about another $80 million for charitable giving and that’s the concept of growing the pie rather than just slicing up a finite pie.”

     

    Nov 26

    A OneAmerica® survey may help participants understand their personal financial picture

    By Sponsor Insight

    Best channels to help employees understand their retirement picture

    By Melissa Musial, marketing research and data manager, OneAmerica  

    As a nationally known record-keeper interested in aiding employers with their employee-retirement-plan objectives, the question of whether retirement plan participants have ample education on financial fundamentals ─ and whether increased education on these topics is needed ─ is foremost on our minds at OneAmerica.®

    By financial fundamentals, I mean basic budgeting, credit scores and monitoring and debt management; all cornerstones of personal finance and topics that are instrumental to an effective financial wellness curriculum.

    Without ample education, adults are often on their own to understand and navigate the delicate balance of paying off owed debt, living the life they want to live, and setting enough money aside to prosper after their work life is completed.

    OneAmerica takes the pulse of participants  frequently, and in 2017-18, it conducted its largest-ever survey of retirement plan participants, including those who work with tax-exempt organizations like yours.

    The poll of more than 12,000 respondents[1] showed that participants report the highest knowledge levels on the topics of budgeting, credit and debt monitoring and management (95 percent) which is great news, as it indicates educational efforts focused on these topics are influencing audiences.

    But the poll also shows that more than 60 percent of respondents lack knowledge on basic investing, retirement plan features, insurance planning and withdrawal strategies at retirement. Additionally, more than one quarter of survey respondents indicate they are only knowledgeable on two or fewer of nine financial wellness topics ranging from budgeting to college planning to personal taxes and that those who are less knowledgeable are more open to receiving education.

    Given these results, there is clearly an opportunity for education that OneAmerica encourages plan sponsors (or the human resources professional at your organization) to embrace, because insight is only good when action follows. The company believes it is important to continue to provide education on topics of budgeting, credit and debt monitoring and management, as survey participants did not appear to be applying their reported knowledge.

    Equally as important in an effective financial wellness curriculum is including education on those topics that participants report lower knowledge about and that are often a barrier to full-plan participation — for example, investing and retirement plan features.

    While the industry is making it easier for participants to begin preparing for retirement with the use of automatic plan features, without education on investment fundamentals or retirement plan specifics, participants may be under preparing or feel that the automatic features are enough to prepare them for a successful retirement.

    Tailoring education for pre-retirees regarding to withdrawal strategies is also critical. Without education on withdrawal strategies, those near or at retirement may continue to work due to a lack of knowledge on how to begin the de-accumulation stage. (To de-accumulate is to take the wealth you’ve acquired during your working years and begin to spend it to fund your lifestyle in retirement.)

    This could provide additional concerns for plan sponsors – such as increased benefit costs and struggles to bring in new talent due to lack of attrition.

    The survey also provided a very clear direction of participant educational preferences. When asked how they like to receive financial wellness education, 65 percent of respondents indicated that having online resources sent to them was their preferred delivery channel.

    Additionally, the OneAmerica survey inquired about the value that participants place on educational resources and found:

    • Web-based tools such as webinars, videos and podcasts were reported the most valuable resource by 42 percent of survey respondents, favored as much by men as women and across all three age ranges, but resonating the strongest among those aged 35 and over, as well as those with higher household income.
    • ‘Real-time chat’ tallies in second, at 15 percent, which resonates more strongly with the 18-to-34 demographic (at 21 percent).
    • More traditional methods – direct mail flyers/postcards (13 percent) and posters and flyers at work (four percent) – rank fourth and sixth respectively.

    The survey results clearly show a shift in education trends. Traditional communication channels such as print and posted items in the workplace have less value to participants. Plan sponsors should embrace those mediums that participants prefer when selecting education deliverables, and when creating their retirement plan’s participant education and communication goals.

    This survey was the third conducted by OneAmerica in five years, and the insights will be used (as has been done in the past) to assist retirement plan sponsors and HR professionals to work with participants to improve their financial wellness and overcome retirement planning hurdles.

    Do you want to know more about the OneAmerica Survey? Download a free infographic and whitepaper at www.oneamerica.com/RSsurvey

    Melissa Musial is a 20-year veteran of the retirement industry and currently serves as the Marketing Research and Data Manager at OneAmerica, where she focuses on using data, analytics, industry trends to meet people where they are at in their retirement journey. She was recently named by LIMRA as one of the 10 Rising Stars of Marketing and Communications under 40 in the financial services industry. 

    OneAmerica is the marketing name for the companies of OneAmerica. Products issued and underwritten by American United Life Insurance Company® (AUL), a OneAmerica company. Administrative and recordkeeping services provided by McCready and Keene, Inc. or OneAmerica Retirement Services LLC, companies of OneAmerica which are not broker/dealers or investment advisors. Provided content is for overview and informational purposes only and is not intended and should not be relied upon as individualized tax, legal, fiduciary, or investment advice.

    # # #

    About OneAmerica

    A national leader in the insurance and financial services marketplace for more than 140 years, the companies of OneAmerica help customers build and protect their financial futures. OneAmerica offers a variety of products and services to serve the financial needs of their policyholders and customers. These products include retirement plan products and recordkeeping services, individual life insurance, annuities, asset-based long-term care solutions and employee benefit plan products. Products are issued and underwritten by the companies of OneAmerica and distributed through a nationwide network of employees, agents, brokers and other sources who are committed to providing value to our customers. To learn more about our products, services and the companies of OneAmerica, visit OneAmerica.com/companies.                                                                                                                                                                

    [1] From Aug. 25, 2017 to Jan. 31, 2018, more than 12,200 OneAmerica retirement plan participants responded to an online poll, sharing their thoughts on financial wellness, education and resource preferences, and potential roadblocks to retirement.

     

    Nov 05

    Nonprofits and corporations working collaboratively

    By Sponsor Insight

    By Abby Rolland, communications projects manager and Genevieve Shaker, Ph.D., associate professor of philanthropic studies, IU Lilly Family School of Philanthropy

    Last year, corporations gave over $20.7 billion to nonprofits, an increase of eight percent since the year before (Giving USA 2018).Through gifts of cash and in-kind materials made through corporate-giving programs, as well as grants and gifts by corporate foundations and volunteering opportunities, corporations and their employees continue to engage in philanthropy. The idea of linking a corporation’s philanthropy with its business interests, often referred to as strategic philanthropy, began to take hold in U.S. companies during the 1980s.

    There are tremendous opportunities for nonprofits and corporations to work together. They both need each other to be successful – nonprofits need donors, volunteers, and board members from the business community, while corporations need nonprofits as vehicles to partner with to give back to the community.

    Corporation employees also benefit from opportunities for collaboration between nonprofits and corporations.

    “Being involved with nonprofit organizations and their developments encourages corporate employees to be more innovative, creative, and increase personal growth,” said Casey Ruschman, products and services manager for Indiana, Ohio, and Kentucky at Duke Energy Corporation and a current graduate student at the Lilly Family School of Philanthropy.

    Ruschman had a successful nine-year career in the accounting and finance department at Duke Energy in Cincinnati, Ohio when she reached a personal crossroads – stay in that department or work more with the community. When a position managing the Duke Energy Foundation opened, Ruschman saw the perfect opportunity to continue working for the company, while also engaging with communities in Ohio and Kentucky.

    During her four years leading the foundation, Ruschman realized that she needed formal education about the philanthropic sector.

    “I discovered that in order to do my job to the best of my ability, I needed more tools and better strategies on giving.” Those thoughts, as well as conversations with her boss, led Ruschman to look into online programs in philanthropy and nonprofit management. “This school and its graduate program really stood out to me,” she explained.

    Ruschman’s commitment to furthering her education to enhance her knowledge of philanthropy led to her nomination for and acceptance of the Cincinnati Business Courier’s ’Forty under 40’ award.

    “I want to be in a career that gives back to the community, and the Lilly Family School of Philanthropy helps practitioners be innovators and leaders who create positive and lasting change.”

    Through her time as the Duke Energy Foundation manager, her current role managing the company’s low-income energy efficiency programs in three states, and her service on several nonprofit boards in Cincinnati, Ruschman has worked with nonprofits in multiple different capacities.

    “There are many ways for nonprofits to engage and partner with corporations,” she said. Ruschman encourages nonprofits to look into various corporate giving and volunteering programs at corporations in their respective communities.

    Key to making a strong first impression is doing your homework.

    • Look into grants, scholarships, or in-kind product delivery that matches the nonprofit’s programs and goals with the corporation’s interests in the community.

    “Research various ways that corporations directly give money to nonprofits,” Ruschman said.

    • Determine whether a company has an employee volunteer program.

    “We have an internal program where we can see volunteering opportunities in the Greater Cincinnati area. Employees are then able to sign up for these various opportunities during their free time,” she said. “If I’m passionate about a cause, I can get a group of coworkers together and form a volunteer event at a local nonprofit. It’s a great way for employees to participate in established volunteering events or start their own,” she explained.

    • Research matching gift programs.

    “Matching gift opportunities provide ways for nonprofits to leverage more dollars. The Duke Energy Foundation will match $1 for $1 up to $5,000 per year for each employee donation to any nonprofit organization,” she said.

    • Research and then ask corporations about other ways they and their employees can give back to the community.

    “My company has a program that allows me to track my nonprofit board service or volunteer hours in an internal system where those hours equate to dollars. Then, I receive up to $2,000 a year for volunteer work that I can give back to any nonprofit,” she explained.

    “Corporations in the U.S. have a large role in philanthropy. For example, Duke Energy works in seven states, and the Duke Energy Foundation annually provides over $30 million in charitable giving. The company strongly promotes community involvement and giving back,” she said.

    “Giving back to local communities gives corporations as a whole a way to create a more positive workplace environment, boost employee engagement, garner positive media coverage, and attract and retain investors.”

    Are company employees more likely to participate in philanthropic activities if the corporation promotes charitable giving? Genevieve Shaker, Ph.D., associate professor of philanthropic studies, researches and analyzes workplace-giving campaigns and has found that to be the case.

    A research study conducted by Shaker, Dr. Robert Christensen, and Jonathan Bergdoll (2017) found that employer-matching programs encourage giving by employees.

    “When employers matched donations, workers appeared more likely to give and to give more money to a cause. About eight percent more people said they donated when they worked for companies that offer this benefit, compared to employees of companies that don’t,” Shaker and colleagues wrote.

    “It’s clear that employees at corporations want to give back in some capacity,” she added. “It’s important for nonprofits to ask about these opportunities with their donors, and for corporations to make clear with their employees that user-friendly matching gift opportunities exist,” she finished.

    Ruschman agrees, and she encourages nonprofits to focus on mission when discussing matching gifts and other corporative giving and volunteering opportunities with companies.

    “Nonprofits that are clear about their mission and their impact in the community are ones that stand out to us. They understand the needs of the community and have concrete solutions, and they partner with other nonprofits, community leaders, government, corporations, and volunteers to achieve their mission,” Ruschman explained.

    Ruschman’s advice for nonprofits when working with a corporation 

    • It’s critical for nonprofits to research a corporation’s giving strategies before making contact in order to understand if they are eligible to secure funding. Make a list of the nonprofit’s community partners, philanthropic support, financials, and other volunteering opportunities.
    • Create a plan focused on a program or project that would match the corporation’s ideals and outcomes. The nonprofit should have two or three ideas on ways the corporation can support its work.
    • Meet with the corporation staff person via phone or in-person to discuss the potential relationship.

    For Ruschman, her desire to give back has resulted in a career that merged her two passions of business and community service.

    “Being a worker and citizen that cares about giving back plays an important role in the culture of a company. I am fortunate to work for a company that is committed to community and service. Personally, my career will always focus on helping people and giving back to better society,” she said.

    Abby Rolland is communications project manager for the Indiana University Lilly Family School of Philanthropy at IUPUI and a current student in the master’s degree program.

     

    Genevieve G. Shaker, Ph.D. is associate professor of philanthropic studies at the Indiana University Lilly Family School of Philanthropy at IUPUI. Her research focuses on fundraising, higher education advancement, philanthropy in the workplace, and philanthropy, public good, and faculty work. She is associate editor of the journal Philanthropy & Education.

    Nov 05

    Helping young people reach their potential

    By Feature, Programming

    By Lynn Sygiel, editor, Charitable Advisors

    Today’s young people are tomorrow’s _______.  It’s a common expression and you can fill in the blank many different ways. It’s an inescapable fact that young people eventually grow up and turn into something.

    Today’s adults, as every generation does, hope that transition is a positive one and one that will make the world a better place.

    It’s also an accepted premise that many young people need a little help along the way and many nonprofits (and for-profits) are there to lend a hand.

    According to the Minneapolis-based National Alliance for Secondary Education and Transition: “Youth development is a process that prepares a young person to meet the challenges of adolescence and adulthood and achieve his or her full potential. Youth development is promoted through activities and experiences that help youth develop social, ethical, emotional, physical, and cognitive competencies.”

    In other words, how do you turn young people into successful adults?

    Five years ago, an index to measure the youth development in multiple countries was created for the British Commonwealth. The purpose of the Youth Development Index (YDI) is to be able to compare five key areas for young people: education, health, employment, civic participation and political participation.

    And as part of this effort, young people were asked for their opinions on the subject. For Eva Maria from New Zealand, youth development “is when, as a young person, you can believe in a future. A real future.”

    Clearly, senior staff at Boys & Girls Clubs in Indianapolis would agree with Eva’s assessment. While there have been substantial changes in professionalizing the youth worker field since 1893 when the local club was first established, several things have remained constant.

    First and foremost, young people come to the clubs to build relationships. For Maggie Lewis, the organization’s president since May, and LeeAnn Harris, who is senior director of club operations, this focus has been critical to the nonprofit’s longevity.

    Research shows that a key factor to promote resilience in youth is the consistent presence of a single caring adult. Harris said that every survey of the views of the clubs’ young people reveals exactly that.

    “It’s never, ever been about a program. The number one reason that they come in our doors everyday is because of our staff and the relationships that staff form with young people,” said Harris who has worked for the nonprofit since 1989.

    “No matter how appealing technology becomes or how integral it becomes to young people’s success or their day-to-day interactions, no matter whether it’s moving young people toward the workforce or just trying to help them get their homework done, whether it’s a kid who only comes to eat or somebody who comes because they want to be on the robotics group, the only way we successfully serve any of their needs is to have that positive adult mentor relationship,” said Harris.

    According to research compiled in the early 1990s by the late psychologist Norman Garmezy that single factor has a significant impact on children living in poverty. But the Boys & Girls Clubs believes it is also about adapting to the needs of young people.

    In May, for example, the nonprofit added a new program at its Finish Line Boys & Girls Club on Indianapolis’ Far Eastside. The Pivot Re-engagement Center is a program for 16- to 24-year-olds and is a partnership of the club, Community Alliance of the Far Eastside (CAFE) and other local organizations. Partnering with EmployIndy, the strategy is to move young people toward employment or other options.

    About two-thirds of the young people that are served at the club are not in school and are not employed.

    Both Harris and Lewis are advocates for young people and think that sometimes adults tend to write them off as lost causes.

    “I think we’ve proven time and again, but even recently through our re-engagement center that young people just want opportunities to be successful,” said Harris. “We’ve not had any problems or incidents there.”

    She said that the goal for the program that started in May was to register 100 young people, but it’s at 700 and counting.

    “These young people have had some bumps along the way and so they’ve come to us to get a better direction and to make the best of themselves,” said Lewis.

    It circles back to believing in a future, and according to Harris, that starts in elementary school.

    “We’ve seen that even with the school-aged young people that we serve. It’s amazing how, if you’ve never had an opportunity to create a vision for your future outside of what you see in your own community or even if you do have an opportunity to have that vision, hope itself can be knocked out of you before you ever turn 16. We see that all the time, and that’s our job to give them opportunity,” said Harris.

    The nonprofit recently received a grant from Finish Line Youth Foundation that matches school-aged young people with employment opportunities at Finish Line stores. It also has a similar grant through Boys & Girls Clubs of America with GAP and Old Navy to support workforce development.

    Again it’s about adapting. For several years, at clubs nationally and locally, there was a downturn of the number of teens participating. Many teens were looking for work opportunities. Boys & Girls Clubs saw this as a good way to address the needs of the population it serves and is helping them become a ready workforce.

    Another thing that has changed in Indiana is there is now a career path for youth workers. Across the state, there are now education programs, which include certificates, associate degrees and higher education programs to certify and educate youth practitioners.

    This year, Indiana is piloting an online program with the Child and Youth Care Certification Board (CYCCB), which is based in Texas. Practitioners in Indiana are able to use an online form to submit applications for Child and Youth Care (CYC) certification.

    Practitioners can complete all required paperwork and submit documentation electronically. Over 300 Indiana practitioners, pursuing certification this year, are expected to use the online system, according to Jeananne Reich who is managing the program for Indiana. So far this year, nearly 200 were awarded the certification. Harris estimates that 75 percent of Boys & Girls Club Indiana’s staff are certified.

    Lewis said over the 125 years, the facilities have changed from places to swim and play sports to places to obtain basic needs.

    “Today, youngsters come to our clubs for basic needs. I cannot stress enough that they are coming for basic needs,” she said.  According to Lewis, poverty is the number one issue where the clubs are located. Annually, the nonprofit serves nearly 7,000 kids at its five facility-based clubs and five school-based sites.

    Over half of club members’ households have an income of $25,000 or less, but families are asked to pay $15 for a young person to attend for the school year.  Over 75 percent of the young people are eligible for free or reduced lunch. Last year, it served nearly 300,000 meals and snacks, making it the second largest provider of Second Helpings meals.

    In 2001, area schools began hosting after-school clubs. Although those programs are smaller, they are effective, according to Harris, since transportation is not an issue, making attendance more frequent. At these locations it is easier to establish relationships with a child’s teacher. In the city, the loss of community schools makes it more challenging. A given facility can have kids attending 50 different schools.

    “There’s been great research done that proves the obvious that the more often a kid attends, the greater the impact you’re able to have. So although it’s a smaller number of kids, we know we have increased impact there because kids are with us almost every day,” said Harris. Second Helpings dinner meals are provided at the school locations, too.

    Currently, there are five school sites. Two in IPS — School #44 and Jonathan Jennings — and three in Warren Township — Liberty Park, Raymond Park Middle School and Pleasant Run School. Earlier this year, three school sites closed when a 21st Center Community Learning Center Grant distributed by the Indiana Department of Education was not awarded. Students from George S. Buck (#94) were directed to the new Finish Line Club, which opened in 2016.

    Harris and Lewis agree that although the adjectives describing the mission have changed, the basic mission has remained the same. It’s always been about helping young people reach their full potential.

    “The part of our mission statement that I think speaks most to youth development is the part that says that we help young people reach their full potential. There are a lot of phrases before and after that — about productive, caring, responsible citizens through this program and that program — but it’s always been helping young people reach their full potential,” said Harris.

    After serving as president of the nonprofit, Lewis, who is an elected member and former president of the Indianapolis City-County Council, said that if she were talking to her fellow council members, she would say, “Our youth are banking on us to get this right. They are looking to us for guidance and direction. And while there are a lot of other things happening in our community that take our attention and take our time away, they still need adults to guide and direct them.”

    Oct 15

    Finding “lemonade” in the new tax law

    By Feature

    By Lynn Sygiel, editor, Charitable Advisors

    When the Tax Cut Jobs Act (TCJA) of 2017 passed Congress in December, many news stories focused on the concerns of nonprofits about the potential impact on individual charitable giving.

    Under the new law, the standard deductions increased dramatically to $12,000 for single filers and $24,000 for married couples filing jointly. The increase, coupled with the reduction or elimination of other itemized deductions, raised fears that many taxpayers who previously itemized and claimed charitable deductions, might claim the standard deduction instead and  forgo making donations.

    But Professor Russell James III, who teaches graduate courses in charitable giving at Texas Tech University, believes there are other ways to look at the law’s effect that suggest making lemonade out of lemons.

    While James knows it will take some time to determine how the law will impact nonprofits’ bottom lines, he said that most articles haven’t told the more complicated story about where nonprofits might focus their energies.

    In the past, researchers would estimate, and then wait a couple of years when hard tax data was used to compare reality with their estimates. The problem the law presents is that it is assumed fewer people will itemize, resulting in less hard data.

    “Because we’ve lost those itemizers, it’s going to be a crazy long time before we really can be confident about the impact of these policy changes,” said the Department of Personal Financial Planning professor who wrote his dissertation on charitable giving at the University of Missouri.

    While nonprofits will have to wait and see for the results for mid-level donors, here’s where the lemonade comes in. James’ advice for development departments is that there are some benefits to the new tax law particularly in the estate-giving and planned-giving space.

    “There is a lot of focus on the negative impact for the mid-level donor group. However, these are people who weren’t itemizing last year are not going to be itemizing this year,” James said.

    “If we move beyond the mid-level donor and look at the top 10 percent wealth group, this tax act is nothing but bonus after bonus after bonus for charitable giving, and the reality is that money comes from the top 10 percent.”

    Hidden in the details of the new law are several changes that actually increase the value of charitable deductions for many of these donors. It is also important to note that some of the biggest tax advantages for donations for this group were left untouched.

    James shared several examples.

    • Donating appreciated stocks, bonds, or other assets instead of cash still avoids all capital gains taxes regardless of whether or not a donor itemizes.
    • Donor-advised funds were also left untouched.
    • Donors age 70½ or older are better off donating directly from an IRA.

    Beyond the charitable tax benefits unaffected by the new tax law, for other donors, the tax benefits for giving have actually increased.

    One of James’ first recommendations is that nonprofits investigate accepting appreciated assets. He just finished a study that analyzed 1 million tax returns from nonprofits from 2010 to 2016. For the first time, a few months ago the IRS released 990s in an electronic and readable format, which simplified complex data analysis.

    Essentially those seven years of data indicate which nonprofits have grown their fundraising.

    “One of the most important predictors (for increased funds) was whether or not the charity received assets, in particular securities and real estate,” he said.

    Just looking at organizations that raised more than $1 million, those that just raised cash increased total fundraising 11 percent. Those organizations that received securities during that time, combined fundraising growth over the same period was 66 percent.

    “So you’ve got this massive indicator of fundraising success that is driven by whether or not organizations are raising money from gifts of assets, than just disposable income cash. The power of noncash gifts to predict long-term fundraising growth applies to nonprofit organizations at every fundraising level,” James said.

    “The point is, I think organizations would be well-served to use the new tax law as an excuse to convince their donors to start giving assets rather than just disposable income.”

    James offers this example:

    “Let’s say you own some Apple stock, and it’s gone way up in value. You can, instead of giving cash to your favorite charity, donate that highly appreciated stock that has all that capital gain in it to the charity. If you owned it for more than a year, you get 100 percent tax deduction on that.

    “And then you can take that cash that you were going to give them this year, and just buy brand new Apple stock. You haven’t changed your portfolio at all, in terms of how much stock you own, the only difference is you wiped out all that capital gains from your portfolio,” said James.

    Gifts of appreciated assets are cheaper because the donor avoids capital gains taxes, James said.  That strategy is more powerful because capital gains tax rates are much higher than last year. The gift isn’t reliant on itemizing, but the advantage is still relevant.

    “This is a big win for the donor, but also for the charity. The donor is now thinking about gifts from assets (i.e., ‘the big bucket’) rather than simply gifts from monthly disposable income (i.e., ‘the little bucket’).”

    James also suggests that if a donor’s favorite charity doesn’t know how to accept stocks or bonds, the donor can simply gift them to a donor-advised fund and then have a check sent to the charity.

    Many nonprofits, he said, are afraid of accepting assets because it’s more work and more hassle.

    He argues that that is where a nonprofit can take a seemingly negative and turn it into an advantage by saying, ‘Hey, there’s a way that you can still get tax benefits from your giving. Here’s how we do it — appreciated assets.’

    “That actually has long-term positive effects for fundraising of the organization as long as fundraisers aren’t scared to ask for gifts of wealth rather than just gifts of cash.”

    And the other change is that there are now donor-advised funds that will accept any kind of valuable property, including items like partial ownership of a racehorse or unharvested crops, providing donors with more options.  A nonprofit can put it in the hands of a fund and after it’s sold, disburse the proceeds to the organization.

    For those donors using donor-advised funds, he recommends bunching. Donors should consolidate contributions in one year, so the deductions will exceed the standard and provide an incremental tax benefit. Then the donor writes checks from the donor-advised fund over the years he or she has taken the deduction.

    For those 70½ and older, giving from your IRA qualifies as part of your distribution and is better than a deduction. It is not reported as income and the gift counts towards the required minimum IRA distribution. This tax benefit is the same regardless of whether or not the donor is itemizing.

    James said it’s important for nonprofits to remember that when the tax rates get higher, the avoidance of paying taxes becomes more valuable.

    Sep 24

    Project management tools: What’s best for your nonprofit?

    By Feature, Technology

    By Lynn Sygiel, editor, Charitable Advisors

    When Annie Cornett was hired by Bloomington-based Social Legends two years ago, the company tracked its projects by using Excel. Teams used both Microsoft’s OneDrive and Dropbox to share files.

    While this system worked really well for a long time, as the company started adding people, it just wasn’t practical.

    “From an efficiency standpoint, we really wanted to look at how we could improve tracking all the different tasks that we were doing and be able to maintain records of what was done,” said Cornett, a consultant.

    And this company is not alone. Many are looking for project management tools, and the software industry has responded.

    With virtual project teams on the rise, and the advent of mobile apps, project management software tools are a burgeoning trend. Earlier this year, several lists offered the top 50 project management tools. Not just the top 10, but the top 50.

    The definition of “project-management software” varies widely, and the needs are likely to depend on the project, the team and project-management style. What’s available out there and what tools might support a nonprofit’s project-management needs? So with all these choices, how does a nonprofit or small business decide what is the best fit?

    Here are steps that two local nonprofits used or are using to make that decision. Social Legends is a consulting firm and Prosperity Indiana is a membership organization that focuses on community development. Tech Soup, a nonprofit international network of non-governmental organizations (NGOs) that provides technical support and donations and discounted rates on technological tools to nonprofits, also weighed in.

    Social Legends

    Cornett began with a general online Google search to investigate various systems and reviews of different products. It’s important, she said, to realize that there are people who are doing the comparison work.

    Project management services are typically online systems designed for collaboration on projects. These systems allow team members and supervisors to keep an eye on details to complete a project and provide both a big picture of all projects and the nitty-gritty details about work being completed.

    One key factor for Social Legends was how user-friendly a system was and how well it would integrate with other programs.

    “We didn’t want to spend a lot of time in training, trying to understand a new system, learning all the new bells and whistles. We wanted it to be pretty intuitive. And we kind of just wanted to jump in and run with it pretty quickly.

    “We didn’t want to select a system and in a year and a half have to move on to something else because it doesn’t have the capabilities to integrate the way we wanted it to,” she said.

    Once Cornett narrowed the selection to four software programs, other staff members jumped in and tried each demo system back-to-back.

    “It’s worth exploring from a free trials standpoint. We got in and just played. A lot of companies will give you 30 days for free. You can get in, tool around and see what the different functionalities are and how easy it is to use whether it’s adding a project or adding a task or tracking your time in system.

    “So we had to get in the weeds a little bit toward the end and use those different systems, and we really just looked at the different research that had been done and compared the functionalities.

    “It’s really intuitive in a lot of ways, but I think a lot of people get scared,” she said.

    Staff members also tested some of the online training videos. One or two people blind-tested the system by doing some of the basics. They had no background knowledge.

    “It was kind of a test run on our end, too, to see how user-friendly the system was going to be,” she said. “They didn’t have any problem with the basic functionality, adding a project, adding a task, putting your details in, figuring out reminders, checking things off.

    “That really was kind of one of the selling points of this system for us,” she said.

    Social Legends selected Teamwork Projects, which is cloud-based. For about a year and a half, it has used the smallest office plan, which is $49 a month, and has five users ranging in age from 27 to 42. It has helped align work plans and provide storage space for 40 projects. The company’s information is stored on its website and goes to the cloud, too.

    “It allows all of us to work remotely and file share. So if we have a project and we’re working on a job, we can leave the file in the system for the next person. It’s just more efficient,” said Cornett.

    And while it has different functions that they don’t use, they determined they could grow into them.

    “It’s going to have all these functionalities, but you don’t have to use them all either,” said Cornett. “It allows you to customize it to how your team works, which is what  is really nice about the system.”

    Cornett said everything in the tool is centrally located, including tasks, timelines and notes. For the company it has helped to ensure quality control – files don’t get lost between team members and, there’s no confusion on a timeline and all of the current versions of all the files are in the system.”

    Another feature is the ability to archive a project.

    “We can save all the data, and we can save all the different steps, timelines and all the documents. It’s really helped us to kind of streamline storage as well.”

    When Social Legends has needed technical assistance, it has received good responses. Teamwork Projects is always looking to improve and has been responsive to suggestions from its clients.

    Social Legends isn’t done investigating the system. Every month, staffers identify an additional feature and determine if it’s a good fit and will improve the quality of their work.

    There is another feature that has been a boon to their work with clients – adding an external user to a specific project.

    “When we’ve worked with different clients on certain projects, we actually created their project plan in our system and have been able to give them access to it,” Cornett said. “I will say when we have brought outside users into the system, we’ve not had problems with them having usability issues either.”

    Although Cornett said they don’t run into many nonprofits that are currently using a project management system, she sees how the ability to add users could be helpful. The system allows adding access, which can be particularly helpful with committee members.

    “I can see it being a great tool to help manage those smaller groups that get pulled into those kinds of activities along the way,” Cornett said.

    “I could see a lot of nonprofit organizations really liking the ability to track time on various projects and events. When they wonder, ‘How much time am I putting into that? What is the return on the investment?’

    “It has the option to do the time tracking and really look at ‘How much time did we spend on something?’ You can do it from your phone. It’s easy to jump into a meeting or when you start work on a project, you can turn the time tracker on really quick and easily. So we’ve done that for a few projects just to see how long this is really taking us,” she said.

    The only drawback, Cornett said, is getting used to a new system and a new routine.

    “It’s just the switch culturally for us to a new system. You kind of have to retrain your brain, you have to retrain your team a little bit.”

    Prosperity Indiana

    Jessica Love, executive director at Prosperity Indiana, is currently on the quest to find a project management tool.

    “I’m in a nonprofit group and folks talk a lot about project management tools that they have found useful: Monday and Asana,” said Love.

    One goal for her is that the software provides a visual snapshot of projects.

    While her staff is using ToDo List and it works for some projects, like the organization’s annual conference, it doesn’t provide her a comprehensive look at all that the staffers are challenged with completing, and they don’t use the team function well.

    “Although we track indicators and our team members individually keep track of their work plan, we cannot visually see the incremental progress we’re making on our work plan. We can have a sense of it, but I think it will be helpful for us to be able to just pull something up at any moment and see where we are,” she said.

    Love has delegated the exploration process to another team member who is researching available software and developing a spreadsheet to share how the tools compare.

    “We’re looking at different options. We want to see at any time where we are with projects, and better than just printing reports.”

    And while there are reviews and ratings online, the search doesn’t stop there. Some solutions will have all the tasks a team is looking for, while others will only have a few.

    Love knows this all too well.

    “I also think if it’s not working, don’t keep using it,” she said.

    “If you explored it, you thought it was great, you found this awesome system and then it didn’t work for you, you cannot keep making it work. We did that, when we got our new CRM. We did so much research. We talked to all kinds of other associations. We thought we had scoured the research and felt really good about it.

    “And then we used the system. And even though it was really painful to have to admit, we completely went to a different CRM.”

    One thing that Love wants to be able to do is at any given time know the stage of project so she can support staff members better.

    “I try to be encouraging when staff members accomplish something, but I don’t always know. I may encourage them at a time when I have time to and not encourage them on something else that was really awesome because of my own capacity. So my fear is that when I do provide encouragement or recognition of their work, it may feel like a moving target: ‘Oh, she really liked this one.’”

    Some reviewers recommend a Gantt chart, a tool that allows a manager at any time to see who is doing what, and how various tasks are related. It helps everyone use available resources more effectively.

    “So I think a new tool is going to help us all manage ourselves individually and to give me a better understanding of where staff is with certain things. It will help if we can see it visually. I’m so visual and I know a lot of people are,” Love said.

    Her goal is to help her employees balance their work better and also celebrate their accomplishments.

    “I’m envisioning that it will help me communicate to them what success looks like for me. That’s one of the things that I personally want to improve,” she said.

    In total, the nonprofit will have seven to 10 users with access to a project management tool. Love admits she doesn’t even know what to expect for pricing and what they might be able to eliminate.

    Love recognizes that it is important to acknowledge that there is no one perfect system and it’s important to understand that just because it works for somebody else, it may not work for her team and match the nonprofit’s priorities.

    “So we’re exploring. There will still be that gut check of not just doing what’s big and flashy. We want to explore and see what works best and stack them against each other before we pick one.”

    TechSoup

    Nick Mediati is TechSoup’s marketing specialist. For over three decades, the nonprofit based in San Francisco has solicited donations of technological products and then sells them to nonprofits for a nominal fee. This year its philanthropic services and giving programs reached the milestone of benefiting over 1 million NGOs in 236 countries and territories.

    “Personally, I am not too attuned to how nonprofits as a whole are using project management tools, but it would not come as a surprise if many organizations weren’t using such tools.” However, he feels there is more interest.

    While Mediati personally uses old-school pen and paper lists to track tasks, his department uses Wrike to track team projects and tasks.

    “It is a pretty power-packed tool, and I think we’ve only scratched the surface of what it can do. I personally rely heavily on its built-in calendar, which lets you get a visual overview of your upcoming projects and tasks.

    “It’s definitely had a learning curve, but it also has made it easier to track down deliverables for projects so we’re not left to track them down in emails, on Slack, or wherever else.

    Mediati, too, believes that when selecting a project management tool, it is important to take several for a test drive.

    “You often don’t know the pros and cons of a project management tool until you actually dig in and use it, and many — though not all — project management tools provide either limited-time trial versions or stripped-down free versions so you can get an idea of how they work without making a monetary commitment.”

    His recommendation is to start out by determining what the organization’s needs are and what are its pain points.

    “Depending on your needs, maybe you don’t need a full-fledged project management solution. Consider if a full-fledged, high-powered task management tool would require too much mental overhead to use. As a former colleague once put it, task management shouldn’t be a task unto itself,” he said.

    Mediati said another consideration is whether you have a preference to track projects using an online tool like Wrike or Asana, or a traditional piece of software like Microsoft Project, which TechSoup offers.

    In the end, he said a lot of it comes down to personal preference and the approach you and your organization take to managing projects and tasks. Ask for staff input, including what they may have used and what they liked or disliked.

    Mediati also suggested when considering a tool to ask about nonprofit discounts. One of the services that TechSoup has been able to offer for other products is a reduced rate for registered nonprofits. The company website’s comments space has several nonprofits requesting Monday’s and Asana’s project management tools.

    And while not currently offered, TechSoup is currently negotiating with Asana to offer a potential 50 percent discount to qualified nonprofits.

    “The biggest challenge can be learning a tool’s limitations and adapting your workflow to them. Pretty much every tool out there has its benefits and drawbacks, so there will be a learning curve.

    “I can think of plenty of reasons to use one, but for me personally I would point to the fact that it keeps people accountable. Everyone on the team knows what they’re responsible for and when they need to provide their part of a project,” said Mediati.

    Sep 10

    Avoiding common costly retirement plan errors

    By Sponsor Insight

    By Kevin Kidwell, vice president of national tax-exempt sales, OneAmerica®

    As an employer, it’s likely gratifying for you to look out for the welfare of your employees, particularly when it comes to helping them build a retirement.

    Less enjoyable though may be the administration and compliance of your nonprofit’s retirement plan. As an employer, you have responsibility, however, to work to avoid the common errors and pitfalls that are discovered during Internal Revenue Service (IRS) and Department of Labor (DOL) audits.

    Here are my suggestions to avoid them.

    Common plan errors

    First, ask yourself what you think costs more to remediate — a malpractice suit, or a correction to your retirement plan? Any guesses as to the average cost of correction?

    You might be surprised that the costs are nearly identical.  In 2015, the average DOL audited fine was $424,000, and the average malpractice suit was $425,000. [1]  While both costs may seem astronomical, there are ways to prepare and reduce your risk of an audit-plan failure resulting in a fine.

    There are two types of government audits that your plan may be exposed to, the first from the IRS and/or the second from the Department of Labor.

    The IRS tends to focus on more tax-related issues, such as current deductions or delaying the recognition of income. Also within the IRS’s jurisdiction is regulation compliance particularly that pertain to plan qualifications, including nondiscrimination testing and all limits.

    The IRS also looks at plan-document compliance. This includes consistency among all plan documents and operation, compliance with constantly changing plan eligibility regulations and administration.

    More recently, the IRS has become concerned with improper investment valuations in cases where an asset is illiquid (so few retirement plan participants and a low volume of activity, and not easily converted into cash) or is not readily valued, which can cause an undervalued or overvalued benefit distribution.[2]

    The labor department focus tends to be on audits, ensuring that a plan is maintained for the benefit of the employees. This office is concerned about things such as fees, eligibility and timing of contributions.

    Even most plans not subject to the federal law that protects plan participants, known as The Employee Retirement Income Security Act of 1974 (or ERISA), are subject to state law, which contains language that mirrors ERISA and its “prudent expert” rule, which is the highest standard of care possible. It encompasses the standard fiduciary obligations, but in addition requires their application in a manner that an expert in the field would use. In presentations that I make about the “Prudent Expert Standard” and “ERISA” I typically include a lot of legal terms.

    My suggestions:

    • Document the plan and processes
    • Follow the provisions of the plan and processes
    • Make sure the fees you are paying for services are reasonable
    • If you aren’t sure or have questions in all of those areas, find an experienced financial professional who can help you

    In a nutshell: If Joe Smith has a retirement plan, the intent is to keep the maintenance fees reasonable and ensure that the beneficiary money is invested properly.

    It’s worth the effort

    Preparing for an audit can be a time-consuming process. You will likely be asked to provide copies of documents, procedures and disclosures without a lot of warning or much time to fulfill the request.  These may include:

    • Plan document and amendments
    • Investment process documentation/Investment Policy Statement
    • Board/committee meeting notes
    • Fee disclosures
    • Effective notice of eligibility/Annual meaningful notice
    • Loan/ Qualified Domestic Relations Order (QDRO) procedures
    • Current 5500 and audit report

    A well-designed retirement plan can help to provide meaningful solutions for your employee base.  It also allows you to recruit talented employees and find ways to incentivize through retirement.

    When I’ve done presentations on audits, whether tax-exempt or 401(k) audiences, I’ve seen people in the audience cringe. But our strong suggestion is to work with experienced professionals to minimize the potential for the audits ever happening. Planning, preparation and collaboration with retirement professionals can lead to a much less stressful situation down the road.

    Kevin Kidwell is vice president of national tax-exempt sales and works to provide ideas, knowledge, and information – both technical and practical – to facilitate improved plan and participant outcomes.

    Since joining OneAmerica in 1988, Kevin has held various positions within the Retirement Services division.

    Beginning in 2000, his exclusive focus has been on healthcare and tax-exempt organizations.

    Disclosures

    OneAmerica® is the marketing name for the companies of OneAmerica.

    The views and opinions expressed in this material are solely those of the author and do not necessarily reflect the views and opinions of any of the companies of OneAmerica. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

    Products issued and underwritten by American United Life Insurance Company® (AUL), a OneAmerica company. Administrative and recordkeeping services provided by McCready and Keene, Inc. or OneAmerica Retirement Services LLC, companies of OneAmerica which are not broker/dealers or investment advisors.

    Provided content is for overview and informational purposes only and is not intended and should not be relied upon as individualized tax, legal, fiduciary or investment advice.

    Registered Representative of and securities offered through OneAmerica Securities, Inc., a Registered Investment Advisor, Member FINRA, SIPC.

    Not affiliated with or endorsed by the Social Security Administration, the Centers for Medicare & Medicaid Services, or any governmental agency. 

    [1] Source: What is the Bigger Liability-a 401(k) or a Malpractice Suit-By: Mike Haynes, Director, Retirement Plan Services

    [2] Source: Audit survival tips for retirement plans By: Tom Swain, FSA, EA, FCA, MAAA, Bryan, Pendleton, Swats & McAllister, LLC (BPS&M)