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Feb 25

Nonprofit Excellence: the change Welborn wants to see

By Feature, Leadership

By Lynn Sygiel, editor, Charitable Advisors

For over two years, Candice Perry has worked to develop nonprofit leaders. In her position as the Welborn Baptist Foundation Nonprofit Excellence Officer, her key responsibilities have been to strengthen nonprofits executives and develop a talent pipeline. The foundation is based in Evansville and serves the Tri-state area.

Perry has carved out several approaches for this work. Some times for invitation-only programs, and at other times she or another program officers may identify an organization that needs a consultant to strengthen its efforts.

“The organization may be telling us in their application that they need funding and programming, but we also know that they aren’t going to be successful, if they don’t also put some effort into creating a fundraising plan. So we invite them to share a little bit of information with us, so that we can then connect them and finance the opportunity for a consultant to work with them,” she said.

The foundation has also partnered with Indiana University’s School of Public & Environmental Affairs (SPEA) to create the Next Generation Leadership Academy. The program’s six modules cover governance, finance, fundraising, evaluation, marketing, communication and strategic planning.

“We reached out to organizations that we are familiar with and asked their leadership if they have a next-generation participant or someone in the wings whose skills they would like to build and strengthen.” New executive directors who don’t fall into that category, but need to gain strength, might also be invited.

The academy is being offered a second time, and isn’t just limited nonprofits that are grantees. Indiana University instructors come to Evansville and spend two concentrated days covering a subject. Over the course of nine months, the cohort covers all the topics and participants receive a certificate upon completion. With the group size limited to 15, the program lends itself to interaction.

“We want to offer it not every year, but perhaps every other year or according to the need. There are a lot of organizations in our footprint that are not aware that we’re doing this or that it is an option. It gives us an opportunity to continue to know organizations that we really haven’t had the pleasure of knowing or understanding,” said Perry.

Perry also realizes the importance of developing board members. As a cohort-learning series, it offers Sustain-abilities. An executive director and a board chair are learning partners and spend three full-day sessions at the foundation. Between the in-person sessions, there are webinars with a consultant who is the series facilitator.

The two primary focus areas are fundraising and building an organizational culture. An organization is invited back, if progress is shown and there is an interest to continue.

“What we have learned is that executive director and that board chair have taken back their learning and shared it with the rest of the board. There’s this embedding of information that starts to occur,” said Perry.

This particular series was an experiment that the foundation had started prior to adding Perry’s position.

“It was one of the pilot offerings that helped inform them that we need a Nonprofit Excellence impact area. There was a space that we need to fill,” she said.

At the time, Perry was an executive director and attended the pilot with her board chair.

“I can tell you first hand that I saw those aha moments that my board chair was having throughout that series,” said Perry. “I saw the change that occurred in that board chair and how it translated to how he ran our board meetings, our development of our board members, the way that board chair interacted with the other board members, staff and myself. There was a definite shift that occurred for the organization that was strong enough and still is there today, even though that board chair and I am not there. It has continued for that organization.”

The foundation is now working to create a Board Leadership Academy. The concept is to equip board members to better engage with a nonprofit by explaining what is needed of them and what questions to ask when considering joining a board. Perry started investigating this option by going to other entities that were offering board trainings and then look at what fits the Evansville community.

“And where we landed was going to some specific businesses that are well-known in our community for supplying people to serve on boards, and we worked with their HR departments,” she said.

Each corporation supplied three participants for a consultant-led, one-day training. Each potential board member was assigned to a local nonprofit for three months to receive an introduction to services and learn about the organization’s financials.

“They’ll be treated as if they were onboarding that organization. But there’s no expectation that they join that board.

In three months, together with the corporation’s HR person, they will discuss how has this changed perspectives about community engagement.

The Welborn Foundation sees itself as a critical contributor to Evansville’s nonprofit leadership development.

“Everything the foundation does has an evaluation plan around it, so hopefully we can watch the needle move and the community will see the change,” Perry said.

Feb 25

Grants can help with capacity building, too

By Feature, Leadership

By Lynn Sygiel, editor, Charitable Advisors

When Rev. Donovan Coley joined the board at the Fort Wayne Rescue Mission in 2006, he felt the organization had lost its way. The agency, established in 1903, was doing good work, he said, but its impact on the community was limited, and it didn’t have executive leadership.

“By the time I got into my second year on the board, I could see that we were spinning our wheels. There was no strategic direction. We were not addressing at a deep level the root causes of homelessness. We needed an executable plan of action to serve the clients in a way that’s truly transformational,” he said.

Coley wasn’t alone. The entire board realized it needed to do some serious work to competently lead the organization. Without a CEO, the board had taken on some day-to-day responsibilities, and it had gotten to point where it was often toxic.

So what did the board do about it? One of its first moves was to name Coley chief executive officer of the Rescue Mission and president of the Rescue Mission foundation. Another step was to look for financial assistance to help strengthen the organization from within. The nonprofit wanted to take a good, hard look at itself.

Enter the Fort Wayne-based Foellinger Foundation with a capacity-building grant. It was the first of five capacity grants the Fort Wayne Rescue Mission received from Foellinger.

“I think it was one of the best things that the Foellinger Foundation ever did was to come alongside the very heart and soul of an organization. It was their smallest grant, but yet, I believe it had the greatest impact because they focused on organizational health,” said Coley who became executive director in 2008. “The grant gave us that expanded capacity to really serve at a higher level.”

Four years ago, GrantCraft, a service of the New York-based Foundation Center, released the report “Supporting Grantee Capacity: Strengthening Effectiveness Together.” In the report, capacity building was defined as “fundamentally about improving effectiveness, often at the organizational level. The term is sometimes used interchangeably with other terms like organizational development, institution building and funding plus.”

Rev. Donovan Coley on capacity building. It is simply increasing an organization’s ability to maintain relevance, expand impact, enhance growth and affirm sustainability. So I would say, capacity building is when an organization takes seriously their mission and their vision and they are committed to doing what they do for the long term, and by having the right kind of leaders, right kind of strategic direction, the right kind of structure, the right kind of metrics and just having the right kind of tools to really guarantee that they’re people will be served at the optimum levels.

While not all foundations award capacity grants, both the Foellinger Foundation in the Fort Wayne area and Welborn Baptist Foundation in Evansville do. 

Cheryl Taylor, the Foellinger Foundation’s executive director since 2001, said that since 1992, the foundation has supported capacity building efforts in Allen County, but has not always used that term.

“Our theory of change is that the stronger and more effective the organization is, the better they’re going to be able to serve their clients, customers or consumers and that the stronger, more effective, more adaptive leaders are, the better they’re able to serve the people they’re targeting,” she said. “For us, capacity building is the focus on the internal development of the organization and how the organization itself get better.”

Last year, the foundation, which was 60years old, reviewed its capacity-building grants. In the last decade, it has awarded area nonprofits over $3.5 million as a part of a larger initiative. Part of what it wanted to learn was the impact these grants were having, and to assess how to improve the process.

“Evaluation is part of the foundation’s culture. Dollars are limited, and the question for ourselves was, ‘Why should we fund that?’” Taylor said.

Taylor also believes if a grant category is important, the foundation has an equal responsibility to explain why.

The Welborn Baptist Foundation has a similar focus on improvement. Both Welborn and Foellinger belong to a national organization, Grantmakers for Effective Organizations, which offers conferences and includes sessions about capacity building.

Two and a half years ago, Candice Perry was named Welborn’s nonprofit excellence officer. Perry’s position was added after Welborn staff members and board members had spent time evaluating the foundation’s three funding areas and long-term goals.

“We don’t call it capacity building because there are a lot of different entities using capacity building, and it means something different. What Welborn wants to see is more effective leaders creating lasting impact in their organizations within their service sector, the larger nonprofit sector and ultimately the community. We want to see a nonprofit achieve sustainability, impact and mission fulfillment by strengthening their leadership,” said Perry.

But it’s difficult. Foellinger’s Taylor believes that in order for a nonprofit to ask a program officer for help, there needs to be a level of trust.

“There is an element of fear in this,” Taylor said.  She said nonprofit leaders may worry that it reflects poorly on them if they come to a foundation and say “I need help looking at staff training or I need help on financial sustainability.”

But that’s not how Foellinger views it.

“Foellinger has been vocal for years that that is not going to affect your request in its regular cycle. In many respects, it helps you, because it indicates that you care,” said Taylor.

Taylor knows that not all capacity grants will be successful. She cited several organizations that investigated mergers, and after a fair amount of time, determined it wasn’t right.

“I’m fine with that, you looked at it and made the decisions for your organization,” she said. “In my opinion, one of the distinct opportunities that private foundations have is to essentially serve as the research and development function for the nonprofit sector. They often can be a little bit more flexible.”

Foellinger’s yearlong review resulted in refinements of its capacity-building grant   framework. The foundation recognizes that it needs to provide ongoing education to potential grantees and consultants about the value and importance of strengthening an organization’s foundation (For more information, see Capacity building grants: a new process).

No longer will the foundation simply ask grant applicants if their organizations have done any infrastructure work, but now will ask how the efforts have impacted regular operations, and essentially how what was learned was applied.

Moreover, the actual application process was formalized. Unlike most of the foundation’s grants, application questions for capacity building are not posted on Foellinger’s website.

“If we’re going to have the investment, rather than us just saying, ‘Here, answer these three questions,’ we formalized the process to make it more personal and specific,” said Taylor.

Now, a single program officer fields all requests, and then after a conversation with the nonprofit, tailors application questions specific to the nonprofit’s desired use of the funds.

Foellinger believes that it’s important for a grantee to have some skin in the game, and nonprofits that agree to commit some of their own money to a certain project can make a stronger case for support, although there is flexibility on the amount and type of commitment. Its capacity-building grants are turned around within 60 days.

Coley, of the Fort Wayne Rescue Mission, said the initial grant was critical and helped focus the mission’s work. It has changed its model in the emergency shelter and removed the revolving door practice. It has expanded its mental health services and developed multiple programs, including a long-term program that currently serves 70 people and invests in individuals, that Coley says transforms their paths instead of just warehousing them.

“As the organization became healthier, the foundation provided an opportunity for us to nominate a board member and to talk about the impact of the capacity-building grant on the organization, and one board member, Imogene Nusbaum-Snyder, won a prestigious award and the organization won a Better Business Torch Award.

“So I would say we just continued to become healthier and then that positioned us for other foundations and other funders to say, ‘There’s something going on over there,’ and now we’re in the midst of a $23.1 million capital campaign, and of all the major foundations have actually stepped in to say, ‘We would like to invest in the Fort Wayne Rescue Mission.’

“I cannot imagine where Fort Wayne Rescue Mission would be without the capacity building grants. I would encourage any organization to focus on that which is most important – capacity building.”

In the Evansville area, Perry has seen organizations moving to deeper conversations between board and staff to create a culture of learning.

“They are learning to put focus on mission and vision and aligning their resources to that vision. They are starting to ask questions that they didn’t ask before concerning how to prepare, how to plan, how to develop themselves. I’m hearing more executive directors say ‘You know, I understand that we’re not being strategic about how we’re using evaluation. Their thought process is going deeper than just service provision,” said Perry, who was the executive director of the domestic abuse service agency for nearly eight years before her current role.

She’s also seen more synergy between executive directors and boards.

“Everything we do has an evaluation plan around it, so hopefully we can watch that needle move. What we also want to foster is collaboration among sectors. We want nonprofits to be invited to the table, where they can influence community change by sharing what the needs are,” she said.

Feb 11

Insights from 2017–2018 CEO/ED Leadership Transitions

By Sponsor Insight, Uncategorized

By Bryan Orander, president, Charitable Advisors

Every two years, we do a quick analysis of the nonprofit leadership transitions Charitable Advisors has supported. Our takeaway two years ago was that an increasing number of new ED/CEOs were coming from outwardly facing roles like fundraising and advocacy in contrast to the longstanding “program expert” being the primary leaders being considered.

For this assessment, we analyzed the 26 organizations that we worked with through the entire transition process in 2017-2018. Internally, we found this exercise helpful to not only celebrate success, but also to set goals for the future.  

Here’s a brief summary of what we’re seeing from the frontlines.

Number of leadership transitions – In total, we supported 12 organizations in 2017 and 17 in 2018. Of that number, we were engaged in only the search-preparation work with several clients. For purposes of this analysis that brings the two-year total to 26.

The increase in transitions from 2017 to 2018 means this trend of retirements and turnover is continuing to impact our sector. We are already working with three organizations planning leadership retirements in late 2019 or early 2020.

First-time executive directors and CEOs – For 69 percent of the 2017/2018 hires, this was their first ED/CEO position. Of that number, 19 percent were internal promotions. In general, board members seem to have a preference for capable internal candidates, but many have limited knowledge of the staff leaders reporting to the ED/CEO.

Recruiting sectors: In total, 73 percent of the new leaders came from the nonprofit sector and 19 percent previously held business roles. We expect nonprofit backgrounds to continue to dominate but board members are sometimes open to business leaders who bring specific expertise or broad networks.

Age/generation: We debated whether to divide hires by generation or age group. We don’t track birthdays, so we estimated age and generation. It is a good sign that early and mid-career professionals are stepping up into the ED/CEO roles. On the downside, it may be getting harder for older leaders to find their next roles and that likely means we are underutilizing experienced people from our sector.  

Gender: The past two years have been a tale of two streaks. In 2017, our clients overwhelmingly hired female ED/CEOs. In 2018, there was an extended stretch that was heavily male. For the two years, overall, the mix was 65 percent female and 35 percent male. This overall mix is close to the national statistic but shows how small samples can skew perceptions.

Race/Ethnicity: I am pleased to be able to say that board leaders are becoming much more vocal about their desires to recruit diverse candidates who are often underrepresented on their leadership teams. We are also focused on improving this metric and can report that 19 percent (5) of our ED/CEO hires over this two-year period were leaders of color, including three of our last 10. With each search, we are working to expand our reach and visibility with the pool of capable diverse leaders. Our goal is to present a diverse slate of qualified candidates to every search committee.

To help support our effort, we encourage candidates to provide their information to our Executive Candidate pool even if current open searches are not of interest. Please submit at: https://charitableadvisors.hirecentric.com/jobs/133773.html

Looking ahead: As we look to 2019 and beyond, we anticipate a continuing flow of boomer retirements and natural leadership turnover that will provide opportunities for next generation leaders. It is our goal to continue to improve our processes and networks to make a positive contribution to the changes in nonprofit leadership.

We are excited about our reputation for being an affordable and effective alternative to board members taking on the search themselves in this tight labor market. Please contact Bryan Orander at Bryan@CharitableAdvisors.com or Don Gulbrandsen at Don@CharitableAdvisors.com with questions or comments about affordable, effective executive search or succession planning support.

Feb 04

United Way and Salesforce.org: Teaming up to change giving

By Feature, Technology

By Lynn Sygiel, editor, Charitable Advisors

We live in an era where technology seemingly changes by the minute. What’s new today is old tomorrow. The trend is not lost on nonprofits, which continually seek how to best incorporate technology into their fundraising efforts.

With figures showing recent declines in charitable giving, the quest remains: Is there a digital platform that could reframe how nonprofits connect with donors and really transform philanthropy?

Chris Herndon, chief marketing and engagement officer at United Way of Central Indiana, believes that its partnership with Salesforce.org, the foundation arm of the national cloud-based software company, has the opportunity to do just that.  

“It’s kind of a big deal,” said Herndon about the product that is now available to Indiana companies from United Way.

It is certainly a platform for nonprofits to keep tabs on.

Three years ago, United Way chapters in major markets pooled their resources to invest in digital strategies. At the time, Salesforce was one of their selected companies and the 10 United Way chapters began using the company’s marketing cloud software, receiving Salesforce’s expertise and guidance in the process.

The relationship transformed about a year ago, when the United Way chapters became colleagues with Salesforce to create an app called the Philanthropy Cloud, Herndon said. Launched in late 2018, the platform was designed by Salesforce’s foundation in partnership with United Way.

Initially, the goal was to better engage current donors and potential donors. Nationally, the trend was fewer people giving after the recession, particularly middle-class Americans who had less discretionary income.

That trend is support by the Indiana University’s Lilly Family School of Philanthropy, which reported that the share of households contributing to charity has dropped from 67 percent in 2004 to 55.5 percent in 2014, the latest year for which figures are available.

But according to Herndon, the United Way-Salesforce working group also knew that the next generation of employees wants to work for an employer that will enable them to engage with their communities. And they knew that incorporating technology was key to delivering a personal, customizable way that could be scaled.

The concept for the platform first introduced at Salesforce’s 2017 Dreamforce, and then rolled out at last fall’s Dreamforce conference.

Herndon said the term philanthropy implies a more strategic approach, and that there’s been a shift to think increasingly about corporate social responsibility and the goals each company wants to achieve.

Herndon likens the Philanthropy Cloud to a financial account where you can log in, see your investments, your volunteer activity and get a tax statement.

“This gives them a better tool to roll up all that employee giving, volunteering, and achieved community impact outcomes. It allows them to manage their matches, communicate their company’s philosophy and specific goals,” said Herndon.

On a local level, United Way began its marketing the product to its current business partners, which included an invitation-only event a couple of weeks ago. The plan is to do more of those. Currently there are about 50 United Way chapters nationally that are involved.

Ashley Furois, United Way of Central Indiana’s senior director of fundraising, said there is an annual standard per-employee fee based on the employee size per company.

“Standard would be $2 per user per month. A user is an employee, so anybody who has access to the site, if they use it or not,” she said. First Financial Bank based in Cincinnati with 170 employees in Indianapolis is the first area user.

“I think, it complements how we were already changing how we work with our current corporate partners. We’ve been changing our fundraising focus to be from that annual campaign perspective to really a year-round supportive perspective. And this is just another tool that allows us to help do that,” she said.

Nonprofits that populate employees’ profile pages pull from two different databases – Guidestar and United Way. In the short term, United Way is banking on companies and nonprofits that have relationships with companies to help populate the volunteer opportunities.

“Long term, we hope to have a portal or a way for a database to be set up so that some of these opportunities are easily accessible to the companies even if there isn’t already a relationship established,” said Furois.

For area nonprofits, it is important to make sure that their Guidestar profiles are up to date, said Herndon. When an employee accesses a nonprofit’s information, not only can they learn about the mission, but its federal tax ID and nonprofit rating appears. The platform provides the ability to make a donation or easily volunteer.

Serve Indiana’s Executive Director Marc McAleavey sees lots of possibilities. On a state level, he and his team are developing ways to engage employers to strengthen or develop volunteer programming for Indiana companies. He is excited by the opportunities for a user to create his or her philanthropic profile.

“When I saw the demonstration, I saw so many possibilities. It will help not only the company see the impact their employees are making, but also each employee can understand their circle of influence and how they’re making an impact in their communities. It’s a win-win.”  McAleavey pointed out that the Independent Sector publishes a volunteer wage value and updates it regularly. Last year, the volunteer hour was $24.60, up 2.2 percent from the previous year.

McAleavey sees future applications, too.

“Right now, it is about engaging employers. But I think that the power of the Philanthropy Cloud is you can tell an individual’s philanthropic story for a long period of time. I would love to help think through how they can open it up a little bit bigger, so that young adults or even kids start accessing the Philanthropy Cloud so it follows the person no matter where they work,” he said.

Another example, he sees for future use is vetting potential nonprofit board members. An executive committee could request it to use as a resume to learn more about an individual’s philanthropic history. 

The new platform has generated interest from companies that don’t have existing relationships with United Way of Central Indiana.

“It’s been interesting that some assumptions that some companies may have with United Way and just seeing us in a different light in terms of being progressive and innovation,” said Herndon.

According to Furois, nationally there are 40 companies who have purchased the product.

It also helps keep employees engaged by providing customized content based on the individual’s interests with content changing in real time.

“(An individual) can go in and set his or her interests, but also using Artificial Intelligence, it will see what articles you’re clicking on and looking at, and it starts to serve content that is most relevant to you. So hopefully, you get that personal experience, that customized experience, and you are going to get more deeply involved.”

Herndon said there is a multiyear plan to continue to develop the platform. The ability to volunteer for nonprofits will roll out this spring. Additionally employees that want to make an impact on a cause but do not know local nonprofits working in that specific arena can learn about organizations doing the type of work they want to support.

“If I were to oversimplify, it solves how we better connect people who want to help with people who are in need. And then as I think as we learn more about the people who want to help, we can be a bridge between what people care about and what the community needs.

“It is also creating a better experience for people. When you think about how technology has transformed every other area of our life and made it more convenient and allowed us to better engage with things we care about, it should happen in this space as well. So it’s been pretty cool at bringing this to life,” said Herndon.

Furois who has worked for United Way of Central Indiana for 10 years, is excited for many reasons.

“For me, I think the fact that we’re taking an organization that is over 100 years old and introducing something that’s new, unique and different it is exciting to me. It has possibilities for our donors and volunteers, but also for us as an organization,” she said.

Features of the Philanthropy Cloud

A company may purchase the platform from United Way of Central Indiana and then make it available to its employees.

To see a demo of the platform, click here.

  • An employee may create an individual profile, after which the platform will hone content and include what is most relevant to an employee based on interactions with the site. At anytime, an employee can edit his or her causes. For example, an employee is at lunch and hears that a colleague just had a great volunteer opportunity at an organization that deals with food and hunger. An employee can change his or her causes and save that information.
  • An individual’s profile page gives his or her giving history, if it’s recurring or a one-time gift.  Similar to Amazon, the individual can easily donate again and make the same donation. He or she can also get a tax receipt. It provides a snapshot of how the individual is giving. Based on an individual’s giving, it populates pages with articles about the causes he or she supports.
  • Locally, United Way staff will create content to add to the site.
  • On the volunteer portal, which will launch in the spring, employees have the chance to share their talents. Employees can locate and sign up to volunteer for local nonprofits and employee can also post volunteer opportunities for others in the company. Through a peer-to-peer connection, it can increase the visibility of lesser-known organizations.
  • Employees can see specific details about volunteer opportunities – their location, when they start and how to sign up. After signing up, an automatic confirmation and thank-you email is sent directly to the employee.
  • Businesses can see how their employees are giving, either by cause or in a geographic region.
  • If a company has a corporate social responsibility cause, it can highlight opportunities. Companies are asking employees what philanthropic causes they want their employers to invest in. The platform can help employers see if the causes they’ve chosen are actually where employees are investing their time and talent.
  • Future iterations will have portable profiles, so if an employee leaves a company, his or her profile can too.

United Way’s beginnings are rooted in problem solving.

In 1887, Denver had a burgeoning population that put a strain on human services. A large migration to Colorado was caused by the outbreak of tuberculosis. In order to reduce their risk of illness, individuals sought higher elevation and cleaner air.

In Denver, faith leaders partnered and created a united campaign that benefitted health and welfare agencies. They founded the Charity Organization Society to collect the funds for local charities, to coordinate relief services, to counsel and refer clients to cooperating agencies, and to make emergency assistance grants for cases that could not be referred.

Indianapolis entered the picture in 1918 during the war and was more like a war chest.

Herndon said, “There’s some iconic photos literal war chest of cash on Monument Circle and again it was the leaders of the community wanting to rally everybody together.”

The name Community Chest was widely used for United Way organizations until the 1950s.

Since 1946, the American Federation of Labor and the Congress of Industrial Organizations (AFL-CIO) and United Way Worldwide have enjoyed a cooperative relationship. Workplace giving was introduced about 40 or 50 years ago, and that was through the labor unions working with United Way to co-create the concept of workplace giving and payroll deduction.

It sees the Philanthropy Cloud and its technology as its next innovation.

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.