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Aug 21

Nine best practices to steer nonprofit technology

By Sponsor Insight

By Robert Ramsay, CPA, CISA, CITP, CCSFP, Barnes Dennig

Working with nonprofit leaders on a regular basis, the questions I get from the executive directors and C-suite personnel typically revolve around, “How deep in the details do I need to be for my organization?”

While the answer to this question varies greatly, there are a few tips I provide to help leaders sort this out. The following is a brief overview of current key topics, and offers guidelines for steering technology dealing with security, staffing, outsourcing, strategic planning, cloud computing, online banking and finding board members from the technology sector.

 

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Barnes Dennig is offering a free educational seminar covering these topics and more on Sept.13th.

Ford Salon at Robertson Hall, Butler University (4600 Sunset Ave.). Registration and breakfast at 7:30 a.m. , presentation and discussion at 8 to 10 a.m.

Let us know if you are interested in attending and we’ll send you more information.

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Ransomware:

Data security may be the most difficult and fastest changing element of technology to keep up with today (There are many interesting discussions about the “singularity,” and when robots will take over, but practically speaking, data security is the issue of the day). The most common data security risk is Ransomware, the malware that encrypts your information and demands a ransom to return your data.

By the end of 2017, ransomware is projected to exceed $1 billion per year according the FBI. Executives must make sure that everything (and I mean everything of significance) is backed up and easily retrieved. They also must ensure that all employees are trained to “think before they click.” As backup and retrieval improves and employees reduce the number of times they accidentally click on malware, Ransomware as we know it will diminish in volume and severity.

Online banking:

Online banking is a convenient way to move money. Unfortunately, this applies to the nefarious as well as the well-intentioned. Executives should challenge their finance teams and their bankers to demonstrate that segregation of duties exist to such an extent, that if one person’s account were hacked, this would still not allow the hacker to misdirect (and steal) electronic funds.

Network penetration testing:

Also called “white-hat hacking,” network penetration testing can help you know “What do we look like to a hacker?” This is becoming more and more routine, especially for entities that accept credit cards. Almost like an annual financial statement audit, having an annual data security audit can help make sure your controls are evolving as fast as the threats.

HIPAA compliance:

One set of standards that is growing rapidly in the nonprofit sector is HIPAA security requirements. These are a result of U.S. Federal laws that govern personal healthcare information (PHI). Originally just for healthcare providers, these laws have expanded to include all parties in the healthcare system that touch PHI. Because nonprofits want to improve client outcomes, tracking health information is becoming more ubiquitous. Many organizations are choosing to comply with HIPAA as a risk management decision, even if they may not be legally obligated to do so. This is often wise for marketing, as well as security purposes.

PCI compliance:

Similar to HIPAA, PCI is another set of data security standards becoming generally accepted in the nonprofit sector. These Payment Card Industry (PCI) Data Security Standards are more widely required and more precisely defined than the HIPAA requirements. They also offer a clear tier of difficulty that corresponds with the agency’s volume and complexity of processing. Leaders should insist that their finance and information systems teams are coordinating to meet and exceed these requirements on an ongoing basis.

Staffing /outsourcing:

Outsourcing is a fact of life in technology, but very few internal technology teams know enough to provide 100 percent of the security knowledge needed to keep you safe. However, every nonprofit needs to have someone in-house that fully understands your mission, your strategic plan and your current use of technology. If that person is good, then you can task them with deciding activities that are best performed in-house, and those best outsourced.

Strategic technology planning:

Starting at the board level, almost all nonprofits are familiar with strategic planning. These efforts provide guidance to management, and ensure priorities are clearly communicated. Similarly, strategic technology planning helps steer the technology team. When properly aligned, technology is most efficiently assisting the entire organization to meet its goals. The board should provide clear objectives, and allow management to decide how to meet them.

The cloud:

Internet-provided computing can save costs and provide flexibility to IT operations. It presents opportunities, and risks that must continuously be weighed against the opportunities and risks of NOT using the cloud. Because the environment changes rapidly and risk management can be very difficult, having a board member (or committee) from the technology sector can be very important. Ongoing communications between the board and management are a great way to navigate these challenges.

Finding board members from the technology sector:

This is typically not an easy task for the board chair or the personnel committee. When the benefits of diversity are mentioned, technology experience should be included on the list of needed skills. Fortunately, several organizations are earnestly working to assist boards wishing to connect with technology leaders. In your community, you may have any number of networking groups. The following are some of the largest with a national footprint: United Way’s BoardBank, VolunteerMatch.org, NTEN, and the NPower network. Regionally, there is a large variety of organizations that offer board member training and matching. They can range from your local YWCA to an arts consortium. The bottom line for these efforts is to be intentional about recruiting to fill this niche requirement on the board.

Robert J. Ramsay, CPA, CISA, CITP, CCSFP has performed consulting services for more than 20 years, helping organizations make more mission and strengthen their processes, with a particular focus on data security.  He is a member of the firm’s nonprofit client service team and has worked with organizations across the sector.  Prior to joining Barnes Dennig, he worked for PwC and TechBridge, a 501c3 consulting firm in Atlanta.

Barnes Dennig’s website provides additional information on these topics. Click here to learn more about our technology practice and the services for nonprofits like yours.

 

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Event Description:

What Not-for-Profit Leadership Needs to Know about Technology and Cybersecurity

Wednesday, September 13th, 2017
Ford Salon at Robertson Hall, Butler University
4600 Sunset Avenue, Indianapolis, Indiana 46208

7:30 am – Registration and Breakfast
8:00 -10:00 am – Presentation & Discussion

You don’t have to look far to see the news stories: technology threats, security breaches and fraud are on the rise. Don’t miss this opportunity to learn about the current situation not-for-profit organizations are facing as we discuss the big picture on technology, cybersecurity and risks that impact not-for-profits every day.

Join Barnes Dennig Director and technology expert, Robert Ramsay, CPA, CISA (Certified Information Systems Auditor), CITP (Certified Information Technology Professional), as he leads an interactive discussion on what nonprofit leaders need to know about technology and cybersecurity. Attendees will gain useful knowledge on the following topics, and more:

  • How to protect your operations while doing business online, and where to look for risks
  • Cybersecurity threats that not-for-profits commonly face and what to do about them
  • How to fight technology fraud with HIPAA/PCI compliance
  • Email vulnerabilities and how they can impact online banking
  • Best practices for online treasury management

This event is presented free-of-charge, and attendees will be awarded 1.5 hours of CPE credit. Register Here>>

 

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Aug 21

Leaders: Do you know what is on your organization’s horizon?

By Leadership, Sponsor Insight

By Sara M. Johnson, FACHE Director, Executive Education,IU School of Public and Environmental Affairs at IUPUI

While relaxing on a recent cruise to Cuba, I started thinking about leadership (I know…I can’t help it). Ever an observer and student of leadership and organizational culture I was struck by lessons that can be learned on both land and sea.

As we left the port on the cruise ship, I positioned myself on the top deck to watch our departure. As we worked our way to the Skyway Bridge at the edge of Tampa Bay, I noticed the ship turning subtly left and right within a path of lighted buoys. Slowly, the ship would veer left, then right, threading its way through the Bay as we headed out to sea. There was great attention to direction and the required turns that led us safely out to the Gulf. The narrow passage under the bridge also required a precise positioning by the captain in order to prevent the cruise ship from hitting the bridge supports. This seemed a strategic process to ensure the safety of the ship and its passengers. Though it may have been something the captain did all the time, it was strategic, subtle and purposeful. I doubt I would have known it was happening had I not been on the deck observing his path.

On land, I mindlessly travel the same route to work most of the time. I know where the potholes are, the lane changes, and the bottlenecks. I know the best time of day to leave the house to avoid the most traffic. It is easy to drive through traffic without really thinking about what I am doing. Some days I arrive at work, hardly remembering the trip.

In the classic book, “Leadership on the Line,” by Ron Heifetz and Marty Linsky, they talk about the “view from the balcony.” Like the view from the ship’s deck, leaders must occasionally step back, take a look out over the organization, and observe the big picture and the horizon. It is easy to get comfortable and lose sight of what is ahead and the signs along the way.

So, in my relaxed state on vacation, it occurred to me how dangerous it may be to lead the way I drive versus the way the captain navigated the water. Do I need to “get on the balcony” or “on the deck” to determine the best path for the future success of my team and organization? Like the buoys, should I be paying more attention to the signals from staff and other stakeholders?

In times of great change, leaders need to build organizational confidence. I suggest it is also good for leaders to do this for themselves occasionally to take note of their own development, reaffirm their values and the direction they are leading their team or organization.

Making an effort to be intentional in our leadership, “getting on the deck” and strategically looking to the horizon as we observe the signals that should guide us daily. Not only will we feel more confident but those who follow will feel more confident, too.

Sara Johnson is clinical assistant professor for the IU School of Public and Environmental Affairs and director of IU Executive Education. Johnson teaches graduate and executive education courses. She is a fellow of the American College of Healthcare Executives (FACHE). As director of Indiana University Executive Education, Johnson leads a team of over 40 faculty and staff.

Aug 15

Ball Brothers Foundation: Emphasizing family and community

By Feature

By Lynn Sygiel, editor, Charitable Advisors

Efficient, flexible and patient.

These three adjectives guide the funding decisions of the Muncie-based Ball Brothers Foundation, according to Program Officer Jenna Wachtmann.

Both Wachtmann and Senior Program Officer Rich Spisak, who came to the foundation just over a decade ago as its first full-time officer, took time recently to share the vision, innovations and unique focuses of the foundation, which at age 90, is among the earliest established foundations in the country.

“Part of the role of this foundation is it is able to provide efficient, flexible and patient capital. I think patient capital is a really good term for the work that we do. We can be patient and see things through,” Wachtmann said.

Patience shows up in current projects, such as improving the area around Kitselman Trail Head, which has been part of the foundation’s vision for 20 years.

“We have just been slowly chipping away at projects in that geographic area,” said Wachtmann, who joined the foundation three years ago. She said key to committing to a project for the long run is that the foundation’s endowment is set up as a perpetual, not sunset foundation.

In the U.S., there are over 42,000 family foundations with assets of more than $400 billion, according to Foundation Source, a service provider that helps families become more efficient philanthropists. In the past, family foundations rarely thought about an end to family’s giving, assuming they would exist in perpetuity from generation to generation. One reason some foundations sunset is concern that over time there might be a shift from the original donors’ intent. There are other reasons, too, like children not having an interest in the foundation or assets dwindling.

That, however, is not the case for the Ball Brothers Foundation. The foundation’s first strategic plan was developed a little over a decade ago. During those strategic planning sessions, lengthy discussions led to the decision that the family would continue to be involved in leadership roles. As a result, it became a high priority to cultivate that next generation of leaders.

Family member Michael Justin (Jud) Fisher is the foundation’s president. He is a Michigan native, a graduate of the Indiana University Lilly Family School of Philanthropy, and joined the Ball Brothers Foundation in 2003 after a banking career. The board is currently made up of third and fourth generation family members. Of the 13 board members, only four are not family members. Spread across the country are well over 200 descendants.

The foundation’s associate directors’ program helps educate the next generation of leaders. While the program was started before both full-time program officers joined the staff, they have helped formalize it. Currently six family members who live outside of the state take part.

The six come to Muncie three times a year at their own expense to learn about the community and the foundation’s grantees. Site visits have become part of their experience.

“They’re seeing exactly where our grants are going. The last time they were here, we took a bus tour. We put our board members, associate directors, and several community leaders on a bus and drove for two and a half hours around the city, pointing out all the various projects that we’ve talked about for a long time. They hadn’t always seen the previously funded projects or how they connect to one another. Those are valuable learning opportunities. So that gets to the heart of the innovation — as new proposals come to light, our board can make great decisions because they’ve seen in person what is being talked about,” Wachtmann said.

Not only have family members become aware of how a foundation operates prior to possible service, but they also have become ambassadors to the rest of the family and their communities. While not guaranteed a spot on the board, associate directors are guaranteed the opportunity to learn how the foundation operates.

“They’re learning skills that they’re taking back to Denver or to New York City, so they’re involved philanthropically in their own community in ways that benefit them, too,” said Wachtmann.

Donor intent is vitally important and talked about regularly. The perpetual mission — to continue to improve quality of life — has always been at the forefront, according to both program officers.

“The board honors that because these were the family members who came before them. They’ve made the choice to continue to honor that donor intent out of respect for the legacy, but also because the need is clearly still here. We are set up so that we can always serve the needs of the community,” said Wachtmann.

One thing that has changed in recent years is the foundation’s visibility in the community.

“We’re much more transparent than we ever have been,” said Spisak. In the last 10 to 15 years, interactions with nonprofits and ways of doing business have changed. During this period, the foundation began to produce annual reports, and has held annual receptions for foundation grantees.

Wachtmann believes that not having a regular annual report was rooted in the family not wanting to draw a lot of attention to its giving. “But I think that there was a realization that the foundation could have a greater impact by telling its own story, and by telling the stories of its grantees. This, coupled with studies that showed that people just didn’t understand what foundations did, resulted in more of a drive to tell BBF’s story.” Ball family members, too, receive the annual report whether or not they are directly involved.

The decision to have some board members be community leaders who know the area was also intentional. The Ball brothers lived, worked and made their lives in Muncie, and they were dedicated to improving the quality of life here. Those board members who live locally can help guide the conversations to priority community needs.

“Our charter restricts us to give only in the state of Indiana. Over time, it has always been that the majority of money has stayed in this local community and that has been the underlying belief of the family throughout the years,” said Spisak. He said typically, 90 percent of the foundation’s money stays in Muncie/Delaware County with only a small percentage given statewide.

Another program to increase transparency was started over a decade ago. An annual fellow’s program is designed to help local nonprofits understand from the inside, how the foundation works.

Two nonprofit directors are selected to participate for nine months. Often they are from very different organizations. At the onset, each receives $7,500, and later in their tenures, another $7,500 to work on individual projects. In addition, fellows receive money to attend a conference of their choice.

Together with foundation staff, they read and discuss several books and articles about foundations and management, like Jim Collin’s book, “Good to Great,” and Joel Fleishman’s book, “The Foundation: A Great American Secret: How Private Wealth is Changing the World.” In the summer, they visit the Foellinger Foundation to see how another foundation functions.

Spisak said they have gotten great feedback about the program. The program was born out of conversations with the Fort-Wayne-based Foellinger Foundation that included questions such as: How do we make sure that nonprofit organizations understand what a foundation is? How do we make nonprofits more comfortable with foundations? And at the same time, how do we learn more about what’s it really like to be in the shoes of a nonprofit executive?

To date, more than 20 local nonprofit leaders have completed fellowships. These fellows have also served as focus groups for the foundation staff helping simplify the grant process and offering input on the best format for the foundation’s annual report. The relationships have provided staff with candid insights.

According to Wachtmann, nonprofit ownership is critical. In recent years, the foundation has made proactive grants, inviting nonprofits to address a problem in the community and come up with a proposal. The foundation is not prescriptive with these RFPs, instead relying on its grantees to be the experts on knowing what’s best for their nonprofits and their communities.

Annually the Ball Brothers Foundation provides 40 to 50 Rapid Grants capped at $5,000. The beauty is the response time — nonprofits receive approval or denial of funding in seven to 10 days. Both said the innovation has been incredible and that people can take $5,000 and “make magic happen.”

With their roles in the community, for example, program officers often pick up on area trends and issues. The opioid epidemic is one of growing concern. Another is that manufacturing sector employment is down. And while manufacturing output is still extraordinarily high, there have been population losses.

So questions the foundation continues to ask is: What do we do to make our community as attractive as possible? How does our community attract families and businesses to move there? How do we ensure that professionals want to stay here and raise their families? “That theme is kind of at the forefront of all of our work,” said Wachtmann.

According to Spisak, workforce development is key because poverty is such an issue.

“Poverty just affects everything. Quality of life. Economic development. Population growth. Employers coming in. We’re doing so much more with workforce development, economic development, working with our Chamber to try to tie things together,” he said.

Muncie has always been grounded in entrepreneurship. In fact, the foundation exists because the Ball Brothers were inventors and makers. Among the programs that BBF has supported include STEM education and robotics for schools and after-school programs. Recent grants to maker spaces in Anderson and Muncie provide opportunities for these efforts.

“It ties back to ‘What is the community talking about?’ We faced devastating population losses. We have to be a community that can attract people here and business to locate here. We’ve got to capture that entrepreneurial spirit back. And so part of our job is to continue to find ways to drive to find good projects that drive the quality of life,” said Wachtmann.

Both officers believe another role that the foundation plays is a convener, asking, What are the problems? What are the challenges? What are your needs?

In the past year, summits organized by the foundation included opportunities for early childhood and environmental grantees to share innovative programming and potentially make collaborative connections. The environmental summit included grantees from Northern Michigan’s Leelanau area, which are supported by another Ball family philanthropy, the Muncie-based Edmund F. and Virginia B. Ball Foundation.

As Ball Brothers Foundation moves forward, it also looks back. Some of its earliest projects were visionary, including its early grant to build a hospital. With past strong support for medical efforts, and with the IU School of Medicine housing the second largest program in the state in Muncie, the foundation’s president began to look at what to do to continue to strengthen the medical portion of the economic community engine. The other major economic driver in the community is Ball State University.

Hospital and IU School of Medicine-Muncie personnel approached Fisher to begin a dialogue about the future direction of medicine in Muncie. The outcome was concept called Optimus Primary and is designed to strengthen the medical education sector in Muncie, giving it more of a niche.

“We know based on research that where a doctor trains, he/she often stays within a certain 100 miles radius of that area. And so the more doctors that train in our community, and the better doctors that train in our community, hopefully, we can retain some of those in our city. So that’s good for our region, and it’s good for our state,” said Wachtmann. Delaware County is 87th out of 92 counties in community health rankings, according to the Robert Wood Johnson Foundation county health rankings report, so good medical care is imperative.

What they learned from doctors in training in Muncie was that they wanted better housing options and specialized training opportunities.

“Then we’re able to issue a request for a proposal that says, ‘We’ve heard that these are themes that you have in common, and we’re ready to respond to that. You tell us what you want to do. We’re not going to tell you, we don’t know, what your future doctors need training-wise, but you tell us what you need to be innovative, and we’ll take a look at it,” said Wachtmann.

“So we made a series of grants of about half a million dollars in response to what were those identified community needs. Our funding is targeted to pilot several initiatives to make medical training in our community stand out,” she said.

One of those initiatives involves joint training programs where EMS personnel will be training right beside doctors in combined scenarios. This and other collaborations include Ball State University, Meridian Health Services and additional partners who will help develop program and curriculum that help strengthen Muncie’s physician-training programs and make them stand out.

There is some risk with innovation. Wachtmann said Purdue University’s President Mitch Daniels talks about measuring the risk of inaction against the benefit of proactive.

“We can sit and wait and think, ‘Oh, it seems kind of dicey’ or we can jump in and say, ‘We’re going to put a bit of money into it and we’ll see what happens.”

 

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AN UPCOMING NONPROFIT OPPORTUNITY

Indiana Youth Institute, in partnership with the Ball Brothers Foundation, intends to help improve the organizational effectiveness of youth-serving nonprofit organizations in East Central Indiana.

With funding provided by the Ball Brothers Foundation, IYI invites community and faith-based youth-serving nonprofit organizations to apply for assistance to improve their current effectiveness and their capacity to serve in the future.

Grantees are limited to organizations within Delaware, Randolph, Henry, Jay, Madison, Grant, and Blackford counties.

Request for applications can be found here.

Applications are due to IYI by 9:00 a.m. (EDT) on Aug. 28.

Two grants will be awarded. Collaborative applications from two or more agencies for one grant award are encouraged. Each grant recipient will receive the following:

  • 80 to 120 hours of coaching and technical assistance focused on one or more of the following (see page 6 for more details):
    • Strategic planning
    • Fundraising and sustainability planning
    • Board development
    • Evaluation plans and processes
    • Financial management policies and processes
    • Human Resources management policies and processes
    • Executive Coaching
    • Another area that would increase the effectiveness of the organization
  • Registration and hotel expenses for 2 persons to attend IYI’s Because Kids Count Conference in Indianapolis – November 28 & 29, 2017.
  • Registration of $750 for 1 person to attend a professional development training or conference in spring 2018. The Fund Raising School at the Indiana University Lilly Family School of Philanthropy is one option for consideration.
  • The opportunity (based on successful completion of other activities) to apply for a sub-award of $5000 to $10,000 to be used only for approved organizational effectiveness/capacity-building purposes.
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Aug 07

Is outsourced accounting right for your NFP?

By Finance, Sponsor Insight

By Chris Mennel, audit manager, Alerding CPA Group

As your nonprofit strives to use its resources as effectively as possible, at some point, you might consider outsourcing the functions that fall under your accounting and financial umbrella.

Nonprofits often outsource areas that require specialized knowledge or a significant number of hours, such as payroll processing and payroll tax preparation. Outsourcing accounting functions also can provide benefits – if it matches up with your organization’s needs and budget.

Before committing to an outsourced accountant or an internal hire, consider the following:

  • Labor costs – Organizations that outsource their bookkeeping often realize an overall reduction in payroll, employee training and the cost of benefits. On-staff accountants are often charged with administrative tasks that could ultimately be accomplished with personnel that can be hired at a lower salary. Additionally, the outsourced provider would offer consistency, even when your organization has turnover. However, it’s important to know that sometimes the cost of outsourcing could be higher depending upon the mix of work required.
  • Depth of knowledge and expertise – Outsourcing with someone that specializes in nonprofit accounting often provides your organization with a higher level of expertise and greater resources than you could find if you hired your own accountant. The outsourced person likely has a number of individuals that they can consult with as issues arise, and these individuals will be knowledgeable in a variety of areas.
  • Efficiency – Bookkeeping is time-consuming, especially when dealing with multiple responsibilities. Moving bookkeeping, payroll and other financial responsibilities to an outsourced service provider allows your staff to focus on your organization’s mission. But, keep in mind that an outsourced accountant won’t be onsite every day.
  • Staying current with regulations and laws – Nonprofit regulations and laws are always changing, and it’s challenging and time-consuming to stay up-to-date on these matters. An outsourced accountant will likely be up-to-date on those matters that affect your organization.

Outsourcing allows you to work with financial professionals of varying levels of experience and expertise tailored to the functions they’ll perform. These responsibilities could include:

  • Processing payables, receivables and cash transactions
  • Reconciling accounts at each month’s-end
  • Preparing financial statements, budgets and forecasts
  • Assisting with tax and grant reporting requirements, and
  • Adequately communicating financial matters to your board.

But you don’t have to outsource all of these functions. Depending on your needs and budget, you can outsource only the ones that make sense for your organization. You also may benefit from occasionally using other firm experts — investment advisors, HR and IT support and valuation specialists, as necessary.

Many nonprofits turn to outsourcing accounting functions at times of significant personnel transition or workload increases. For the nonprofit that can’t afford the day-to-day expertise of a director of finance or CFO, outsourcing certain financial oversight functions, such as review of bank reconciliations, may enhance the system of internal controls.

When considering outsourcing any accounting function, make sure you’re working with a manager or partner who’ll become familiar with your operations. This will help provide continuity of service, as well as a resource for your senior management and board of directors. This manager or partner will also supervise junior firm members, providing an added layer of oversight.

The final word

Even with a provider handling your accounting functions, you won’t be able to absolve yourself of financial decision-making. Remember, while an external firm can assist and advise you on financial matters, those charged with governance (typically the board of directors) must continue to have the last word on making significant financial decisions. Be prepared for some commitment of time during any transition of accounting services. A learning curve is inevitable, whether it be external outsourcing or an internal hire. However, accounting and financial reporting is ever-changing and complex, at times. The wealth of knowledge and support that an experienced outsourced accountant can bring to the table could be invaluable.

Jul 31

Moving from starving to thriving

By Sponsor Insight

By Zachary Kester, JD, LLM CFRM, Charitable Allies

Spending too much on overhead is bad. But how much is too much?

While scholars agree that the 15 percent line implicitly reflected in Part IX of the Form 990 is too low, what’s the sweet spot? And, maybe more importantly, what do funders think?

Both scholars and funders are coming to recognize the importance to programming quality of spending adequately on overhead.

Over the past several years, the landscape has been changing. As more people realize that such costs have little to do with the effectiveness of a nonprofit, the focus is shifting toward a nonprofit’s impact.

General attitudes are changing despite the fact that charity watchdog groups are at odds about the extent to which the overhead ratios are helpful in assessing nonprofit organizational strengths. Charity Navigator has spearheaded The Overhead Myth campaign while Charity Watch maintains that overhead ratios are essential to assessing charitable effectiveness.

The Nonprofit Starvation Cycle is “leaving nonprofits so hungry for decent infrastructure that they can barely function as organizations — let alone serve their beneficiaries” according to Ann Goggins Gregory in the groundbreaking publication that first identified the Starvation Cycle. The Starvation Cycle involves nonprofits habitually spending inadequate funds on overhead such that a lack of infrastructure interferes with daily programming.

Think about that day you and your coworkers fought with a $30 printer for several hours when a $100 printer would regularly and reliably print without issue. That wasted time is equal to wasted money. This is the cycle in a nutshell.

The cycle “starts with funders’ unrealistic expectations about how much running a nonprofit costs” and is fed by “nonprofits’ misrepresenting their costs while skimping on vital systems — acts that feed funders’ skewed beliefs,” according to Goggins Gregory. This is exacerbated by the fact that individual donors are more likely to give when they are told that 90 percent or 100 percent of their donation goes directly to programming.

Alleviating the starvation cycle

The first step to alleviate the starvation cycle is in the nonprofit’s hands. The organization’s leaders should and analyze the ways in which their nonprofit currently operates.

By delving deeper into understanding what the nonprofit organization needs to create a solid infrastructure, members of the board and those on staff can begin to develop a clear foundational need. Without a strong office support system, a nonprofit will be unable to function, just as a typical for-profit company would if they did not spend money on cultivating a well-balanced framework. One example in the Goggins Gregory study was a nonprofit’s, “furniture [was] so old and beaten down that the movers refused to move it.”

A nonprofit is well-advised to take the time with its staff and board to truly reflect on what is necessary for the nonprofit’s daily operational needs. If these basic necessities are not matching up with results, then it’s a sign an organization could be in serious trouble.

The second step in changing this cycle is to change the way donors view the concept of overhead. Funders must be comfortable knowing that part of their grant may go toward maintaining a successful office space. Of course, the amount spent on overhead should be reasonable. Some funders permit an agreed upon percentage of its dollars be used for the administrative needs of the nonprofit.

On the flipside, foundations and government funders must alleviate the tension nonprofits feel when they receive a grant. If these funders can begin to change the entrenched perception that all (or nearly all) overhead is bad, then nonprofits would feel more comfortable using part of the grant in order to continue running efficiently.

Together, funders and nonprofits can work together to alleviate the typical challenge of the starvation cycle. In fact since last year, the Ford Foundation permits grantees to use 20 percent of each grant award for overhead — effectively setting up the organization for success for having allocated enough funds to cover grant compliance and administrative costs.

If your nonprofit is struggling to make ends meet, take a look at what exactly makes up its overhead funding. Sometimes spending more there will increase success.

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 for your nonprofit organization.

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

Jul 31

Domestic Violence Network: 20 years of fighting domestic violence

By Feature, Leadership

By Lynn Sygiel, editor, Charitable Advisors

Nonprofit networks vary in shape, size and mission. Some are satellites of national organizations and others establish connections and facilitate collaboration.

Ask Tracey Horth Krueger or Kelly McBride about the Domestic Violence Network (DVN) in Indianapolis, and they’ll tell you that after 20 years, it is still vibrant and relevant. That is in large part because of its ability to adapt and respond to community needs, according to Horth Krueger, the network’s first executive director, and McBride who has been in the position for the past 3½ years.

In reality, the network has been around since the 1980s, first as a grassroots movement. Regular monthly meetings were informal conversations that provided opportunities to collaborate and make connections. At those gatherings, direct service providers would discuss what they needed to support their work, but would then leave and return to clients and caseloads. There wasn’t an entity or staff support that would advance those initiatives between meetings.

“In 1997, the decision was made to try to secure funding to get a staff to really build the domestic violence network,” said Horth Krueger, who is now CEO of the Indiana Coalition to End Sexual Assault. “In my opinion, everything that is DVN now is built on what preceded it for the 10 years or 15 years prior to that. It is an extension of the work that that committed group of advocates has been doing in this city for years.”

DVN started with three employees and now brings numerous nonprofits to the table, including at least a half dozen area domestic violence shelters. One initial obstacle was overcoming nonprofits’ fear that such an entity, while worthwhile, would add to the competition for existing funding dollars. Organizations wanted to be set apart and be attractive to funders on their own.

“It was Mayor Peterson, a strong advocate for this work, who was able to say, ‘We’re a team, let’s keep our eye on the ball, we do much better when we’re working together.’ And then backed it up with having his deputy mayors in the meetings and involved. It was a great opportunity for DVN to really grow because we had support,” said Horth Krueger.

“What we were saying was, ‘Let’s come at this from a position of power. We’re going to be way more powerful if we’re working together than if we’re continuing to have the walls up,’” said Horth Krueger. “We were really shifting the conversation and saying that is an issue that cannot operate in isolation. We really need each other.”

While DVN’s mission has remained consistent – engage the community to end domestic violence through advocacy, education and collaboration – its delivery has not. Education and training have adapted to what’s happening in the community. DVN has always served in a coordination role.

“As we’re learning what national best practices are, we’re bringing those here, but at the same time we’re learning about what our city is doing. We’re merging those together, so that they fit everyone’s needs,” said McBride, who is a trained social worker.

While Horth Krueger is no longer involved in the day-to-day, she thinks the network also works because it focuses on the broader issues. As a former reporter/anchor at WRTV-6, she worked to bring visibility to the issue. First with the Safe Haven Campaign, which was designed to raise funds for additional transitional housing for victims of domestic violence. That campaign resulted in the opening of Coburn Place, a transitional housing and support service for domestic violence victims. The campaign, which is ongoing, was also designed to raise awareness about domestic abuse.

“That campaign did a phenomenal job at breaking through perception. It was just telling the stories of people that you might watch and think, ‘Whoa, it attacks all of us and our preconceived notions about others.’ So it’s really opening up all of us to be thinking about, ‘God, this really could be happening in my own family.’ And that’s powerful,” said Horth Krueger.

Staying focused on trends and identifying gaps in services gives the network the ability to look more strategically and more comprehensively at community needs and ultimately prevent domestic violence.

“DVN is not serving the needs of victims day in and day out, which is precious important work and needs to be the focus of nonprofit organizations. A community needs that other piece where an entity can be stepping back and looking more broadly,” said Horth Krueger.

That’s a role DVN has embraced since its beginning. In 2000, Peterson’s first year as mayor, he led more than 100 citizens in a roundtable discussion that prompted a call for a community action plan to end domestic violence. DVN took the lead, and the Family Violence Community-Wide Plan was issued in 2001.

Four years later, a second mayor’s roundtable identified new priorities for addressing domestic violence, including public awareness and education, economic justice, health and legal issues, prevention and targeted outreach to Hispanic populations. The second formal communitywide plan, Peace in our Homes: A Call to End Domestic Abuse in Central Indiana, was released in 2009. It was a catalyst to establish a coordinated community response.

In 2013, the Community-Wide Plan to End Domestic Violence 3.0 was released by DVN and used the Results Accountability framework. There was a focus on making a measureable improvement in the quality of life for entire communities.

Plans varied in duration from three to five years.

McBride said putting Band-Aids on things is not enough.

“We provide funds for emergency transportation, we have these great shelters to help victims, but how can we stop it in the first place. Domestic violence does not exist in a silo. Our domestic violence victims are coming in with mental health issues, addictions issues and everything else,” said McBride.

The newest community plan is focused on intersections and how poverty and domestic violence are intertwined and how crime and domestic violence are interconnected. It is designed to dive into the root causes of domestic violence, and change the issue in six months. The first — economics – resulted in a study of housing for domestic violence victims. Behind the scenes, a committee will continue the work for the duration of the plan.

“That is such an important conversation because it is all tied together. And if you can solve one or make headway on addressing one of these societal ills, it will have a positive impact on the rest. I see that as the very critical role that they are filling now and are leading it,” said Horth Krueger.

Marion County and the doughnut counties are the focus for the network, and participation is free. It represents people in the Greater Indianapolis area who serve domestic violence victims, and includes not only the shelters and the advocacy programs, but also law enforcement, the legal community and work in hospitals.

“It’s the full continuum and what needs to be in place to address the needs of victims and hold perpetrators accountable and prevent abuse. It’s the repository of all of this information about who’s doing what in the community and how,” said Horth Krueger.

DVN publishes two reports a year – “The State of Domestic Violence in Central Indiana,” a compilation self-reported by the nonprofits that serve the population and which provides a snapshot of the number of clients served. It’s designed to present an update on the state of domestic violence in Central Indiana based on similar reports compiled in 2014, 2013, 2011 and 2008.

The second report connects data from the IMPD, Julian Center and the Marion County prosecutors’ office to get a better understanding of what domestic violence looks like in the criminal justice system. The report hasn’t had consistent funding, but currently has government funding, and will put out preliminary statistics in the fall .

“That’s more of the arrests and the convictions. What does recidivism look like? Are we seeing domestic violence reported to the police in more spots within Marion County? That doesn’t mean it is happening more, it’s just reported more there. So then we’ve taken that data, and we share with our network and our partners and then we can help identify better prevention strategies or intervention strategies,” said McBride.

Most funding is local, but DVN holds a national grant in partnership with IMPD, the city, Julian Center and the prosecutors’ office. Called the Baker One Initiative, it is an IMPD-led policing initiative to identify high-risk offenders early in order to prevent homicide or serious assault. The original project, started in Mecklenberg County (Charlotte area), North Carolina, in 2002, has proven successful in preventing lesser crimes from escalating to seriously violent or fatal acts.

“Baker One Initiative’s initial data shows that it is working,” said McBride. “We’ve applied for several other federal grants in partnership with those folks as well, and we should find out about those in the next couple of months.”

While funding ebbs and flows, McBride said it is important that programs remain consistent. Recognizing that a service provider could lose funding for a program, for example, DVN assumed the responsibility for youth and employer education.

“There were people doing that, but their grants would ebb and flow. So if they lost a youth-prevention grant, then they would lose that program. So it wasn’t sustainable within the community,” said McBride.

“We’re not only educating our advocates but our community members. And we also educate high school and middle school students on how to identify and respond to teen-dating violence, what a healthy relationship looks like and what consent looks like,” said McBride. It’s been in place for three years this fall, and it has branched out to include a youth network once a month to engage peers in healthy relationships.

While the advocates’ network still meets the first Tuesday of the month, there are now trainings to provide ongoing support. In addition, DVN offers best practice trainings nine months of the year, and there is a monthly wait list. The remaining months DVN hosts a commemoration and holiday party, and a retreat to focus on self-care for direct service providers.

What’s next? In an ideal world, Horth Krueger sees the network working to make domestic violence unacceptable like Mothers Against Drunk Driving.

“The perpetrator is the one making them leave home, and so why are we putting it on the victim to relocate to a part of town they’ve never lived in, not that they have anything against that part of town, but they don’t know where the grocery is, they don’t know where the drugstore is, they don’t know the schools. So the movement has had to be aware of that and try to make those accommodations so they don’t feel completely removed from all they know.

“The housing issue is huge, but I think we need to think differently about the housing issue and maybe we don’t bring everybody to one building. We have scattered sites. We need to be out in these communities, we need to have partnerships with different organizations.”

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Lessons learned

McBride and Horth Krueger have been immersed in the issue of domestic violence. And over the 20 years Domestic Violence Network in Central Indiana, they’ve learned a thing or two about how networks function.

They were willing to share some practical tips for nonprofit networks in order to stay relevant.

  1. Don’t become stagnant. Be flexible and adaptable and continue to pay attention to trends, issues and the needs of the community. The work is not black and white and has to be ever evolving.
  2. Relationships are key. Keep building and recognize that they can be ever changing.
  3. Do your homework. Find the influencers. Talk to people who’ve established networks or continuity. You’re never done. Talk to people who have been in your shoes.
  4. Don’t tie your efforts to a specific politician. If you tie the issue to an elected official, then you’re not thinking about sustainability. You want that support, and you want to be a priority to them, but you cannot become an office of because them.
  5. Listening is very, very important. It helps to have that skill set so that when you have multiple voices around a table, you can come to a consensus, and help people come to a consensus. You have to have the ability to listen and make sure that people feel heard and are heard. There are awesome ideas everywhere, and it’s important to elevate people’s ideas.
  6. Recognize that domestic violence intersects with almost every other social problem. With domestic violence affecting 1 in 3 women, and 1 in 7 men, you know someone who’s been touched by domestic violence. Keep asking: How can we pull together the community.
  7. Continue to work better and continue to communicate.
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Jul 24

The need for more basic philanthropy research

By Sponsor Insight

By Amir Pasic, Eugene R. Tempel Dean, Indiana University Lilly Family School of Philanthropy

Judging by the proliferation of research-inspired ventures, it may seem we’re in a golden age of philanthropic knowledge creation. But we are not focusing enough of our efforts on basic research.

Given the urgency of finding better ways to solve pressing social issues, it’s not surprising that the vast majority of research generated is applied research. Both the standard ways of doing philanthropy and the paradigm-bending (and busting) efforts to transform and disrupt conventional approaches come armed with research findings on what works, where there are strategic gaps in expectations and how some interventions are more effective than others.

This data-driven search for solutions is awesome and inspiring. Our current philanthropic research ecosystem is highly fragmented. Its inhabitants often belong to a variety of industries or professions whose connection to philanthropy is contingent on other interests and commitments. And today’s growing expectations of philanthropy are only likely to increase because of current political winds, and because total annual giving at $390 billion does not seem small compared to the nonmilitary portion of federal discretionary spending: $518 billion a year.

However, basic research also is needed to give more coherence to this burgeoning applied research engagement, and to give it a better chance at driving innovation. Shared fundamental questions unite applied and basic research. We just need to devote patience to pursuing basic questions, such as why do humans give? How does giving affect our social life? And how is giving connected to exchange relations in the market and to the power relations of authority?

A classic case for the value of basic research, The Usefulness of Useless Knowledge, was reissued this year by Princeton University Press. Written by the man who brought Albert Einstein to America, it argues that both deeper understanding and technological progress are best facilitated not by seeking immediately applicable solutions, but through “the unobstructed pursuit of useless knowledge.”

Such “useless knowledge” now resides in every smartphone built from “basic” discoveries that in their time did not have ready uses, ranging from electricity to relativity to quantum mechanics. In the social sciences and humanities, basic research leads to novel designs for our social institutions (think of social security and public health) and to the ways we form and express our identities and find meaning.

Alarm also is being raised about declining government investment in basic research, including by the president of MIT and the head of the Institute for Advanced Study, Einstein’s academic home. Realistically, philanthropy will fund only a small portion of flagging government support for basic science research. But even a campaign to fund basic science through philanthropy would benefit from better fundamental understanding of philanthropy.

We’re likely to see many more efforts to tap into philanthropy or to regulate the flow of financial resources into it. The decisions made would be improved by better understanding of what “it” is. Is philanthropy a tax dodge, the outsourcing of government, an agent of pluralism, or is it its own thing that reflects a fundamental feature of the human condition? It can be all of these things, but the last point merits more attention.

We often hear suggestions that the private sector or the government would do philanthropy’s work better. One can make that argument, but it is one that seeks not to improve or understand philanthropy, but to substitute it for something else.

This suggests that basic research on philanthropy is not going to succeed by walling it off from other disciplines and ways of approaching human nature and social interaction. But at the same time, if there is a basic puzzle to investigate that focuses on the how and why of human generosity, we cannot simply follow the practitioners and thinkers who consider philanthropy an offshoot of market behavior or authority relations that can be managed and understood better by using only these more established lenses.

There is a surge of applied research activity to draw upon.

Every association or forum for discussing the effectiveness of philanthropy is bringing its own research to the table. Just glance at the work of our established infrastructure organizations such as GuideStar, the Foundation Center, the Center for Effective Philanthropy and Independent Sector, not to mention the consultancies that advise foundations on big bets or generate interpretive strategic templates such as “collective impact.” They are generating ever more sophisticated and useful syntheses, deep dives, case studies, data tools and research reports.

The Gates-funded “Giving By All” initiative is fostering a range of applied research on interventions that might facilitate more donations by the public at large.

Even following the Stanford Social Innovation Review only begins to reveal the expanding universe of applied research and experimentation.

Our field is replete with excellent associations and consultants who serve as the McKinseys and Bains of the philanthropic world.

However, we are not so blessed with the equivalent of the multitude of excellent business schools in the world of commerce that build knowledge and allow us to discern among the flurry of urgent insights by providing rigor and the perspective of broader and longer context.

In the academic world, we have simply not kept up with the pace of innovation and experimentation that is being driven by research-savvy practitioners. We have not done an adequate job of building the connective sinews, as basic and applied research do not progress in isolation. They benefit from cross-pollination and creative tension between curiosity driven basic questions and applied discoveries.

As the first school of philanthropy, we have a role to play in pursuing the basic questions and engaging them with the repertoire of fundamental data generation and applied work for which we are already known.

But we are not alone. For example, The Human Generosity Lab is “the first large-scale transdisciplinary research project to investigate the interrelationship between biological and cultural influences on human generosity.”

And more broadly, there has been dramatic growth in the number of academic programs that teach about philanthropy. These are mostly found in schools of public affairs and public policy, where “nonprofit management” is a growing line of instructional business. But here too, more connective tissue needs to be grown to connect data-driven innovators on the one hand and scholars outside the professional school domain on the other.

Our understanding of philanthropy and our quest to make it more effective will benefit from embracing curiosity-driven research that seeks to understand what ties our disparate concerns together in the pursuit of basic questions about human generosity.

Amir Pasic, Ph.D., is the Eugene R. Tempel Dean of the Indiana University Lilly Family School of Philanthropy since 2015. Prior to joining IU Lilly Family School of Philanthropy, Dean Pasic was vice president of international operations at the Council for Advancement and Support of Education (CASE). Previously, he was associate dean for development and strategic planning at Johns Hopkins University School of Advanced International Studies (SAIS) and the executive director of the Foreign Policy Institute.

Jul 17

Use people strategy as your competitive advantage

By Sponsor Insight

By Mike Bensi, advisor, FirstPerson

I was flipping through some old school papers I’ve hung on to for far too long and found my notes from Michael Porter’s book, Competitive Advantage. If you haven’t heard of Michael Porter, here’s a great summary of him and the business ideas and strategies he’s shared over the years.

In this particular book, Porter said companies win over their competitors by being cheaper or by being different — being perceived by the customer as better or more relevant. There are no other ways.

While Porter was speaking to competition within business, we can apply this to the competition for talent we’re experiencing today. Companies have two ways to gain an advantage over other companies looking for the same talent: pay the most or be so different from other companies it’s easy to draw in and keep top talent.

Playing the numbers game is not sustainable, and applicants don’t rank this in the top criteria when looking for jobs. Companies must reflect on how their people strategy is better and different than other companies. To accomplish this, think like Porter and create a “value chain” within your employee lifecycle. This value chain should focus on five stages of your employee lifecycle as a series of activities which link together. With it, you’ll be better able to show talent how you stand out from the rest.

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Jul 17

Homeless resources in Indianapolis

By Feature, Programming

This week, Indianapolis Star reporter, Maureen Gilmer, wrote a story about seeking help for a homeless mom. The story referenced the Street Outreach Rapid Response Team, and other nonprofits that acted immediately to secure a spot for this family. To learn more about Indianapolis’ services, read her article.

Just like that, within three hours, a desperate young mom and her kids were rescued from an uncertain future. I was astounded at how quickly this family got the help they desperately needed, but at the same time, I know there are others who aren’t as lucky as Brown and her family.

These kinds of street rescues are what Street Outreach Rapid Response Team and Professional Blended Street Outreach are built to do. The rapid response team is actually a network of 67 people representing 22 organizations in the city — shelters, hospitals, mental health agencies, veterans’ groups, even animal welfare advocates.

“We’ve identified gaps in services available on the streets for people, and we’ve brought those folks together to help those most vulnerable,” said team coordinator Melissa Burgess.

When an email goes out to the group, “everybody jumps up and is ready to help if they’re able to,” she said.

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Jul 10

Fiscal Responsibility Primary Goal of Board

By Sponsor Insight

by Yvonne de Calonne & Michelle (Micki) Siner

Certainly, complying with self-dealing rules and following the letter of the bylaws are requirements of fiscal responsibility. But they may be just the minimum requirements.

Here are three ways for boards to further exercise their fiscal responsibility.

1. Assure the agency stays within its budget

Prepare a realistic budget. It is always appropriate to budget based upon educated estimates of the actual costs and revenues of intended services. But these estimates should not ignore the history of the budget item.

Neither history nor the estimate should stand as the lone criterion of a budget item. Justify the budget variances. At each board meeting, receive a report from staff on actual expenditures compared to budget. Significant variances – say, 10 percent or greater – should be explained.

A plan should be presented to bring the budgeted item back into line to accomplish the agency’s budget goals for the year. While it is important to correct unfavorable variances – spending too much –do not overlook under-spending. Money not spent as planned, such as advertising or program development costs, may result in revenues missing budget later in the period.

Adjust the budget when needed. Occasionally, the budgeted items may prove invalid. A program may not begin because of permitting or personnel issues. A major event may disrupt revenues or require overtime. When this happens, create a new budget for the remainder of the period with these events taken into consideration. The budget for unaffected line items remains unchanged. Then, once again, the agency is working with an achievable budget.

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