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Governance

May 18

Nonprofits rush to take advantage of PPP lifeline

By Feature, Governance

By Lynn Sygiel, editor, Charitable Advisors

Cindy Booth advocates for Marion County’s abused and/or neglected children through her work at Child Advocates.

Rosalyn Demares promotes state artists through Indiana Artisan.

Rachel Sahaidachny invests time and energy helping writers tell their stories at the Indiana Writers Center (IWC).
Julia Whitehead champions Kurt Vonnegut’s legacy at the museum and library that bear his name.

What these four nonprofit leaders have in common is that they applied for Small Business Administration’s (SBA) Paycheck Protection Program loans. As of May 8, Indiana SBA-approved lenders helped complete 71,614 loans, totaling more than $9.66 billion, according to SBA.

What is not clear, however, is how many of these loans were approved for nonprofits.

Laura Schafsnitz, public affairs specialist at the Indiana District Office of the SBA, said that its priority is still processing funds, and has not yet differentiated between the two eligible groups – nonprofits and small business.

United Way of Central Indiana and the Arts Council of Indianapolis found some answers through a survey of local nonprofits concerning the status of PPP applications.

Denise Luster, UWCI’s vice president of impact research and analytics, said it reached out to 118 nonprofits in six counties ranging from grassroots organizations to those with multi-million dollar budgets. The target audience was the human services sector, but it reached beyond United Way’s network of accredited partners.

Of the 118 respondents, 85 applied (72 percent) for a PPP loan. By the end of April when the responses were tallied, 68 nonprofits had received approval, and 17 had not yet received word. Of the 68 approved, 50 had funds in their bank accounts. The average amount applied for was $352,872. The April 30 report does not reflect second round of PPP loans application, which opened just three days prior.

Ernest Disney-Britton, the Arts Council of Indianapolis’ vice president of community impact, shared similar data.

“I can tell you that of the 76 organizations that responded to our survey, 84 percent said they had applied for the Paycheck Protection Program,” he said. “One mid-sized organization indicated that it had received $85,000 and another mentioned it received $329,000.”

Unlike the first round of the PPP program in which funds were depleted quickly, round two still has money to give out, according to Schafsnitz.

The PPP program was not without its well-publicized wrinkles and that’s among the reasons why early in the state’s shelter-in-place order, some nonprofit leaders tried to provide support for local nonprofits. The Arts Council, for example, convenes weekly sessions that include at least 90 CEOs and executive directors. United Way and the Immigrant Welcome Center do the same. In its latest Community Connect report, 53 agencies participated in the Welcome Center’s Partner Power call. These have also been opportunities for nonprofit executives to share information and pose questions.

Child Advocates’ Executive Director Booth said she heard about the PPP through emails from the organization’s state office, national CASA and United Way. These emails shared the opportunity, what it means and what to consider.

But applying for a PPP loan was not for everyone. Booth shared a story about a colleague from southern Indiana who sought her out as sounding board, explaining her thought process and her reasons for her decision.

“I think for the smaller (organizations), sometimes it’s just even talking to somebody. ‘Am I on the right track? Does this sound right to you?’

“She really was being very thoughtful, but when she got to the ‘no,’ she was like, ‘I feel like I should be say, ‘yes.’ There’s money out there, I should be saying yes.’” That director ultimately decided not to apply,” said Booth.

The biggest question for Demares, a one-person staff, was: Is it truly a forgivable loan?” Indiana Artisans has two stores with 13 part-time employees, one in Carmel and one in the French Lick Resort. “We’ve never had any kind of loans, so this was new,” she said.

As information about the program evolved, some had concerns about the reality of forgiveness. PPP loans can qualify for forgiveness, but if not, the loan has a 1% interest rate over two years, with no payments due during the first six months.

Booth figured, while it could be viable, her concern was any negative implications. So with her CFO, she conferred with the agency’s auditor who encouraged her to apply. Booth also talked with her national and state CASA colleagues. This all happened, she said, within a number of hours. Booth said they learned early that you needed to start the process with your local bank. For Child Advocates that was Huntington Bank, and the nonprofit’s board treasurer is a bank employee who connected them the correct staff person at the bank.

All had been in regular contact with their boards or executive committees. Board members, they all agreed, provided helpful information and advice.

There was also information coming from those weekly calls, oftentimes from an expert on a particular topic. The three arts leaders — Demares, Sahaidachny and Whitehead — were regulars on the Arts Council calls.

Sahaidachny said those calls have been a godsend.

“I definitely have learned a lot. It certainly helps because it’s so hard to keep up with everything; to be able to get that recap every week has really helped me through the last two months,” she said.

“The Arts Council really spearheaded this effort of communication which has been amazing. (It is) important for the information, but also important to feel like you’re all in this together, sharing and helping each other and not feeling competitive,” said Whitehead.

After conversations with their bankers, all four had the documents ready when the loan program opened on April 3. For the Writers’ Center that was Regions, for Indiana Artisan it was Old National, Child Advocates banks with Huntington and the Vonnegut Library and Museum banks with National Bank of Indianapolis.

When the SBA launched the Paycheck Protection Program, there were high demands and technical glitches that stalled loan processing.

That wasn’t the case for Whitehead who said the Vonnegut Museum and Library’s CFO submitted its application the morning the program opened.

“We worked closely with our bank. National Bank of Indianapolis worked that entire weekend to process the loans,” she said.

Booth said it was a simple one-page application. “I think our CFO had her finger hovered over the send button as soon as Friday came,” said Booth.

While the two others were ready, they weren’t successful submitting electronically on the first day.

Demares wasn’t able to connect to Old National’s portal to upload any documents. But her banker emailed that evening to say that the portal was open and functioning, but her application would have to be redone. While she Demares did this immediately and successfully submitted it to the bank, it took until April 29 to receive approval from the SBA.

Sahaidachny had a similar experience. Her bank’s online portal kept crashing and freezing. She was finally able to complete the PPP submission the following Monday. Later that week, she received an email from her bank that the SBA had quit taking applications because the dollars had run out. Regions, however, continued to process applications to have ready in anticipation of a second round of funds. The fund was replenished and opened again on April 27. After lots of handwringing, on May 5 the Writers’ Center executive learned the money was deposited in its account.

Two of these nonprofits applied for loans of under $50,000, and two over, reflecting the sizes of their payrolls. In order to receive forgiveness, at least 75 percent must be applied for payroll costs, while the remainder can be used for mortgage interest, utilities and rent. The loan is intended to cover eight weeks of these expenses, and the borrower must then complete forgiveness application and submit to its lender. Ultimately, the bank is responsible for assessing forgiveness.

Booth said Child Advocates learned on April 16 that the organization had been approved, and Whitehead said it was April 7. The next step is applying for forgiveness. Each has a different eight-week period that beginning on the date the lender made the first disbursement of the PPP loan to the borrower.

“We didn’t expect funding as quickly as we did. That was a wonderful surprise,” said Whitehead. “We took the money and put it in a restricted account. We’re using it for payroll, but it’s sitting in a restricted account as we deplete the funds over the next couple of months. We did it for ease of accounting and also just to really highlight that those are special funds.”

All had positive experiences with the local bankers. None of the four knew of any nonprofits that applied that were denied.

“The bankers that I worked with were so responsive to my questions in the beginning of the application process. They really helped us understand what we needed to show and with their help we were able to put that together,” said Sahaidachny.

If there is a silver lining, each was able to keep staff and had the chance to reflect and plan for a different future – delivering services virtually or planning for the safe re-opening.

Whitehead said since the museum and library opened at its new location in November, it’s been a breakneck pace.

“The PPP allowed me to take a breath, and to talk with our staff about what was going well, and what was not going well. We had this wonderful clearing where we can reset. We opened in November and we were operating beyond our capability. This gave us a chance to stop and think, ‘OK what really makes sense. Shat changes do we need to make, so that we can comply with whatever the new normal will be.’”

Jul 02

Voices from the field: lessons on collaboration

By Governance

By Lynn Sygiel, editor, Charitable Advisors

Partnership, collaboration and merger are terms often bandied around in the nonprofit world. And while the concept of collaboration isn’t new, it has become a hot topic as a way to reduce duplication, increase coordination and contribute to collective impact.

According to a 2014 Bridgespan survey of nonprofits and funders, the overwhelming majority of nonprofit and foundation CEO respondents had taken part in one or more forms of collaboration. The survey found that 91 percent of CEOs have engaged in one of four common forms — associations, joint programs, shared support functions and mergers.

While nonprofits reported the most activity in the less integrated forms, 55 percent of foundations wanted to see more mergers, and 76 percent of nonprofits wanted to see more shared support functions.

In early May, Charitable Advisors partnered with Charitable Allies to host a forum. Six local nonprofit leaders took part and shared experiences and the lessons learned for an audience of nonprofit professionals.

The panelists were: Stephen McCaffrey, president and CEO at Mental Health America of Indiana; David Westenberger, CEO of Indiana Youth Services Association; Jim Morris, president and CEO at Greater Indy Habitat for Humanity; Kendra Belden, operations director, Lutherwood Residential; Janice Hicks-Slaughter, director of partnerships and outreach at the School of Education and Exercise Science, Marian University; and Kim Donaghue, senior consultant, Newgrange Consulting.

As the director of agency services at United Way of Central Center Indiana for over 12 years before her retirement in December, one of Donaghue’s primary functions was building capacity, and in this role she facilitated six or seven mergers. There was one merger she deemed perfect.

“It was an excellent agency that did wonderful work, they were smart in looking far ahead. They weren’t in financial trouble at the time, but they knew that they weren’t sustainable. Instead of waiting until they were in trouble, they decided to be proactive and began looking around at what their options were,” Donaghue said.

Most difficult, according to Donaghue, was identifying potential partners.

“Truthfully they had already identified three possible partners. They really only looked at options that were culturally and mission-appropriate,” she said.

With United Way’s financial help, the agency hired a consultant to help exam its options, and later help pay for merger legal fees.

She thinks the reason this one was successful was because the two nonprofits had complementary programs, and the agency looking to merge had programs that the other didn’t have. In addition, the partnering agency was not only able to hire the entire staff, but hired the former executive director as its development director.

“It was the most perfect marriage, I’ve ever seen,” Donoghue said. “They also absorbed some board members.”

Critical, too, were the separate meetings the consultant convened with the nonprofit’s executives and board members, giving both the chance to talk candidly and think objectively.

“It’s hard work and you need people to think big picture and from their professional selves perspective more than the personal.”

Donaghue believes most funders are receptive to support an agency exploring combinations, but are not as receptive to organizations that are failing and looking for any lifeline.

“From a funder’s perspective, we like to see an agency being proactive about its situation and really look at itself and see what they have to offer another organization,” she said. “If an agency is in dire financial straits, let’s face it, it’s going to be real tough to find a merger partner. There are not going to be a lot of agencies out there that are going to want to absorb someone in financial trouble.”

Not all consolidations are successful. Morris, who became the president of the Greater Indy Habitat for Humanity in 2011, shared an anecdote to illustrate when a conversation can take an unexpected turn.

Over the course of a year, two area Indiana Habitat affiliates discussed merging, and had all but signed the agreement. In the 11th hour, Morris received a call offering a deviation from the original plan. Rather than merging, it wanted to hand over the retail operation to Indianapolis, and keep its executive director at the helm of the local Habitat affiliate. For Morris and his board, this would have been a money-losing proposition.

“It was kind of frustrating. I really struggled with when there is an opportunity to meet a greater demand, and we have an opportunity to be more effective and efficient, but I understand that the humanness of who we are,” said Morris. In the end, the affiliate exec didn’t want to lose her position.

Ultimately, the panelists agreed, relationships are the foundation of successful collaborations.

Belden said a partnership between Community Health Network and Lutherwood Child and Family Services in 2013 led to establishing a relationship with an organization with a specific expertise.

Lutherwood, a locked secure treatment facility for youth who are placed there through the courts, through DCS and probation, has therapists and doctors on staff. The center’s staff witnessed new challenges for some of the residents: They were survivors of human trafficking. To the extent they could help, the Department of Child Services was involved, but didn’t have the expertise to offer programs for these girls.

The facility’s CEO had worked with Megan Jessup, the COO of Ascent 121, a program that provides long-term trauma recovery for teen survivors of trafficking. What if Ascent 121 could provide the much-needed programming and lend its expertise to the situation? The Impact Program, which provides residential care for teen survivors ages 12-18, was designed and Lutherwood entered into a contractual partnership with the Carmel-based organization to deliver this service.

“It goes back to relationships that we already had. Communication was a whole lot easier because we knew her, she knew us,” said Belden.

That relationship allowed open communication and to reach a consensus about programming which has continued. There are weekly partner meetings with both staffs. As an example, Belden shared how Ascent 121’s close working relationship with the FBI affects the center’s work. When there is a pending FBI raid, Ascent 121 communicates with Lutherwood’s staff and the facility’s staff can be ready to house additional residents.

Hicks-Slaughter is not new to mergers.

In 2002, she experienced her first with the merger of Big Brothers and Big Sisters. At the time only about five Big Brothers and Big Sisters chapters nationwide were still separate, and she was the executive director of Big Sisters. After 18 months of meetings, the organizations were blended, and she became COO of the newly formed local chapter.

Her second merger was the Hook’s Discovery and Learning Center with Marian University. The science-based program was a good fit for Marian, and its programming was integrated in the school’s outreach work with schools. And to round out Hicks-Slaughter’s trifecta, she had a role in the Ruth Lilly Health Education Center merger with Marian University in 2014.

At the time, the Ruth Lilly Center noticed trends in declining school field trips, and anticipating a reduction in revenues, the CEO of the center began meeting with different entities to identify possible collaborations. Marian University was one of those places.

“It started out as a meeting to just kind of talk, and after so over so many meetings, many lunches, many conversations, it was decided that there was such a mission cohesiveness, it should come together. Key was that the trustees of Marian and the board members of Ruth Lilly Health Education Center came together in agreement because the case for this was strong.

“We were also incredibly fortunate to be able to make that case to a major funder who provided a merger grant. It was a three-year grant that helped us the staff move out of that facility and transfer all of its programming to an outreach format that emanates out of Marian. I’m now responsible for outreach, and partnership development at Marian but I’m also the director of the Ruth Lilly Health Education Center, and we continue to grow and get stronger,” said Hicks-Slaughter.

She said it was not an inexpensive venture to incorporate staff and ensure a stable presence. In addition, the grant allowed them to incorporate the “wow” factor into the outreach programming, incorporating virtual reality.

In Indiana, according to the secretary of state’s office, from 2007 through early 2015, 441 nonprofits filed for mergers. The previous year, there were 71 on the list, including the Ruth Lilly Health Education Center (RLHEC) with Marian University. Long-time nonprofits like the 25-year-old Ruth Lilly Health Education Center and Hook’s Discovery Center have been reinvented by joining with Marian to continue delivering services to schools through outreach programs.

Both Donaghue and Hicks-Slaughter reminded that it’s important to not let your donors be surprised. Communicate early and often so they know that the organization is being responsible.

Hicks-Slaughter said once the merger was finalized, they invited donors to a reception so they could see and hear from people who were in the new roles.

“They could hear about the future, not just that we merged, but this is why we merged and where we see ourselves heading. And that’s what they want to hear because they’re not all happy about it. Make sure that you communicate with them and continue,” she said.

The 2014 Bridgespan survey also found that CEOs said the more integrated forms — shared support functions and mergers – were more successful, claiming that joint programs failed 20 percent of the time. Often they felt pressure from funders to engage in some type of joint programing, but when the funding ended, so did the collaboration.

While shared support functions and mergers take more to implement in both effort and money, the outcome provided structure to achieve impact.

McCaffrey’s and Westenberger’s organizations are examples of support function partnerships.

McCaffrey oversees 12 subsidiary nonprofits as part of Mental Health America of Indiana. At the time McCaffrey arrived at the organization in 1991, there were several organizations that had spun off and were frail and fledgling.

“We made a strategic decision to say, ‘Why don’t we ask our spin-offs, if they’d like to come back?’”

The plan allowed subsidiaries to keep their boards and make decisions on programs and policies. As part of a larger group, they could benefit from the statewide group’s business expertise, but had to adhere to its accounting procedures, HR procedures, and be supervised by the parent organization’s staff.

“Sort of independent but sort of integrated,” said McCaffrey. “Eventually it became our strategic way of growing and being more secure financially ourselves. I think it’s been a good thing, and it allows us to expand our reach as an organization, with 12 or so many boards and a volunteer and staff reach that’s huge. It has provided lots of options for grants or funder applications,” he said.

Westenberger has had similar experiences, first with nine nonprofits that became one organization, Fountain for Youth in Columbus, and since 2012 as Indiana Youth Services Association (IYSA). His organization has responsibility for more than 30 client organizations that outsource their accounting and HR functions to IYSA. Besides member services, the organization operates its own programs and is now credentialing Indiana youth workers and building awareness of programs.

“Before these small nonprofits had a part-time bookkeeper who may have only had minimal training. Now, they had an outsourced CFO who is Ivy Leagued educated.

“It wasn’t even the value of the service and when you add the value of the service and what you can do with that money in the community, you’re at $1 million all of a sudden. Out of your $18 million, you’re spending collectively; you just added a $1 million in your social return. That’s the driver; not can I save $100 bucks a month on my outsourced accounting,” he said.

Donaghue reminded the group that it’s relationships in the community that afford you opportunities for partnerships. Begin with relationships in the community, then look to state associations and groups and even consultants who might work with a similar organizations and offer valuable connections.

“Again, I just think it’s relationships and keeping your head up for whatever opportunities are out there,” she said.

Dec 04

Nonprofits: Taking a productive break

By Feature, Governance

By Lynn Sygiel, editor, Charitable Advisors

The advice is often well-intentioned, and it’s something that hard-working, driven individuals may hear a lot: Stop and smell the roses, get away and clear your head, or take a sabbatical to rest and rejuvenate.

When one person in a company takes a break, the work can still go on. When the whole company takes a break, there’s an inherent danger that the vacation will be permanent.

Nonprofits, many of which operate on limited budgets, are no exception. Out of sight, out of mind? A temporary shutdown could be considered a gamble, but it could also be just what a struggling organization needs.

Several years ago, two area nonprofits  — the Indianapolis Opera Company and the Martin Luther King Community Center — announced they were taking a break. It raised many questions in the community over the future of the two organizations.

Both nonprofits resumed operations in about a year and from all indications, appear to have used their “downtime” wisely.

Both nonprofits had funding issues that needed to be resolved, but beyond trying to shore up their financial shortcomings, both used the time to figure out their roles and how they stood in the community. One tactic for both boards was to carve out time to listen to their constituents, to understand what services were important to them, or in the case of the Opera, what performances did their patrons prefer.

To help with the process, both organizations had funders who were willing to keep the process moving.

Kimberly Sterling was Martin Luther King’s board president when the decision to temporarily close was made in early 2014. The board’s goal was to temporarily transfer programming to other agencies, and within six months be back up and running. Early on, the board hosted a town-hall meeting, and according to Sterling, there was a great community response. Attendees shared which services were critical and which could go away.

“So as we began to work on a strategic plan for both the short term, and more importantly from a sustainability perspective for the longer term, we were able to heed the voice of the community,” Sterling said.

United Way of Central Indiana offered the center financial support to hire a consultant, Pat Gamble-Moore, to serve as a kind of interim director and keep things moving, things like paying bills and working with the board to design a plan. She worked with the board for nearly a year, and after taking a position at PNC, joined the board herself.

During its pause, the center’s building was never unoccupied. While there was no staff, tenants and agencies were using the building. And while it had to revamp and transform the organization, the board formed strategic partnerships with other groups such as the Edna Martin Christian Center and Kaleidoscope to provide youth programming.

Matt Mindrum, the Opera’s current board chairman, had just signed on to the board when the announcement to shut down was made. He noted that not only was the environment changing here, but opera companies were changing in many places and moving away from large performance spaces to more intimate ones and adding variety to their repertoire.

“So the business model was changing on a macro level at the same time that our circumstances were changing at a micro level. I think that combination really required us to press the reset button. Not only did we need to pause so we could pay our bills, and figure out how to get moved into the Basile Opera Center building and do all the things that we talked about doing for a long time, but we also needed to pause to figure out where we were going.”

After the company canceled the final opera of the 2013-2014 season, a funder provided a grant to assess the future of the Opera, hiring a consultant and market research firm. Together, Steven Stolen and Smari helped the board identify what audiences wanted and determine what various future paths could look like.

“We treated the study, not only as an opera study, although it was opera-funded through the Lilly Endowment, but we included the IRT, the ISO, Butler, the Chamber Orchestra, the Phoenix Theater, the Center for the Performing Arts in Carmel, Jazz Fest and Dance Kaleidoscope. We went out and talked to folks who weren’t just our core audience, but really the arts-inclined audience broadly speaking. And we heard a variety of things from them,” said Mindrum.

Among the findings: Sponsors’ expectations were not being met, the budget needed to be severely cut and reworked, the venues were too large, leadership had to change, and the board of directors needed an overhaul.

“Quality had been inconsistent, and that was probably the biggest takeaway, and quality if you’re a professional performing arts organization, is job one. It’s not that we didn’t have some really high-quality productions, but we had too much variability,” said Mindrum who inherited the chairmanship of the company’s first year back.

David Starkey, the Opera’s general manager and artistic director since March, says the Opera’s board did something more difficult than they realize — they didn’t let the quiet or dark period go on too long. According to Starkey, these resets have a national average of about 3 ½ years.

MLK changes

In its search for a new director, Sterling said the Martin Luther King board was looking for someone with leadership capabilities who had community center experience but not necessarily as the leader. It was also important to understand the uniqueness of how community centers work.

In June of 2015, the MLK board hired Allison Luthe. She had both a community organizing background, and a short stint at a community center. She came on board as managing director, an interim position.

With a short-term playbook in hand, Luthe worked with the board to change both programming and mission. The mission had focused primarily on providing programming, but now it was also trying to be more inclusive to the needs in the neighborhood.

“It was pretty clear to me that we weren’t connected to the neighborhood,” Luthe said.

She cites an example. On Labor Day, a couple of months after she arrived, there was a group of parents across the street from the MLK center on West 40th Street who were protesting chain-link fence going up around the adjacent Butler-Tarkington Park because of park improvement. Luthe met some of the protesters  — youth football coaches — who feared they would lose practice fields because of the park’s development.

Luthe found out the coaches didn’t know Martin Luther King was a community center to help serve some of the very kids they were coaching. No one had ever introduced themselves before, the protesters said.

“There was a disconnect,” Luthe said. I just spent a lot of time getting to know them, we had the town hall meeting at the school and they came to that. We ended up seeing each other in a couple of other places.  One of them, their brother was murdered, so we helped them plan the peace rally that they had. So really, we just spent time getting to know them and now they all bring their kids here, the football team works out of here.”

Luthe would become the center’s executive director and worked with the board to develop a long-term strategy.

Before the pause, United Way provided more than 60 percent of the funding for the MLK center. Today it’s at 23 percent and the center has a mix of funding from a variety of sources. Luthe secured a small grant from Meridian Street United Methodist Church to restart some youth activities, and the church has continued as a partner.

When Luthe began as managing director, there were 1.5 employees. Today, there are nine full-time, five part-time permanent employees and 10 temporary employees in the summer. The budget went from $300,000 to $1.2 million, with federal and state contracts.

One main question that the center had to answer: When does it make sense for the center to have its own programming and when should it collaborate?

And while programs and staff have returned, the center now offers its after-school K-5 programming at the neighborhood’s public school, School 43. The program is funded by a 21st Century Community Learning Center grant, which is highly competitive. Grades 6 and 7 meet at the center, but the center is submitting a proposal to expand the grant to add those grades to the school as well.

There is still a long list of partnerships, which won’t go away even with funding, said Luthe, since the partners excel at offering these programs.

The board realized that a signature fundraising event was needed to maintain community relationships. MLK’s grew out of conversations with community members during Luthe’s first summer. With four murders in the neighborhood in the summer of 2015, she had calls from former neighbors who were concerned and wanted to help.

Her response to each of them was simple.

“We’re in a renewal phase and doing better. What if we had a breakfast event and you come and talk a little bit about the history, so that we could stay in touch with our history?“

The Founders’ breakfast fundraiser was born and now happens the Friday before Martin Luther King’s birthday and is hosted by Meridian Street United Methodist Church.

Financially, there is a short leash. There are check limits and the finance committee meets monthly. Everything that is proposed has to have a funding source. The board is proactive, and asks tough questions.

Recently the center hired a wellness coach. The center already had employment coaching and a WorkOne mobile unit. For people who want a better way of life, no matter how much is in their bank account, the center wants to help them grow personally or professionally.

MLK spent the last year doing focus groups with the Public Policy Institute, which is getting ready to produce a report about gentrification, racism, neighborhood safety, and perception of where you live.

Visitors to the center tell Luthe the building has a sense of life, and she’s hoping to add an MLK Guild to help make it more of a welcoming community-owned place.

Sterling said one of the board’s goals was to see people using the facility.

“I think that’s always important when people who are coming for services feeling like it’s a place that they would want to be in. But I think most important are the services that are being provided are based on the needs that are assessed,” said the former board chair.

Opera changes

One of the changes that the Opera made was to its programming venue. It moved from Clowes Hall that had a capacity of 2,100 to the Schrott Center for the Arts, which seats 450. The Opera has also offered programming at Booth Tarkington Civic Theatre in Carmel, which is similar in size to Schrott.

In addition, the office’s move to the Basile Center at 40th and Pennsylvania streets, Starkey said, was a game changer and is helping it to become a center for community arts and culture with its additional tenants.

“It changed the Opera from being a producer to a community leader. And when you look at IMA, and IRT and the Symphony, those three nonprofits, they all have place.

“And now we’re in a place where we are daily giving to our community, and that changed the mindset,” said Starkey. “An arts organization that takes that more collaborative approach is a core of the 21st century model. I have found tremendous dedication to this neighborhood, this building, to this revitalization, how they shift and move has been really encouraging.”

But that’s not all that has changed.

“So, venue, programming, collaboration, and then maybe the final thing would be the type of artists that we seek to cast and to develop here. We’ve embraced the idea that we want to be a training ground for the next generation of world-class singers. We’ve got the best opera school in the country an hour down the road (Jordan School of Music at Indiana University), and we’ve got lots of other great programs nearby.  We’re a rich community when it comes to vocal arts,” said Mindrum.

“We believe we need to be the champion of the vocal arts, the champion of opera. And opera is automatically the top of the food chain. Our responsibility is to be the best professional company that does opera and theatrical representations of that,” said Starkey.

That now includes building a strong middle and offering shows that have ensembles.

“When you do a South Pacific, it’s an ensemble show, when you do Man of LaManchia, it’s an ensemble show,” said Starkey.

The Opera’s board has taken steps to try to ensure a pause doesn’t happen again, including shrinking the board. Mindrum said the board was somewhat unwieldy. The board, he said, now provides more detailed and regular oversight in a variety of places, especially financial. The budget changed, too. It was at $1.9 million and is now a little over $900,000.

“So we shrunk the board, but we’re now in a position where we’re ready to expand it again a bit. We went from a maximum of 45 in our bylaws to a maximum of 35 in our new bylaws. We’re at 23 or 24 right now. We definitely had to sort of narrow before we could broaden again,” he said.

Starkey said it’s a change of philosophy.

“It’s not about how big and bulky can you be. It’s about the nimbleness that you have in your leadership. So size shall represent philosophy and philosophy should represent size. The board has to have a more intimate relationship and understanding of its involvement, and it cannot be just oversight and check the boxes,” said Starkey who moved back to Indiana from Asheville, N.C. in March.

While Mindrum and Starkey believe the temporary suspension was necessary, Mindrum reminds that a pause is never going to be perfect on the other side.

“You feel like you’ve stopped, you’ve done the right things. You’ve taken stock of where you are, you’ve asked the marketplace where you should be going and you put the strategy together. You hired a new director, and you’ve gotten the board reconstituted. Everything is in where you think is the right spot, and then you press “go” and not as much audience comes back as you thought was going to come back. You run into funders who said, ‘I want to see a couple of years of history before I’m going to come back and provide funding.’”

The Opera didn’t have a surplus the first year back and Kevin Patterson, the general director serving both executive and artistic roles, was the “right guy” to get them back on stage. Now with Starkey, Mindrum believes the Opera has the guy who was going to get us to operate within our means.

“He did a great job with Man of La Mancha. We took what had been tracking toward another deficit year and turned it around and broke even in this last fiscal year, and now we’re on track for a solid surplus this year.

My two primary goals as chair were to continue to put on quality productions and operate within our means. That’s really it. And I think that will get us to a place where we’ll continue to build confidence and use this new programming model to develop new audiences, continue to build the education program that is been so strong and really fits nicely with our approach to develop talent, use this building in a better way.”

 

Dec 04

Advice from those who have been there

By Feature, Governance

By Lynn Sygiel, editor, Charitable Advisors

For many people, experience is the best teacher. And while not all nonprofits have taken a pause, two local organizations have recently been through the rigorous process and can offer their perspectives.

Kimberly Sterling, the former board president of the Martin Luther King Center, and Allison Luthe, the center’s current executive director, shared advice applicable to a human services agency.

The Indianapolis Opera’s Matt Mindrum, the current board chair and David Starkey, the general manager, looked at the pause from an arts perspective.

Here are some of their suggestions:

Have a clear plan and consistent messages

Sterling said it’s not enough to just ensure that clients will be served. The board should have a purpose behind the pause. Why is it happening? Is it purely financial or are there services that are being duplicated by others?

Before the pause, a nonprofit needs a media plan, and everyone from staff to leadership has to be clear in their descriptions of the reasons for the break. Electing a spokesperson is important to make sure messages are consistent. Having one person delivering the message also frees up others to attend to other steps to turn around the organization.

Know your board

Sterling said it is critical when planning a pause to understand who on the board is willing to work. During a pause, there will be an additional time commitment, and an oversight board will not work.

“Everyone needs to be all in, and if you’re not, it’s OK, we just needed to know who’s staying and who’s not. It needs to be a board that clearly understands its role and works well together. Board development was absolutely critical, especially in the short term, particularly when we didn’t have staff.”

In MLK’s case, the board chair decided to step down because of other commitments, and Sterling took the helm.

The board also knew it needed a strong treasurer and someone to work with the auditors. MLK’s was a volunteer who stepped up after reading about the center’s situation in the newspaper, and volunteered his services to help. Although his term is up, Jeff Gearries continues to serve on the board.

When Sterling rotated off the board at the end of her term, she wanted to make sure there was a strategic plan. The board’s responsibility was not only to fight fire an immediate need, but also plan for the next three to five years.

Sterling said the board’s work was guided by a quote from Dr. Martin Luther King: I am what I am because of who we all are.

“As you think about what a community center is, it’s about the community, it’s not about the staff members, and it’s a reflection of the community or at least it should be.”

Recognize that healing needs to take place

In both cases, there was a lot of personal attachment to the organization as it was.

Starkey, who became the Opera’s general director in March, recognizes that the healing is still happening.

“When you have an accident and you injure your body, you have to be very dedicated that you heal, and you must be very optimistic. I came to a city and to an organization that was deeply troubled. I knew many of the people and many of the circumstances, knowing the past leadership of this company, admiring it from a distance. The healing is still happening. And I think we have the greatest healing tool, and that’s music, specifically singing. Time does heal. If you come back pretty quickly, then some of that didn’t have time yet.”

Know your community

Luthe’s first month on the MLK job saw the Double 8 food store on Illinois Street close. Her first reaction was to move into action and provide support. While the center didn’t have a lot of money at the time, they did have two shuttles available, and people in the neighborhood that needed food.

Their plan was to drive folks to the nearest grocery store. They produced fliers, and got everybody excited.

But nobody showed up to ride the shuttles.

“That’s when I said, ‘We’re going to have to get in touch with people and find out what they do need.’ If you’re going to be a community center, you’ve got to be grounded in the neighborhood. Make sure that in your renewal that you’re really connected to whom you should be connected to.”

Define your organization

Luthe said people had to understand that, “collectively this is going to be a new thing.”

“If you have a million dollar house next door (in Tarkington Tower), and then you’ve got an abandoned block of boarded-up houses, what’s your mission and who are you really here to serve? So I think people needed to figure that out. Are we a social justice organization that is a cultural center, are we a social service provider or are we a gathering place?”

Apr 18

A proving ground for board service

By Feature, Governance

By Lynn Sygiel, editor, Charitable Advisors

When Forbes magazine published its list of 20 Best Cities For Young Professionals last month, Indianapolis was No. 10.

But Jesamyn Sparks, Shae LeDune and Trevor Bruner would take the description one step further: Indy has a vibrant young professional network. And the three have had a hand in creating it.

Bruner is co-president of the executive committee of Agave, the Eiteljorg Museum’s young professional group. LeDune is an executive committee member. Sparks is president of the Ronald McDonald House’s Young Professional Board, and has assumed other leadership responsibilities during her five years as a volunteer.

While young professional boards are a relatively recent phenomenon, nationally, nonprofits have begun to find opportunities to capture the attention of the 21-to-40-age group.

“I think that nonprofits are really recognizing the value of tapping into a slightly different demographic than traditional boards. It’s really about thinking ahead and keeping the boards fresh,” said Sparks. “It’s great to see organizations around town that are embracing that strategy to start cultivating those board members earlier.”

Sparks credits the Ronald McDonald House with having the foresight to recognize this untapped resource seven years ago. Agave got its start 10 years ago.

LeDune said that educating her age group about Central Indiana nonprofits is key to the organizations’ future. Her former boss, Tom Hoback, who was an Eiteljorg board member, recruited her. Initially, he relied on her for advice about how to get younger people in the museum’s door, but then he realized she would be a great fit for the auxiliary.

LeDune is not alone in her volunteer service. Agave has six people on its executive committee and the Ronald McDonald House engages a 12-member leadership board and 10 additional committee members in volunteer activities.

Other nonprofits, like Goodwill and the Children’s Bureau, have created similar groups, Sparks said. BoardSource, a national organization working to strengthen nonprofit board leadership, has challenged boards to reflect the constituency they serve. Sparks said that has never been an issue at the Ronald McDonald House because typically, individuals come to serve because they have a personal connection.

“That direct experience is a really powerful thing, and I believe that it’s critical for the health and success of an organization to keep everybody focused,” said Sparks. “The mission of what the Young Professionals are trying to do is to support the mission of the House.”

The House has two-year board terms. Agave is less formal and has an organic transition for its leadership. Both boards have bylaws. As presidents, Bruner and Sparks attend their organizations’ board meetings, but leave when the board is in executive session and do not cast votes.

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Ronald McDonald House

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Indianapolis’s young professional groups

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“So we kind of get an inside look. We get to sit in and see what the museum has planned, and get updates as the year goes along about how those initiatives are going. We can bring that to our board to make sure that whatever we’re doing is in line with what (the museum) needs, so we can complement what they have going on,” said Bruner.

Communication between the young professionals and the nonprofits is supported by staff liaisons who attend all their meetings, take notes and answer questions.

Agave executive committee members must attend their group’s meetings, volunteer for the museum at least five hours annually and be a museum ambassador. They are responsible for setting the strategic direction for their group, plan events, secure sponsors and recruit museum members from their age group. There is not a personal contribution expectation, other than an annual $30 membership fee.

The Ronald McDonald House’s group functions much like a board. There is an expected $50 annual minimum contribution.

“Although when you add in other events, fundraising that’s happening here at the House and campaigns, certainly our board and leadership committee members do tend to give more than just the expected amount. It is certainly not required, but people get excited about the mission of the House, and they connect with the stories,” said Sparks.

Both groups regularly champion the work of their parent organizations to young professionals, using informal informational sessions and the city’s organized professional networks. They are also able to share their groups’ missions at a young professionals’ roundtable group.

But both groups believe the key to involving their generation is getting them through the door.

“We like to invite new members to participate in the quarterly dinners we host for families by bringing a food item, serving families and talking with families. Just physically being in the House is important. To me it is a real hopeful place, and I think sometimes for someone who hasn’t really spent a lot of time there, it can be a surprise. I was surprised when I first started volunteering here years ago,” said Sparks.

One of Agave’s primary activities is recruiting museum members from their age group. Typically, there are 50 to 75 members annually. Bruner, with his co-president Brian Cusimano, added a personal commitment to secure at least five new members unique to their networks.

There is a $30 fee, which includes access to the museum and Agave’s social events.

“Agave tries to educate and engage young professionals in the world of contemporary, Western and Native American art to develop the next generation of Eiteljorg visitors and leadership. I think if we can get new people through the door, then they are going to see the world of the Eiteljorg. There is amazing art and so much more that I think people just don’t realize,” said LeDune.

The Ronald McDonald House’s board plans three fundraising events each year — a trivia night, a bingo event and a Colts viewing party — with all of those funds going directly back to the House. Sparks said she’s proudest of the game room that the group helped fundraise for.

“We’re always available to help whenever the House needs us. And I like to think that we’ve helped to grow that segment of the donor base that maybe previously just scratched the surface,” said Sparks.

Agave offers networking social events in conjunction with new exhibits and scavenger hunts to learn more about the museum. When the museum had the guitars exhibit a few years back, the group did a summer event called Jorgstock with bands and food. This year, they are making changes to keep it fresh.

Both groups are excited about the opportunities to learn from current nonprofit board members.

Agave is actually formalizing its approach and putting a mentorship program in place, pairing each Agave executive committee member with a museum board member.

“I think it’s priceless. There are so many people on the board who have done so much with the museum, but outside that are just successful people. To have a mentor like that, I think is going to be great. I think it will be a big time value proposition for Agave folks. They get direct access to community leaders, and they get to see exactly what goes into board member service,” said Bruner.

The three think there is an opportunity to learn more about governance, how nonprofits function and the ethical responsibilities of board members.

Bruner offers advice for young professionals thinking about service.

“If you are interested in getting involved, I say ‘Dive in.’ If I had to say anything, it would be, ‘Go for it,”’ he said.

Mar 21

Nonprofits can lobby, too

By Feature, Governance

By Lynn Sygiel, editor, Charitable Advisors |

A few eyebrows were raised 2½ years ago when United Way of Central Indiana named Andrew Cullen as its lobbyist. A few nonprofits questioned his appointment, primarily because they thought that nonprofits could not lobby.

And while in fact, nonprofits are allowed to lobby, Cindy Booth of Child Advocates believes that the perception still exists. She’s the executive director of the nonprofit that advocates for abused and neglected children in Marion County.

“I think people, boards and directors, executive directors are generally uninformed about what they can do and worry about the risk of getting in trouble. So they do nothing or they call it educating,” said Booth. Nationally last year, 280 nonprofits spent nearly $36 million lobbying, according to Open Secrets.org, which tracks the lobbying industry.

While there are specific regulations that have been around since 1934, federal tax laws allow every charitable nonprofit to engage in some legislative lobbying activities. Before 1976, IRS rules stated that 501(c) 3 organizations could lose their tax-exempt status if they did more than an “insubstantial” amount of lobbying. Sections 501(h) and 4911 of the Tax Reform Act of 1976, however, established clearer guidelines called the “lobbying‐expenditure test.”

There are, however, spending limits and technicalities that curb nonprofits from spending all of their time and money on legislative lobbying. If a nonprofit spends more than $500 on legislators or more than $1000 on state executives, the lobbyist must register, pay a fee and file reports with the Indiana Lobbying Registration Commission. Nonprofit lobbyists cannot use any organizational resources to support or oppose candidates or political parties.

Cullen said that United Way believes lobbying is part of the organization’s mission.

“I really do feel like I have one of the best jobs in the Statehouse. I get to behave like any other lobbyist, but with no self-interest to promote. My job isn’t to make some rich guy richer, my job is to help poor people get on the path to self-sufficiency. And I feel really honored to have this job,” said Cullen.

Booth said that few nonprofits ever hit the federal maximum, which is 20 percent of a nonprofits’ budget with a cap of $1 million.

So what exactly can Indiana nonprofits do?

During last year’s legislative session, United Way helped launch an effort to provide state funding for 211, a network of eight centers across Indiana that gets annual support from United Way. According to Cullen, 211 had become a victim of its own success. The public viewed it as a place to connect to services, and when the state started advertising it as a method to receive benefits, United Way and others thought it was time to educate state legislators about the service the nonprofit provides.

“In the Marion County’s 911 Center, the dispatchers have a button they push, ‘This is not a 911 problem, it’s a 211 problem, transfer, bam.’ That’s part of their training. Connect2Help 211 was happy to provide that service, but ultimately, had to recognize that if it was an essential government service, the government needed to be part of the solution and support it. It’s unfair to donors to be expected year after year to continue to fund an expansion of a government service,” he said.

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In advance of the lobbying effort, 211 staff had done a cursory survey of all the funds that support human services in Indiana and determined there is about $300 million in private and philanthropic donations that support human services, and there is about $3 billion in federal, state and local funding.

“So if you’re only playing in the $300 million pool and not trying to effect change in the $3 billion dollar pool, you’re really not serving the citizens as effectively as you should. Nonprofits, in my opinion, have a better handle on the actual needs of Hoosiers, because they are the direct service providers in most cases and should be informing our government how to best spend those dollars,” said Cullen.

Part of Cullen’s work was to help 211 advocates who shared the good work the agency does and help them change the message.

“My experience around and near the legislature told me that that was not a good message. Most of what I did would be to say: ‘Stop talking about how this helps people, start talking about how this helps taxpayers.’ That’s what the legislature of today wants to hear. You know their top priority is not necessarily the old model of traditionally providing welfare services. It’s the new model of raising people out of welfare. And so it was really important that we change the messaging.

“So when we started to connect the dots and prove to the legislature that 211 connects Hoosiers to services that ultimately put them on the path to self-sufficiency, get them off their dependency on government and on the road of leading self-sufficient lives that was a winning argument,” he said.

That doesn’t mean, however, the funding was a slam dunk. While the House supported the initial legislation, the Senate asked tough questions: Was this a good system? Was it efficient? Legislators wanted facts and figures to understand why they should invest taxpayer dollars. The data provided awarded the 211 network $1 million in last year’s two-year budget.

“And it would be my expectation, and certainly my hope, that a million dollars would be the floor going forward for what the state will fund for the 211 network every year. But that being said, you know we cannot take our eye off the ball. We’re going to have to lobby for it every two years, just to make sure.”

Booth says Child Advocates has taken a bit of a different approach.

The Indiana Office of Guardian Ad Litem / Court Appointed Special Advocates, which was started in 1990, certifies and provides training and support to local GAL/CASA programs in 77 Indiana counties. The Indiana office is administered by the Indiana Supreme Court, and as a government office, its director, Leslie Dunn, cannot lobby. At the same time, Marion County’s office was incorporated as Child Advocates, Inc. and became a standalone nonprofit.

The network of programs held a CASA thank-you appreciation day in early March with state legislators. Over 300 volunteers from around the state met with their legislators and shared stories of what happens for individual kids in need of services in legislators’ districts.

“It’s very informational, it’s very one-on-one,” said Booth. “This time, we thanked them for the increase we got last year, and let them know that it wasn’t enough because even with the increase, we still have 5,000 children statewide who are on the waiting list.”

These informational sessions don’t mean there isn’t a overall plan.

“Eight years ago, we determined that we needed more funding at the statewide level, but we realized that legislators had no idea who we were. So we embarked on a relationship-making campaign and truly an educational campaign with the legislators. They had no idea what Guardian Ad Litem was and the general public confused us with Department of Child Services,” said Booth.

The first couple of years were spent talking with legislators about the nonprofit’s work on behalf of neglected and abused children. They held receptions, breakfasts and did different things to help legislators understand how the program benefits children in the child welfare system.

It culminated when Supreme Court Chief Justices Randall Shepard and Loretta Rush needed support for an increased budget for the Supreme Court, part of which would be for CASA programs. The county network enlisted all of its CASAs to talk with legislators and the legislature, and they were able to help make the case.

The network also pays attention to tracking bills that affect the work of Child Advocates/Guardian Ad Litems.

For Booth, it continues to be about building relationships. After an initial meeting with Rep. Susan Brooks, R-Ind., her nonprofit hosted a listening session.

“She asked me to identify a list of juvenile court judges, DCS leaders, the CASA leaders and maybe some service providers. We had about 30 people in the room in early March. She sort of let us just talk about what we were experiencing, the challenges and everything.”

Brooks’ staff took notes, and she asked good questions, Booth said.

“She listened with interest about Child Advocates and what we are doing because she had experience in the field, but she also had the interest in those topics. They talked about having a second listening session and inviting local and Congressional legislators.

“I’m not exactly sure what the follow-up is going to be with that, but I think she came away with a clearer understanding of what is happening in her district. I was quite impressed by that,” said Booth.

What is on the docket for United Way next year?

“Early childhood education. Look out. We’re coming strong in 2017. It’s going to be my biggest project in my life. It’s time that Indiana stops becoming one of only eight states in the nation that doesn’t provide early childhood education for our most vulnerable citizens. The good news is, I think, that legislators see that. I think that most policy makers are coming to that conclusion. The question is just how do we do it in the right way? How do we expand in a way that ultimately leads to the highest potential child outcomes?,” said Cullen.

If Booth were talking with other nonprofits, she suggests several reasons they should lobby — the need to have well-informed legislators in power who are educated by those on the frontlines.

“I think ultimately it benefits your program. All the legislators know is what someone has told them or what they’ve read. And they really need to hear it from someone who is in it every day. It elevates their level of understanding. And we want more well-informed legislators,” Booth said.

Mar 21

Nonprofits’ minimum wage bind

By Feature, Governance

By Jennifer Jones Austin, commentary, Times Union |

Across the nation there is mounting concern about economic inequity. At the heart of the matter of the ever-increasing economic divide are stagnant wages, which have plagued millions of low- and middle-income Americans for decades. But here in New York state we have a real opportunity to do something about this.

Gov. Andrew Cuomo has proposed a $15 minimum wage to be phased in over the next two years for New York City residents and by 2021 for all other New Yorkers. His proposed legislation, the first of its kind put forth by the governor of any state, has the very real potential to increase the financial stability and improve the upward mobility of 3 million New Yorkers. The governor has evidenced his commitment to the minimum wage increase by using his own authority to raise the wages of both state and SUNY employees, but he has not yet moved to include those workers who provide vital human services for the state.

Human services and Medicaid-funded workers employed by nonprofits funded by state government contracts and Medicaid reimbursements deliver mandated services including child welfare, childcare, senior services and supports for the disabled. These workers perform critical roles in our economy and in the communities they serve. However, more than 50 percent of them, more than 400,000, earn less than $15 an hour.

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Mar 08

Top nine tips for managing junior boards

By Feature, Governance

By Cynthia Remec, executive director and founder, BoardAssist

Every day BoardAssist is approached by enthusiastic millennials who are eager to be agents of change on a nonprofit board.  Unfortunately many of these terrific candidates are either too young to be considered for a full board seat by our clients, or unable to meet the financial commitment required by our nonprofit clients.

Until recently we had not been able to accommodate these terrific people and their generous desire to give back.  Now we can, with our new Pilot Junior Board Matching Program!

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Mar 08

A trending fundraising tool: a junior board

By Feature, Governance

By CJ Orr, associate director, Orr Associates |

Six years ago, the phrase “junior board” was understood by only a few. Now, I hear it all the time. I work at a nonprofit consulting firm, Orr Associates, Inc (OAI). OAI works exclusively with nonprofits to help them with their fundraising and development needs. Our nonprofit partners consistently tell us they struggle to engage with millennials. Many of them have been building junior boards to serve as a solution.

Over the past year, I took the time to study the complexities and fundraising interests of the millennial generation. In my research, I identified over 400 nonprofits that have a junior board and spoke with over 70 of them about their junior board. I also serve as a board member on four different junior boards.

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Mar 08

Boarding call for next-gen leaders

By Feature, Governance

By Anna Pikovsky Auerbach, Moonridge Group COO, Stanford Social Innovation Review |

The millennial generation cares about the state of the world and wants to get involved—so why do so few boards have young members?

A quick search of “millennials on nonprofit boards” yields more than 67,000 search results on Google. Most of the articles that turn up emphasize the value of millennial leadership, and include calls to engage and involve them in the social sector. But reality lags far behind interest and intentions.

One large, national survey in 2012 showed that only 2 percent of board members were under 30, while 43 percent were between 50 and 64. Meanwhile, 70 percent of millennials spent at least an hour volunteering last year, and 84 percent made a charitable donation. More than other living generations, the millennial generation is focused on making a difference, being hands-on, and pursuing what it loves. Data like this makes it clear that millennials care about the state of the world and want to get involved — so why do so few boards have young members?

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