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Aug 02

Professionals share insights on how continuing education in law impacts their careers and organizations

By Sponsor Insight

by Miki Pike Hamstra, assistant dean of graduate programs, IU McKinney School of Law

Many professionals find it invaluable to gain knowledge of the law and how it intersects with their entity’s efforts. While some choose to pursue a traditional law degree to gain that information, there is an alternative.

The IU Robert H. McKinney School of Law offers a Master of Jurisprudence (M.J.) degree that demonstrates you don’t need a law degree to gain that skill set. Students and recent graduates of the program share why they chose it.

Ebonye M.J. Crowe, a dual-degree student and grade-level administrator at MSD Warren Township Schools, found that the M.J. degree offered more than she originally envisioned. “My initial intention was to gain knowledge of the law and pair it with my urban education studies to help me to be better informed of law and policy in my role,” Crowe said. “However, I’m learning it’s BIGGER than that! My law and UES classes are the perfect pairings. They complement one another very well and will provide me the foundational knowledge I need to understand the big picture and think more critically.”

Carolyn Dawson, a 2021 graduate of IU McKinney’s M.J. program, found that the degree has given her invaluable insights as part of her work in the contract grant service line as a research administrator pre-award at Regenstrief Institute. “I was looking for something challenging that I could use and transfer into any field I continued to work in,” Dawson said. “I wanted something that would help me look at things differently than the way I saw the world and force me to look at the bigger picture.”

Another IU McKinney graduate, Keva Ropp, shared that her M.J. studies, which she completed in 2020, helped her be a better student advocate in her role as the assistant director of finance in the department of medicine at the IU School of Medicine. “I believe my M.J. degree has been a great factor in being more educated and aware of changes in the law,” Ropp said. “It allows me to be a better advocate for the students that I encounter, my colleagues that I work with, and the IUPUI community that I support.”

Duong Quyhn Vu, IU McKinney’s first M.J. graduate, is a data scientist at UrbanLogiq. “The Master of Jurisprudence gave me a foundation in legal understanding and critical thinking, skills that help me to develop creative solutions to problems, understand technical papers, and perform research for my career,” she said. “We integrate and visualize diverse data sets so that public officials of any technical background can understand what their data is telling them and better serve their communities.”

To learn more, visit IU McKinney’s website.

IU McKinney School of Law and Purdue University introduce new agriculture degree

by Miki Pike Hamstra, assistant dean of graduate programs, IU McKinney School of Law

Agriculture is an enormous business enterprise in Indiana and as with any economic endeavor, legal knowledge is a vital part of supporting it. Issues can be as varied as drainage, probate concerns, environmental issues, food safety, technology, patents, and many more.

IU McKinney and Purdue University have teamed up to create the first Master of Jurisprudence /Master of Science (M.J./M.S.) in agricultural economics in the nation. This effort capitalizes on both institutions’ signature specialties — law and agriculture — to provide a foundation in agricultural law. Purdue’s agricultural economics expertise offers an in-depth understanding of the food system’s economics and the concepts and theories required to make effective decisions in a dynamic industry. IU McKinney’s legal training emphasizes understanding regulatory oversight, administrative agencies’ roles, policy questions, and transactional structures.

M.J./M.S. students with a multidisciplinary education in agricultural economics and law will be able to make creative and significant contributions to their companies, the food and agribusiness industries, and food and agriculture policies in Indiana and elsewhere. To learn more, visit IU McKinney’s website.

Jul 19

The journey to an anti-racist community

By Sponsor Insight

by Pamela Ross, vice president of opportunity, equity and inclusion at Central Indiana Community Foundation

Almost three years ago, Central Indiana Community Foundation (CICF) and its affiliates, The Indianapolis Foundation and Hamilton County Community Foundation, announced our new shared mission and a focused commitment to dismantling systemic racism. After spending generations committed to making the Central Indiana community stronger through philanthropy, we were faced with the realization and data-driven proof that our collective efforts were still leaving people and communities behind while others prospered. And it was clear that race still has a profound impact on the opportunity for someone to reach their full potential.

We committed to learning more, having hard conversations amongst our staff and leadership, and most importantly, developing authentic relationships with residents, listening to them — and activating what we heard. We made space to learn and encouraged our employees and board members to bring their whole selves into this work. As we’ve continued to learn more, we’ve invited others — community leaders, corporate leaders, not-for-profits, our fundholders — to join us on this journey towards equity. All with mixed success.

On our journey to be a leader in creating one of the most anti-racist communities in this nation, a few of our fundholders chose to take their philanthropy elsewhere. In conversations about race with our staff, there were times when we were challenged by the tone of voice used to share their perspective and experiences instead of listening to what was being shared.

There were times when our choice in language could have been chosen more wisely when addressing privilege and our country’s history of centering the White experience. In reflecting on those moments, we were faced with Abraham Maslow’s two options, “step forward into growth, or step back into safety.” We chose — and will continue to choose — the former. And in that choice, new funds and relationships came to fruition because of our commitment to equity and growth is not wavering.

We don’t pretend to have all the answers or have this journey figured out. We have to be intentional and authentic and willing to make mistakes — and learn from them. The process of becoming an anti-racist organization, community, and nation is ever evolving.

Centering and empowering the voices and experiences of people of color is crucial in equity work. Uplifting, trusting and valuing the lived experiences of the people most impacted by the systemic issues you’re trying to address cannot be a step you skip over. When so many companies are trying to improve in this space, too often, people of color are burdened with the expectation to draft anti-racism statements and inclusion strategies without adjustments to existing workloads or emotional support when they’re constantly reliving this trauma. This work must be an opportunity for those voices of color, not another obligation.

Anti-racism cannot be performative. If your allyship or pledge to equity is designed to primarily benefit you or your organization’s reputation, it is simply a distraction. Celebrating a new DEI hire across your social media but not giving that individual any true power or voice within the organization is not advocacy. Being a keyboard warrior by reposting a hashtag or sharing a crafted statement without acknowledging your own privilege and role in systemic issues does not lead to equality. This work must include actions and real change that may never get publicly recognized but you know it is important, nonetheless.

We, at CICF, have learned that the path towards equity is beyond challenging and continuously filled with nuance. There is no guidebook with proven solutions. It is not fast or transactional. But we must all unite in our commitment to struggle towards racial equity. The time for change must happen now.

Jul 12

3 essential practices to create an inclusive board culture

By Sponsor Insight

Ask the challenging questions needed to achieve alignment with diversity goals

by Erin Hedges, president, Hedges

Despite good intentions, there is still much diversity, equity, and inclusion (DEI) work to be done in the nonprofit boardroom. A June 2021 report from BoardSource indicates that while boards may be getting slightly more diverse, they are far from representing the communities they serve, and recruitment practices too often lack alignment with diversity goals.

At Hedges, we are challenging ourselves to question traditional board governance practices and identify new ways for organizations to create a more diverse, equitable, and inclusive board culture. Resulting from our learnings, we share three practices for nonprofit leaders to consider:

  1. DEI work should be grounded in an organization’s “why.” Too often, the purpose of recruiting diverse board members is to “check a box” provided by funders on a grant application. This narrow approach misses the opportunity for important board-driven conversations that can identify how diversity in representation, lived experiences, and perspectives can unlock greater potential for the organization. By taking time to uncover the reasons “why” an organization needs more diversity in the boardroom, boards can identify the specific purpose for board-led DEI efforts and create a collective responsibility to move these efforts forward.

To get started, BoardSource offers specific questions boards can ask themselves to explore an organization’s purpose for having a more diverse boardroom including:

  • Is our organization’s reputation being negatively (or positively) impacted by our board’s composition vis-à-vis diversity?
  • If someone were to make assumptions about our organizational values based on our board composition, what would they be likely to think?
  • How well are we cultivating a deeper understanding of the community or communities that we serve and bringing their perspectives, needs, feedback, and priorities into our strategic boardroom discussions?
  • Are we ever at risk of making decisions without fully understanding how these decisions may affect those we serve?
  • If we were to make a deeper commitment to diversity, inclusion, and equity, what would that mean for our mission, our work, and the people we serve?

Once the board can formulate responses to these types of questions, it will gain clarity as to “why” board diversity matters and what the organization has to gain. The board will have identified its purpose in developing a plan to recruit and successfully support more diverse members that can bring valuable, new contributions to discussions, deliberations, and decision-making for the organization.

  1. Bylaws can be a powerful DEI tool. Moving DEI intentions into action is key to successfully creating an inclusive boardroom. In addition to developing a plan to use as a playbook, board members can consider incorporating DEI provisions into the organization’s bylaws. Not only will these provisions guide and direct board members, but also provide accountability measures that will increase successful outcomes of these efforts.

Including DEI provisions in bylaws demonstrates that DEI is a core organizational value. NEO Law Group offers specific recommendations of how organizations can accomplish this. One of our favorites is stating the diversity goal from your plan (i.e., greater diversity in representation, lived experience, and perspectives) in your bylaws. A favorite focused on equity is including an equitable compensation provision that all employees should be paid a fair and reasonable wage. A favorite focused on inclusion is adding a Conduct of Meetings provision to allow directors other than the president to chair meetings. A full list of their recommendations can be found here.

To ensure these DEI commitments are reflected in an organization’s approved bylaws, review each section of the current bylaws and determine how they need to be revised to reinforce DEI commitments. Building these commitments into bylaws will provide accountability to organizational leadership in moving to more diverse, equitable, and inclusive board governance.

  1. Board member value should be viewed beyond what they can give or get. Historically, nonprofit organizations have relied on their board for fundraising and, in fact, we have recommended this practice many times over. But when boards set minimums for board member financial contributions and give/get policies, barriers based on a person’s “treasure” are created. At Hedges, we are challenging organizations to let go of the old giving and getting minimums and, instead, encourage individual giving amounts that are “personally meaningful” to each board member.

Organizations with giving minimums or give/get policies for board members should ask themselves what barriers to board diversity and inclusivity are these policies creating? What perspectives, lived experiences, or talents might we be missing on our board because of these policies?

That’s not to say that board members shouldn’t still be involved in fundraising. When training organizations to fundraise, we ask board members to identify a part of the fundraising process that aligns with their preferences and comfort level. Whether it is identifying potential donors, cultivating donor relationships, directly soliciting gifts, or providing donor stewardship, we have found that all board members are able to play a role in fundraising efforts. In this way, an organization acknowledges that a board member’s time and talent are as equally valuable as their treasure.

Creating change takes intentionality and patience, but the need for greater diversity, equity, and inclusion in our boardrooms is urgent. By taking time to figure out the “why,” building DEI commitments into bylaws, and valuing individuals for all that they bring to board membership, boards can lead the way to greater impact within their organization and community.

Erin Hedges is the founder and president of Hedges, an Indianapolis consulting firm that advances social change by strengthening Central Indiana’s philanthropic sector. Hedges is launching Lead with Purpose, a new training series to equip individuals for effective nonprofit board service. More information about Lead with Purpose can be found here.

Jul 06

For nonprofits, moving forward requires looking back

By Sponsor Insight

Research reveals top concerns among nonprofits as they work on recovering from pandemic

by Leslie Wells, assistant director of communications, Paul H. O’Neill School of Public and Environmental Affairs at IUPUI

New research on COVID-19’s impact on the nonprofit sector finds that organization leaders who want to find a way forward must first look back at how they have weathered the pandemic thus far. While the past 15 months have been a challenge for every sector, associate professor/researcher Marlene Walk is optimistic about the future of nonprofits.

“It’s very interesting how nonprofits rose to the challenge while still serving those in need,” says Walk, who teaches at the Paul H. O’Neill School of Public and Environmental at IUPUI. “For many smaller nonprofits, this was a survival situation for both their clients and them as well.”

After analyzing data and examining trends, Walk has three pieces of advice for nonprofits as they navigate the return to work and the future of their organizations:

  • Ask employees for their opinions, including about remote work and whether it can/should continue.
  • Determine which organizational practices can be improved upon.
  • Evaluate which new technologies adopted during the pandemic should be institutionalized.

Walk and O’Neill student Abby Klippel recently worked with Mandi Stewart, an associate professor at North Carolina State University, and Kerry Kuenzi, assistant professor at the University of Wisconsin-Green Bay, to analyze 77 COVID-19 impact reports collected through the National Council of Nonprofits. These reports detail how nonprofits have operated since March 2020. The data analysis covers more than 23,000 nonprofit organizations across 43 states.

The team released its updated report on May 5, 2021, focusing on three areas of impact: financial indicators, human resources and employees, and the most common COVID-19 concerns.

Survey results: Common COVID-19 concerns

Organizations in 13 states answered questions about their most pressing issues. Among them, finances were the most common COVID-19-related worry for organizations in nine of those states.

Nonprofits in eight other states ranked “struggling with how to safely offer services during a global pandemic” as their top concern.

Lastly, nonprofits in six states were primarily worried about their own organization’s human resource considerations, including their employees’ job status, salaries, and overall well-being.

The human toll

That third area is Walk’s primary research focus — the employee side of the equation.

Previous studies from Johns Hopkins University showed the nonprofit sector lost about 13% of its workforce from March 2020 to February 2021.

“That mirrors what we see in our research,” Walk says. “It will take years for that workforce to recover that number of lost workers.”

She says while large organizations will likely be fine, how smaller organizations handled the pandemic will have a big impact on their future.

“We’re really interested in the employee perspective,” Walk explains. “How do they perceive their organization’s changes? If a nonprofit laid off 20% of its workforce, how does that impact those who are still there?”

Their research found that many nonprofit workers saw their hours reduced, their pay cut, and, in some cases, their jobs put on hold or eliminated. Much like in other sectors, many also saw a shift to predominately remote work.

“These organizations need to look at what worked well from an employee perspective, not just a financial perspective,” Walk says. “Our fear is that employees may feel this pandemic was such a critical incident, and that their employer didn’t handle it well, that they will choose to leave.”

Another report Walk is working on, due out later this year, seems to also show the other side of the spectrum.

“Our initial research is showing that some employees have doubled down on their commitment to the nonprofit sector,” she says. “It really depends on how they were personally affected by COVID and how they think their organization handled it. Was their psychological contract, those unwritten expectations of their organization, violated? That has a big impact.”

Financial stressors

When it came to the financial impact of COVID-19, Walk admits the team wasn’t surprised by the findings. Many organizations reported individual donations and membership fees were down. In fact, 90% of responding organizations in Nevada saw individual donations plummet and 68% of nonprofits in Texas saw a decline in earned income.

Grant revenues were down as well. Nearly 35% of respondents in Texas reported a delay in grant processing, which can affect cash flow. About 16% of those in Connecticut saw a reduction in state grant funds.

But one of the hardest hit areas were arts-related nonprofits.

“It’s important to keep in mind that nonprofits are really diverse,” Walk says. “How an organization was impacted really depends on what types of nonprofits we’re looking at. The arts sector was hit very hard because they often have outward-facing events as a main source of revenue. Having concerts virtually is just not the same.”

In fact, 90% of West Virginia’s responding nonprofits reported cancelling events due to pandemic precautions, while the same was true of 25% of nonprofits in Alabama and Georgia. Reports like these indicate that the arts sector is the slowest sector to recover, with studies projecting it will take at least 18 months for it to bounce back.

Walk stresses that it’s important to focus on more than earned income, though. She uses social services as an example of organizations that were hit from both sides.

“Social service organizations had to adjust to drops in volunteers, increases in demand and expenses to provide for clients, and shifts in procedures due to distancing and cleaning requirements,” she explains.

Respondents in Missouri indicated an average expense increase of $302,417 per nonprofit during the study period, while Pennsylvania respondents indicated a total estimated $95.3 million in additional operating costs.

Looking ahead

Between the numbers, Walk sees signs of hope and further proof that the nonprofit sector is resilient and capable of adapting to change.

She points to the increase in collaboration, resource sharing and partnership development during the pandemic that helped nonprofits survive and serve their clients. Some smaller nonprofits even added health care to their employment packages, which would be a positive trend — if it sticks around.

“There will be collateral damage, unfortunately, but I tend to be more positive than negative,” Walk admits. “I think the sector as a whole will recover and continue its mission to serve.”

To read the full article and access the data tables, visit States of COVID-19: Synthesis of State-level Nonprofit Reports on the Impact of the COVID-19 Pandemic.

Jun 21

3 hot topics in treasury management right now

By Sponsor Insight

by John Haggarty, vice president; Gail Bradley, vice president; and Dave Voris, region manager, treasury management, Horizons Bank

As part of our interactions with nonprofit clients, we consistently hear about topics related to interest rates, credit card acceptance, scams and fraud. Here are a few tips to help you address challenges in these areas.

Interest rates
Many nonprofit organizations, especially in the wake of the pandemic, struggle to have enough funds to fulfill their mission — notwithstanding that the current interest rate environment has drastically reduced the earnings that can become available from their reservoirs of cash.

We’ve heard nothing to indicate that short-term investment rates will be increasing in the near future. Several issues are keeping interest rates down. First and foremost, interest rates were drastically reduced in March of 2020 in an attempt to support the U.S. economy, during a period we know now as the beginning of the pandemic. And, in the latest jobs creation report from March, employment numbers are improving but not at a rate for the Federal Reserve to begin raising rates despite concerns about some inflation.

There also is an extreme amount of cash built up within the banking system, brought about by corporations that have conserved cash as a strategy to work through the uncertainties caused by the pandemic. This cash build-up also is caused by less than normal spending among consumers who have been housebound during the past 15 months.

A combination of the above, along with recently introduced assistance from the federal government, the overall banking system is so flush with deposits that higher interest rates do not need to be paid to attract additional deposits. Since we expect this condition to last for at least 12 to 18 months, we recommend that nonprofit organizations not lock funds into long-term certificates of deposit simply to achieve some additionally higher rates. They should also consider asking about the option of tiered money market rates instead of traditional certificates of deposit. Learn more about these options here.

Credit card acceptance
To help with donation cash flow, nonprofit organizations should allow donors to submit funds directly with online payment portals. An online payment portal is a convenient solution that increases revenue, generates material operating efficiencies, expedites transactions, improves customer service and convenience, and powerfully enhances any enterprise payments platform.

How does it work? A unique web address is provided and linked to a secure landing page. This portal can support both consumer and business-to-business payments.

These donations can be established as one-time donations or as an ongoing monthly or quarterly donation. That functionality can assist with various donations becoming an annuity instead of a one-time event. Learn more about the features of an online payment portal here.

Protecting against fraud
Another major concern among nonprofit organizations is the risk of fraud. There are several ways to help your business or nonprofit stay safe from scams and fraud.

For example, Horizon’s Positive Pay enables clients to easily detect counterfeit and fraudulent and unauthorized items on a daily basis through online banking. The checks are compared to the issued check file that is uploaded to the secure portal. Any mismatched items will be flagged for the user to review for payment. Protection against check fraud as well as unauthorized ACH transactions can avoid much expense and interruptions to an organization’s operations.

Our Reverse Positive Pay also allows users to review all incoming and paid checks for potential fraud scenarios, making an organization’s checking transaction management process less prone to faulty checks and their attached business losses.

Another precaution we take at Horizon is Detect Safe Browsing. This software provides real-time security so clients don’t become victims of online fraud.

To learn more about how you can defend your nonprofit organization against fraud, visit our site.

John Haggarty, vice president, Gail Bradley, vice president, and Dave Voris, region manager, treasury management, represent many years of experience in understanding the unique needs of nonprofit organizations. They focus on wrapping specially designed depository products, treasury management, and funds management together to help each nonprofit organization manage their cash flows in the most economical way.

Jun 21

Developing a successful hybrid-work model

By Sponsor Insight

By Cody Lents, Partner and Change Manager at COVI, Inc.

Empower employees with choice
As vaccinations trend up and restrictions trend down, a significant number of workers are set to return to the office in coming months. Your extroverted employees are undoubtedly excited. However, their introverted counterparts may not share the same enthusiasm. So, how can you maximize morale and culture to enable the best performance out of both groups?: A thoughtfully-designed hybrid Work-from-Home (WFH) model that prioritizes both the needs of your organization’s employees and processes.

Lay the groundwork for success
The first critical step in transitioning into a hybrid WFH model is developing and communicating processes that level the playing field for both in-house and remote workers. Set clear expectations about your organization’s internal communications, cyber insurance, bring-your-own-device (BYOD) policy, etc., to ensure that remote workers don’t feel left behind compared to their in-person colleagues.

While remote work can be an opportunity to cut “traditional” office costs, leverage it as an opportunity to invest in your workforce. Consider using what your organization saves on overhead to provide your employees with a stipend to make working remotely more comfortable. This allows employees to outfit themselves at home with equipment like an ergonomic chair, an extra monitor, noise-canceling headphones, etc.

At the office, consider re-developing your organization’s layout to better accommodate a hybrid approach: dedicated “open-space” plans for those in and out of the office, private offices for focused work, and spaces specifically designed to encourage collaboration/socialization both face-to-face and virtually.

Invest in your infrastructure
The next critical step in transitioning your organization to a hybrid approach is ensuring your infrastructure is capable of handling the needs of employees working in different spaces. Now may be the time to upgrade your organization’s software to the enterprise level so that you can take advantage of security, communication and collaboration features.

Migrating your organization’s servers to the cloud is another way to streamline efficiency for your remote workforce. This makes it easier for your employees to collaborate and share files via a centralized location in which they can upload/save their work to.

Don’t compromise on security
With employees using a mixture of personal and company devices, it’s imperative that your organization communicates a clear security policy to ensure the safety of your data. The following three steps are a great start to a more secure digital infrastructure:

  • Determining what endpoint protection your remote workers need will aid in virus prevention. Windows Defender is a great antivirus software included in Windows 10, however, it does not meet the compliancy and security minimums of today’s security landscape.
  • Implementing two-factor authentication [2FA] is a secure way to ensure that only admins and users are allowed into accounts that would otherwise be vulnerable to cyber attacks.
  • Utilizing a virtual environment that allows devices to connect to a secure server or service, as opposed to a user’s internet connection, allows your organization to keep information encrypted, private, and safe.

Questions?
Now is the perfect time for a comprehensive technology assessment to prepare for the new-normal in our evolved workspaces. If you want to discuss what an assessment entails or if you need assistance implementing a hybrid-work approach for your organization, reach out to COVI at cody@gocovi.com for help. COVI is an Information Technology (IT) agency specializing in productivity, security, support and strategy services, located in Indianapolis, Indiana.

Jun 14

Public Support Test: 33.3% Is the Magic Number and Here’s Why

By Sponsor Insight

by Jamie Koglin, senior tax accountant, Alerding CPA Group

Whether your public charity is in the early years of formation or has operated for decades, there is one particular mathematical calculation that should always remain at the forefront of your decision making — the public support test. It is a small but mighty calculation that is vital to maintaining status as a public charity. On the Form 990, Schedule A is used to provide detail about sources of support, types of support and, ultimately, to calculate the public support percentage.

According to the IRS, there are two methods in which a non-profit may qualify as a publicly supported charity:

  1. Under IRC Section 509(a)(1): The organization is primarily supported by contributions from governmental units, publicly supported organizations, and/or the general public.
  2. Under IRC Section 509(a)(2): The organization receives no more than one-third of its support from gross investment income and more than one-third of its support from contributions, membership fees, and gross receipts from activities related to its exempt function.

An organization’s reason for public charity status determines which of the tests apply to calculate the public support percentage. For sake of simplicity, this article focuses on the testing under IRC Section 509(a)(1).

The 509(a)(1) Public Support Test

Organizations claiming public charity status under this section must receive at least 33.3% of its support from the public, or from governmental units over a 5-year period — the current year plus the prior four years. At a high level, public support/total support = public support %. Sounds simple right? Wrong. There are several factors used to determine this calculation, therefore, we will break it down further.

The numerator

The public support portion, or the numerator, consists of four important line items. The first three lines include gifts, grants, contributions, membership fees, tax revenues levied and the value of services or facilities furnished by a governmental unit to the organization at no charge. Unusual grants are not to be included. All of these sources of revenue are considered “good money” and help the public support test. The fourth line item is the portion of support classified as excess contributions. Excess contributions are considered “bad money” in that they hurt the public support calculation.

Excess contributions are amounts from a single donor, during a 5-year period, that exceed 2% of the total support of the organization over that same 5-year period. The amounts in excess of 2% are subtracted from the public support total. Thus, large amounts from a single donor, are considered “bad money” and have a negative impact on the support test.

Unusual grants, which are excluded from the calculation entirely, are generally substantial and material contributions from disinterested persons. They are also unusual and unexpected in amount, and large enough to jeopardize the public support calculation. There are many factors that help determine whether a grant is considered unusual, the most common is whether the organization would typically meet the public support test without this grant occurring. The ability to classify a large contribution “unusual” would ultimately be favorable for the public support calculation.

The denominator

The denominator of the calculation includes total contributions and grants, gross income from investments, income from unrelated business activities, other income, and gross receipts from related activities. If the numerator/denominator is greater than 33.3%, the organization passes the public support test. It is also important to note that in the first five years, the organization receives a grace period. The percentage is not calculated until year 6, therefore new organizations have some flexibility in their operations during the first few years.

Most organizations will pass the test consistently without issue. For those receiving a low percentage of support from the public, “tipping” becomes a concern. “Tipping” occurs when a substantial grant or contribution causes the percentage of public support to drop below 33.3%. If this occurs two years in a row, the organization will revert to private foundation status. “Tipping” into private foundation status not only has a negative impact on the organization but also on its donors. Private foundations are subject to more restrictions on its functions and their donors are subject to a lower deductibility of donations. In addition to that, the process to reclaim its public charity status will require a consecutive 60-month period of meeting the public charity test.

There are ways to prevent “tipping,” including seeking diverse sources of funding, ensuring that activities are classified correctly on Schedule A, and paying close attention to amounts that should be classified as unusual. Also, working with donors to ensure that contributions are received in appropriate installments or amounts is important as the impact it can have on the public support test can be unfavorable.

The public support test is critical. It is important to help these organizations understand this test and the impact it can have on maintaining their public status. These organizations are doing a great deal for our communities, and our country as a whole. We want them to do well and maintain their publicly supported status so that they can continue to carry on their mission and support the societies in which we live.

Oftentimes, the organization may not realize the impact on the public support calculation until the end of the year, which could result in an organization unexpectedly losing their public charity status or taxes being imposed. Because of this, it is important to monitor this calculation throughout the year to avoid any disruption when time to file the 990. The stakes are high, so it is important to keep good records and pay close attention. Need help? The trusted advisors at Alerding CPA Group can help navigate through the calculation.

As a senior tax accountant for Alerding CPA Group, Jamie Koglin prepares tax returns for individuals, corporations, partnerships, trusts, non-profits, property tax assessments and various states. Her responsibilities include managing client contact, research and recommendations, preparing extensions, strategic tax planning and quarterly payment consulting and interpreting tax laws and updates.

Jun 07

Build resiliency into your nonprofit strategic planning

By Sponsor Insight, Uncategorized

by Angela E. White, CRFE, Johnson Grossnickle and Associates

Life is full of opportunities and challenges, and we certainly faced our share in 2020. However, not everything we’ve gone through in the last year is negative. There are some lessons learned we may want to keep — opportunities to capitalize on in the future. It is important to learn from each challenge so you can prepare, mitigate, and more easily turn the next challenge into an opportunity. That’s called resiliency. It sounds easy — but let’s be honest, it isn’t.

Resiliency is the ability to recover from a setback, adapt to new challenges, and keep going in the face of adversity. In a nonprofit, as a staff or volunteer leader, one of the best tools to foster resiliency no matter what is thrown at your organization — internally or externally— is a strategic plan, which:

  • Provides a road map to lead your organization from where you are now to where you would like to be in the future;
  • Sets priorities and focuses your organization’s resources; and
  • Establishes measurable goals and a template to evaluate progress and adapt to a changing environment.

During a recent JGA webinar, I shared six tips to help you create a resilient organization by building resiliency into your strategic planning:

  1. Prepare for the unexpected. Include learning sessions at the beginning of your strategic planning process to provide the knowledge you need to make your organization more resilient.
    a. Acknowledge internal and external threats,
    b. Consider different scenarios and plans,
    c. Stay informed about trends, and
    d. Identify lessons learned.
  2. Concentrate on the customer experience: For nonprofits to be resilient, it is important to think about who your core “customers” are and who your potential “customers” might be as you think about implementing your mission and opportunities for growth.
    a. Provide excellent customer service,
    b. Help your customers (constituents, donors, etc.) make their lives easier,
    c. And anticipate their needs.
  3. Find a niche: Finding your niche doesn’t mean staying stagnant — or just doing what you’ve always done. This is where your mission statement is key. Let it serve as your anchor in this process.
    a. Establish what is unique about your organization and bolster your special traits,
    b. Strengthen and create partnerships, and
    c. Continue to strengthen financial sustainability.
  4. Invest in good tech: Put technology in place to implement a business continuity plan to make your organization resilient and to best position yourself to implement your strategic plan.
    a. Put the right technology in place,
    b. Ensure technology helps you, and
    c. Don’t spend time doing tasks that take you away from your constituents.
  5. Cultivate a productive work culture: The values section of your strategic plan is key to strengthening your work culture and helping you build resiliency. Keep those values central to your future planning and invest in your people as they are the ones who are going to make your strategic plan a reality.
    a. Build a resilient culture through open communications and trusting relationships,
    b. Prioritize learning opportunities, and
    c. Foster team building.
  6. Give back to the community: In your strategic plan, make certain you have embedded opportunities for staff and volunteers to touch and feel your mission, so they understand their role in giving back to the community and supporting the important work you do.
    a. Provide opportunities for staff and volunteers to engage with the mission,
    b. Serve the community, and
    c. Be transparent to foster trust in your organization by stakeholders and the public.

You can learn more about weaving resiliency into your organization’s plans by listening to the complete Nonprofit Resiliency and Strategic Planning webinar recording. If you’d like to discuss undertaking a strategic planning process, creating a short-term plan tailored to your changing environment, or gathering strategic intelligence to inform decision making, we’ve put together a list of special fast-track packages to help you in 2021.

Angela E. White, CFRE, serves as Senior Consultant and CEO of Johnson, Grossnickle and Associates. She previously served as Executive Director for Institutional Advancement at the University of Indianapolis and Vice President of Institutional Advancement at Saint Mary-of-the-Woods College. Angela is a faculty member at The Fundraising School at the IU Lilly Family School of Philanthropy, presents on behalf of the Women’s Philanthropy Institute, and serves on the Committee on Directorship for CFRE International.

Jun 01

Is it time to let go? Then do it

By Sponsor Insight

by Jan Breiner Frazier, managing member, Planning Plus, LLC

Beginnings are exciting, stimulating, and often exhilarating. Endings are functional, inevitable, and sad.

No words are truer than these when thinking about retirement and succession planning. As a 30-plus year consultant, I have advised a number of CEOs, including owners and founders, to begin thinking about succession planning — not only for them but for their key leadership staff and longevity of their organization. In fact, this is a critical discussion topic that generally emanates from strategic planning. And, on more than one occasion, this advice proved valuable to the company when the key leader unexpectedly was out of the picture.

For the past few years, there has been a sea change occurring in the non-profit community as founders, and long-term CEOs and executive directors are thinking about, planning for, or have already followed through on retirement. Many of those who rose to the occasion of providing “human” services in such areas of healthcare, housing, food insecurity, mental health, domestic violence, etc. to those needing a helping hand were children of the 60’s who wanted to make the world a better place. Many of them did. But, as with all human endeavors, it becomes time to take a rest and turn it over to the next generation.

This article, however, is not about the need for succession planning. Rather, this writing is geared to those who are handing over the reins — and it is much harder than it sounds. I can attest to that.

During my consulting tenure, I have gathered a body of knowledge used to guide, lead and often direct organizations towards success. For the last few years, I have been transferring much of that knowledge to my partners so they can continue the organization into the future, or as long as they want (it helps that they love what we do). As a professional, I know that what I do, I do very well. But as a founder, I know that I need to be open to new ideas of what we do, how we do it, and for whom. At some point, I have to let go to allow my protégés the freedom to experience their own successes, challenges and, yes, sometimes failures. That is the only way to grow.

If I have done my job well, they will be fine. Just as parents must trust they have created a solid foundation for their children to succeed, so it is with business leaders. Yet the human condition is such that it is often difficult to manage such a transition.

As I look at a five-year plan, these are the steps I recommend (and am trying to follow):

  1. Provide opportunities for professional development in other areas than your primary business. Ensure the next generation is well versed not only in your industry, but in higher level thinking and strategizing opportunities. My two partners have enrolled in multiple programs to increase their skill sets (and obtain several certifications) as well as find new ways of looking at things.
  2. Avoid being the “final” say on proposals and project methodologies. Make sure others know the critical pieces but allow for their own language, tone, and approach to working with clients.
  3. Become more of a mentor than a boss. Rather than explaining how they should proceed, ask the critical questions about why they have chosen a particular path.
  4. Identify (and stick to) the role you will play over the next year, two years, etc. It is exceedingly difficult for staff when you float in and out of the business — one day hands off, the next day micro-managing.
  5. Remain open to their ideas of operations, approach, and implementation, while at the same time ensure they are up to speed on all financial and legal requirements of the organization.

To some, this article may seem like “of course” simple concepts, and you may already be going down this path. But for those of you thinking about winding down over the next few years — and those of you who are ready to take up the mantle — it would be an interesting conversation to have to determine how well you are managing an impending transition.

What does staff need from you? How can you provide guidance instead of management? And, most importantly, what legacy do you want to leave?

May 17

Achieving racial inclusion in the workplace

By Sponsor Insight

by Jeremy York, author, Synergy, adapted from the Society for Human Resource Management

Ensuring people from underrepresented communities are recruited and advanced is far more beneficial for an organization than recruiting or advancing any one individual. Diversity, equity, and inclusion (DEI) attempts to level the playing field to allow the best ideas to flourish, connect talented individuals from underrepresented backgrounds with opportunities that those in the majority often have unfair access to, and empower the best organizations to thrive. Done right, creating diverse, equitable, inclusive organizations yield greater profitability, innovation, and smarter teams.

When employees who are different from their colleagues are allowed to flourish, the company benefits from their ideas, skills and engagement. The retention rate of those workers also rises. Here are five practical strategies for creating an inclusive environment.

  1. Educate your leaders. Your organization’s executives and managers will be instrumental to your DEI efforts. Leaders — especially middle managers — must be held accountable for results. Leaders should be expected to demonstrate a commitment to inclusivity and, more importantly, to be responsible for the environment in their respective departments. Ongoing feedback from their own managers will help to hold them accountable, as does tying the goal to their performance evaluations.
  2. Form an inclusion council. Consider forming a council comprised of a dedicated group of eight to 12 influential leaders who are one or two levels below the CEO. Carefully select them for their passion and commitment to inclusion. They need to be “a channel for communication” between the rank and file and the C-suite, and that includes advocating for inclusiveness in discussions with top executives when necessary. Ideally, councils should be involved in goal-setting around hiring, retaining and advancing a diverse workforce and in addressing any employee engagement problems among underrepresented employee groups.
  3. Celebrate employee differences. One of the most important ways to show employees that you respect their backgrounds and traditions is to invite them to share those in the workplace. It’s well-known that diversity in teams leads to better decision-making, greater innovation and, ultimately, higher returns. Inclusion is what connects people to the business, and we believe it’s one of the core reasons that diverse employees stay with organizations that recognize and celebrate diversity.
  4. Listen to employees. Conduct a comprehensive assessment of your organization’s demographics and people processes to develop specific strategies to promote inclusiveness. Think about the culture you want and how you can create one that is authentic to your brand while meeting the needs of your employees.
  5. Communicate goals and measure progress. Establish and clearly communicate specific, measurable and time-bound goals as you would with any other strategic aim. Every company should first benchmark their culture before they begin investing in it. Here are some actions to follow:

    Conduct a full audit of your people processes — from recruiting and hiring to developing and retaining employees. Couple the data with engagement and other workforce survey data to gain a full measure of your climate.
  • Identify any shortcomings and measurable discrepancies around inclusiveness in your organization.
  • Instill rigor into inclusion strategies with data-driven plans, and measure the results.
  • Establish a clear business case for how the company will benefit by having a more inclusive culture by asking:
  1. What are our inclusion goals?
  2. What are the reasons for those goals?
  3. How do we quantify inclusion?
  4. How will inclusion impact our mission, brand or bottom line?

When you can answer these questions, you’re speaking the language of your stakeholders, legitimizing the business of inclusion and making inclusion a ‘verb’ versus an ideal.

Instead of trying to change some people to fit the organization, we must focus on transforming our organizations to fit all people. To get workplace diversity and inclusion right, you need to build a culture where everyone feels valued and heard.

To hear the full interview with Jeremy York of Synergy, click below.