By Sara M. Johnson, FACHE Director, Executive Education,IU School of Public and Environmental Affairs at IUPUI
While relaxing on a recent cruise to Cuba, I started thinking about leadership (I know…I can’t help it). Ever an observer and student of leadership and organizational culture I was struck by lessons that can be learned on both land and sea.
As we left the port on the cruise ship, I positioned myself on the top deck to watch our departure. As we worked our way to the Skyway Bridge at the edge of Tampa Bay, I noticed the ship turning subtly left and right within a path of lighted buoys. Slowly, the ship would veer left, then right, threading its way through the Bay as we headed out to sea. There was great attention to direction and the required turns that led us safely out to the Gulf. The narrow passage under the bridge also required a precise positioning by the captain in order to prevent the cruise ship from hitting the bridge supports. This seemed a strategic process to ensure the safety of the ship and its passengers. Though it may have been something the captain did all the time, it was strategic, subtle and purposeful. I doubt I would have known it was happening had I not been on the deck observing his path.
On land, I mindlessly travel the same route to work most of the time. I know where the potholes are, the lane changes, and the bottlenecks. I know the best time of day to leave the house to avoid the most traffic. It is easy to drive through traffic without really thinking about what I am doing. Some days I arrive at work, hardly remembering the trip.
In the classic book, “Leadership on the Line,” by Ron Heifetz and Marty Linsky, they talk about the “view from the balcony.” Like the view from the ship’s deck, leaders must occasionally step back, take a look out over the organization, and observe the big picture and the horizon. It is easy to get comfortable and lose sight of what is ahead and the signs along the way.
So, in my relaxed state on vacation, it occurred to me how dangerous it may be to lead the way I drive versus the way the captain navigated the water. Do I need to “get on the balcony” or “on the deck” to determine the best path for the future success of my team and organization? Like the buoys, should I be paying more attention to the signals from staff and other stakeholders?
In times of great change, leaders need to build organizational confidence. I suggest it is also good for leaders to do this for themselves occasionally to take note of their own development, reaffirm their values and the direction they are leading their team or organization.
Making an effort to be intentional in our leadership, “getting on the deck” and strategically looking to the horizon as we observe the signals that should guide us daily. Not only will we feel more confident but those who follow will feel more confident, too.
Sara Johnson is clinical assistant professor for the IU School of Public and Environmental Affairs and director of IU Executive Education. Johnson teaches graduate and executive education courses. She is a fellow of the American College of Healthcare Executives (FACHE). As director of Indiana University Executive Education, Johnson leads a team of over 40 faculty and staff.
By Chris Mennel, audit manager, Alerding CPA Group
As your nonprofit strives to use its resources as effectively as possible, at some point, you might consider outsourcing the functions that fall under your accounting and financial umbrella.
Nonprofits often outsource areas that require specialized knowledge or a significant number of hours, such as payroll processing and payroll tax preparation. Outsourcing accounting functions also can provide benefits – if it matches up with your organization’s needs and budget.
Before committing to an outsourced accountant or an internal hire, consider the following:
Labor costs – Organizations that outsource their bookkeeping often realize an overall reduction in payroll, employee training and the cost of benefits. On-staff accountants are often charged with administrative tasks that could ultimately be accomplished with personnel that can be hired at a lower salary. Additionally, the outsourced provider would offer consistency, even when your organization has turnover. However, it’s important to know that sometimes the cost of outsourcing could be higher depending upon the mix of work required.
Depth of knowledge and expertise – Outsourcing with someone that specializes in nonprofit accounting often provides your organization with a higher level of expertise and greater resources than you could find if you hired your own accountant. The outsourced person likely has a number of individuals that they can consult with as issues arise, and these individuals will be knowledgeable in a variety of areas.
Efficiency – Bookkeeping is time-consuming, especially when dealing with multiple responsibilities. Moving bookkeeping, payroll and other financial responsibilities to an outsourced service provider allows your staff to focus on your organization’s mission. But, keep in mind that an outsourced accountant won’t be onsite every day.
Staying current with regulations and laws – Nonprofit regulations and laws are always changing, and it’s challenging and time-consuming to stay up-to-date on these matters. An outsourced accountant will likely be up-to-date on those matters that affect your organization.
Outsourcing allows you to work with financial professionals of varying levels of experience and expertise tailored to the functions they’ll perform. These responsibilities could include:
Processing payables, receivables and cash transactions
Reconciling accounts at each month’s-end
Preparing financial statements, budgets and forecasts
Assisting with tax and grant reporting requirements, and
Adequately communicating financial matters to your board.
But you don’t have to outsource all of these functions. Depending on your needs and budget, you can outsource only the ones that make sense for your organization. You also may benefit from occasionally using other firm experts — investment advisors, HR and IT support and valuation specialists, as necessary.
Many nonprofits turn to outsourcing accounting functions at times of significant personnel transition or workload increases. For the nonprofit that can’t afford the day-to-day expertise of a director of finance or CFO, outsourcing certain financial oversight functions, such as review of bank reconciliations, may enhance the system of internal controls.
When considering outsourcing any accounting function, make sure you’re working with a manager or partner who’ll become familiar with your operations. This will help provide continuity of service, as well as a resource for your senior management and board of directors. This manager or partner will also supervise junior firm members, providing an added layer of oversight.
The final word
Even with a provider handling your accounting functions, you won’t be able to absolve yourself of financial decision-making. Remember, while an external firm can assist and advise you on financial matters, those charged with governance (typically the board of directors) must continue to have the last word on making significant financial decisions. Be prepared for some commitment of time during any transition of accounting services. A learning curve is inevitable, whether it be external outsourcing or an internal hire. However, accounting and financial reporting is ever-changing and complex, at times. The wealth of knowledge and support that an experienced outsourced accountant can bring to the table could be invaluable.
Spending too much on overhead is bad. But how much is too much?
While scholars agree that the 15 percent line implicitly reflected in Part IX of the Form 990 is too low, what’s the sweet spot? And, maybe more importantly, what do funders think?
Both scholars and funders are coming to recognize the importance to programming quality of spending adequately on overhead.
Over the past several years, the landscape has been changing. As more people realize that such costs have little to do with the effectiveness of a nonprofit, the focus is shifting toward a nonprofit’s impact.
General attitudes are changing despite the fact that charity watchdog groups are at odds about the extent to which the overhead ratios are helpful in assessing nonprofit organizational strengths. Charity Navigator has spearheaded The Overhead Myth campaign while Charity Watch maintains that overhead ratios are essential to assessing charitable effectiveness.
The Nonprofit Starvation Cycle is “leaving nonprofits so hungry for decent infrastructure that they can barely function as organizations — let alone serve their beneficiaries” according to Ann Goggins Gregory in the groundbreaking publication that first identified the Starvation Cycle. The Starvation Cycle involves nonprofits habitually spending inadequate funds on overhead such that a lack of infrastructure interferes with daily programming.
Think about that day you and your coworkers fought with a $30 printer for several hours when a $100 printer would regularly and reliably print without issue. That wasted time is equal to wasted money. This is the cycle in a nutshell.
The cycle “starts with funders’ unrealistic expectations about how much running a nonprofit costs” and is fed by “nonprofits’ misrepresenting their costs while skimping on vital systems — acts that feed funders’ skewed beliefs,” according to Goggins Gregory. This is exacerbated by the fact that individual donors are more likely to give when they are told that 90 percent or 100 percent of their donation goes directly to programming.
Alleviating the starvation cycle
The first step to alleviate the starvation cycle is in the nonprofit’s hands. The organization’s leaders should and analyze the ways in which their nonprofit currently operates.
By delving deeper into understanding what the nonprofit organization needs to create a solid infrastructure, members of the board and those on staff can begin to develop a clear foundational need. Without a strong office support system, a nonprofit will be unable to function, just as a typical for-profit company would if they did not spend money on cultivating a well-balanced framework. One example in the Goggins Gregory study was a nonprofit’s, “furniture [was] so old and beaten down that the movers refused to move it.”
A nonprofit is well-advised to take the time with its staff and board to truly reflect on what is necessary for the nonprofit’s daily operational needs. If these basic necessities are not matching up with results, then it’s a sign an organization could be in serious trouble.
The second step in changing this cycle is to change the way donors view the concept of overhead. Funders must be comfortable knowing that part of their grant may go toward maintaining a successful office space. Of course, the amount spent on overhead should be reasonable. Some funders permit an agreed upon percentage of its dollars be used for the administrative needs of the nonprofit.
On the flipside, foundations and government funders must alleviate the tension nonprofits feel when they receive a grant. If these funders can begin to change the entrenched perception that all (or nearly all) overhead is bad, then nonprofits would feel more comfortable using part of the grant in order to continue running efficiently.
Together, funders and nonprofits can work together to alleviate the typical challenge of the starvation cycle. In fact since last year, the Ford Foundation permits grantees to use 20 percent of each grant award for overhead — effectively setting up the organization for success for having allocated enough funds to cover grant compliance and administrative costs.
If your nonprofit is struggling to make ends meet, take a look at what exactly makes up its overhead funding. Sometimes spending more there will increase success.
Attorney Zac Kester provides generalist and strategic nonprofit legal and consulting services. He holds a Master of Laws, a post-law school advanced degree, in which he studied the unique needs of tax-exempt nonprofit organizations. His legal and consulting career has focused on nonprofit organizations.
With highly experienced legal and training personnel, Charitable Allies provides all manner of legal and educational services for boards, officers, management and staff of myriad charities throughout the sector. From basic one-time questions about a single matter to training for boards and officers to complex reorganization or merger of activities, Charitable Allies is your go-to cost-effective provider of legal services for your nonprofit organization.
By Amir Pasic, Eugene R. Tempel Dean, Indiana University Lilly Family School of Philanthropy
Judging by the proliferation of research-inspired ventures, it may seem we’re in a golden age of philanthropic knowledge creation. But we are not focusing enough of our efforts on basic research.
Given the urgency of finding better ways to solve pressing social issues, it’s not surprising that the vast majority of research generated is applied research. Both the standard ways of doing philanthropy and the paradigm-bending (and busting) efforts to transform and disrupt conventional approaches come armed with research findings on what works, where there are strategic gaps in expectations and how some interventions are more effective than others.
This data-driven search for solutions is awesome and inspiring. Our current philanthropic research ecosystem is highly fragmented. Its inhabitants often belong to a variety of industries or professions whose connection to philanthropy is contingent on other interests and commitments. And today’s growing expectations of philanthropy are only likely to increase because of current political winds, and because total annual giving at $390 billion does not seem small compared to the nonmilitary portion of federal discretionary spending: $518 billion a year.
However, basic research also is needed to give more coherence to this burgeoning applied research engagement, and to give it a better chance at driving innovation. Shared fundamental questions unite applied and basic research. We just need to devote patience to pursuing basic questions, such as why do humans give? How does giving affect our social life? And how is giving connected to exchange relations in the market and to the power relations of authority?
A classic case for the value of basic research, The Usefulness of Useless Knowledge, was reissued this year by Princeton University Press. Written by the man who brought Albert Einstein to America, it argues that both deeper understanding and technological progress are best facilitated not by seeking immediately applicable solutions, but through “the unobstructed pursuit of useless knowledge.”
Such “useless knowledge” now resides in every smartphone built from “basic” discoveries that in their time did not have ready uses, ranging from electricity to relativity to quantum mechanics. In the social sciences and humanities, basic research leads to novel designs for our social institutions (think of social security and public health) and to the ways we form and express our identities and find meaning.
Alarm also is being raised about declining government investment in basic research, including by the president of MIT and the head of the Institute for Advanced Study, Einstein’s academic home. Realistically, philanthropy will fund only a small portion of flagging government support for basic science research. But even a campaign to fund basic science through philanthropy would benefit from better fundamental understanding of philanthropy.
We’re likely to see many more efforts to tap into philanthropy or to regulate the flow of financial resources into it. The decisions made would be improved by better understanding of what “it” is. Is philanthropy a tax dodge, the outsourcing of government, an agent of pluralism, or is it its own thing that reflects a fundamental feature of the human condition? It can be all of these things, but the last point merits more attention.
We often hear suggestions that the private sector or the government would do philanthropy’s work better. One can make that argument, but it is one that seeks not to improve or understand philanthropy, but to substitute it for something else.
This suggests that basic research on philanthropy is not going to succeed by walling it off from other disciplines and ways of approaching human nature and social interaction. But at the same time, if there is a basic puzzle to investigate that focuses on the how and why of human generosity, we cannot simply follow the practitioners and thinkers who consider philanthropy an offshoot of market behavior or authority relations that can be managed and understood better by using only these more established lenses.
There is a surge of applied research activity to draw upon.
Every association or forum for discussing the effectiveness of philanthropy is bringing its own research to the table. Just glance at the work of our established infrastructure organizations such as GuideStar, the Foundation Center, the Center for Effective Philanthropy and Independent Sector, not to mention the consultancies that advise foundations on big bets or generate interpretive strategic templates such as “collective impact.” They are generating ever more sophisticated and useful syntheses, deep dives, case studies, data tools and research reports.
The Gates-funded “Giving By All” initiative is fostering a range of applied research on interventions that might facilitate more donations by the public at large.
Even following the Stanford Social Innovation Review only begins to reveal the expanding universe of applied research and experimentation.
Our field is replete with excellent associations and consultants who serve as the McKinseys and Bains of the philanthropic world.
However, we are not so blessed with the equivalent of the multitude of excellent business schools in the world of commerce that build knowledge and allow us to discern among the flurry of urgent insights by providing rigor and the perspective of broader and longer context.
In the academic world, we have simply not kept up with the pace of innovation and experimentation that is being driven by research-savvy practitioners. We have not done an adequate job of building the connective sinews, as basic and applied research do not progress in isolation. They benefit from cross-pollination and creative tension between curiosity driven basic questions and applied discoveries.
As the first school of philanthropy, we have a role to play in pursuing the basic questions and engaging them with the repertoire of fundamental data generation and applied work for which we are already known.
But we are not alone. For example, The Human Generosity Lab is “the first large-scale transdisciplinary research project to investigate the interrelationship between biological and cultural influences on human generosity.”
And more broadly, there has been dramatic growth in the number of academic programs that teach about philanthropy. These are mostly found in schools of public affairs and public policy, where “nonprofit management” is a growing line of instructional business. But here too, more connective tissue needs to be grown to connect data-driven innovators on the one hand and scholars outside the professional school domain on the other.
Our understanding of philanthropy and our quest to make it more effective will benefit from embracing curiosity-driven research that seeks to understand what ties our disparate concerns together in the pursuit of basic questions about human generosity.
Amir Pasic, Ph.D., is the Eugene R. Tempel Dean of the Indiana University Lilly Family School of Philanthropy since 2015.Prior to joining IU Lilly Family School of Philanthropy, Dean Pasic was vice president of international operations at the Council for Advancement and Support of Education (CASE).Previously, he was associate dean for development and strategic planning at Johns Hopkins University School of Advanced International Studies (SAIS) and the executive director of the Foreign Policy Institute.
I was flipping through some old school papers I’ve hung on to for far too long and found my notes from Michael Porter’s book, Competitive Advantage. If you haven’t heard of Michael Porter, here’s a great summary of him and the business ideas and strategies he’s shared over the years.
In this particular book, Porter said companies win over their competitors by being cheaper or by being different — being perceived by the customer as better or more relevant. There are no other ways.
While Porter was speaking to competition within business, we can apply this to the competition for talent we’re experiencing today. Companies have two ways to gain an advantage over other companies looking for the same talent: pay the most or be so different from other companies it’s easy to draw in and keep top talent.
Playing the numbers game is not sustainable, and applicants don’t rank this in the top criteria when looking for jobs. Companies must reflect on how their people strategy is better and different than other companies. To accomplish this, think like Porter and create a “value chain” within your employee lifecycle. This value chain should focus on five stages of your employee lifecycle as a series of activities which link together. With it, you’ll be better able to show talent how you stand out from the rest.
Certainly, complying with self-dealing rules and following the letter of the bylaws are requirements of fiscal responsibility. But they may be just the minimum requirements.
Here are three ways for boards to further exercise their fiscal responsibility.
1. Assure the agency stays within its budget
Prepare a realistic budget. It is always appropriate to budget based upon educated estimates of the actual costs and revenues of intended services. But these estimates should not ignore the history of the budget item.
Neither history nor the estimate should stand as the lone criterion of a budget item. Justify the budget variances. At each board meeting, receive a report from staff on actual expenditures compared to budget. Significant variances – say, 10 percent or greater – should be explained.
A plan should be presented to bring the budgeted item back into line to accomplish the agency’s budget goals for the year. While it is important to correct unfavorable variances – spending too much –do not overlook under-spending. Money not spent as planned, such as advertising or program development costs, may result in revenues missing budget later in the period.
Adjust the budget when needed. Occasionally, the budgeted items may prove invalid. A program may not begin because of permitting or personnel issues. A major event may disrupt revenues or require overtime. When this happens, create a new budget for the remainder of the period with these events taken into consideration. The budget for unaffected line items remains unchanged. Then, once again, the agency is working with an achievable budget.
By Angela E. White, CFRE, senior consultant and CEO, Johnson, Grossnickle and Associates
Giving USA released its annual estimates of U.S. charitable giving in June for 2016, and the results show overall growth during a presidential-election year filled with national tumult and impending policy changes. Giving USA 2017: The Annual Report on Philanthropy reports that total giving in our nation reached $390.05 billion in 2016, an increase of 2.7 percent over 2015. This total is the highest since Giving USA began tracking this data 40 years ago.
Published by Giving USA Foundation, a public service initiative of The Giving Institute, Giving USA is the longest running and most comprehensive report of its kind in America. It is researched and created by the Indiana University Lilly Family School of Philanthropy.
Despite volatility in economic and political arenas in 2016, each of the nine major categories of charitable organizations realized growth in giving. This has happened only five other times during the past 40 years (1976-2016). The increase continues a positive growth trend, indicating that charitable giving has overcome losses from the 2008 recession, although growth has slowed and is considered moderate overall.
Giving by individuals showed strong growth — an increase of 3.9 percent (2.6 percent adjusted for inflation), continuing to be the largest source of charitable giving. Research indicates that this growth may be attributed to an increase in gifts from the general population rather than from mega-gifts — currently defined as gifts exceeding $200 million — as in recent years. This strong growth boosted total giving and offset the drop in bequests (-9 percent). Bequests are not predictable and frequently fluctuate from year to year and are not influenced by economic factors.
“In 2016, we saw somewhat of a democratization of philanthropy,” notes Patrick M. Rooney, Ph.D., associate dean for academic affairs and research at the Lilly Family School of Philanthropy. “The strong growth in individual giving may be less attributable to the largest of the large gifts, which were not as robust as we have seen in some prior years, suggesting that more of that growth in 2016 may have come from giving by donors among the general population compared to recent years.”
Organizations in the arts (6.4 percent), health (5.7 percent), the environment (7.2 percent), and international affairs (5.8 percent) experienced significant growth in giving. Growth in the arts may indicate the effect of assertive and innovative fundraising practices. And, research suggests growth in environment and international affairs could have been impacted by a new phenomenon borne of the contentious political climate: rage donations. These donations are a reactive reflex for some donors, given out of frustration in response to post-election policy changes.
Education, while still very strong, saw slower growth in 2016 (3.6 percent) than in recent years, which may be related to the drop in mega-gifts.
What does all this mean for future nonprofit fundraising? The recession is officially behind us with a seven-year growth trend, but new challenges lie ahead. Philanthropy trends show Americans continue to give generously even in uncertain times, though their giving priorities may shift a bit with the issues at hand.
For example, the predicted cuts in government support of specific programs could put pressure on philanthropic support of basic needs charities and other human services and public-society benefits organization.
It is important to remember that as the national economic climate changes, so can donors’ passions and giving patterns change. Different and innovative approaches to cultivate prospects and donors may be called for to increase giving and move your organization forward.
We encourage you to download a free copy of the Giving USA 2017 highlights or order your full copy of the report at givingusa.org.
Angela E. White, CFRE, has been instrumental in JGA’s success since 1996, when she joined the JGA team. In 2011, she became CEO of JGA, responsible for providing day-to-day leadership to the firm and guiding the JGA staff, while continuing to provide tailored consulting services directly to its clients. White has a high level of expertise in philanthropic consulting in healthcare, education, social services, arts and faith-based organizations. She also has considerable knowledge and experience in strategic planning and data analysis.
By Ann M. Merkel, Senior Vice President and Chief Market Development Officer, The National Bank of Indianapolis
Congratulations! As the leader of your nonprofit, you have successfully led your team in growing and fulfilling your organization’s mission. In fact, your organization is serving more people than you ever envisioned — or planned for!
As we know, with growth often comes challenge — specifically, how are you going to fund all of this growth? Maybe you secured a new, large contract or you’ve received a large multi-year grant? Or maybe you’ve outgrown your physical space?
Regardless, you may be faced with a new challenge — asking your bank for short- or long-term financing. Here are some steps for turning that challenge into a success.
Get to know your banker before you have a need. Communicate regularly and familiarize your banker with your organization’s ongoing funding sources. Share your strategic plan and communicate the steps for achieving your plan. This understanding will allow your banker to be your advocate when it comes to approving your loan request.
Be prepared to discuss your financial statements. You’re a skilled administrator and an enthusiastic visionary for your organization, but if you don’t have a strong understanding of your organization’s finances, include your controller, financially-savvy board member or your CPA in the conversations when you’re seeking a loan.
Confirm your financial statements are current and accurate. Most funders, including banks, prefer to rely on CPA-prepared reviewed or audited financial statements. Make sure your banker understands the nuances of nonprofit accounting, as well as how contracts or funding cycles affect your financial results.
Communicate a clear plan for how you intend to repay the loan. Create a financial statement forecast that addresses not only the impact on your organization of the new or expanded revenue source, but also the additional related expenses. Your banker needs to have a clear understanding of the additional cash flow that will be available to repay the loan.
Identify the asset(s) that you will use to collateralize the loan. If that asset is real-estate related, include the cost of “due diligence” items (appraisal, survey, title work, etc.) into your financial forecast.
Share the feasibility study, if your organization is engaging in a capital campaign to repay the loan. If this isn’t your first campaign, be prepared to discuss the size and success of previous campaigns.
The suggestions outlined above will not only be of benefit when times are good, but will also pay dividends should your organization experience a decrease or interruption in its annual revenue stream.
A solid banking relationship is especially critical when your organization faces an unexpected financial challenge. Communicating early and honestly with your banker will increase the likelihood that your bank will be willing to work with you during the challenging time. As a nonprofit administrator, you know very well that your donor relationships are built on mutual trust and take time to cultivate; and, the same can be said for your banking relationship, too!
In her role as Senior Vice President and Chief Market Development Officer for The National Bank of Indianapolis, Ms. Merkel is responsible for cultivating and maintaining high profile corporate, individual and community relationships.
By Jeremy York, HR Field Representative, the Synergy Companies
Most people are familiar with the term job description. It is the document that outlines items such as job responsibilities, experience, education, skills, etc. A dreaded document that most managers hate to prepare or fail to see the overall importance of having such a list. But what most managers do not understand is that a job description is an essential component of a successful people strategy.
First, job descriptions provide clarity and outline expectations. They help employees understand the fundamental framework for their job. Without job descriptions employees find themselves interpreting the job as they see fit, bogged down in a quagmire of tasks that may not be job-related or do not add value to the business strategy. Employees don’t have a clear focus on where they should spend their time or what tasks are the most important if it is not provided in a job description.
Second, job descriptions are a valuable tool in the recruitment process by specifically outlining job duties to applicants. They provide a road map in identifying qualified candidates so that you can hire the best talent. Applicants understand the core responsibilities of a role when they apply and therefore, understand what they’ll be expected to do once hired.
Third, job descriptions assist managers during performance reviews to accurately evaluate an employee’s ability to perform his or her job. Many managers struggle with performance reviews and see them as creating conflict. The job description can lessen the appearance of conflict by providing objectivity in assessing employee performance against the defined responsibilities of the job. Compare employee actions to job specifications and voila, an accurate assessment of performance.
Lastly, job descriptions help ensure legal compliance with regulations such as the Americans with Disabilities Act and the Fair Labor Standards Act. Employers often find themselves in situations where an employee asks for an accommodation based on a disability or argues that he or she is eligible for overtime pay. Job descriptions can serve as the first line of defense when questions arise regarding these situations.
Still not convinced that you need job descriptions? Having job descriptions can be the difference between winning or losing (paying hefty fines and/or penalties) employment related legal battles. This means that job descriptions could save you thousands, even millions of dollars in legal fees and settlements. Whether unemployment or unfair employment practices claims, job descriptions could be your best defense in giving yourself more leverage against such claims.
Jeremy York, SPHR, SHRM-SCP, is a Human Resources Field Representative for Synergy PEO Services. He provides strategic and generalist HR support to local nonprofit organization leaders and their staffs. York has over 15 years of human resources experience. He is the current director of certification for the Indiana State Council of the Society for Human Resource Management (SHRM) and serves on the IndySHRM board of directors as the past president.
By Andy Canada, senior consultant, Johnson, Grossnickle and Associates
A development audit is a great “barometer” to measure the capabilities of your development office and to establish goals and strategies for future success. This internal assessment is a rare opportunity to get a fresh perspective on a strong development program and can allow you to pause and take stock of how things are going and what resources may be needed to move forward and produce even better results. Development audits can also help solidify an organization’s philanthropic focus by ensuring board, staff and all areas of the organization are working together and embrace a unified culture of philanthropy. Often, organizations seek such an assessment of internal readiness in preparation for a new campaign or as a strategic planning process begins.
A development audit provides an opportunity for an objective overview of your internal development function, including current structure, systems and staffing. The audit process will provide practical advice to position your organization well for a campaign or whatever your next step may be. To be most effective, we believe, audits should include both a qualitative component — built from resource review and interviews with key staff and volunteers — and a quantitative analysis of recent fundraising data.
Here are some questions a development audit can help you answer about your development operation:
What is an appropriate level of expectation for the development office?
Are we performing to our full potential or are there ways to improve performance?
Are we performing to the level of other peer institutions?
What is our level of investment to raise funds?
Are we utilizing best practices?
How does our development performance align with our financial needs?
Do we have the appropriate staffing and structure to work with leadership in a cohesive and effective way?
How can we position the development office for further success in fundraising?
Is the current focus and direction of the development department aligned with the organization’s strategic priorities?
If our organization undertakes a new campaign or enhanced fundraising effort, is the current development operation set up to succeed?
View a development audit as an opportunity to move your mission forward. Learn more about using a development audit to help your organization set new goals and advance its development efforts by downloading our tip sheet.
Andy Canada, senior consultant, brings to JGA significant development experience focused in annual giving, planned giving, major gift development, and campaign development and implementation. Prior to joining JGA in 2010, he distinguished himself as development director with both the development teams at Indiana University Foundation and Purdue University, where he participated in significant transformative campaigns.
