Skip to main content
Category

Sponsor Insight

Dec 16

Organizational assessments: What are they and why does your organization need one?

By Sponsor Insight

by Erin Hedges, founder and president, Hedges

It’s that time of the year again … the time when we get to say, “Let’s circle back on that after the holidays” or “We’ll regroup in the new year.” It’s the time for forecasting and budgeting … for reflecting on what was accomplished and what goals we should set for the future.

Nonprofit leaders constantly balance day-to-day management with long-term strategic thinking, but the end of the year always brings that task to bear in unique and time-sensitive ways. As the page turns from Q4 back to Q1, nonprofit executives are often wondering, “Is my organization on track and how do I know?” At Hedges, our recommendation for answering this question is simple: Like any successful employee, organizations need an annual review to measure their health, effectiveness, and growth. We call this an organizational assessment.

What is an organizational assessment? An organizational assessment is a measurement tool designed to assess your organization’s current standing — both in areas of strength and areas where there are critical gaps. Ultimately, it should capture your organization’s key strengths and challenges across the core functions of a nonprofit.

At Hedges, we call these the Four Pillars of Organizational Health. These pillars are Programs & Impact, Leadership & Culture, Marketing & Communications, and Finance & Development. Using this Four-Pillar framework, Hedges benchmarks organizations against 30 Organizational Indicators aligned with leading industry standards and informed by our experience in partnering with more than 140 nonprofit organizations over the last 20 years.

This 30-indicator assessment includes overarching questions such as:

  • Are there systems and processes in place to measure the organization’s impact?
  • Do the individuals impacted have opportunities to inform program delivery?
  • Does the organization have strong staff satisfaction and retention?
  • Is the board of directors high performing?
  • Does the organization have a clear brand voice and strong digital media presence?
  • Does the organization have diverse revenue streams and partnerships?

Who is involved in an organizational assessment? The most effective organizational assessments include input from multiple directions. We recommend that organizational assessments include input from staff, board members, and the individuals your organization impacts. Staff members can provide input through a simple staff satisfaction survey and board members may complete a self-evaluation of themselves and the entire board.

These results can then be compiled with client feedback that is captured through existing program evaluation methods or through a separate client satisfaction survey. Critically, you should be able to draw a direct line between the questions you ask in a survey or evaluation and the indicators you use to make your organizational assessment.

Organization leaders such as the executive director or the board chair should oversee the organizational assessment process, but they may also tap into contractors and consultants who specialize in nonprofit operations and governance.

What are the benefits of an organizational assessment? Not only does an organizational assessment answer the question: “Is my organization on track?” but it also provides the following three key benefits:

  1. An organizational assessment can give you helpful data to use for setting measurable goals. For example, you may have a general goal of improving staff satisfaction in 2023. In an assessment process, you may discover that 80 percent of staff feel like the culture at your organization is positive but only 20 percent describe communication as strong. Now, thanks to this assessment data, you can make you 2023 goal much more specific and measurable with concrete baseline data to inform your year-end goal (i.e., from 80 percent to 100 percent) with a clear area for improvement (i.e., communication).
  2. An organizational assessment can make your funding requests more competitive. Self-awareness is a great character quality in people and in organizations. It shows authenticity, humility, and responsibility — all things that supporters love to see from nonprofit organizations. An organizational assessment is a quick, simple way to demonstrate self-awareness, that you take your mission seriously, and that you want to be honest about where you are excelling and where you have room to grow. The data you glean from an organizational assessment not only strengthens your internal goal setting but should also strengthen your grant requests and donor appeals. For example, in an assessment process, you may learn that 100 percent of the individuals you impact say you make a positive difference in your life, or 80 percent of staff see themselves working at you organization in three years. Those are great data points that will ensure your organization stands out in the crowd.
  3. An organizational assessment sets the tone for a positive, transparent culture. More and more, employees want to see their employers take accountability for the culture and dynamics that are present in their workplace. An organizational assessment is a tool that says, “We hear you.” By conducting an organizational assessment process, especially with the help of a third-party facilitator, your organization can get a holistic picture of both the pain points that are holding you back and the strengths you didn’t know were there.

If you’re looking ahead to 2023 and wondering what your organization should focus on and where you need to invest your energy, consider starting with an organizational assessment. Having concrete data to describe where you are now is the best way to articulate where you want to be.

Erin Hedges is the founder and president of Hedges, an Indianapolis consulting firm that advances social change by strengthening Indiana’s philanthropic sector. Contact Erin at erin@hellohedges.com to learn more about Hedges’ 30-Indicator Organizational Assessment.

Nov 28

Conducting a development audit: Is it time for a fundraising check-up?

By Sponsor Insight

by Angela E. White, CFRE, senior Consultant and CEO, Johnson, Grossnickle and Associates

The pandemic caused many nonprofit organizations to respond to urgent needs. Now nonprofit teams are emerging, ready to take stock of what they learned and determine how best to serve their constituents and deliver on their mission. This opportunity for reflection and planning presents a great time to consider the role of philanthropy at your organization and conduct a fundraising check-up.

What is a fundraising check-up? A development audit or assessment is a tool to measure capabilities of your fundraising program and help you identify opportunities to grow philanthropic support. It provides an objective view on assessing your current fundraising outcomes, setting realistic yet aspirational goals for future performance, and identifying areas for additional investment to be able to perform to your full potential. And, importantly, this tool will assess how well you have embraced a unified culture of philanthropy among your board, staff, and across your institution.

When should you conduct a fundraising check-up? There are some specific times when it is particularly beneficial to conduct a development audit. If your organization is going into strategic planning, an audit can help you determine a realistic plan to raise more money to fund your strategic initiatives. As new leadership comes into an organization, there are often new priorities that need to be funded or an opportunity to reflect on the staffing and structure of the organization.

Many nonprofits saw dramatic shifts in their revenue sources during the pandemic, either from an influx of new donors, the addition of new government funding, and/or potential shifts in corporate or foundation funding. As you identify these shifts in revenue, the audit can provide your leadership with an opportunity to dig more deeply into the trends to determine if it is a blip in the radar or something you can capitalize on for future growth.

National trends are also warning of a shifting donor base, with fewer households donating to charity. An audit can help you look at the implications of these trends within your organization and the mechanisms that could help you engage and keep new donors.

How do you conduct a fundraising check-up? We believe it is good to have an outside firm conduct an audit to provide a level of objectivity. However, you may be able to employ many of these methodologies if you wanted to undertake this type of check-up yourself, using your own analysis and reports.

Prior to undertaking an audit, it is important to communicate to staff and volunteers that you’ll be conducting an audit. Lesson any anxiety they may feel by sharing how you will use the information. An audit is not punitive. It shouldn’t be thought of as a way to find problems or mistakes. It is an opportunity to strengthen your development program and boost your fundraising results.

Before starting the audit, identify who you may want to engage to help you conduct objective interviews, compile data and resources, and assist with scheduling. Take the time to compile complete and accurate data and resources.

What data do you review in a fundraising check-up? First, review qualitative data sources to understand where you are and where you might be able to improve. Look over printed resources, such as your strategic plan, policies and procedures, and collateral materials. Conduct interviews with key staff members, board members, leadership, department heads, and volunteers. These conversations bring light to the numbers and data you will collect elsewhere.

Examine your development systems and structure to ensure you have the right resources and procedures in place to support the development operation. Are there resources the development department needs that are not being provided? Are you using your donor database to its full potential and are you able to track the kinds of metrics you need?

Next, examine quantitative data. We recommend looking at five years of fundraising data to identify trends. Look at the drivers of philanthropic revenue. Are you overly reliant on one source of philanthropic revenue that might put your organization at undue risk, for instance if there was a cut in major grants or government funding?

Compare your development expenses, including staff time and direct costs, to your philanthropic revenue to calculate your cost to raise a dollar (CRD) and the return on investment (ROI). This snapshot of your performance can be compared to peer institutions and national trends.

Using benchmarking data in an audit can help you gain an understanding of how well your development effort is performing as compared to your peer and aspirant institutions. The annual Giving USA report is an excellent benchmarking source.

How do you use a fundraising check-up? Once you review the quantitative and qualitative data that you have compiled, present those results along with your recommendations to your leadership, board, and staff for review and discussion. Following this review, develop an action plan and timeline for implementation of your recommendations.

Taking the time to conduct a development audit is a worthwhile way to capitalize on what’s going well and understand where you can expand and invest to raise even more funds for your organization in the future.

Angela E. White, CFRE, serves as Senior Consultant and CEO of Johnson, Grossnickle and Associates (JGA). Angela is a faculty member at The Fundraising School at the IU Lilly Family School of Philanthropy and serves on the CFRE International Committee on Directorship.

Oct 17

Impact United: United Way of Central Indiana launches interactive data tool

By Sponsor Insight

The new dashboard illustrates community need and the collective impact of United Way’s partners

By Margaret Matray, communications manager, United Way of Central Indiana

Data tells a story.

United Way of Central Indiana has long collected and analyzed data to understand the needs of the community and inform its decisions and strategies.

The data paints a picture of who in our community is living in or near poverty, what their greatest barriers are – and how organizations across the region are working to address those challenges.

Now, United Way is making that data available to the public for the first time. Launched this month, the Impact United Dashboard is an interactive data tool that illustrates community need and the response of United Way’s partners in Boone, Hamilton, Hancock, Hendricks, Marion, Morgan and Putnam counties.

“It’s our way of making sure that we are showing how we have been accountable to the community, to donors, to funders – to ensure we are lifting their impact but also (showing) how we’re trying to invest in communities where there are gaps in services,” said Denise Luster, United Way’s vice president of impact research and data analytics.

The dashboard provides snapshots of United Way and its partners’ work in key focus areas, including economic mobility, educational success, food, health, housing and transportation. Users can explore the data by focus area, dig into the demographics of those served and filter the data by county.

“This should be a tool that anyone can use to see some key highlights of what’s happening within their community, no matter where they’re located,” said Stephanie Fritz, United Way’s strategic research and analytics senior director.

The tool reflects the most recent data that’s available and is designed to be a “living dashboard” that will be updated as new data emerges, said Daniel Hedglin, United Way’s director of data insights and storytelling.

Throughout the dashboard, data that shows community need comes from national, state and local sources and The Polis Center’s SAVI program at IUPUI. Data showing impact comes from organizations, programs and community-based organizations that partner with, or receive funding from, United Way.

“This data comes from our partners in impact,” Fritz said. “It’s their work that they’re doing in the community.”

United Way’s reporting and analytics team – called the Strategic Information team – began talking about creating a public dashboard last year.

Community organizations that work with United Way report data to the nonprofit quarterly and biannually. A dashboard was a way to show them – and the community – what their collective impact looks like, said Purbasha Dasgupta, United Way’s research and evaluation senior manager.

“This is our collective footprint in the Central Indiana community,” said Dasgupta, who led the project.

The dashboard reflects the “immense collective efforts” of United Way’s partners to serve people in the community, Hedglin added.

According to the dashboard:

  • More than one in three Marion County households are in poverty or are considered ALICE, meaning they earn above the Federal Poverty Level but not enough to afford a basic household budget. (ALICE stands for Asset Limited, Income Constrained, Employed.)
  • About 29% of households that are in poverty or ALICE in United Way’s seven-county service area are families with children.
  • A racial wealth gap exists between white Hoosiers and communities of color. For every dollar earned by a white household in the region in 2019, Black or African American households earned 88 cents on average. Hispanic households earned 76 cents.

Through the dashboard, users can see how particular community needs are being addressed. For example, more than 63% of households that are in poverty or considered ALICE in the region are headed by single women. The data shows that more than half of adults receiving career counseling and coaching from United Way’s partners are from the same population. And 42% of childcare assistance services are provided to single female parents or caregivers.

“Through our various initiatives, we’re not only addressing the fact that we see there’s a need that’s particularly present in this one specific population, but our impact work was able to tie together to help move them … on a trajectory from poverty to ALICE, ALICE to stability,” Fritz said. “Our partners in impact are providing these services to address that.”

Whenever she talks about data, Luster points out that it’s more than numbers. Data represents real people living in our community. The dashboard can educate Hoosiers on where the need is and what can be done to meet those needs.

“The breadth and depth of the need is great, but there are also many organizations out there trying to help address that need,” Luster said.

To explore the data dashboard, visit uwci.org/impactunited.

Oct 03

All leaders must adapt to the new world of work

By Sponsor Insight

Establishing an employee-centric work environment is a good business strategy

by Sara Johnson, director, executive education, clinical associate professor

The world of work is changing — and so are workers’ expectations. The call to leaders is clear: Adapt now or risk the organization’s future.

Adaptability is one of the keys to effective leadership. Those who adapt well know how to adjust their style when the situation calls for it. Another key is continual learning — being willing to find new ways to do things that will help you lead others and your organization while also improving worker satisfaction and organizational outcomes.

These elements of effective leadership are especially necessary in our current work environment. As employees around the world return to offices and worksites, leaders must recognize and act upon the reality of our new world of work. Not doing so means potentially losing good workers and watching organizations fail as a result. The price of this turnover can have a ripple effect on our communities and society, including economic impacts, hiring challenges, and an increased competition for quality workers.

Evidence of a workforce shift already is mounting. According to the U.S. Department of Labor, 11.5 million workers quit their jobs between April and June of 2021. People are rethinking what is important to them and … well … it’s no longer “business as usual.”

According to Shahar Erez, CEO of the freelance talent platform Stoke, “The Great Resignation is propelled by three forces: the changing generation, the economic crisis, and the realization among employees that they can have a different social contract — spending more time with family when they work remote and skip the commute.”

In addition to those factors, workers say personal safety also is a consideration during the ongoing pandemic. As new strains of COVID-19 spread, working in a collective environment doesn’t feel safe to some.

Navigating a changing landscape

So, how does a leader adapt to navigate these new realities? Learning fast is necessary as is recognizing that what was once important to their workforce is no longer a priority. In the 2000s, many companies focused on fun — creating workspaces with recreational activities so that their employees could play and decompress at work. Fast forward to today and fun has fallen by the wayside.

In a recent article in the Harvard Business Review, “Future-Proofing Your Organization,” the authors note that what matters to employees now is having their work connect to a meaningful purpose. They also value inclusiveness and autonomy. Workers want to be trusted to do their jobs — on their terms, and leaders need to understand how to balance their employees’ personal needs with the company’s ongoing business strategy.

For years, we have said that a good business strategy includes a focus on customers. Customer-centric business practices have been put in place to achieve this strategic goal. It is now time to use employee-centric business practices that will meet the needs and demands of your workforce; a
workforce that will now choose where to work based on how autonomously and meaningfully they can work.

Leaders, my advice to you is this: Quickly make the shift to being more employee centric. While it may force you into uncharted waters, adapting will help the future success of your organization, those you serve, and your employees as we navigate this new world of work.

Sep 19

3 challenges a strategic planning process can solve amid financial uncertainty

By Sponsor Insight

How nonprofits can position themselves for success as the pandemic subsides

Alexis Kollay D’Ettorre, consultant, Hedges

Is anyone else feeling a bit of déjà vu after hearing ongoing news reports of an impending recession? You too? It feels as though we just finished with a recession … because we did.

The greatest economic downturn since the Great Depression, The Great Recession, took place from 2007 to 2009, and was marked by financial decline worldwide. From a global economic standpoint, identifying causes of The Great Recession can help us avoid similar events … or to recover more quickly if we do. That approach could be especially helpful given that economy experts predict a continued financial slump and possibly another recession.

The good news is that nonprofits can learn from our experiences rebounding from The Great Recession too. Having experienced that financial decline, funders’ responses to crisis, and surviving the worst of the pandemic, how will nonprofits use that knowledge to not just survive but sustain and thrive?

A Nonprofit Quarterly study of nonprofit funding trends following The Great Recession illuminates potential trends as we navigate this economic downturn with no clear end date. While the rate of nonprofit closure was 13.5 percent during the peak of the recession (2008-2010), the rate was only 3.3 percent higher than it was two years prior and only 5.3 percent higher than it was the two years after. And, because new organizations were launched just as often as they were closed, the number of nonprofits remained relatively steady before, during, and after the recession. This study also found that the most stable organizations during The Great Recession were human service organizations. They experienced the lowest rate of closure and the smallest losses overall. Seems promising, right?

But it’s also important to consider that, on average, Great Recession recovery time for nonprofits lasted about five years, from 2010 to 2015. According to nonprofit fundraising software expert Classy, recessions last 15 months on average. In today’s terms, considering 2020 to be the start of the economic downturn, we’re potentially looking at being in recovery mode through 2027. If we want to be part of the 86.5 percent of nonprofits that weather the recession, clear well-thought-out goals, and actions to carry us through to stability are exactly where to start.

Until a decade ago, Hedges primarily provided grants-related services, but as we saw funders begin to show a deepened interest in nonprofits with active strategic plans, we established a service line dedicated to the inclusive, community research-based strategic planning processes that funders and organizations alike were calling for. Today, we’re seeing this need remain as strong as it was then, maybe even stronger. Whether an organization has a strategic plan is still one of funders’ most frequently asked questions.

When inching our way out of the pandemic, a meaningful strategic plan is an extremely effective springboard toward greater strength. On one hand, some nonprofits experienced significant funding gaps during the pandemic that have left them struggling to remain stable. On the other hand, other nonprofits were grateful to receive a healthy number of unexpected gifts as a reaction to the limited finances nonprofits then faced and the higher need for nonprofit services. But, as we begin to leave behind pandemic-bound operations and related funds have gone by the wayside, how will we re-establish financial security in this new climate? Here are three challenges an effective strategic planning process can solve for nonprofits amid the economic uncertainty we’re facing.

Challenge #1: Not being financially prepared

As the time in which many funders granted nonprofits unrestricted pandemic-related funds to address any need ends, it’s still unclear if funders will return to their pre-pandemic gift restrictions, including requiring that nonprofits fully align with their own priorities. But, so far, that seems to be the trend.

Large U.S. foundation funding increased from 2020 to 2021, but COVID-19-specific funding dropped 31 percent between the same fiscal years. Additionally, corporate foundation funding dropped even more drastically, by a rate of 76 percent. While foundations and corporations continue to give, it can be assumed that the unrestricted funding of the most difficult pandemic years will continue to decline.

Understanding what questions funders are asking now is a solid starting point for preparing your organization to manage financial instability. Many of the trending questions we are seeing benefit nonprofits greatly (and, subsequently, the participants who seek their services) include:

  • Describe your efforts to incorporate DEI into your organization’s work as well as your action plan for addressing your DEI limitations. Of course, this concept was coming into focus well before the pandemic, but as the COVID-19 crisis exposed how acutely present disparities in healthcare, education, and opportunities of all kinds are for people of color, funders and organizations alike are no longer able to place this issue on the backburner. Change must happen now.
  • How will your organization sustain this effort after funding has ended? This is a fairly common question, but it’s more important now than ever. This is your chance to feature the ways you were able to weather the pandemic storm and therefore be resilient and better equipped for continued bad financial weather. Strategic plans play a substantial part in an organization’s sustainability. When we set goals and keep our attention focused on them, we don’t stray toward flashy and potentially unbeneficial opportunities. We build strength and consistency leading to long-term sustainability.
  • Tell us how your initiative is innovative. Highlight your efforts to shift practices amid the pandemic to address community needs and then shift back s (i.e., how nimble is your nonprofit, which may predict your continued ability to sustain during the ongoing financial crisis).

As a part of your strategic plan, be sure to address the critical issue of maintaining funder cultivation and stewardship. While this is Fundraising 101 outside of financial insecurity, it’s easy to set aside relationship development when fires are blazing around us. However, nonprofits that don’t maintain communication and relationship with their individual, corporate, and foundation funders in times of challenge will lose their attention to other organizations who prioritize remaining top of mind.

“Trust, security, and stability” are three key factors Classy describes as essential to retaining and engaging donors in a pandemic and post-pandemic environment. Even as individuals reduce their amount of giving to nonprofits, they will still find a way to give to organizations that they trust. In other words, organizations that continually communicate with them, offer secure and streamlined donation methods, and show stability amid the crisis will earn their trust.

A strategic plan not only speaks volumes for your longevity and vision for the future, but it creates a set of instructions for how you’ll obtain and/or maintain stability. We learned earlier that recessions last about 15 months, and recovery time afterward is about 5 years. It would be wise to set financial goals for the coming three to five years which is, coincidentally, the typical timeframe of a strategic plan, and even beyond.

Challenge #2: Impulsively returning to pre-pandemic methodology

We’ve heard it said in countless ways: The COVID-19 pandemic brought our world to a screeching halt and then turned it upside down. While we’re grateful to have the worst of the pandemic in the rearview mirror, we’re still managing the after-effects, including a struggling economy. It’s safe to say that we will be for some time. Nonprofits shifted their practices in record time to continue their work in a tremendously challenging time. In many cases, organizations changed their methods of implementing existing programs and, in other cases, many established new programs to meet new needs. Regardless of whether organizations wanted to make those changes or not, we’re now faced with identifying how well those changes served us during the pandemic and now, as we move out of the pandemic.

With little certainty about what turn our economy will take next, it is critical that nonprofits analyze how they provided services before and during the pandemic. That analysis can help them determine how they can most effectively meet participant needs in the future. The sooner this is determined, the sooner organizations can operationalize their methodology and stabilize funding sources to match that need.

Holy Family Shelter is an excellent example of commitment to evaluating their service methods before, during, and while recovering from the pandemic, to identify ideal next steps. A program of Catholic Charities Indianapolis, Holy Family Shelter operates as an emergency shelter specifically for families, regardless of religious affiliation, serving as a safe refuge for those facing homelessness and supporting them as they seek permanent housing and self-sufficiency.

When facing the pandemic, Holy Family Shelter was forced to temporarily limit on-site sheltering for those experiencing homelessness since their facility includes congregated communal eating and bathroom spaces. If Holy Family Shelter were to simply stop serving clients because of their facility limitations, more than 750 individuals could be without housing and a long-term support system to meet their self-sufficiency goals. Rather than simply stop partnering with those seeking their services, Holy Family Shelter leaned into what was once a much smaller-scale transitional housing program and worked with existing landlords to ensure clients could remain in their spaces.

They also diverted them to hotels and other safe, temporary alternative housing when no other options were available. Meeting basic needs and providing intensive case management services and long-term support toward permanent housing and self-sufficiency remained a critical component of Holy Family Shelter’s partnership with clients, even in this non-traditional service model, because much of it could be done virtually.

Even as the pandemic-related restrictions were lifted, Holy Family Shelter staff members analyzed their pre- and mid-pandemic methods and determined that they can serve far more clients by continuing to use their new methods than they could before, while beginning to re-integrate on-site housing as well. As a result, what came to be known as the Sustain, Support, and Divert program became a central approach. While these major changes certainly required a significant operational adjustment, returning to pre-pandemic programming practices would simply diminish the impact they could have.

Holy Family Shelter’s experience is a prime example of why strategic planning is so critical. Rather than continue along the same path we always have, strategic planning processes allow us to ask critical, and sometimes tough, questions about why and how we do what we do as well as set a realistic plan for operationalizing new methods. And, when new operations, methods, and funding are required, a strategic planning process gives us dedicated time to set goals and related actions that will progressively move us toward our end point.

As you embark on a strategic planning process and evaluate former and current programming, you might ask yourself questions like:

  • What has changed for our participants since the pandemic began?
  • What will never return to how it was before the pandemic (for example, increased use of digital methods, increased knowledge of race/ethnicity-based disparities)?
  • Can our pre-pandemic methods still meet participants’ needs in this new climate?
  • What methods did we shift toward amid the pandemic that have worked well for our participants?
  • Are there programs we implemented before the pandemic that are no longer as relevant? Would other methods be better to solve those issues now?

Challenge #3: Operating in a vacuum

One of the most critical elements of a successful strategic plan is that it’s well-informed by a variety of voices and ample data. Through a community research-based strategic planning process, organizations will hear from stakeholders about what they need to change, and funders will be able to view the organization as sustainable beyond the pandemic. This introspection should be inclusive of both internal and external research.

Internal research will involve taking a close look at your strengths, challenges, and opportunities. It also will provide insights about what are you doing well, what hazards may come in your way (such as shifting funder priorities), and what exciting prospects are on the horizon (such as a sector-wide shift toward virtual services seen during the pandemic)? It’s also important to include your own staff and board. After all, these are the internal crew members who see your work, day in and day out. When invited to share anonymous and authentic feedback, we see crews impart their passion for the cause, the brilliant ideas they’ve been waiting to share, and constructive methods for improving overall organizational success.

This is where welcoming in an external entity to lead your strategic planning process is so important. As my colleague Hannah Gooding shared, a third-party facilitator provides “the necessary neutrality to collect real information.” Someone not currently close to your organization can serve as a “buffer,” making it possible to obtain honest feedback and share it in a productive way.

This comes into play just as much for external data collection. We must take time to ask intentional questions and gather information from sources we don’t connect with every day. External data collection may include surveying and speaking with clients, families of clients, volunteers, partner organizations, funders, donors, and more. You might also consider looking into the practices of similar organizations and gathering current data on best practices in your field.

Summing it up

If we were to magically jump ahead five years and you had made no changes to your nonprofit’s current operations, what would your reflections be? Would your existing finances and fundraising efforts have sustained you? Would your programs remain relevant if you made no changes to their implementation? Would you have all the information needed to address the true needs in our community?

Of course, as we’ve learned through a global pandemic and looming recession, we can’t possibly predict all conditions that would help answer these questions. But gathering data, making predictions, and implementing a plan that prepares our organizations for greater security, sustainability, and impact for years to come will leave us in an incredibly powerful position despite economic turbulence.

Alexis Kollay D’Ettorre has more than 15 years of experience serving dozens of nonprofits. Her passion for people contributes to strong partnerships with organizations across Central Indiana and beyond as they grow their capacity.

Sep 12

How is your nonprofit inspiring trust?

By Sponsor Insight

Gaining donor confidence in your organization is essential

by Better Business Bureau

If asked, could you easily answer what your nonprofit does to inspire trust and donor confidence? Certainly, you could mention different programs and services offered. But what if you could convey everything in a way that instantly resonates with potential donors?

This is where trust seals come into play. Think about it. When you see the lock icon in an URL, you instantly know any personal and payment information you provide on the website will be secured. Or, how about the number of stars for a customer review? It’s easy to identify one star as a poor review, whereas five stars are an excellent review. We are wired to subconsciously identify these trust seals which also applies to BBB’s Accreditation seal.

Donors seek reassurance that their financial support is being used properly, and for more than a century, they have been coming to Better Business Bureau (BBB) for guidance. Spotting the BBB Accredited Charity seal lets them know they are (or would be) supporting a trustworthy non-profit.

The trust seal is earned through BBB’s Charity Accreditation Review Program which promotes high standards of conduct among organizations that solicit public contributions. The free program evaluates 501(c)3 charities against BBB’s 20 Standards for Charity Accountability — a baseline set of best practices that review the following four key areas of interest to donors:

  • Financial management
  • Fundraising and information materials
  • Governance and oversight
  • Measuring effectiveness

The result is a confirmation of existing strengths and/or identifying areas for improvement which BBB can help address to enrich your charity’s practices. If all 20 standards are met, charities can use the BBB Accredited Charity seal for a nominal fee determined by their organization’s annual revenue. Given its value and significance, a charity would be wise to consider proactive steps that strengthen the public’s trust through BBB Accreditation.

As a fellow nonprofit, BBB understands the trials and tribulations of running a charitable organization.

We value the work local nonprofits do here in Indiana and want to help you succeed as we work alongside you every day. We also know the importance of operational efficiency and how communicating your intentions to the public takes time, money, and energy. One way to ease your load so you can focus on your mission is to become a BBB Accredited Charity.

Get started with your free evaluation today at BBB.org.

Sep 06

Understanding in-kind donations

By Sponsor Insight

by Michael A. Staton, CPA, managing director, Alerding CPA Group

In-kind donations have been part of the nonprofit world for a long time. Galas have silent auctions that require a significant number of items to be contributed for their donors to bid on and generate contributions for the organization to fund its nonprofit mission.

Items are needed to perform the services nonprofits offer to benefactors and perform day-to-day tasks. Examples of such donations can include a box truck to deliver food, clothing, or kitchen equipment used in food preparation to serve to the homeless. The list goes on and on of the many types of items that nonprofits receive on a daily basis from generous donors.

Any non-cash item that a nonprofit receives from a donor is considered an “in-kind” donation and carries its own specific measurement and reporting requirements. In-kind contributions are categorized into two main classifications under U.S. GAAP. They are classified as either in-kind “goods” or in-kind “services.” In-kind goods or services should be valued and recorded in your general ledger based on fair market value.

Fair market value is the price you would have paid for the goods or services if you would have had to go out and purchase the items. Remember, the general rule for donated services is still that you only record the cost of the service if you would have “purchased the service if they had not been donated.” Most volunteer hours are still not considered in-kind donations of services; only those that are specialized.

In September 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-07 on Topic 958. The new ASU addresses Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. The new ASU was not aimed at changing how we recognize the In-kind contributions, but rather on providing transparency on the disclosure of the donations to the readers of the organization’s financial statements.

The new guidelines require the nonprofit to report the in-kind donations on a separate line in the Statement of Activities so the reader can clearly identify the number of in-kind contributions recognized by the organization. Cash and non-cash donations can no longer be grouped under the “contributions” line item.

There are also several changes that will need to be made to the note disclosures if your organization provides formal statements to its contributors and benefactors. All in-kind contributions will be disclosed by the type of asset contributed. Examples would include legal services, advertising, equipment, materials, food, clothing, etc. The disclosures would also include specific information on whether the asset was “monetized or utilized” by the organization.

The policy used to determine whether to monetize or utilize an asset. If the asset was utilized the organization would describe the programs that benefited from the donation. If monetized, then the organization must disclose their policy on how donations are monetized and any restrictions on the use of the funds. All these changes are part of the overall transparency initiative of FASB and are geared toward providing donors better information.

For more guidance, contact an Alerding CPA Group account representative to discuss this and any other issues you might have.

Aug 15

Greetings from United Way of Central Indiana’s new CEO

By Sponsor Insight

An interview with Fred Payne

Three weeks on the job as leader of United Way of Central Indiana, I admit, I’m already astounded.

Astounded by the importance of United Way of Central Indiana’s role in our seven-county community; the support from the passionate United Way staff and board, who are eager to bring me up to date on our impact initiatives, fundraising strategies and advocacy efforts; and the kindness of hundreds of friends, colleagues, donors, civic and nonprofit leaders, and folks I haven’t had the pleasure of meeting yet who emailed me their personal congratulations upon my appointment as president and CEO.

As of this writing, I’ve been asked on several occasions: Who is Fred Payne? Why did I choose this leadership role? What is my vision for United Way? And, my favorite question, Is a hot dog a sandwich? Below, I’m happy to oblige!

Who is Fred Payne?
I am the youngest of eight children. I’m from Louisiana and spent most of my younger days in the South. Indiana became my home upon graduation from IU Law School, where I met my bride, Kelly. Four children and many professional affiliations later, my family and I are proud Hoosiers by choice.

Why lead United Way?
After nearly five years as commissioner of the Indiana Department of Workforce Development, I felt better equipped to understand the needs facing our communities. Every day, I saw individuals who wanted to live the best lives they were capable of but were held back by a lack of basic needs, education, training and opportunity. Building on the great work of my predecessors, I’m looking forward to opening the doors to new opportunities for United Way to help people in a deliberate and focused manner and strengthening new partnerships along the way.

What is my vision for United Way?
With only a few weeks under my belt, I can safely say that my big vision is to create greater partnership between government and nonprofit organizations in a strategic, intentional way. We are called United Way for a reason — we cannot fight poverty as a single entity. Central Indiana is a place filled with diversity of thought, brain power to move ideas to action, and compassionate people willing to support others.

This month, I’m traveling across United Way’s entire service area of Boone, Hamilton, Hancock, Hendricks, Marion, Morgan and Putnam counties for a series of free Community Meet-and-Greet events. I hope to introduce myself to as many passionate individuals as possible and better understand the needs we face and the opportunities we have as a community. If you live or work near any of these Community Meet-and-Greet locations, please reserve your spot and join us!

Is a hot dog a sandwich?
Speaking of astounded, I never realized my “rapid fire” questions could raise such great debate!

Thanks for all you do to support our communities. It’s a pleasure to join you, work with you, and serve in Central Indiana’s nonprofit sector.

Aug 08

Nonprofit leaders must take a hard look at employee engagement in today’s job market

By Sponsor Insight

by Christine Shepherd, managing partner, PlanningPlus

When I was entering the workforce in my late teens, a solid, well-written resume and interview skills were everything. As a job seeker, long tenure and job stability were key factors in the job hunting and interviewing process. If you were looking for positions in management and leadership, a stable and consistent work history was considered a major plus.

Now, more than 25 years later, the job market is in a different place. Various job experiences paired with shorter tenure have slowly become the new normal. Career paths are not always linear. And the massive number of job vacancies and an unprecedented employee turnover rate have led to a significant paradigm shift in employment power.

According to the article Rewriting Employee Engagement, published by the Society for Human Resource Management (SHRM) on Feb. 3, 2022, “19 million (people) resigned between March 2021 and July 2021.” Talking heads and critics tried explaining this labor movement as a blip in time — a response to an influx of COVID relief funding. As time went on and more jobs continued to sit open, it has become evident that employers no longer hold the power.

In the article, the author Eva Andres goes on to say, “It’s a desire for change fed by pandemic-era introspection … What we’re seeing now is shift of power from employer to employee, a humanistic labor evolution in which people are revisiting their values and what they want to do with their lives. That is forcing employers to adapt to employees’ needs instead of the other way around.”

Yes, that’s right. The hiring organization is now in the hot seat.

So how do we assess how we are doing with employee engagement and what can we do better? As defined by SHRM, employee engagement “is the extent to which people enjoy and believe in what they do for work and have the perception that their employer values what they bring to the table.”

The Great Resignation, as it has been called, requires employers to pause and evaluate if and how they are engaging with current and prospective staff. Research has shown that there are six main drivers for employee engagement that an employer should consider: work, people, total rewards, opportunities, company practices, and quality of life.

Of these six drivers, employers often consider two or three out of the six, most often total reward (compensation and benefits) and opportunities (career pathing and job advancement).

It is critical for employers to understand that employees are motivated and driven by different values, goals, and outcomes. For nonprofit organizations that often have limited resources and flat organization charts, it is imperative that leaders seek to understand what is meaningful to employees, what they value, and why they chose to work for their organization. It’s also important to understand how to add value in the lives of employees and how to make a difference to them — and for them.

Making organizational changes, even good ones, takes time, and it must start at the beginning for it to be lasting change. Start with current policies and procedures, job descriptions, performance plans and employee handbooks. Evaluate and assess the message, tone, and clarity of communications with staff members. Beginning with current recruitment and retention strategies will help identify the areas in which the nonprofit is currently doing well with employee engagement as well as opportunities to do better.

It’s important to involve employees in the process and ensure you are working with honest and candid feedback about current retention and recruitment practices.

PlanningPlus has helped dozens of for-profit and nonprofit organizations assess and enhance their employee engagement strategies. We understand that with a candid assessment, a critical eye, and a true desire for change, you can truly be a value-add in the lives of all your employees.

Jun 20

Special event season is here! What’s next?

By Sponsor Insight

by John Mainella and Michael Pettry, principals, Cape Fletcher Associates and consulting partners of CICF

The season of special events is squarely upon us in Central Indiana. Whether springtime galas, summer golfing events or the increasingly popular breakfast fundraiser, most organizations are in the midst of special event season.

But special events are a lot of work. Then again, you already know that no doubt.

Here’s where many not-for-profits leave tremendous opportunities on the table. After all the work that brings a special event to life, they forget that the actual value of the event likely lies in what happens following the event. Which existing donors made a second-mile gift or increased their giving level? (A move up the giving tiers!) Who made a first-time donation to the organization? (A candidate for renewal and increased giving!)

We recently had a conversation with an executive director lamenting about all of the time and energy that went into planning and executing an event but forgot to invest intentionality and strategy into what happens in the days and weeks after the event.

Whether you are a seasoned staffer, just starting your journey in development, or a stalwart board member, here are three suggestions to increase the longer-term benefits of your special events.

Record event attendees into your database and segment this group. Organizations use databases for many reasons, but one is especially important: to grow the base of support. Even though a donor may have given at a special event, they should be added to your database and segmented into their own category.

For the next year or so, use this segmentation strategy when you want to communicate with or solicit the constituency. A good rule of thumb to remember is that the likelihood of retaining a first-time donor increases if you make seven touchpoints with them in the first year.

Impact, impact, impact. The donor likely made a contribution at the event as a result of an extraordinary and emotional appeal to support your mission. In the days and weeks following their gift, make sure that you show the donor the impact of their giving. Consider your first touchpoint be a thank you note sent 24 to 48 hours after they donated their gift.

Next, a month after receiving their gift, text or email them a quick 60-second impact video highlighting the work that their gift made possible. Check out this recent study from the Lilly Family School of Philanthropy about the power of video in donor engagement. That subsequent follow-up is a chance to remind them why they gave at your event and show them that you are already putting their gift to work.

Engage them differently. Don’t assume that you will see the donor at next year’s event. Organizations often see a relatively high turnover rate from year to year for attendance at events. But this doesn’t mean special event donors aren’t interested. When we think of the rule of seven touchpoints to retain a donor, build a strategy using your segmentation to keep your event donors engaged throughout the year.
Add them to your quarterly newsletter mailing list. Consider a personal phone call recognizing the six-month or one-year anniversary of their special event gift. Send an email several weeks before the next event with a “Hope to see you there!” theme. Even though the message isn’t overtly asking for a gift, make sure to include a link for donation for people who aren’t able to attend the event.

At the heart of building your culture of philanthropy is a commitment to establishing meaningful relationships with donors and prospects. Of course, special events play a unique role in building relationships with both constituencies, but it is the wise and artful institution that embraces the fact that special events are only the first chapter of a long and meaningful donor relationship.

Founded by principals John Mainella and Michael Pettry, Cape Fletcher Associates employs sound philanthropy practices and effective communication strategies to grow your base of support.